Dolphin Entertainment Inc (DLPN) 2020 Q4 法說會逐字稿

Greetings and welcome to Dolphin Entertainment Fourth Quarter 2020 Earnings Call. (Operator Instructions) As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, James Carbonara of Investor Relations.

Thank you. And once again, welcome to Dolphin Entertainment's Fourth Quarter and Full Year 2020 Earnings Call. With me on the call are Bill O'Dowd, Chief Executive Officer; and Mirta Negrini, 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 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 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although the company believes that expectations and assumptions reflected in these forward-looking statements are reasonable, it makes no assurances that such expectations will prove to have been correct. Actual results may differ materially from those expressed or implied in the forward-looking statements due to various risks and uncertainties.

For a discussion of such risks 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 company's annual report on Form 10-K contained in subsequent filed quarterly 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. Any 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 Bill O'Dowd, Chief Executive Officer of Dolphin Entertainment. Bill, please proceed.

Thanks, James, and hi, everyone. Good afternoon. Thank you for joining us today. And thank you, James, for reading the safe harbor statement. I think we should announce, record that and release it as our first NFT. That would do very well. Following in our traditional format, I will start by discussing our financials at a high level and then speak about Dolphin 1.0 and the acquisitions we have made since last year's 10-K earnings call and then moved to our launch of Dolphin 2.0, beginning with our recent announcements regarding NFTs.

Okay. I said last week that I was excited to share our financials because our financials reflect the strength of our Super Group. Let's start with revenue. Even during the pandemic with movie theaters, live music venues, restaurants and hotels closed nationwide, Q4 revenue grew to approximately $6.7 million from $6.2 million in 2019. We believe Q1 revenues will pass $7 million and we continue to believe that 2021 revenues will pass $30 million without taking into account any Dolphin 2.0 initiatives, such as our recently announced NFT division.

As exciting as our revenue growth is, we feel even more proud about our improved balance sheet. In 2020, even while continuing to pursue our growth and acquisition strategy, we improved our working capital deficit by over 80% from $15.6 million, down to $3 million. And as you all know, of course, if you're pursuing an acquisition strategy, you use cash, so it works against your working capital. But ours improved by over 80%. We're very, very proud of that fact. Quite frankly, if it weren't for the NFT announcements, this would be the headline of our improved balance sheet is positioning us for future growth tremendously. We believe we will -- furthermore, we believe we will reach a working capital surplus shortly, certainly within 2021. It's our goal. And furthermore, both stockholders' equity and current assets doubled in value and our cash on hand more than tripled from 2019 to 2020.

And we believe that our financial statements differentiate us in the microcap space. To recap, how many microcap companies can make the following statements: First, we generate real revenue and grew revenue in Q4 year-over-year during the pandemic. We have more cash on our balance sheet than debt. We expect to have a working capital surplus this year. And lastly, we expect to remove our going concern this year. Oh, and by the way, we may be a microcap, but we are considered the best in the world at what we do, which is to market pop culture, which is a great segue to Dolphin 1.0.

Dolphin 1.0 is the day-to-day work of our world-class PR and marketing agencies. They have been consistently recognized as the premier PR agencies in our fields, period. And when you put the very best under one roof, the growth that comes from cross-selling is exciting. Now I recognize that many of the people listening to this call and shareholders of Dolphin in general, are relatively new to our story. So let me quickly tell you more about our companies.

The first company we acquired was 42West in 2017. 42West is an entertainment PR powerhouse. There's simply no other way to describe them. In the most recent Power 50 list of the PR firms in this country from the New York Observer, 42West was ranked the most powerful PR firm in entertainment. Last year at the Oscars, 42West was involved with 13 films that received 49 nominations and won 9 Academy Awards overall. And their night at the Emmys was somehow arguably stronger. 42West was involved with 33 programs that received 145 nominations and won 43 Emmy awards overall, including 16 of the 23 winners during the televised portion. That was incredible.

