Dolphin Entertainment, Inc.: Form 10-Q for the period ended Sep 30, 2025

You should read the following management’s discussion and analysis together with our unaudited condensed consolidated financial statements and related notes included under Part I, Item 1 of this Quarterly Report on Form 10-Q, together with the audited consolidated financial statements, the accompanying notes, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K. This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the “Risk Factors” section of our Annual Report on Form 10-K and other factors set forth in other parts of this Quarterly Report on Form 10-Q and our filings with the SEC.

Overview

We are a leading independent entertainment marketing and production company. We were first incorporated in the State of Nevada on March 7, 1995 and domesticated in the State of Florida on December 4, 2014. Our common stock trades on The Nasdaq Capital Market under the symbol “DLPN.”

Through our subsidiaries, 42West LLC (“42West”), The Door Marketing Group LLC (“The Door”), Shore Fire Media, Ltd (“Shore Fire”), The Digital Dept, LLC (“The Digital Dept.”), Special Projects Media, LLC (“Special Projects”), Always Alpha Sports Management, LLC (“Always Alpha”) and Elle Communications, LLC (“Elle”) we provide expert strategic marketing and publicity services to many of the top brands, both individual and corporate, in the motion picture, television, music, gaming, culinary, hospitality, lifestyle and charitable industries. 42West (Film and Television, Gaming), Shore Fire (Music), The Door (Culinary, Hospitality, Lifestyle) and Elle (Impact, Philanthropy, Non-Profit) are each recognized global public relations (“PR”) and marketing leaders for the industries they serve. As a group, they were recognized as the #1 PR firm in the country in the prestigious Observer rankings earlier this year. The Digital Dept. provides influencer marketing capabilities through divisions dedicated to influencer talent management, brand campaign strategy and execution, and influencer event ideation and production. Always Alpha is a talent management firm primarily focused on representing female athletes, broadcasters and coaches. Special Projects is the entertainment industry’s leading celebrity booking firm, specializing in uniting brands and events with celebrities and influencers across the entertainment, media, fashion, consumer product and tech industries. Dolphin’s legacy content production business, Dolphin Films, founded by our Emmy-nominated Chief Executive Officer, Bill O’Dowd, has produced multiple feature films and award-winning digital series, primarily aimed at family and young adult markets.

We have established an acquisition strategy based on identifying and acquiring companies that complement our existing entertainment publicity and marketing services and content production businesses. We believe that complementary businesses can create synergistic opportunities and bolster profits and cash flow. While we may acquire additional companies in the future, we are not in active negotiations with any such companies, and there is no assurance that we will be successful in acquiring any additional companies, whether in 2025 or at all.

We have also established an investment strategy, “Ventures” or “Dolphin 2.0,” based upon identifying opportunities to develop internally owned assets, or acquire ownership stakes in others’ assets, in the categories of entertainment content, live events and consumer products. We believe these categories represent the types of assets wherein our expertise and relationships in entertainment marketing most influences the likelihood of success. We are in various stages of internal development and outside conversations on a wide range of opportunities within these Ventures. We intend to enter into Venture investments, but there is no assurance that we will be successful in doing so, whether in 2025 or at all.

On July 4, 2025, the U.S. H.R.1, an act to provide for reconciliation pursuant to title II of H. Con. Res. 14. (the “OBBBA”) was enacted. The OBBBA introduces multiple tax law and other legislative changes, including modifications to income tax provisions such as domestic research and development expenses, capital expenditures, and U.S. taxation of international earnings; the repeal or acceleration of the sunset of certain tax credits under the 2022 Inflation Reduction Act and elimination of certain penalties for violations of certain regulatory credit programs. We have recognized the effects of the OBBBA provisions in our financial results to the extent they are applicable to the three and nine months ended September 30, 2025. We will continue to evaluate the impact of these provisions on our future consolidated financial statements.

How We Assess the Performance of Our Business

In assessing the performance of our business, we consider a variety of performance and financial measures. The key indicators of the financial condition and operating performance of our business are revenues, direct costs, payroll and benefits, selling, general and administrative expenses, legal and professional expenses, other income/expense and net income. Other income/expense consists mainly of interest expense, interest income and non-cash changes in fair value of liabilities.

We operate in two reportable segments: our entertainment publicity and marketing segment and our content production segment. The entertainment publicity and marketing segment is composed of 42West, The Door, Shore Fire, The Digital Dept., Special Projects, Elle and Always Alpha, and provides clients with diversified services, including public relations, entertainment content marketing, strategic communications, influencer marketing, celebrity booking and live event production. The content production segment is composed of Dolphin Films and Dolphin Digital Studios, which produce and distribute feature films and digital content.

Entertainment Publicity and Marketing (“EPM”)

Our revenue is directly impacted by the retention and spending levels of existing clients and by our ability to win new clients. We believe that we have a stable client base, and we have continued to grow organically through referrals and by actively soliciting new business. We earn revenues primarily from the following sources: (i) celebrity talent services; (ii) content marketing services under multiyear master service agreements in exchange for fixed project-based fees; (iii) individual engagements for entertainment content marketing services for durations of generally between three and nine months; (iv) strategic communications services; (v) engagements for marketing of special events such as food and wine festivals; (vi) engagement for marketing of brands; (vii) arranging strategic marketing agreements between brands and social media influencers or celebrities and (viii) curating and booking celebrities for live events. For these revenue streams, we collect fees through either fixed fee monthly retainer agreements, fees based on a percentage of contracts or project-based fees.

