What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-03-10 compared with 2024-04-01 · 191 added, 287 removed, 227 unchanged (68% of the section changed)

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Bright Mountain Media, Inc.

(together with its wholly-owned subsidiaries, the “Company,” “Bright Mountain” or “we”) has an end-to-end digital media and advertising services platform that efficiently connects brands with targeted consumer demographics.

We focus on digital publishing, advertising technology, consumer insights, creative and media services.

is an end-to-end marketing services company that helps brands with the right audiences, at the right time, with the right message, both effectively and efficiently by removing the middlemen in the marketing workflow.

Our end-to-end offerings combine consumer insights with creative services, media services, and advertising technology to deliver solutions to improve audience fidelity for brands.

We focus on digital publishing, advertising technology, consumer insights, creative services, and media services.

Digital Publishing

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Consumer Insights

Our consumer insights division focuses on providing primary and secondary research, competitive intelligence, and expert insight to address customers' strategic issues.

Our consumer insights division focuses on providing primary and secondary research and competitive intelligence to address customers' strategic issues.

We provide cutting-edge and dynamic research, offering clients a comprehensive perspective on their consumers.

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Our aim is to empower clients to access the most sought-after advertising spaces across diverse platforms tailored to their specific needs and preferences.

Our data-driven approach ensures that ad placements are not only well-targeted, but also continuously optimized for maximum efficiency and ROI.

Our commitment to combining premium inventory access with data-driven programmatic campaign optimization makes us an indispensable partner in the success of our clients' advertising and marketing endeavors.

Our data-driven approach aims to ensure that ad placements are not only well-targeted, but also continuously optimized for maximum efficiency and ROI.

Our commitment to combining premium inventory access with data-driven programmatic campaign optimization makes us a valuable partner in the success of our clients' advertising and marketing endeavors.

The Company generates revenue through:

• the selling of advertisements placed on our owned and managed sites and on partner websites where we earn a share of the revenue;

• facilitating the seamless, real-time exchange of advertisements on a large scale, bridging networks of buyers (referred to as "DSPs") and networks of sellers (referred to as "SSPs");

• fees for facilitating the seamless, real-time exchange of advertisements on a large scale, bridging networks of buyers (referred to as "DSPs") and networks of sellers (referred to as "SSPs");

• serving advertisers through providing access to premium resources and leveraging data to optimize programmatic campaigns, where revenue is derived from the planning and execution of creative and media marketing campaigns;

• providing primary and secondary research, competitive intelligence, and expert insights to address customers' strategic issues, where revenue is primarily derived from providing a single integrated service for such research;

• provision of creative and media services to advertisers.

Recent Developments

On April 20, 2023, the Company completed the acquisition of two business units of Big Village (Big Village Insights, Inc.

and Big Village Agency LLC (together, referred to as the "Big Village Entities")), for approximately $20.0 million, plus assumed liabilities, in an all-cash transaction funded by the Centre Lane Senior Secured Credit Facility (the "Big Village Acquisition").

As part of the Big Village Acquisition, the Company formed BV Insights, LLC ("Insights") and Big Village Agency, LLC ("Agency"), to own the assets acquired in the transaction.

In addition, letters of employment were extended to certain legacy employees of the Big Village Entities, resulting in the employment of an additional 203 employees on April 20, 2023.

Other Developments

During 2022, the Company began scaling down its operations of Slutzky & Winshman Ltd, a digital media company located in Israel that was acquired in August 2019.

This decision was made after a consistent decline in revenue.

In 2023, we terminated operations in Israel and all employees were terminated.

Also in 2023, we terminated the operation of News Distribution Network, Inc., a newspaper technology company, which we also acquired in 2019, and subsequently rebranded this service as Mediahouse, also as a result of a declining revenue stream.

There were no specific costs associated with these exits.

At December 31, 2023, these two entities have not yet been dissolved.

Key Factor Affecting Our Performance

Also in 2023, we terminated the operation of News Distribution Network, Inc., a newspaper technology company, which we also acquired in 2019, and subsequently rebranded this service as Mediahouse.

During 2024, we terminated the operation of Wild Sky Media Co Ltd., located in Thailand, and all employees were terminated.

At December 31, 2024, these three entities have not yet been dissolved.

