Dolphin Entertainment issues convertible notes

Published 27/02/2025, 22:08
Dolphin Entertainment issues convertible notes

In a recent SEC filing, Dolphin Entertainment (NASDAQ:DLPN), Inc. disclosed the sale of convertible promissory notes totaling $625,000 to investors. The transactions occurred between January 16, 2025, and February 21, 2025, with the company receiving equivalent cash proceeds. This adds to the company’s existing debt burden of $25.34 million, as reported by InvestingPro.

The notes carry a 10% annual interest rate, with varying maturity dates. Two notes, totaling $425,000, are due five years from their issuance dates, while the remaining two $100,000 notes mature in two and three years, respectively. Noteholders have the option to convert the principal and accrued interest into Dolphin Entertainment’s common stock at predetermined conversion prices. The company’s current ratio of 0.76 indicates potential liquidity challenges, with short-term obligations exceeding liquid assets.

The conversion prices for the $100,000 notes are set based on the average trading price of the common stock before the conversion, with a minimum floor price of $1.01, equal to the closing price on the Nasdaq on the date of the respective notes. The other conversion prices are fixed at $1.02 and $1.11 per share, corresponding to the closing prices on the issuance dates of the third $100,000 note and the $325,000 note, respectively. Despite challenging market conditions, the company has maintained 21.66% revenue growth. For comprehensive analysis of Dolphin Entertainment’s financial health and growth prospects, including 8 additional key insights, visit InvestingPro.

Dolphin Entertainment asserts that the issuance and sale of these notes, along with any common stock issued upon conversion, are exempt from registration under Section 4(a)(2) of the Securities Act. This information is based on a press release statement. The company, currently valued at $11.94 million in market capitalization, maintains a debt-to-equity ratio of 1.86.

In other recent news, Dolphin Entertainment has made significant adjustments to its financial and corporate governance structures. The company amended its Series C Convertible Preferred Stock terms, reducing the conversion rate from ten votes per share to three. This change was overwhelmingly approved by shareholders, with over 25 million votes in favor. Additionally, Dolphin Entertainment extended the maturity date of its promissory notes to January 2027. The amendment includes a minimum conversion price of $1.00 per share, offering investors a longer horizon for potential equity conversion. These adjustments reflect Dolphin Entertainment’s strategic efforts to enhance its financial flexibility and maintain balanced governance. Investors can review detailed documentation of these changes in the SEC filings. The company’s recent moves are part of its ongoing strategy to navigate the evolving entertainment industry landscape.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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