Dolphin Entertainment , Inc. (NASDAQ:DLPN), a Florida-based personal services company, has filed an amendment to its articles of incorporation, effectively modifying the voting rights associated with its Series C Convertible Preferred Stock. The change, which was approved by shareholders at the annual meeting held Monday, increases the number of votes per share of common stock the Series C is convertible into from five to ten votes per share.
This adjustment was one of the four proposals presented to Dolphin Entertainment's shareholders during the annual meeting on September 24, 2024. The other proposals included the election of seven directors to the board, the ratification of Grant Thornton LLP as the company's independent registered accounting firm, and the approval of a reverse stock split of 1-for-2, which was approved but not mandated.
The company's shareholders elected the following directors with an overwhelming majority: William O’Dowd, IV, Mirta Negrini, Michael Espensen, Nelson Famadas, Hilarie Bass, Nicholas Stanham, and Claudia Grillo. The ratification of Grant Thornton LLP as the independent registered accounting firm and the approval of the reverse stock split also passed with significant support from the shareholders.
The increase in voting rights for the Series C Convertible Preferred Stock passed with 31,694,179 votes in favor, 1,552,425 against, and 90,441 abstentions, along with 7,194,556 broker non-votes. This change to the preferred stock terms has been formalized in the Articles of Amendment filed with the Secretary of State of Florida.
The modifications to the company's corporate governance and capital structure are detailed in the 8-K filing with the Securities and Exchange Commission. This report is based on the press release statement issued by Dolphin Entertainment, Inc.
In other recent news, Dolphin Entertainment has seen significant developments. The company posted a second-quarter revenue of $11.4 million, a 4% increase year-over-year, and a first-half revenue of $26.6 million. Despite an adjusted operating loss of $100,000 for the quarter, Dolphin Entertainment achieved a positive adjusted operating income of $900,000 for the first half of the year.
Maxim (NASDAQ:MXIM) Group adjusted the price target for Dolphin Entertainment from $6.00 to $4.00, while maintaining a Buy rating on the stock. The company's recent achievements include the acquisition of Elle Communications and the launch of the Staple Gin product.
In addition to these developments, Dolphin Entertainment announced the appointment of Hilarie Bass, a distinguished corporate advisor, to its Board of Directors. Bass brings over three decades of legal expertise and a strong track record in leadership roles across various organizations. Dolphin's CEO, Bill O'Dowd, expressed confidence in Bass's ability to contribute to the company's strategic vision and growth.
Dolphin Entertainment also has plans for expansion, particularly into the sports industry and live events. These strategic plans are expected to enhance the company's operational capabilities and create new revenue streams. According to Maxim Group, upcoming movie and product launches, plans for owned and co-owned live events, and the launch of a sports company could be potential catalysts for future growth.
InvestingPro Insights
Dolphin Entertainment's recent corporate governance changes come amid challenging financial conditions for the company. According to InvestingPro data, DLPN's market capitalization stands at a modest $13.77 million, reflecting recent stock price declines. The company's shares have fallen significantly over the past year, with a one-year price total return of -64.0% as of the latest data.
Despite these challenges, Dolphin Entertainment maintains impressive gross profit margins of 93.92% for the last twelve months as of Q2 2024, indicating strong core business efficiency. However, an InvestingPro Tip highlights that the company is not profitable over the last twelve months, with a negative operating income of $3.25 million for the same period.
The recent changes to voting rights for the Series C Convertible Preferred Stock may be seen as a strategic move to consolidate control during this period of financial strain. Another InvestingPro Tip notes that analysts do not anticipate the company will be profitable this year, which could explain the management's focus on governance structures.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips for Dolphin Entertainment, providing deeper insights into the company's financial health and market position.
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