During 2024, the Company's consumer insights division maintained a business line which connected clients to individuals with expertise across a multitude of disciplines for consulting on particular projects for those clients.

In March of 2024, the consumer insights division stopped offering those expert broker services and sold the assets related to its expert broker business to a third party.

In June of 2024, W.

Kip Speyer retired from his position as Chairman of the Board, and Harry Schulman resigned from his position as a member of the Board.

In August of 2024, the Board of Directors of the Company appointed Ms.

Elaine Riddell, Mr.

Pergola, and Mr.

Triscari as directors of the Company, effective August 8, 2024.

On November 27, 2024, a judgment was entered against the Company granting damages of $1.7 million in connection with the Ladenburg litigation described in Item 3.

On December 26, 2024, the Company and its subsidiaries entered into the Twenty-First Amendment to the Credit Agreement for the purpose of securing a bond to stay execution of the judgment.

The Company obtained the bond and a stay of execution of the judgment was granted on February 3, 2025.

The Company currently plans to appeal the judgment.

Key Factors Affecting Our Performance

Seasonal Fluctuations .

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Limited Number of Customers .

During the years ended December 31, 2023, and 2022, two and one customer(s) represented 23.0% and 37.7% of revenue, respectively.

For the year ended December 31, 2024, one customer represented 12.2% of our revenue, and for the year ended December 31, 2023, two customers represented 13.0% and 10.0% of our revenue, respectively.

The loss of either of these customers could have a material adverse impact on our results of operations in future periods.

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The following are the key financial and operational metrics for the years ended December 31, 2024, and 2023:

December 31, 2024

December 31, 2023

(in thousands)

Revenue $ 44,546 $ 19,580

Cost of revenue

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Impairment of goodwill and intangibles

Financing income (expense)

(8,752) (3,057)

Net loss from operations

$ (35,564) $ (8,125)

Adjusted EBITDA (1)

$ (3,932) $ (2,463)

Financing and other expense, net

Adjusted EBITDA (loss) (1)

(1) For a reconciliation of net loss to Adjusted EBITDA see “Use of Non-GAAP Financial Measures” below.

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• the selling of advertisements placed on our owned and managed sites and on partner websites where we earn a share of the revenue;

• facilitating the seamless, real-time exchange of advertisements on a large scale, bridging networks of buyers (referred to as "DSPs") and networks of sellers (referred to as "SSPs");

• fees for facilitating the seamless, real-time exchange of advertisements on a large scale, bridging networks of buyers (referred to as "DSPs") and networks of sellers (referred to as "SSPs");

• provision of creative and media services to advertisers.

Revenue increased approximately $12.1 million, or 27%, for the year ended December 31, 2024 when compared to the same period in 2023.

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and (v) facility costs.

General and administrative expenses increased approximately $8.4 million, or 59%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.

General and administrative expenses decreased approximately $1.1 million, or 5%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.

See below for a detailed analysis of general and administrative expenses for the years ended December 31, 2024 and 2023.

Impairment of goodwill and intangibles

Impairment of goodwill and intangibles increased approximately $17.1 million, or 100%, for the for the year ended December 31, 2023 compared to 2022.

Impairment of goodwill and intangibles decreased approximately $17.1 million, or 100%, for the for the year ended December 31, 2024 compared to 2023.

Results of Operations

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The following is our analysis for the period.

Year Ended December 31,

($ in thousands) 2023 2022 Change % Change

Revenue $ 44,546 $ 19,580 $ 24,966 128 % increased

Cost of revenue 31,766 10,493 21,273 203 % increased

Gross margin 12,780 9,087 3,693 41 % increased

General and administrative expense 22,522 14,155 8,367 59 % increased

December 31, 2024

December 31, 2023

(in thousands)

Cost of revenue

General and administrative expenses

Impairment of goodwill and intangibles

17,070 — 17,070 100 % increased

Loss from operations

(26,812) (5,068) (21,744) 429 % increased

Financing income (expense) (8,752) (3,057) (5,695) 186 % increased

Net loss from operations

$ (35,564) $ (8,125) $ (27,439) 338 % increased

Gross margin % 29 % 46 % (18) % (38) % decreased

Our revenue showed an overall increase of $25.0 million, or 128%, for the year ended December 31, 2023, compared to the same period in 2022, which was driven by $31.0 million in revenue as a result of the Big Village Acquisition, and was partially offset by macroeconomic factors, coupled with an overall reduction in spending by some customers due to inflationary concerns, which led to lower than normal rates and lower earnings.