42West also has a celebrity division that includes names such as Tom Cruise, Tom Hanks, Meryl Streep, Jason Statham and Megan Thee Stallion, among many, many others. And in January of this year, we acquired BHI, a leading entertainment consumer products, video gaming and esports PR firm that has become a division of 42West. The acquisition of B/HI provides a tremendous gateway into the last remaining large vertical of entertainment for our Super Group, the $160 billion video gaming and esports market. This transaction has paid immediate dividends as we announced shortly after the acquisition that B/HI signed Funko, our fellow NASDAQ company, to promote their Snapsies consumer product line, marketing Funko's entry into the toy category. 42West and B/HI have also signed Tyler Blevins, otherwise known as Ninja, the most popular video gamer in the world. It's been a great first 3 months with B/HI.

Also in the Dolphin family is Shore Fire Media, the best in the music PR business. CEO Marilyn Laverty is a legend. And over the past 30 years, she has built a tremendous business. Shore Fire represents individual recording artists such as Bruce Springsteen and The Dave Matthews Band, songwriters, publishers, authors and various other individual artists. And they also represent live events, such as Super Bowl Music Fest and Summer Fest and many others. In any given month, Shore Fire handles the PR for over 100 artists, singles and album drops. And we believe they have the largest, most diverse roster in the music PR business. Shore Fire consistently has tremendous nights at the Grammy Awards, including again this year, when Shore Fire's client roster earned 15 Grammy nominations across Album of the Year and multiple genre film and comedy categories.

The third leg of our PR firms still is The Door. We absolutely adore this company. They are the leading culinary and hospitality PR firm in the world, representing celebrity chefs and Food Network stars such as Rachael Ray and Robert Irvine, as well as the mega events in that industry, such as South Beach Wine and Food Festival, the New York Wine & Food Festival and Windy City Smoke Out in Chicago. They also represent many of the leading hotel brands, including 11 hotels in their hospitality portfolio that have been recognized by the distinguished Condé Nast Traveler 2020 Reader's Choice Awards. And in early 2019, The Door launched a Consumer Products division that has grown tremendously and which represents a very large opportunity for us.

Complementing these 3 PR firms is Viewpoint Creative, a creative agency that we feel makes the best promotional videos in the business, among many other creative assets. Their legacy is in television and past and present clients include HBO, ESPN, Showtime, Discovery Networks, A&E and many more. And we've now taken their expertise, and they've created promotional videos for clients across our PR firms, including the Consumer Products division at The Door.

And in August of last year 2020, we added Be Social, a leading influencer marketing firm out of Los Angeles, which was a highly strategic acquisition for us. I know we talked a lot about this on our Q2 earnings call last year. Be Social both represents popular individual influencers under its talent management division and also as a brand services division, which specializes in both organic and paid influencer marketing campaigns, media relations, digital strategy and events. PR and influencer marketing go together like peanut butter and jelly. They are the twin pillars of earned media. We believe the ability to offer influencer marketing campaigns targeted by every possible demographic, including location and interests is a tremendous advantage for us in Dolphin 1.0. Simply put, our PR firms can really cross-sell Be Social's influencer marketing expertise when designing their campaigns.

And that collaboration speaks to the thesis of Dolphin 1.0 and to the benefit of bringing 6 best-in-class companies together under one roof as an entertainment marketing Super Group. Six companies means 30 different ways to cross-sell. When we were just 1 company, we obviously couldn't cross-sell with ourselves. And when we were 2 and 3 companies, we were building. But now we feel we have reached scale on the cross-selling, and it's showing with our revenue growth. Revenue growth during the pandemic, again, with no movies and theaters, live music venues, restaurants and hotels.