We earn entertainment publicity and marketing revenues primarily through the following:

• Talent – We earn fees from creating and implementing strategic communication campaigns for performers and entertainers, including Oscar, Tony and Emmy winning film, theater and television stars, directors, producers, celebrity chefs and Grammy winning recording artists. Our services in this area include ongoing strategic counsel, media relations, studio and/or network liaison work, and event and tour support. We believe that the proliferation of content, both traditional and on social media, will lead to an increasing number of individuals seeking such services, which will drive growth and revenue in our Talent departments for several years to come.
• Entertainment Marketing and Brand Strategy – We earn fees from providing marketing direction, public relations counsel and media strategy for entertainment content (including theatrical films, television programs, DVD and VOD releases, and online series) from virtually all the major studios and streaming services, as well as content producers ranging from individual filmmakers and creative artists to production companies, film financiers, DVD distributors, and other entities. In addition, we provide entertainment marketing services in connection with film festivals, food and wine festivals, awards campaigns, event publicity and red-carpet management. As part of our services, we offer marketing and publicity services tailored to reach diverse audiences. We also provide marketing direction targeted to the ideal consumer through a creative public relations and creative brand strategy for hotel and restaurant groups.
• Strategic Communications – We earn fees by advising companies looking to create, raise or reposition their public profiles, primarily in the entertainment industry. We also help studios and filmmakers deal with controversial movies, as well as high-profile individuals address sensitive situations. We believe that growth in the Strategic Communications division will be driven by increasing demand for these varied services by traditional and non-traditional media clients who are expanding their activities in the content production, branding, and consumer products PR sectors.
• Digital Media Influencer Marketing Campaigns – We arrange strategic marketing agreements between brands and social media influencers, for both organic and paid campaigns. We also offer services for social media activations at events. Our services extend beyond our own captive influencer network, and we manage custom campaigns targeting specific demographics and locations, from ideation to delivery of results reports. We expect that our relationship with social media influencers will provide us the ability to offer these services to our existing clients in the entertainment and consumer products industries and will be accretive to our revenue.
• Celebrity Booking and Live Event Programming – We arrange for brands and events to book celebrity and influencer talent. Our services include the creation of the strategy to elevate the brand or event through celebrity and/or influencer inclusion, to the booking of celebrities and influencers for commercial endorsements or appearances, to the curation of event lists and securing attendance, to the coordination and production of live events. We believe the expansion of brands seeking celebrity and/or influencer endorsements, as well as celebrity and/or influencers to attend brand-sponsored live events, will drive growth and revenue for the next several years.

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Content Production (“CPD”)

Project Development and Related Services

We have a team that dedicates a portion of its time to identifying scripts, story treatments and novels for acquisition, development and production. The scripts can be for either digital, television or motion picture productions. We have acquired the rights to certain scripts that we intend to produce and release in the future, subject to obtaining financing. We have not yet determined if these projects would be produced for digital, television or theatrical distribution.

We have completed development of several feature films, which means that we have completed the script and can begin pre-production once financing is obtained. We are planning to fund these projects through third-party financing arrangements, domestic distribution advances, pre-sales, and location-based tax credits, and if necessary, sales of our common stock, securities convertible into our common stock, debt securities or a combination of such financing alternatives; however, there is no assurance that we will be able to obtain the financing necessary to produce any of these feature films.

In June 2022, we entered into an agreement with IMAX Corporation (“IMAX”) to co-produce and co-finance a documentary motion picture on the flight demonstration squadron of the United States Navy called The Blue Angels. IMAX and Dolphin each agreed to fund 50% of the production budget and we paid $2,250,000 related to production costs of The Blue Angels in connection with this agreement. IMAX entered into an acquisition agreement with Amazon Content Services LLC, (the “Amazon Agreement”) for the distribution rights of The Blue Angels and during the nine months ended September 30, 2024, we recorded $3,421,141 of revenue related to the Amazon Agreement. The Blue Angels documentary motion picture was released in theatres on May 17, 2024 and began streaming on Amazon Prime Video on May 23, 2024. We expect to derive additional revenues in 2025 from The Blue Angels documentary from sales in IMAX theatres in museums.

In February 2025, Dolphin Films partnered with Aircraft Productions of Toronto, Canada to produce a re-boot of the popular 1986 MGM hockey movie “Youngblood.” The film premiered at the Toronto Film Festival in September 2025.

Revenues

For the three months ended September 30, 2025 and 2024, we derived a majority of our revenues from our entertainment publicity and marketing segment. During the nine months ended September 30, 2024, we generated income in our content production segment related to The Blue Angels documentary motion picture and during the nine months ended September 30, 2025, we generated income in our content production segment related to sales of our motion picture, Believe, released in 2013.

The table below sets forth the percentage of total revenue derived from our segments for the three and nine months ended September 30, 2025 and 2024:

Expenses

Our expenses consist primarily of:

(1) Direct costs – include certain costs of services, as well as certain production costs, related to our entertainment publicity and marketing business. In the same period of the prior year, direct cost includes the amortization of film production costs related to The Blue Angels, using the individual film-forecast-computation method which amortizes film production costs in the same ratio as the current period actual revenue bears to estimated remaining unrecognized ultimate revenue.

(2) Payroll and benefits expenses – includes wages, stock-based compensation, payroll taxes and employee benefits.

(3) Selling, general and administrative expenses – includes all overhead costs except for payroll, depreciation and amortization and legal and professional fees that are reported as a separate expense item.

(4) Acquisition costs – includes agreed upon payment to the Special Projects sellers during the nine months ended September 30, 2025 and during the three and nine months ended September 30, 2024, the costs were related to the acquisition of Elle.

(5) Impairment of goodwill – includes an impairment charge related to ceasing operations of Viewpoint and triggering event during the third quarter 2024.

(6) Impairment of notes receivables – includes the write-off of the notes receivable from Midnight Theatre.

(7) Depreciation and amortization – includes the depreciation of our property and equipment and amortization of intangible assets and leasehold improvements.

(8) Legal and professional fees – includes fees paid to our attorneys, fees for investor relations consultants, audit and accounting fees and fees for general business consultants.

Other (Expense) Income

For the three months ended September 30, 2025 and 2024, other expense (income) consisted primarily of: (1) changes in fair value of convertible notes; (2) interest income; and (3) interest expense. For the nine months ended September 30, 2025, other expense (income) also included loss of extinguishment of debt. For the nine months ended September 30, 2024, other expense (income) also included the change in fair value of the outstanding warrants.