The macroeconomic impacts significantly reduced direct sales by digital publishing customers as well as traffic on our website, which resulted in lower revenue in

these divisions.

In addition, some vendors have changed their platforms to favor short video and other "creator" content over news and media type content during 2023.

These changes reduced visitors to our site and revenue in general.

The Company focuses on digital publishing, advertising technology, consumer insights, creative and media services.

Revenue generated by each division is set forth below:

Financing and other expense, net

Gross margin percentage

Our revenue increased by $12.1 million, or 27%, for the year ended December 31, 2024, compared to the same period in 2023.

For the year ended December 31, 2024, revenue includes $36.5 million, which represents the impact of the Big Village Acquisition, completed in April 2023.

This compares to $31.0 million for the same period in 2023.

The Company focuses on digital publishing, advertising technology, consumer insights, creative services, and media services.

Changes in revenue generated by each such division are set forth below:

December 31, 2024

December 31, 2023

(in thousands)

Year Ended December 31,

2023 2022 Change % Change

Digital publishing $ 4,130 $ 8,032 $ (3,902) (49) % decreased

Advertising technology 9,463 11,548 (2,085) (18) % decreased

Consumer insights 23,868 — 23,868 100 % increased

Creative services 5,130 — 5,130 100 % increased

Media services 1,955 — 1,955 100 % increased

$ 44,546 $ 19,580 $ 24,966 128 %

Digital publishing

Digital publishing revenue decreased by $3.9 million, or 49%, for the year ended December 31, 2023 compared to the same period for 2022.

Advertising technology

Consumer insights

Creative services

Media services

Digital Publishing

Digital publishing revenue decreased by $2.4 million, or 58%, for the year ended December 31, 2024 compared to the same period of 2023.

Approximately $1.7 million, or 3%, of the Company’s revenue for the year ended December 31, 2024 was generated from our digital publishing customers compared to $4.1 million, or 9%, for the same period in 2023.

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Advertising Technology

Advertising technology revenue decreased by $2.1 million, or 18%, for the year ended December 31, 2023 compared to the same period for 2022.

Advertising technology revenue increased by $9.0 million, or 95%, for the year ended December 31, 2024 compared to the same period of 2023.

Approximately $18.4 million, or 33%, of the Company’s revenue for the year ended December 31, 2024 was generated from our advertising technology customers compared to $9.5 million, or 21%, for the same period in 2023.

During the year ended December 31, 2023, approximately 100.0% of advertising technology revenue was generated in the U.S.

and 0% was generated from our business in Israel, compared to 90% and 10% in the U.S.

and Israel, respectively, for the same period in 2022.

During the latter part of 2022, the Company started scaling down its operations in Israel and focused more on its U.S.

market in advertising technology to capitalize on more attractive revenue streams.

The loss of revenue in Israel is a contributor to lower than expected growth in revenue in this category during 2023.

The Company subsequently closed operations in Israel in 2023.

This growth was driven by our ability to leverage our resources to attract top advertisers, which in turn has allowed us to onboard premium publishers.

This led to an increase in volume, as well as rates and overall revenue.

Consumer Insights

Consumer insights revenue, which is a new offering we acquired with the Big Village Acquisition, increased by $23.9 million, or 100%, for the year ended December 31, 2023 compared to the same period in 2022 and represented approximately 54% of the Company’s revenue for the year ended December 31, 2023.

Consumer insights revenue increased by $3.2 million, or 13%, for the year ended December 31, 2024 compared to the same period in 2023 and represented approximately 48% of the Company’s revenue for the year ended December 31, 2024.

As discussed above, the Big Village Acquisition was completed in April 2023, and is the main driver of the increase in consumer insights revenue for the year ended December 31, 2024.

Creative Services

Creative services revenue, which we also acquired as part of the Big Village Acquisition, increased by $5.1 million, or 100%, for the year ended December 31, 2023 compared to the same period in 2022, and represented approximately 12% of the Company’s revenue for the year ended December 31, 2023.

Creative services revenue increased by $1.9 million, or 38%, for the year ended December 31, 2024 compared to the same period in 2023, and represented approximately 13% of the Company’s revenue for the year ended December 31, 2024.