So now let's discuss Dolphin 2.0. The core investment thesis of Dolphin for all the new folks on this call and our new shareholders, the core investment thesis of Dolphin is that the relationships and expertise of our world-class marketers in the entertainment industry can be monetized in a variety of ways, far greater in a world of direct-to-consumer products and services. So let me ask you a question. It's a question I usually end every presentation I make at LD Micro or any other conference. If you had the world's only collection of best-in-class entertainment marketing companies, and I mean best-in-class, what would you do? Our answer to that question is that we would own some of what we are marketing. Specifically, we will seek to own products and services where our strength of direct-to-consumer marketing will most greatly increase the likelihood of our success. It's as straightforward as that.

We give certain categories of products and services the best possible chance to succeed. We certainly believe that is true with NFTs. We also believe that to be true with a wide variety of other consumer products. We also believe that is true with specific live events in the food space, in the music space, and in the esports space. And we also believe that is true with content, whether it be feature films, documentaries, television series or podcasts. We are in an inflection point in the history of Dolphin. If Dolphin 1.0 is the marketing of pop culture, then Dolphin 2.0 is using pop culture to market. We have now reached scale with Dolphin 1.0, with scale being defined as the acquisition of the very best marketing agencies across every major vertical of entertainment: film, television, music, gaming, esports, culinary and hospitality.

We were specific about what we wanted in the roadshows of 2017, before we uplisted to NASDAQ. Those who have been with us since then know we've talked about these verticals for 3 years. We were specific about what we wanted and who we wanted. We have only offered 6 letters of intent to companies along the way, and we have made those exact same 6 acquisitions. To use a sports analogy, we have the players we want in our clubhouse. We are ready to play, and we feel the game is only just beginning. It took us 3 years to build that scale in Dolphin 1.0 and we will use that scale to maximum advantage for the rest of our lives in Dolphin 2.0.

So let's talk about Dolphin 2.0. We've been waiting for this day. Well, first, how do we think about it? Well, as many of you know, who were on the call last week, we were in our CEO Summit in Miami last week. We divide our opportunities into 4 major categories of Dolphin 2.0. Those 4 categories are the creation of consumer products by ourselves and with partners; the creation of content also by ourselves and with partners; the creation of our own live events; and finally, the taking of ownership positions in other people's companies that create either consumer products, content and/or live events, in exchange for our developing and marketing them across all of the Dolphin companies.

So those are our 4 categories: consumer products, content, live events and equity. Now we expect to announce 2 major products or initiatives in each 2.0 category this year, with the exception of live events, which will start in 2022 due to COVID. So that will be 6, 2.0 products or initiatives this year; 2 from consumer products; 2 from content; and 2 resulting in equity stakes in other companies. We've announced our first, which is NFTs, the first of our 2 in the consumer products category. We expect to have 5 more this year.

The launch of Dolphin 2.0 dramatically expands the number of traditional catalysts we expect to have in any given calendar year. Previously, we made 1 to 2 acquisitions per year to build our scale in Dolphin 1.0. We will continue to make acquisitions when we identify skill sets or markets that will help us. However, now we expect to add another 6 catalysts this year and 8 catalysts in 2022 and going forward, from our Dolphin 2.0 initiatives, which begins with NFTs, which again fall under our consumer products initiatives for 2021. We -- that was obviously a major explanation of Dolphin 2.0 and what we think we have in front of us.

We used last week's call to share some insights around the launch of our NFT division last month. We have tremendous excitement around our position in the market. NFTs are a perfect representation of how our unique set of companies can increase the likelihood of success for this type of product. Why? Because let's look at what needs to happen to create NFTs, right? First, you need to identify and develop IP, intellectual property, right? That is what Hollywood does. It's what I've done for 25 years, and we feel we are particularly well positioned to either acquire or partner for the very best IP. I think that's beyond debate.

Second, you need to produce the actual creative product. We absolutely know how to do that, and we have both viewpoints, in-house capabilities and the ability to manage all of our collective relationships to the very best creative artists, animators, graphic designers, visual effect supervisors that Hollywood has to offer. Quite frankly, we can identify the best IP and we can create the coolest products.