RESULTS OF OPERATIONS

Three and nine months ended September 30, 2025 as compared to three and nine months ended September 30, 2024

Revenues

For the three and nine months ended September 30, 2025 and 2024 revenues were as follows:

Revenues from entertainment publicity and marketing increased by approximately $2.1 million for the three months ended September 30, 2025, as compared to the same period in the prior year, primarily driven by an increase in revenues attributed to organic growth across substantially all of our subsidiaries. Revenue from entertainment publicity and marketing increased by $5.0 million for the nine months ended September 30, 2025, as compared to the same period in the prior year. The increase for the nine months ended September 30, 2025, is primarily driven by the inclusion of $2.1 million in revenues from Elle and Always Alpha that were not present for the first six months in 2024, increase of approximately $4.3 million in the revenues of Shore Fire, Special Projects, The Digital Dept and The Door, offset by a decrease in revenues of 42West of $0.8 million and a decrease in revenues of Viewpoint that ceased operations during the nine months ended September 30, 2024.

Revenues from content production decreased by approximately $3.3 million during the nine months ended September 30, 2025, compared to the same period in the prior year. The decrease was related to revenue from the Amazon Agreement for The Blue Angels documentary film that was released in 2024.

Expenses

For the three and nine months ended September 30, 2025 and 2024, our expenses were as follows:

Direct costs increased by approximately $0.4 million in the three months ended September 30, 2025 as compared to the three months ended September 30, 2024. The increase of direct costs is attributed to cost incurred of approximately $0.3 million for The Digital Dept. events, and $0.1 million for Special Projects during the three months ended September 30, 2025. Direct costs decreased by approximately $1.1 million for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024. The decrease in direct costs for the nine months ended September 30, 2025 is directly attributable to approximately $1.8 million of capitalized production costs amortized for the production costs of The Blue Angels that was recorded during the nine months ended September 30, 2024. The decrease was offset by an increase of direct costs of approximately $0.7 million for The Digital Dept. events. During the nine months ended September 30, 2025, the Company did not amortize capitalized production costs related to The Blue Angels documentary film.

Payroll and benefits expenses increased by approximately $0.8 million for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, primarily due to an increase in payroll expenses for Always Alpha, Special Projects, The Digital Dept. and The Door to support the increase in revenue of those subsidiaries. Payroll and benefits increased by approximately $2.7 million for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily due to the inclusion of the Elle and Always Alpha payroll expenses of approximately $2.2 million in the nine months ended September 30, 2025.

Selling, general and administrative expenses increased by approximately $0.2 million, for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, due to the $0.1 million increase in bad debt expense, and an increase of $0.1 million in travel expenses. Selling, general and administrative expenses remained consistent for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024.

Acquisition costs for the nine months ended September 30, 2025 were approximately $0.4 million, related to an agreed upon payment to the sellers of Special Projects related to the working capital adjustment. Acquisition costs for the three and nine months ended September 30, 2024 were $0.1 million and $0.2 million, respectively, related to our acquisition of Elle on July 15, 2024.

Impairment of goodwill was approximately $6.5 million and $6.7 million for the three and nine months ended September 30, 2024, respectively. As discussed in Note 3 – Goodwill and Intangibles Assets in the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q, during the three months ended September 30, 2024, we performed a quantitative assessment driven by triggering events related to decline in our stock price in combination with recurring net losses, resulted our market capitalization to less than our book value. We considered this to be a triggering event and therefore performed a quantitative assessment analysis of fair value of goodwill as of August 31, 2024. The quantitative assessment resulted in the impairment of goodwill in the amount of $6.5 million of a few of our reporting units, and $0.2 million impairment of goodwill as a result of the closure of one of our reporting units. Goodwill was not impaired for the three and nine months ended September 30, 2025.

Depreciation and amortization remained consistent for the three and nine months ended September 30, 2025, as compared to the three and nine months ended September 30, 2024.

Legal and professional fees increased by approximately $0.2 million and $0.1 million, respectively, for the three months and nine months ended September 30, 2025, as compared to same period of the prior year. The increase is primarily due to legal fees incurred in connection with ongoing litigation with the seller of Socialyte.

Other Expense (Income), net

Change in fair value of convertible notes – We elected the fair value option for one convertible note issued in 2020. The fair value of this convertible note is remeasured at every balance sheet date and any changes are recorded on our condensed consolidated statements of operations. For the three months ended September 30, 2025, we recorded a loss in the change in fair value of the convertible note issued in 2020 in the amount of $0.05 million and for the nine months ended September 30, 2025, we recorded a gain in change of fair value of the convertible notes issued in 2020 in the amount of $0.02 million. For the three months ended September 30, 2024, we recorded a loss in change in fair value of convertible notes issued in 2020 in the amount of $0.01 million, and for the nine months ended September 30, 2024, we recorded a gain in the change of fair value of the convertible notes issued in 2020 in the amount of $0.06 million. None of the decrease in the value of the convertible note was attributable to instrument specific credit risk and as such, all the gain or loss in the change in fair value was recorded within net loss.

Change in fair value of warrant – The warrant issued with the convertible note payable at fair value issued in 2020 was measured at fair value at the time of issuance and subsequently remeasured at estimated fair value on a recurring basis at each reporting period date, with changes in estimated fair value of the warrant liability recognized as other income or expense. The warrant expired on September 4, 2025. The change in fair value of the 2020 warrant that was not exercised decreased minimally for the nine months ended September 30, 2024. For the three and nine months ended September 30, 2025 and the three months ended September 30, 2024, there was no change in fair value.

Loss on extinguishment of debt – On May 12, 2025, we exchanged three nonconvertible promissory notes held by Dolphin Entertainment LLC, (“DE LLC”) an entity wholly owned by our Chief Executive Officer (“CEO”), Bill O’Dowd, for three convertible promissory notes. We determined that the transaction should be accounted for as an extinguishment of debt and recorded a loss on the extinguishment of debt of $0.8 million for the nine months ended September 30, 2025, for the difference between the carrying value of the nonconvertible notes payable and the fair value of the convertible notes payable on May 12, 2025.