As discussed above, the Big Village Acquisition was completed in April 2023, and is the main driver of the increase in creative services revenue for the year ended December 31, 2024.

Media Services

Media services revenue, which we also acquired as part of the Big Village Acquisition, increased by $2.0 million, or 100%, for the year ended December 31, 2023 compared to the same period in 2022, and represented approximately 4% of the Company’s revenue for the year ended December 31, 2023.

Media services revenue increased by $467,000, or 24%, for the year ended December 31, 2024 compared to the same period in 2023, and represented approximately 4% of the Company’s revenue for the year ended December 31, 2024.

Cost of Revenue

(in thousand s )

Year Ended December 31,

2023 2022 Change % Change

Direct salaries and labor $ 7,355 $ — $ 7,355 100 % increased

Direct project and other cost 10,246 — 10,246 100 % increased

Non-direct project cost 6,371 — 6,371 100 % increased

Publisher cost 5,877 5,967 (90) (2) % decreased

Content creation 1,078 1,372 (294) (21) % decreased

Sales commission 764 880 (116) (13) % decreased

Other 75 2,274 (2,199) (97) % decreased

$ 31,766 $ 10,493 $ 21,273 203 % increased

Costs of revenue increased $21.3 million, or 203%, for the year ended December 31, 2023, compared to the same period for 2022.

This increase is mainly attributable to the acquisition of the Big Village Entities during the year ended December 31, 2023.

December 31, 2024

December 31, 2023

(in thousands)

Direct salaries and labor costs

Direct project costs

Non-direct project costs

Publisher costs

Content creation

Sales commissions

Cost of revenue increased $8.4 million, or 27%, for the year ended December 31, 2024, compared to the same period of 2023.

For the year ended December 31, 2024, cost of revenue includes $25.9 million, or 64% from the impact of the Big Village Acquisition, which was completed in April 2023.

This compares to $24.0 million, or 75% for the same period in 2023.

Direct Salaries and Labor Cost

Direct salaries and labor cost was $7.4 million for the year ended December 31, 2023, and represented 23% of overall cost of revenue for this period.

These costs represent salary and labor cost of employees that work directly on customer projects for our consumer insights, creative and media services, which divisions we acquired as part of our acquisition of the Big Village Entities.

Direct salaries and labor cost increased $202,000, or 3% for the year ended December 31, 2024 when compared to the same period in 2023.

Approximately $7.6 million, or 19%, of the Company's cost of revenue for the year ended December 31, 2024 was a result of direct salaries and labor cost, compared to $7.4 million, or 23% for the same period in 2023.

These costs represent salary and labor cost of employees that work directly on customer projects for our consumer insights, creative services, and media services divisions.

Direct Project Cost

Direct project cost was $10.2 million for the year ended December 31, 2023, and represented 32% of overall cost of revenue for this period.

These costs include payments made to third-parties that are directly attributable to the completion of projects that allow for revenue recognition for our consumer insights, creative and media services, which divisions we acquired as part of our acquisition of the Big Village Entities.

Direct project cost increased $1.5 million, or 14% for the year ended December 31, 2024 when compared to the same period in 2023.

Approximately $11.7 million, or 29%, of the Company's cost of revenue for the year ended December 31, 2024, was a result of direct project cost compared to $10.2 million, or 32%, for the same period in 2023.

As discussed above, the Big Village Acquisition, which was completed in April 2023, is the main driver of the increase in direct project cost for the year ended December 31, 2024.

Non-Direct Project Cost

Non-direct cost was $6.4 million for the year ended December 31, 2023 and represented 20% of overall cost of revenue for this period.

These costs represent overall client service costs that are not specifically related to a particular project, but relate to services we acquired as part of our acquisition of the Big Village Entities.

Non-direct project cost increased $246,000, or 4%, for the year ended December 31, 2024, when compared to the same period in 2023.

Approximately $6.6 million, or 16%, of the Company's cost of revenue for the year ended December 31, 2024, was a result of non-direct project cost compared to $6.4 million, or 20%, for the same period in 2023.

These costs represent overall client service costs that are not specifically related to a particular project.

Publisher Cost

Publisher cost was $12.4 million, which represents 31% of overall cost of revenue, and $5.9 million, or 18%, of overall cost of revenue for the years ended December 31, 2024 and 2023, respectively.