And then third, after posting the NFT for sale, most crucially, you have to be able to market it. In other words, NFTs are direct-to-consumer entertainment and sports collectibles. That is what they are: direct-to-consumer, entertainment and sports collectibles.

We feel we are the best in the world at direct-to-consumer entertainment marketing. We have 42West, B/HI, The Door, Shore Fire and Be Social, all leaders in their industries and all with deep experience promoting entertainment-based consumer products. That is what we do. Therefore, we feel our unique expertise and relationships gives us, gives our NFTs and gives the NFTs we produce with our partners, the very best chance to succeed. And that is why NFT has made the cut, to be 1 of our 6 Dolphin 2.0 initiatives this year and why we're so excited about them. I think the world's excited about them.

On last week's call, I mentioned the growth of the market in NFTs. I noted that $60 million in NFTs sold in 2019 and $250 million in NFTs sold in 2020. And based on reports of sales from the first couple of months of the year, that it would be reasonable to assume that the market would grow to $4 billion or $5 billion in 2021. To many, that seemed difficult to believe. Quite frankly, many people are still asking, what is an NFT? Well, anyway, I'm here to say that I was wrong. I don't believe that anymore. I think that estimate of $4 billion to $5 billion in 2021 is too low. Why? Because it was just reported by CNBC this week using nonfungible dot com data that over $2 billion in NFT sales occurred in the first quarter alone, $2 billion. And here's the best part, that number does not include certain private marketplaces, the biggest of which is NBA's Top Shots. It was reported that NBA's Top Shots sold over $470 million of NFTs in the first quarter.

And for those on the call last week, you know that our entry into this space has been planned since the middle of February, long before any of these numbers were public. We believed in this space for one additional reason, and that is the fact that on almost all major NFT exchanges today, you cannot buy an NFT with a credit card. We believe this growth will only accelerate, as hard to believe as that may be, when credit cards are accepted. On last week's call, we asked the question of could the NFT market hit $500 billion by 2025, similar to how Netflix disrupted the film and television business by digital delivery, would the NFT market do the same for collectibles? When we were assuming that this year would see $5 billion in NFT sales, that would represent 100x growth. Of course, now that it seems that NFT sales will pass $10 billion this year from $250 million last year. $10 billion this year if Q1 saw $2.5 billion, including NBA Top Shots, then $500 billion would represent 50x growth over the next 4 years.

What could account for that? And quite frankly, we think the answer is the acceptance of credit cards. Because the vast majority of NFTs today can only be bought with Ethereum. It's a single cryptocurrency. That's it. Almost every person let a loan investor that I've talked to since our announcement, has called me after our announcement to start the NFT division, was not aware of that fact. They did not know that you couldn't buy NFTs with credit cards. I still have not read the importance of that fact in any article I have read on NFTs.

And here's the stark comparison. There are less than 150,000 active crypto wallets in the NFT space in the United States. That's it. That's for all forms of cryptocurrency, not just Ethereum, less than 150,000 crypto wallets. The first quarter sales were made by less than 75,000 buyers. Obviously, that's less than 1% of the adult population in the United States having a crypto wallet. By comparison, what percentage of American adults have credit cards? The entire growth to date of the NFT marketplace doesn't account for 99% of the buying public. And of everyone you know that has bought an NFT, how many of them are under the age of 25? My guess would be not many, if any at all. And why is that important? Because that's a huge segment of the entertainment and sports collectibles market.

We believe NFTs are here to stay. The digital delivery of collectibles just has too many advantages, from vastly lower cost of production, elimination of inventory and shipping costs and then obviously, global markets for every product. We like the NFT market. We love our position in it. We have the relationships to produce really cool NFT product lines around both content and individuals, from motion pictures, from television, from music, from the culinary world, from gaming and esports and from traditional sports, which is where we've chosen to start with the partnership with Hall of Fame Resort Entertainment Company. In these first days of the NFT marketplace, sports memorabilia is strongest out of the gate, a tip of the hat to the NBA and Dapper Labs for creating NBA's Top Shots. It's a beautiful product and they deserve the success they're enjoying. $470 million plus of revenue in their first full quarter and their first full quarter in the market is astounding.