Interest income – The increase of interest income was inconsequential for the three and nine months ended September 30, 2025 as compared to same period of the prior year.

Interest expense – Interest expense increased by approximately $0.1 million and $0.2 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in the prior year. The increases were primarily due to the new convertible and nonconvertible notes entered into during the three and nine months ended September 30, 2025 and the second term loan outstanding during 2025 as compared to the same period in the prior year.

Income Taxes

We recorded an income tax expense of approximately $0.04 million for each of the nine months ended September 30, 2025 and 2024. The income tax expense reflects the accrual of a valuation allowance in connection with the limitations of our indefinite lived tax assets to offset our indefinite lived tax liabilities. To the extent the tax assets are unable to offset the tax liabilities, we have recorded a deferred expense for the tax liability (a “naked credit”).

Net Loss

Net loss was approximately $0.4 million or $(0.03) per share based on 11,770,195 weighted average shares outstanding for both basic loss per share and diluted loss per share for the three months ended September 30, 2025. Net loss was approximately $8.7 million or ($0.80) per share based on 10,930,286 weighted average shares outstanding for both basic loss per share and fully diluted loss per share, for the three months ended September 30, 2024. The change in net loss for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, is related to the factors discussed above.

Net loss was approximately $4.1 million or $(0.36) per share based on 11,370,007 weighted average shares outstanding for both basic loss per share and diluted loss per share, for the nine months ended September 30, 2025. Net loss was approximately $10.6 million or ($1.07) per share based on 9,964,607 weighted average shares outstanding for both basic loss per share and fully diluted loss per share, for the nine months ended September 30, 2024. The change in net loss for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, is related to the factors discussed above.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows

Operating Activities

Cash used in operating activities was approximately $2.6 million for the nine months ended September 30, 2025, a change of approximately $1.6 million from cash used in operating activities of approximately $1.0 million for nine months ended September 30, 2024. The increase in cash used in operating activities was primarily a result of a decrease of approximately $2.7 million in non-cash items such as impairment of goodwill and notes receivable, share-based compensation, amortization of capitalized production costs, and other non-cash losses, which was offset by an increase of approximately $1.1 million net change in working capital.

Investing Activities

Cash flows used in investing activities for the nine months ended September 30, 2025 was inconsequential. Cash flows used in investing activities for the nine months ended September 30, 2024 were $2.5 million, mainly related to the net issuance of $1.3 million of notes receivable to Midnight Theatre, and $1.2 million payment related to the acquisition of Elle, net of cash acquired.

Financing Activities

Cash flows provided by financing activities for the nine months ended September 30, 2025 were approximately $2.2 million, which mainly related to:

Inflows:

• $3.3 million of proceeds from convertible notes payable; and
• $0.8 million of proceeds from nonconvertible notes payable.

Outflows:

• $1.3 million of repayment of existing term loan;
• $0.5 million payment of the contingent consideration related to the Elle acquisition; and
• $0.07 million of repayment of finance leases.

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Cash flows provided by financing activities for the nine months ended September 30, 2024 were approximately $2.5 million, which mainly related to:

Inflows:

• $2.1 million of proceeds from related party loan; and
• $1.2 million of proceeds from the Lincoln Park equity line of credit described below.

Outflows:

• $0.7 million of repayment of existing term loan; and
• $0.06 million of repayment of finance leases.

Debt and Financing Arrangements

Total debt amounted to $25.4 million as of September 30, 2025, compared to $22.4 million as of December 31, 2024, an increase of $3.0 million, primarily related to an increase in convertible and nonconvertible promissory notes, offset by the repayment of the term loan.

Our debt obligations in the next twelve months from September 30, 2025 are approximately $6.0 million. We expect our current cash position, cash expected to be generated from our operations and other availability of funds, as detailed below, to be sufficient to meet our debt requirements.

2025 Lincoln Park Transaction

On August 12, 2025, we entered into a purchase agreement (the “2025 LP Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park” or “Investor”), which provides that, upon the terms and subject to the conditions and limitations set forth therein, we may sell to Lincoln Park up to $15,000,000 of shares (the “Purchase Shares”) of our common stock, par value $0.015 per share (the “Common Stock”) over the thirty-six (36) month term of the 2025 LP Purchase Agreement. Concurrently with entering into the 2025 LP Purchase Agreement, we also entered into a registration rights agreement with Lincoln Park, pursuant to which we agreed to provide Lincoln Park with certain registration rights related to the shares issued under the 2025 LP Purchase Agreement (the “2025 LP Registration Rights Agreement”).

Beginning one business day following the Commencement Date (as defined below) and thereafter, we may direct Lincoln Park, on any business day selected by us (the “Purchase Date”) to purchase up to 20,000 shares of Common Stock if the closing sale price is not below $0.10 (each, a “Regular Purchase”); provided that the share amount under a Regular Purchase may be increased to up to 25,000 shares, up to 50,000 shares, up to 75,000 or up to 100,000 shares if the closing sale price of the Common Stock is not below $1.50, $1.75, $2.00 or $2.50, respectively, on the business day on which we initiate the Regular Purchase. However, Lincoln Park’s maximum commitment in any single Regular Purchase may not exceed $500,000. Each Regular Purchase is subject to adjustment for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction as provided in the 2025 LP Purchase Agreement. The purchase price for Regular Purchases (the “Purchase Price”) shall be equal to 97% of the lesser of: (i) the lowest sale price of our Common Stock during the Purchase Date, or (ii) the average of the three (3) lowest closing sale prices of the Common Stock during the ten (10) business days prior to the Purchase Date. We shall have the right to submit a Regular Purchase notice to the Investor as often as every business day. A Regular Purchase notice is delivered to the Investor after the market has closed (i.e. after 4:00 P.M. Eastern Time) so that the Purchase Price is always fixed and known at the time we elect to sell shares to Lincoln Park.