We experienced a decrease of $90,000, or 2%, for the year ended December 31, 2023 compared to the same period in 2022.

These costs represent payments to media providers and website publishers.

We experienced an increase of $6.5 million, or 111%, for the year ended December 31, 2024 compared to the same period in 2023.

This increase is consistent with the increase noted in revenue for our advertising technology division.

These costs represent payments to media providers and website publishers which drive revenue for our advertising technology division.

Gross margin was $16.5 million, and $12.8 million for the years December 31, 2024 and 2023.

Our gross margin increased $3.7 million or 41% for the year ended December 31, 2023, when compared to the same period for 2022 Gross margin as a percentage of revenue decreased to 29% for the year ended December 31, 2023 compared to 46% for the same period of 2022.

Our gross margin increased $3.7 million or 29% for the year ended December 31, 2024, when compared to the same period for 2023.

Gross margin as a percentage of revenue remained consistent at 29% for both years ended December 31, 2024 and 2023.

General and Administrative Expenses

Year Ended December 31,

($ in thousands) 2023 2022 Change % Change

Personnel cost $ 10,024 $ 6,622 $ 3,402 51 % increased

Legal fees 981 231 750 325 % increased

Professional fees 4,750 3,276 1,474 45 % increased

Insurance 1,014 599 415 70 % increased

125 38 87 227 % increased

Amortization of intangibles

2,490 1,558 932 60 % increased

Website expense

1,193 1,257 (64) (5) % decreased

Other 1,945 574 1,371 239 % increased

Total $ 22,522 $ 14,155 $ 8,367 59 % increased

Gross margin as a percentage of general and administrative expense 57 % 64 % (7) % (12) % decreased

General and administrative expenses increased $8.4 million, or 59%, for the year ended December 31, 2023, compared to the same period in 2022.

The increase is due to a combination of factors as discussed below.

December 31, 2024

December 31, 2023

(in thousands)

Personnel costs

Professional fees

Website expenses

Data processing

Gross margin as a percentage of general and administrative expense

General and administrative expenses decreased $1.1 million, or 5%, for the year ended December 31, 2024, compared to the same period in 2023.

The decrease is due to a combination of factors as discussed below.

Personnel Cost

Personnel cost increased by approximately $3.4 million, or 51%, for the year ended December 31, 2023 compared to the same period in 2022.

This change is mainly driven by an increase in head count as a result of the acquisition of the Big Village Entities.

During the year ended December 31, 2023, the Company's headcount increased by a net amount of 136 employees, or 252%, mainly attributable to the Big Village Acquisition.

Personnel cost for Big Village employees is allocated between cost of revenue and general and administrative expenses depending on their contribution to certain revenue generating projects.

The overall increase in headcount during the year ended December 31, 2023, was partially offset by a reduction in the Company's headcount by 85 employees, including 54 employees that were terminated as a reduction in force.

Personnel cost decreased by approximately $1.3 million, or 13%, for the year ended December 31, 2024 compared to the same period in 2023.

The Company reduced its headcount in 2024 by 71 employees, including 28 employees that were terminated as a reduction in force.

The Company incurred severance cost of approximately $250,000 in connection with this reduction.

Approximately $75,000 is included in cost of revenue with the balance of $314,000 included in general and administrative cost.

The Company incurred severance cost of approximately $389,000 associated with a headcount reduction during the same period for 2023.

We had 119 total employees as of December 31, 2024, compared to 190 total employees as of December 31, 2023.

Legal fees increased by $750,000, or 325%, for the year ended December 31, 2023, compared to the same period in 2022.

Approximately $711,000 of overall legal fees during 2023 represented costs associated with the Big Village Acquisition.

Legal fees increased by $1.6 million, or 167%, for the year ended December 31, 2024, compared to the same period in 2023.

This increase is due largely to payments made as part of the ongoing litigation with Ladenburg.

For a full description of litigation matters, see Note 17, "Commitments and Contingencies," to the consolidated financial statements.

Professional Fees

Professional fees increased by $1.5 million, or 45%, during the year ended December 31, 2023, when compared to the same period in 2022.

Approximately $1.5 million of overall professional fees during 2023 represented costs associated with the Big Village Acquisition.

Professional fees decreased by $1.2 million, or 25%, during the year ended December 31, 2024, when compared to the same period in 2023.