We know that Hall of Fame Resort and Entertainment Company is a leader at the crossroads of professional football and entertainment, which makes them a perfect first partner for Dolphin's new NFT division. Dolphin's best-in-class entertainment marketing companies and ability to design, produce, release and promote NFTs will deliver tremendous value for this powerful partnership. We like our first product coming out shortly with NFL Legends Tim Brown, Earl Campbell and Doak Walker, and we like that this is only the tip of the iceberg for us. It's the start of our partnership with Mike Crawford and his team at Hall of Fame. It's put a start of the various announcements we anticipate having in the coming weeks about our choices of entry with NFTs. It's all of the various entertainment verticals I just mentioned. And it's the start because NFTs as a whole only represent the very tip of the iceberg for our opportunities within Dolphin 2.0. Our NFT division was the first announcement of many we anticipate making this year.

Okay. We've been waiting for this day for over 3 years. We feel we're now at our starting line. Dolphin 2.0 is here, and we could not be more excited. With that said, I'll now turn it over to Mirta.

Thank you, Bill, and good afternoon, everyone. I'll now discuss results for the year ended December 31, 2020. Revenue for the year ended December 31, 2020 was $24.1 million compared to $25 million in 2019. As discussed on our call last week, we ran certain marketing campaigns during the third and fourth quarter of 2020, totaling approximately $1.5 million. During the third quarter of 2020, we had reported approximately $900,000 in gross revenues and a corresponding $900,000 in direct cost expenses related to these campaigns. Upon further review of our revenue recognition policy, we determined that the $900,000 should have been recorded as a pass-through expense and should not have been recorded as direct cost expense or as revenue.

As a result, we have restated our third quarter 2020 financials on our Form 10-K to reflect the restatement. The error did not affect our loss from operations, net loss or loss per share on our condensed consolidated statement of operations or on our consent consolidated balance sheet or condensed consolidated statement of cash flows reported as of September 30, 2020 on our Form 10-Q filed for the third quarter of 2020.

Overall operating expenses for the year 2020 were approximately $26.6 million compared to $29.1 million in 2019. Direct costs for the year 2020 were $2.6 million compared to $5 million in 2019. Selling, general and administrative expenses for the year 2020 were $4.8 million compared to $3.8 million in 2019. Legal and professional fees were $1.2 million in 2020 compared to $1.6 million in 2019. Payroll costs were approximately $16 million in 2020 as compared to $16.7 million in 2019. Operating loss for the year ended December 31, 2020 of $2.6 million included noncash items from depreciation and amortization of $2 million and an asset write-off of $220,000. This compared to an operating loss of $4.1 million, which included noncash items from depreciation and amortization of $1.9 million for the same period in the prior year.

Net loss for the year ended December 31, 2020 was approximately $1.9 million or $0.35 of basic loss per share based on 5.6 million weighted average shares and $0.58 diluted loss per share based on 6.4 million weighted average shares. This compares to a net loss for the year ended December 31, 2019 of approximately $2.3 million or $0.70 basic loss per share on 3.3 million weighted average shares and $1.20 diluted loss per share based on 4.3 million weighted average shares outstanding. We should note that during the year ended December 31, 2020, we recorded beneficial conversion features on the conversion of net payable in the amount of approximately $1.3 million that is recorded in the caption Interest Expense and Debt Amortization. We also recorded net gains on changes in fair value of liabilities in the amount of approximately $0.9 million; a gain on extinguishment of debt in the amount of $3.3 million; and a loss on the deconsolidation of the Max Steel VIE in the amount of $1.5 million.