In addition to Regular Purchases and provided that we have directed a Regular Purchase in full, we, in our sole discretion, may require Lincoln Park on each Purchase Date to purchase on the following business day (“Accelerated Purchase Date”) up to the lesser of (i) three (3) times the number of shares purchased pursuant to such Regular Purchase or (ii) 30% of the trading volume on the Accelerated Purchase Date (the “Accelerated Purchase”) at a purchase price equal to the lesser of 97% of (i) the closing sale price on the Accelerated Purchase Date, or (ii) the Accelerated Purchase Date’s volume weighted average price (the “Accelerated Purchase Price”). We shall have the right, in our sole discretion, to set a minimum price threshold for each Accelerated Purchase in the notice provided with respect to such Accelerated Purchase and we may direct multiple Accelerated Purchases in a day provided that delivery of shares has been completed with respect to any prior Regular and Accelerated Purchases that Lincoln Park has purchased.

We may also direct Lincoln Park, on any business day on which an Accelerated Purchase has been completed and all of the shares to be purchased thereunder have been properly delivered to Lincoln Park in accordance with the 2025 LP Purchase Agreement, to make additional purchases upon the same terms as an Accelerated Purchase, (an “Additional Accelerated Purchase”).

The purchase price of Regular Purchases, Accelerated Purchases and Additional Accelerated Purchases and the minimum closing sale price for a Regular Purchase will be adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction occurring during the business days used to compute the purchase price. The aggregate number of shares that we can sell to Lincoln Park under the 2025 LP Purchase Agreement may in no case exceed 2,346,371 shares (subject to adjustment as described above) of the Common Stock (which is equal to approximately 19.99% of the shares of the Common Stock outstanding immediately prior to the execution of the 2025 LP Purchase Agreement) (the “Exchange Cap”), unless (i) shareholder approval is obtained to issue shares above the Exchange Cap, in which the Exchange Cap will no longer apply, or (ii) the average price of all applicable sales of Common Stock to Lincoln Park under the 2025 LP Purchase Agreement equals or exceeds $1.12 per share (subject to adjustment as described above) (which represents the lower of (A) the official closing price of the Common Stock on Nasdaq immediately preceding the signing of the 2025 LP Purchase Agreement and (B) the average official closing price of the Common Stock on Nasdaq for the five consecutive trading days ending on the trading day immediately preceding the date of the 2025 LP Purchase Agreement); provided that at no time may Lincoln Park (together with its affiliates) beneficially own more than 4.99% of our issued and outstanding Common Stock.

On August 13, 2025 we issued 244,698 shares of Common Stock to Lincoln Park as an initial fee for its commitment to Purchase Shares of our Common Stock under the 2025 LP Purchase Agreement (the “Initial Commitment Shares”). We may issue up to 122,349 additional shares of Common Stock pro-rata in connection with the sale of Purchase Shares (the “Additional Commitment Shares, and together with the Initial Commitment Shares, the “Commitment Shares”). In connection with the 2025 LP Purchase Agreement, we incurred and capitalized $281,403 of equity issuance costs recorded in other current assets on our condensed consolidated balance sheet.

The 2025 LP Purchase Agreement contains customary representations, warranties, covenants, closing conditions, indemnification and termination provisions. Sales under the 2025 LP Purchase Agreement may commence only after certain conditions have been satisfied (the date on which all requisite conditions have been satisfied, the “Commencement Date”), which conditions include the filing of the Registration Statement (as defined below) covering the shares of Common Stock issued or sold by us to Lincoln Park under the 2025 LP Purchase Agreement.

The 2025 LP Purchase Agreement may be terminated by us at any time after the Commencement Date, at our sole discretion, without any cost or penalty, by giving one business day notice to Lincoln Park to terminate the 2025 LP Purchase Agreement. Lincoln Park has covenanted not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of the Common Stock. Although we have agreed to reimburse Lincoln Park for a limited portion of the fees it incurred in connection with the 2025 LP Purchase Agreement, we did not pay any additional amounts to reimburse or otherwise compensate Lincoln Park in connection with the transaction, other than the issuance of the Commitment Shares.

There are no limitations on the use of proceeds, financial or business covenants, restrictions on future financings (other than restrictions on the our ability to enter into a similar type of agreement involving a “variable rate transaction,” as such term is defined the 2025 LP Purchase Agreement, excluding an “at-the-market transaction,” through the 36-month anniversary of the date of the 2025 LP Purchase Agreement), rights of first refusal, participation rights, penalties or liquidated damages in the 2025 LP Purchase Agreement. We may deliver purchase notices under the 2025 LP Purchase Agreement, subject to market conditions, and in light of our capital needs, from time to time and under the limitations contained in the 2025 LP Purchase Agreement. Any proceeds that we receive under the 2025 LP Purchase Agreement are expected to be used for working capital and general corporate purposes.

On October 3, 2025 we filed a new registration statement on Form S-1 (the “Registration Statement” with the Securities Exchange Commission (the “SEC”) covering the resale of Common Stock in accordance with the terms of the 2025 LP Registration Rights Agreement.

2022 Lincoln Park Transaction

On August 10, 2022, we entered into a purchase agreement (the “LP 2022 Purchase Agreement”) and a registration rights agreement (the “LP 2022 Registration Rights Agreement”) with Lincoln Park, pursuant to which we could sell and issue to Lincoln Park, and Lincoln Park was obligated to purchase, up to $25,000,000 in value of shares of our common stock from time to time over a 36-month period.

During the three and nine months ended September 30, 2025, we did not sell shares of common stock under the LP 2022 Purchase Agreement. During the three months ended September 30, 2024, the Company did not sell shares of common stock. During the nine months ended September 30, 2024, the Company sold 475,000 shares of its common stock, at prices ranging between $2.14 and $3.06 and received proceeds of $1,185,300. The LP 2022 Purchase Agreement expired on September 20, 2025.