Approximately $1.5 million of overall professional fees during 2023 represented costs associated with the Big Village Acquisition that were one-time in nature, and were not repeated during the current year.

Data Processing

Data processing costs increased by $509,000, or 57%, during the year ended December 31, 2024, when compared to the same period in 2023.

As discussed above, the Big Village Acquisition was completed in April 2023, and contributed to data processing for nine months of the prior period and for the full twelve months of the current period, and is the main driver of the increase in data processing for the year ended December 31, 2024.

Impairment of Goodwill and Intangibles

(in thousands)

Year Ended December 31,

2023 2022 Change % Change

Impairment of goodwill and intangibles $ 17,070 $ — $ 17,070 100 % increased

During the year ended December 31, 2023, the Company performed an impairment assessment on goodwill and intangibles for the Ad Network, Owned & Operated, and Insights reporting units.

The assessment indicated that the carrying value was in excess of its implied fair value for the Ad Network and Owned & Operated reporting units, resulting in an impairment charge of $14.1 million and $2.9 million for goodwill and intangibles, respectively.

There was no such charge for the same period in 2022.

There was no such charge for the same period in 2024, after performing an impairment assessment on goodwill and intangibles for the Ad Network, Owned & Operated, and Insights reporting units.

See Note 6, "Intangible Assets, Net", and Note 7, "Goodwill", to the consolidated financial statements.

Financing Expense (Income)

Year Ended December 31,

($ in thousands) 2023 2022 Change % Change

Interest expense $ 9,189 $ 4,263 $ 4,926 116 % increased

Gain on forgiveness of PPP loan — (1,137) 1,137 (100) % decreased

Other (income) expense

(437) (69) (368) 532 % increased

Total financing expense (income) $ 8,752 $ 3,057 $ 5,695 186 % increased

December 31, 2024

December 31, 2023

(in thousands)

Interest expense

Other expense (income)

Total financing and other expense, net

Financing expense increased $3.4 million, or 38%, for the year ended December 31, 2024, compared to the same period in 2023.

This increase was largely attributable to a $4.9 million increase in interest expense related to the Centre Lane Senior Secured Credit Facility, which reflected higher principal and fees as a result of amendments to the Centre Lane Senior Secured Credit Facility during the year ended December 31, 2022 through the year ended December 31, 2023.

In 2022, total financing expense was offset by a reduction in the Paycheck Protection Program ("PPP") loan forgiveness of $1.1 million.

This increase was largely attributable to a $3.5 million increase in interest expense related to the Centre Lane Senior Secured Credit Facility, which reflected higher principal and fees as a result of amendments to the Centre Lane Senior Secured Credit Facility during the year ended December 31, 2024.

Liquidity and Capital Resources

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The following table summarizes total current assets, total current liabilities and net working capital (deficit) as of December 31, 2024 as compared to December 31, 2023.

December 31, 2024

December 31, 2023

(in thousands)

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Net working capital (deficit)

As of December 31, 2023, we had a cash balance of $4.0 million compared with a cash balance of $316,000 as of December 31, 2022.

As of December 31, 2024, we had a cash balance of $2.5 million and a restricted balance of $1.9 million, compared with a cash balance of $4.0 million as of December 31, 2023.

The Company’s liquidity needs, and a discussion of how it intends to meet those needs, is discussed below.

See –“Going Concern.”

During the year ended December 31, 2023 and 2022, the Company received $8.6 million and $3.1 million, respectively, in debt financing from the Centre Lane Senior Secured Financing Facility.

The use of the funds was for general working capital needs and to fund the Big Village Acquisition.

During the year ended December 31, 2024 and 2023, the Company received $1.9 million and $8.6 million, respectively, in debt financing from the Centre Lane Senior Secured Credit Facility.

We used these funds to secure a bond in connection with our appeal of the Ladenburg litigation during 2024, and to fund the Big Village Acquisition in 2023.

Going Concern

Historically, the Company has incurred losses, which has resulted in an accumulated deficit of approximately $166.9 million as of December 31, 2024.

Cash flows used in operating activities were $4.7 million and $3.1 million for the years ended December 31, 2023, and 2022, respectively.

As of December 31, 2023, the Company had a working capital deficit of approximately $11.1 million, inclusive of $4.0 million in cash and cash equivalents.