During the year ended December 31, 2019, we recorded beneficial conversion features related to notes payable converted into common stock in the amount of $1.3 million that is recorded in the caption Interest Expense and Debt Amortization. For the year ended December 31, 2019, we also recorded net gains on changes in the fair value of liabilities in the amount of approximately $3.3 million and a gain on the extinguishment of debt in the amount of approximately $0.7 million. Cash and cash equivalents were $7.9 million as of December 31, 2020 compared to $2.2 million as of December 31, 2019. This does not include restricted cash of approximately $0.7 million in each of these years.

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?

(Operator Instructions) Our first question is from Allen Klee of Maxim Group.

Two quick accounting questions. For the restatement, where does -- the little under $900,000, you reduced the revenue, where does it show up in the expenses? And the second question is what was your share count at the end of the year?

It shows up under direct costs. The expense shows up under direct costs.

Okay. So that will be reduced. Okay. And then the share count at the end of the year?

It was about 7 million shares.

And when will the 10-K be filed? Do you guesstimate?

We're about to file it right now.

Okay. Very good. And then for the 5 companies that you own during the fourth quarter, would you be able to just briefly touch on kind of the key things in terms of how they performed in the fourth quarter and the outlook?

Sure. Happy to. So the 5 before we bought vendor in January. Sure. Well, 42West, obviously, and I'll also touch on if it's helpful as we're hopefully coming out of the pandemic, what that outlook looks like. 42West had a very strong year with the streaming services that really capture -- we capture a tremendous amount of market share from the streaming services, and that will be a business where we have continuing going forward, obviously. Movie theaters are opening up. We just passed the 60% market theaters being opened in this country. And as vaccinations roll out, the drop dates for the big summer movies are beginning to stabilize. We expect Memorial Day, we'll see the first of big studio films. And it seems like that will hold 6, 7 weeks from now.

We moved obviously, our films, James Bond moved to the fall. Top Gun moved from July to November, but that was mostly so Tom could do his world press tour that he does before every film that's extremely well received by theater owners worldwide. You really -- if there's a harder working actor promoting the films, I don't know who it is. And -- but those dates, we feel very comfortable will hold. And so when we come out of the summer season, back in the independent film season, which 42West is we think the strongest as judged by all the Academy award nominations they've received and won over the years, we expect to have a healthy independent film business back again at the end of the summer. So I'd say the outlook is very strong. As again, considering, we haven't had a dime of revenue from films in theaters for a year. But the streaming service businesses has done a great job helping us offset that, and we'll continue that as we go forward.

Shore Fire, they were always the least impacted of our firms. Marilyn's done a fantastic job because most of music is promoted, the singles, the albums without necessarily the touring. Obviously, we don't have any revenue from touring and the promotion of those. But that -- I am not as confident in that, coming back in the third quarter. I think that will be more fourth quarter. But obviously, firms like Live Nation and AEG are working hard to mount those tours again, especially with the bigger artists. But it's doing quite well. And we're back with Shore Fire at pre-pandemic revenues and beyond, even without the touring business.

The Door, obviously, is the company that's been most impacted by COVID. Restaurants and hotels were closed for much, if not all, of last year and the restaurants still -- many of them are just now beginning to think about reopening. When that occurs and we feel -- we're seeing the start of that, which I wouldn't have been able to say even 2 or 3 weeks ago, then The Door will really expand revenue because in the probably third quarter of this year we expect, certainly fourth quarter. That's fighting with 1.5 hands tied behind your back during a pandemic, right, with no restaurants and hotels. The consumer products division really carried us with them. And it's done very well, weathered the pandemic very well and doing, growing quarter-over-quarter.

The Viewpoint was also not impacted very much, given the pandemic growing revenue and having a very strong start to this year. Be Social, launched our kit business after we acquired them. We love that business, and we're expanding some of their services by the fourth quarter of last year, added social media management for brands as well. So we -- of course, they joined the family only in August. So it's -- we didn't have a full year with Be Social. Is that helpful, Allen? I'm not sure.

That's great. And then -- so last year, you talked about the potential of producing 2 movies and selling them in 2021. Is that still something that you -- that seems like reasonable? Or has that plan changed at all?