Convertible Notes Payable

As of September 30, 2025, we had thirty-one convertible notes payable outstanding. The convertible notes payable bear interest at a rate of 10% per annum, with maturity dates ranging between the first anniversary and the sixth anniversary of their respective issuances.

In two tranches, on July 7, 2025 and July 23, 2025, a holder of a convertible note payable that had been issued in 2022 with a principal balance of $500,000 converted the convertible note payable into an aggregate of 463,861 shares of our common stock. On July 23, 2025, another holder of a convertible note payable issued on January 16, 2025 with a principal balance of $100,000 converted the convertible note payable into 91,744 shares of our common stock.

The balance of each convertible notes payable and any accrued interest may be converted at the noteholder’s option at any time at the following conversion prices:

On October 30, 2025, we issued a convertible promissory note and received proceeds of $100,000. The convertible promissory note matures October 30, 2028, bears interest at a rate of 10% per annum and is convertible at $1.67 per share of common stock

We recorded interest expense related to these convertible notes payable of $179,028 and $127,500 during the three months ended September 30, 2025 and 2024, respectively, and $480,279 and $382,750, respectively, during the nine months ended September 30, 2025 and 2024. In addition, we made cash interest payments amounting to $457,612 and $382,750, respectively, during the three months ended September 30, 2025 and 2024, related to the convertible notes payable.

As of September 30, 2025 and December 31, 2024, the principal balance of the convertible notes payable of $7.3 million and $5.1 million was recorded in noncurrent liabilities under the caption “Convertible notes payable” and $0.5 million was recorded in current liabilities under the same caption as of September 30, 2025 and December 31, 2024 on our condensed consolidated balance sheets.

Convertible Note Payable at Fair Value

We had one convertible promissory note outstanding with aggregate principal amount of $500,000 as of September 30, 2025 for which we elected the fair value option. As such, the estimated fair value of the note was recorded on its issue date. At each balance sheet date, we record the fair value of the convertible promissory note with any changes in the fair value recorded in the condensed consolidated statements of operations.

We had a balance of $300,000 and $320,000 in noncurrent liabilities as of September 30, 2025, and December 31, 2024, respectively, on our condensed consolidated balance sheets related to the convertible promissory note payable measured at fair value.

We recorded a loss in fair value of $50,000 and $10,000 for the three months ended September 30, 2025 and 2024, respectively, and a gain of $20,000 and $55,000 for the nine months ended September 30, 2025 and 2024 on our condensed consolidated statements of operations related to this convertible promissory note payable at fair value.

We recorded interest expense related to this convertible note payable at fair value of $9,863 for each of the three months ended September 30, 2025 and 2024, and $29,589 for both the nine months ended September 30, 2025 and 2024. In addition, we made cash interest payments amounting to $29,589 for both the nine months ended September 30, 2025 and 2024, related to the convertible promissory note at fair value.

Nonconvertible Promissory Notes

During the nine months ended September 30, 2025, we issued three unsecured nonconvertible promissory notes and received proceeds of $800,000. As of September 30, 2025, we had eight outstanding unsecured nonconvertible promissory notes in the aggregate amount of $4,680,000, which bear interest at a rate of 10% per annum and mature between November 2025 and August 2030.

As of September 30, 2025 and December 31, 2024, we had a balance of $350,000 and $750,000, respectively, recorded as current liabilities and $4,330,000 and $3,130,000, respectively, in noncurrent liabilities on our condensed consolidated balance sheets related to these unsecured nonconvertible promissory notes.

We recorded interest expense related to these nonconvertible promissory notes of $112,625 and $97,000 for the three months ended September 30, 2025 and 2024, respectively, and $316,375 and $291,000 for the nine months ended September 30, 2025 and 2024, respectively. We made interest payments of $309,917 and $291,000 during the nine months ended September 30, 2025 and 2024, respectively, related to the unsecured nonconvertible promissory notes.

On October 13, 2025, we issued a nonconvertible promissory note and received proceeds of $200,000. The nonconvertible promissory note bears interest at 10% per annum and matures on October 13, 2030.

Nonconvertible Unsecured Promissory Note - Socialyte Promissory Note

In connection with the purchase agreement for the acquisition of Socialyte (“Socialyte Purchase Agreement”), we entered into a promissory note with the seller of Socialyte (“the Socialyte Promissory Note”) amounting to $3,000,000. The Socialyte Promissory Note matured on September 30, 2023 and was payable in two payments: $1,500,000 on June 30, 2023 and $1,500,000 on September 30, 2023. The Socialyte Promissory Note carries an interest of 4% per annum, which accrues monthly, and all accrued interest was to be due and payable on September 30, 2023.

The Socialyte Purchase Agreement allows us to offset a working capital deficit against the Socialyte Promissory Note. As such, we deferred these installment payments until the final post-closing working capital adjustment is agreed upon with the seller of Socialyte. We filed a lawsuit against the seller of Socialyte and certain of its principals related to the Socialyte Purchase Agreement. See Note 14 to these unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

We recorded interest expense related to this Socialyte Promissory Note of $30,000 for the three months ended September 30, 2025 and 2024, and $90,000 for the nine months ended September 30, 2025 and 2024. No interest payments were made during the nine months ended September 30, 2025 and 2024, related to the Socialyte Promissory Note.

Promissory Notes from Related Parties

Dolphin Entertainment, LLC Notes

We issued DE LLC, a nonconvertible promissory note with a principal balance of $1,107,873 which matures on December 31, 2026. On April 29, 2024 and June 10, 2024, we issued two nonconvertible promissory notes to DE LLC in the amounts of $1,000,000 and $135,000, respectively, which mature on April 29, 2029 and June 10, 2029, respectively, (collectively, “the DE LLC Notes”). The DE LLC Notes each bear interest at a rate of 10% per annum.