Cash flows provided by (used in) operating activities were $1.9 million and $(4.7) million for the years ended December 31, 2024, and 2023, respectively.

As of December 31, 2024, the Company had a working capital deficit of approximately $13.5 million, inclusive of $2.5 million in cash and cash equivalents and $1.9 million in restricted cash.

The Company’s ability to continue as a going concern is dependent upon its ability to meet its liquidity needs through a combination of factors.

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Centre Lane Senior Secured Credit Facility

On June 5, 2020, the Company and its subsidiaries entered into to the Amended and Restated Senior Secured Credit Agreement between themselves, the lenders party thereto and Centre Lane Partners Master Credit Fund II, L.P., as Administrative Agent and Collateral Agent (“Centre Lane Partners”), as amended (the “Credit Agreement”).

On June 5, 2020, the Company and its subsidiaries entered into to the Amended and Restated Senior Secured Credit Agreement between themselves, the lenders party thereto (the "Lenders") and Centre Lane Partners Master Credit Fund II, L.P., as Administrative Agent and Collateral Agent (“Centre Lane Partners”), as amended (the “Credit Agreement”).

The Credit Agreement has been amended numerous times to change the terms, including the amounts outstanding, the interest rate, the maturity date and other payment terms.

The outstanding principal owed to Centre Lane Partners was $70.2 million and $33.1 million as of December 31, 2023 and 2022, respectively, which matures on April 20, 2026.

Of the amount outstanding at December 31, 2023, $879,000, $3.0 million, $879,000 and $879,000 are due on March 31, 2024, June 30, 2024, September 30, 2024 and December 31, 2024, respectively.

The balance of $64.6 million is due in 2025 or later.

The amount due under the Credit Agreement bears interest of 7.0% per annum plus the Secured Overnight Financing Rate ("SOFR").

In connection with the Twentieth Amendment, adjustments were made to the interest rate for outstanding loans as follows:

• Changing the last out term loan PIK rate to the SOFR plus 7% until December 31, 2024, and to the SOFR plus 2% (previously 5%) thereafter;

• Conversion of interest payable on the Seventeenth Amendment loans from April 2024 until June 30, 2025 from a combination of cash and PIK to solely PIK at the rate of 15%, with an option to maintain such terms after June 30, 2025 in exchange for an additional 2% PIK fee or transition to payments made 10% PIK and 5% in cash;

• Extending the due date for the 5% exit fee with respect to the Nineteenth Amendment to December 31, 2024.

On December 26, 2024, the Company, the Lenders, and Centre Lane Partners entered into the Twenty-First Amendment to the Credit Agreement, pursuant to which the Company borrowed an additional approximately $1.9 million from the Lenders (“Twenty-First Amendment Loan Amounts”).

Interest incurred on the Twenty-First Amendment Loan Amounts will be payable in a combination of cash and payments in kind.

Interest to be paid in cash will accrue at (i) a rate of 0% per annum from the date the Twenty-First Amendment Loan Amounts are funded until June 30, 2025 and (ii) a rate of 5% per annum thereafter;

provided, however, if prior to June 30, 2025, the Company informs Centre Lane Partners that it will pay the PIK Fee (as defined below) to the Lenders, then the interest rate will remain 0% per annum.

Interest to be paid in kind will accrue at (x) a rate of 15% per annum from the date the Twenty-First Amendment Loan Amounts are funded until June 30, 2025 and (y) a rate of 10% per annum thereafter;

provided, however, if prior to June 30, 2025, the Company informs Centre Lane Partners that it will pay the PIK Fee to the Lenders, then the interest rate will remain 15% per annum.

For purposes of the foregoing, the “PIK Fee” shall mean an amount equal to 2% of the Twenty-First Amendment Loan Amounts outstanding payable in kind.

The outstanding principal owed to Centre Lane Partners was $78.8 million and $70.2 million as of December 31, 2024 and December 31, 2023, respectively.

Of the amount outstanding at December 31, 2024, approximately $3.8 million is due by December 31, 2025.

The balance of $75.0 million is due in 2026.

The First Out Loans and the Last Out Loans have a maturity date of April 20, 2026;

the Twenty-First Amendment Loan Amounts have a maturity date of the earlier of (i) the date upon which certain litigation is resolved and results in the Company being obligated to pay a certain amount in connection with such litigation and (ii) April 20, 2026;

and the Nineteenth Amendment Term Loans had a maturity date of December 31, 2024, in which the loan balance was repaid.