Well, we are excited to announce our 2 initiatives in the content category of Dolphin 2.0. Features are certainly a possibility. The -- we and many of the other independent producers, as I was saying last year, are still waiting on scripted features for production insurance, to be it widely available in the industry. We do see that day coming and expect it to be available by the end of the summer. And if we can mount the first in this year, we will certainly do so. We think we'll be able to, if not in the Q3, hopefully, Q4. And we have other content partnerships and initiatives that we hope to be able to announce shortly. Other than just features, I mean.

Okay. Do you -- so the production -- the 2.0 stuff is -- it's harder to figure out how to model it today, obviously, it's all new stuff. Do you see and envision, like how -- what's the path to where we can maybe try to put some numbers around some of this stuff?

Yes, sure. It's -- well, let's see. We're sitting here on April 15 and we will report our Q1, May 15. And by then, we may have some -- an additional clarity or 2 in the NFT space. But I really think by the time the announcements we anticipate being able to make from late spring and summer, we'll start providing some clarity and particulars around the other 5 initiatives for the year. We would expect to announce the majority of those before we're all back on the call, August 15, and that would help us all model the upside of Dolphin in the next 12 months. By then too, we'll have the partnerships within the NFT space widely announced, if not all announced by then, I would assume.

I imagine we'll have, as I said, another announcement or 2 on the NFT space before we all gather again, May 15. So I think that will give us some greater ability to model the revenue off NFTs, both in our partnership with Hall of Fame and some of the very exciting announcements that both Mike and I will be making in short order as well as, again, the other partnerships we'll have in the NFT space. So I would think, obviously, I'm just not at liberty to say what those announcements will be on this call. But in the next several weeks, I believe you'll see some -- that will give you a chance to start at least creating the placeholders on the modeling, Allen. The content is being lined up. The equity is definitely being lined up. And then, of course, we'll have a second major initiative in consumer products this year as well.

Okay. And I'm sort of backing into these numbers, I'm not completely confident yet, but it looks like your -- that in the fourth quarter on an EBITDA basis, you were -- you did well, you were profitable and better than I expected. And could you talk about kind of maybe just from that perspective, maybe what was behind that? And do you view that as being sustainable going forward?

Allen, yes, we feel we had a very strong year, especially against any of our expectations. This time last year, I mean it's hard to believe we were doing a call last year. And I indicated even no one knew where the pandemic was going to go, we certainly knew how it impacted directly before that call in the previous 2 weeks. All of our restaurant business, all of our motion picture business, right, holy cow. The truth was that I indicated, I believe, on that call that we would do our best to manage towards cash breakeven. We believe we would have had a cash positive year last year, but for the pandemic. And I'm very proud to say that on a cash basis at year-end, you may back out the depreciation and amortization, you back out the $220,000 when we wrote off the asset that was on the balance sheet of 42West before we bought them, they had stock in a private company. Then you'll see that I believe, from Q2, Q3 and Q4, we were. And it's just above cash breakeven, which is on an operating income basis, when you factor in the loss we took in Q1 last year.

So that's very exciting for us. And quite frankly, I'm hoping that is as well received as I think it should be, because to manage to that result in a pandemic was no easy feat for our company, and we're proud to be able to say that. With that said then, going forward, some of these Dolphin 2.0 initiatives will take modest investments. We have the cash on hand. Obviously, we're excited about NFT since it's not a heavy capital requirement. We'll manage that investment in the first half of this year and in the first quarter, it will be a little heavier than the second quarter, and then they'll be paying big dividends for us, we hope, Q3, Q4 going forward. So we think we have tremendous momentum. And as we reported, Q4's revenue being above -- pretty significantly above Q4 of the year before, and we expect Q1 to grow from Q4, obviously. I think the estimates that were out there in the marketplace of $30 million of revenue plus from Dolphin 1.0, I feel very confident about that. And then Dolphin 2.0 only represents what we think is very potentially huge upside for us. So it's exciting.