On May 12, 2025, we entered into an exchange agreement (the “Exchange Agreement”) with DE LLC, pursuant to which, we and DE LLC agreed to exchange the three nonconvertible promissory notes in the aggregate principal amount of $2,242,873 currently held by DE LLC for three convertible promissory notes (the “DE New Notes”) in the same principal amounts. As consideration for the exchange, we and DE LLC agreed to extend the maturity dates on each of the notes by six months. One note, with a principal balance of $1,107,873 now matures on June 30, 2027, one note with a principal balance of $1,000,000 now matures on October 29, 2029 and one note with a principal balance of $135,000, now matures on December 10, 2029. The DE New Notes continue to bear interest at a rate of 10% per annum. DE LLC may convert the principal balance of the DE New Notes and any accrued interest thereon at any time before the maturity date of the DE New Notes into our common stock. The conversion price of each of the DE New Notes is $1.00 per share. We accounted for this exchange as an extinguishment of debt and recorded the difference between the carrying value of DE LLC Notes and the fair value of the DE New Notes of $0.8 million as a loss from extinguishment of debt in our condensed consolidated statement of operations for the nine months ended September 30, 2025.

As of September 30, 2025 we had an aggregate principal balance of $3,062,823 related to the DE New Notes under the caption convertible note payable – related party in our condensed consolidated balance sheets. As of December 31, 2024, we had an aggregate balance of $2,242,873 related to DE LLC notes under the caption with loans from related party. During the nine months ended September 30, 2025, we did not repay any principal balance or make interest payments on the DE LLC Notes. During the nine months ended September 30, 2024, we made cash interest payments in the amount of $200,000 related to the DE LLC Notes.

We recorded interest expense of $56,553 and $56,597 for the three months ended September 30, 2025 and 2024, respectively, and $167,755 and $129,812 for the nine months ended September 30, 2025 and 2024, respectively, related to the DE LLC Notes. As of September 30, 2025 and December 31, 2024, we had a balance in accrued interest – related parties of $431,522 and $263,767, respectively, on our condensed consolidated balance sheets related to the DE LLC Notes.

Mock Notes

During 2024, we issued three nonconvertible promissory notes to Mr. Donald Scott Mock, the brother of Mr. O’Dowd, in the amount of $900,000, $75,000 and $8,112, respectively, and received proceeds of $983,112 (the “Mock Notes”). The Mock Notes bear interest at a rate of 10% per annum and mature on January 16, 2029, May 28, 2029 and December 30, 2029, respectively.

As of both September 30, 2025 and December 31, 2024, we had a principal balance of $983,112 related to the Mock Notes under the caption loans from related party in our condensed consolidated balance sheets. For the nine months ended September 30, 2025 and 2024, we did not repay any principal balance or make interest payments on the Mock Notes.

We recorded interest expense of $24,578 and $24,375 for the three months ended September 30, 2025 and 2024, respectively, and $73,733 and $66,041 for the nine months ended September 30, 2025 and 2024, respectively, related to the DE New Notes and Mock Notes. As of September 30, 2025 and December 31, 2024, we had a balance in accrued interest – related parties of $164,150 and $90,417, respectively, on our condensed consolidated balance sheets related to the Mock Notes.

BankUnited Loan Agreement

On September 29, 2023, we entered into a loan agreement with BankUnited (“BankUnited Loan Agreement”) in which an existing term loan with BankProv was repaid (the “Refinancing Transaction”). The BankUnited Loan Agreement includes: (i) $5,800,000 secured term loan (“First BKU Term Loan”), (ii) and $750,000 of a secured revolving line of credit (“BKU Line of Credit”) and (iii) $400,000 Commercial Card (“BKU Commercial Card”). The First BKU Term Loan carries a 1.0% origination fee and matures in September 2028, the BKU Line of Credit carries an initial origination fee of 0.5% and a 0.25% fee on each annual anniversary and matures in September 2026; the BKU Commercial Card does not have any initial or annual fee and matures in September 2026. The BKU Term Loan has a declining prepayment penalty equal to 5% in year one, 4% in year two, 3% in year three, 2% in year four and 1% in year five of the outstanding balance. The BKU Line of Credit and BKU Commercial Card can be repaid without any prepayment penalty.

On December 6, 2024, we entered into a second Bank United Loan Agreement (“Second BKU Term Loan”) for $2.0 million to finance the acquisition of Elle. The Second BKU Term Loan carries a 1.0% origination fee and matures in December 2027. Similar to the First BKU Term Loan, the Second BKU Term Loan has a declining prepayment penalty equal to 3% in year one, 2% in year two and 1% in year three of the outstanding balance. (The First BKU Term Loan, Second BKU Term Loan, BKU Line of Credit and BKU Commercial Card are collectively referred to as the “Bank United Credit Facility”).

Interest accrues at 8.10% fixed rate per annum on the First BKU Term Loan and 7.10% fixed rate per annum on the Second BKU Term Loan. Principal and interest are payable on a monthly basis based on a 5-year amortization for the First BKU Term Loan and 3-year amortization for the Second BKU Term Loan. Interest on the BKU Line of credit is payable on a monthly basis, with all principal due at maturity. The BKU Commercial Card payment is due in full at the end of each bi-weekly billing cycle. During the nine months ended September 30, 2025 and the year ended December 31, 2024, we did not use the BKU Commercial Card. During each of the three months ended September 30, 2025 and 2024, we made payments in the amount of $354,621, inclusive of $81,596 and $103,279, respectively, of interest related to the First BKU Term Loan. During each of the nine months ended September 30, 2025 and 2024, we made payments in the amount of $1,063,862, inclusive of $259,515 and $324,015, respectively, related to the First BKU Term Loan. During the three and nine months ended September 30, 2025, we made payments in amount of $185,995 and $557,986, inclusive of $30,115 and $98,052, respectively, of interest related to the Second BKU Term Loan. During the three and nine months ended September 30, 2024, there were no payments made in connection with the Second BKU Term Loan.

Interest on the BKU Line of Credit is variable based on the Lender’s Prime Rate. During the three months ended September 30, 2025 and 2024, we recorded interest expense and made payments of $5,000 and $9,161, respectively, and $20,217 and $26,444 for the nine months ended September 30, 2025 and 2024, respectively, related to the BKU Line of Credit.

As of September 30, 2025, we had a balance of $1,778,083 classified as current liabilities and $3,446,960 classified as noncurrent liabilities, net of $75,724 of debt issuance costs, in our condensed consolidated balance sheet related to the First BKU Term Loan and the Second BKU Term Loan. As of December 31, 2024, we had a balance of $1,686,018 classified as current liabilities and $4,782,271 classified as noncurrent liabilities, net of $96,759 of debt issuance costs, in our condensed consolidated balance sheet related to the First BKU Term Loan and the Second BKU Term Loan. During the nine months ended September 30, 2025, we repaid $400,000 of the BKU Line of Credit for a period of 30-days in compliance with the covenants of the BKU Line of Credit. Once the 30-day period was done on July 11, 2025, the Company drew $400,000 on the BKU Line of Credit. As of September 30, 2025 and December 31, 2024, we had a balance of $400,000 of principal outstanding under the BKU Line of Credit.

Amortization of debt origination costs under the Bank United Credit Facility is included as a component of interest expense in the condensed consolidated statements of operations and amounted to approximately $7,012 and $4,206 for the three months ended September 30, 2025 and 2024, respectively, and $21,035 and $12,617 for the nine months ended September 30, 2025 and 2024, respectively.

The BankUnited Credit Facility contains financial covenants tested semi-annually, on June 30th and December 31st, on a trailing twelve-month basis that require us to maintain a minimum debt service coverage ratio of 1.25:1.00 and a maximum funded debt/EBITDA ratio of 3.00:1.00. In addition, the BankUnited Credit Facility contains a liquidity covenant that requires us to hold a cash balance at BankUnited with a daily minimum deposit balance of $2,000,000. As of September 30, 2025, we believe that we are in compliance with all of the debt covenants.

Critical Accounting Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions about future events that affect amounts reported in our consolidated financial statements and related notes, as well as the related disclosure of contingent assets and liabilities at the date of the financial statements. Management evaluates its accounting policies, estimates and judgments on an on-going basis. Management bases its estimates and judgments on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions and conditions. Our significant accounting policies are discussed in Note 2 to our Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2024.

An accounting policy is considered to be critical if it requires an accounting estimate to be made based on assumptions about matters that are highly uncertain at the time the estimate is made, and if different estimates that reasonably could have been used, or changes in the accounting estimate that are reasonably likely to occur, could materially impact the consolidated financial statements.

We consider the fair value estimates, including those related to acquisitions, valuations of goodwill, intangible assets, acquisition-related contingent consideration and convertible debt to be the most critical in the preparation of our consolidated financial statements as they are important to the portrayal of our financial condition and require significant or complex judgment and estimates on the part of management.

Recent Accounting Pronouncements

For a discussion of recent accounting pronouncements, see Note 1 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may include, but are not limited to, statements relating to our objectives, plans and strategies, as well as statements, other than historical facts, that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future. These statements are often characterized by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” ”intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” “goal” or “continue” or the negative of these terms or other similar expressions.

Forward-looking statements are based on assumptions and assessments made in light of our experience and perception of historical trends, current conditions, expected and future developments and other factors believed to be appropriate. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of our control. You should not place undue reliance on these forward-looking statements, which reflect our views only as of the date of this Quarterly Report on Form 10-Q, and we undertake no obligation to update these forward-looking statements in the future, except as required by applicable law.

Risks that could cause actual results to differ materially from those indicated by the forward-looking statements include those described as “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Between August 29, 2025 and November 12, 2025, the Company entered into two subscription agreements (the “Subscription Agreements”) with investors for two convertible promissory notes (each a “Note”) each in the aggregate principal amount of $100,000 and received cash proceeds of $200,000. The Notes bear interest at a rate of 10% per annum. The noteholders may convert the principal balance of the Notes and any accrued interest thereon at any time before the maturity date of the Notes into common stock of the Company (“Common Stock”). One of the Notes matures three years from its issuance date and is convertible at $1.67 per share of Common Stock. The other Note matures five years from its issuance date and is convertible at $1.28 per share of Common Stock. The conversion prices for these Notes were either above or the closing price of the Common Stock on the Nasdaq Stock Market on the respective dates of those Notes.

The foregoing description of the terms of the Subscription Agreements, the Notes, and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the form of Subscription Agreement and the form of Note, which are included as Exhibits 4.1 and 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 13, 2023 and are incorporated herein by reference.

The issuance and sale of the Notes, and any shares of common stock to be issued upon conversion thereof will be issued, by the Company in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act.

Management’s Report on the Effectiveness of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer, to allow timely decisions regarding required disclosure.

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of September 30, 2025. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective due to material weaknesses disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 27, 2025, as amended, which have not been remediated as of the date of the filing of this report.

Remediation of Material Weaknesses in Internal Control over Financial Reporting

We have begun the process of designing and implementing effective internal controls measures to improve our internal control over financial reporting and remediate the material weaknesses. Our internal control remediation efforts include the following:

• Developing formal policies and procedures over the Company’s fraud risk assessment and risk management function;
• Developing policies and procedures to enhance the precision of management review of financial statement information and control impact of changes in the external environment;
• Entering into an agreement with a third-party consultant that assists us in analyzing complex transactions and the appropriate accounting treatment;
• Enhancing our policies, procedures and documentation of period end closing procedures;
• Implementing policies and procedures to enhance independent review and documentation of journal entries, including segregation of duties; and
• Reevaluating our monitoring activities for relevant controls.

Management is beginning the process of implementing and monitoring the effectiveness of these and other processes, procedures and controls and will make any further changes deemed appropriate. Management believes our planned remedial efforts will effectively remediate the identified material weaknesses. As we continue to evaluate and work to improve our internal control over financial reporting, management may determine it is necessary to take additional measures to address control deficiencies or determine it necessary to modify the remediation plan described above.

Changes in Internal Control over Financial Reporting

During the most recently completed fiscal quarter, there have been no changes in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting for the fiscal quarter covered by this report.