And Allen, you cover many microcaps, we feel this was a momentous day for us. Yes, we've always been pointing to the start of 2021. Anybody that's been following us 3 years, give us 3 years, we'll build the Super Group and then we can start off in 2.0. But I think we're way ahead on our balance sheet of where people thought we would be when we finished the acquisition strategy, right, or this phase of the acquisition strategy. We're talking about a company that after 6 acquisitions has a working capital deficit of only $3 million. This time last year, in the midst of the acquisition strategy, we had a working capital adjusted of $15.6 million. We went from $15.6 million down to $3 million in 12 months.

That, I think, puts us and separates us from the overwhelming majority of microcap companies that have no clear path to a working capital surplus. And obviously, we have more cash on the books than debt, which I don't think -- what percentage of micro caps can say that? So we're excited about where we are from a balance sheet perspective. And to answer your question about the growth from 2020, imagine what we can do when we have all of our businesses actually fully operating.

Right. Yes, you definitely outperformed on profitability in the fourth quarter compared to what I was expecting. So one last question on Be Social. I saw 2 days ago on April 13, the company IZEA Worldwide, which does influence marketing. They put out an announcement that they said that they -- as of that date, they already exceeded the total amount of managed services bookings that they had done for the entirety of the same quarter the prior year, which makes me think that maybe that's a good data point for your business. How do you think about the outlook for Be Social?

Be Social has such a bright future with us. I was trying to say in the prepared remarks, those of us who -- those who listened to the Q2 earnings call, influencer marketing and PR really do go hand-in-hand. And now think of it from the lens of Dolphin 2.0. We're going to have our own live event. So let's just say one of them's a food event in Memphis, Tennessee. And it's a chili cook off. Well, imagine if you could target influencers, food influencers, specifically, by interest there and by location, within 30 square miles, a 30-mile radius of Memphis, Tennessee. What could you do to drive people, make it broad awareness and drive people to the event? What could we do when we sell NFTs? Our value hasn't been recognized yet in the NFT space, probably because it's so early, right, Allen, it's hard to model.

But you look at our competitors or other companies trying to launch into the NFT space, without -- we have so many advantages. Not only do we have the direct relationships to the IP, we can partner with people like Hall of Fame Resort and put out NFTs around the only individuals that ever won the Heisman Trophy and been inducted in the Pro Football Hall of Fame. But imagine what our relationships are in the movies, television, et cetera.

Well, now you add Be Social to that. Can you imagine doing an influencer marketing campaign with influencers who have an interest in sports around a sports NFT? Or movies with a movie NFT? Or food around food NFTs? Gaming, around gaming NFTs? We're marketing -- we're using the strength of a company like Be Social, not just to enhance our clients' campaigns with the PR firms, but to enhance the sale of our own products. So it's highly, highly strategic, yes, for Dolphin 1.0. But for Dolphin 2.0 Be Social is a not-so-secret, secret weapon.

And I think the comment I made in August was, the holidays came early. This was the one goal we had for 2020, while we are finishing the acquisition phase of Dolphin, was to buy the very first choice of an influencer marketing firm, and we really had 2.0 in mind as much as 1.0.

Ladies and gentlemen, we have reached the end of the question-and-answer session. And I would like to turn the call back to Bill O'Dowd for closing remarks.

Okay. Well, thank you, everyone, for joining. And I want at the end of today, this call, to just give a special shout out to 160-or-so employees of Dolphin because they were kind enough to make a video for my birthday, which is today, which I saw just before starting this call, and it was the coolest video ever. And I'm very appreciative of it, set to Journey's hits on Separate Ways with original lyrics. And I was very touched. So if there are any of our folks out there listening live to this call. I'm very appreciative and it was a perfect birthday present.

So thank you all for joining today, and appreciate the interest in Dolphin. And hopefully, we'll have some exciting things to share with you in the coming weeks. Thank you, everybody.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.