The amount due under the Credit Agreement bears interest at 7.0% per annum plus the Secured Overnight Financing Rate ("SOFR").

At December 31, 2024, the SOFR was 4.71%, thus the overall interest rate on this facility was 11.71% per annum at December 31, 2024.

Interest is paid in kind at 12.39% per annum on approximately $34.1 million of the amount owed under the Credit Agreement, and at 15% per annum on $29.2 million of the amount owed under the Credit Agreement.

With respect to the remaining $6.9 million owed under the facility, interest is paid in kind at 4% per annum and in cash at the SOFR plus 3.0% (for a total interest rate of 8.39% per annum at December 31, 2023).

Effective July 1, 2024, the $34.1 million outstanding under the Centre Lane Senior Secured Credit Facility will bear interest at 7.0% per annum, plus the SOFR plus 5.0%.

For a full description of the Centre Lane Senior Secured Credit Facility, see Note 10, "Centre Lane Senior Secured Credit Facility," to the consolidated financial statements.

10% Convertible Promissory Note

During November 2018, the Company issued a 10% convertible promissory note (the "Convertible Note") in the amount of $80,000 to the Chairman of the Board, a related party.

The Convertible Note is unsecured, matured five years from issuance and was convertible at the option of the holder into shares of our common stock at any time prior to maturity at a conversion price of $0.40 per share.

The outstanding principal and interest of the Convertible Note was due and payable in November 2023.

At December 31, 2023, approximately $119,000 inclusive of principal and interest is due and payable, and the outstanding principal continues to accrue interest.

For a full description of the Convertible Note, see Note 11, "10% Convertible Promissory Note" to the consolidated financial statements.

Summary of Cash Flows

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(in thousands)

Cash flow used in operating activities $ (4,658) $ (3,115)

Cash flow provided by (used in) operating activities

Cash flow used in investing activities

Cash flow provided by financing activities 8,353 2,664

Net increase (decrease) in cash and cash equivalents, net of impact of exchange rates

$ 3,689 $ (466)

Cash flow (used in) provided by financing activities

Net increase in cash and cash equivalents, net of impact of exchange rates

Operating Activities

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Our primary uses of our operating cash, are for cost of revenue expenses, personnel-related expenditures and other general administrative expenses.

For the year ended December 31, 2024, cash provided by operating activities was $1.9 million.

The primary factors affecting our operating cash flows during the period were our net loss of $17.0 million, adjusted for non-cash charges of $1.9 million for amortization of intangible assets, $2.7 million of amortization of debt discount, $9.4 million in interest paid in kind on the Centre Lane Senior Secured Credit Facility, $254,000 for stock option compensation expense, and a $4.4 million net change in operating assets and liabilities.

The primary drivers of the changes in operating assets and liabilities were a $1.7 million decrease in deferred revenue, a $369,000 decrease in accounts receivable, a $198,000 decrease in prepaid expenses and other current assets, a $5.2 million increase in accounts payable and accrued expenses, and a $1.2 million increase in other liabilities.

For the year ended December 31, 2023, cash used in operating activities was $4.7 million.

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The primary drivers of the changes in operating assets and liabilities were a $1.3 million increase in accounts receivables, a $735,000 decrease in accounts payable and accrued expenses, a decrease in other liabilities of $472,000, a decrease in prepaid expenses and other current assets of $360,000, and a $701,000 decrease in deferred revenue.

For the year ended December 31, 2022, cash used in operating activities was $3.1 million.

The primary factors affecting our operating cash flows during the period were our net loss of $8.1 million, adjusted for non-cash charges of

$1.6 million for amortization of intangible assets, $1.2 million of amortization of debt discount, $144,000 of stock-based compensation expense, $89,000 of stock compensation for the Oceanside shares, $84,000 for the allowance for expected credit losses, $1.1 million from the gain on forgiveness of PPP loans and a $121,000 net change in operating assets and liabilities.

The primary drivers of the changes in operating assets and liabilities were a $119,000 decrease in accounts receivable, a $695,000 increase in prepaid and other current assets, a $487,000 decrease in accounts payable and accrued expenses, a $698,000 increase in other liabilities, a $466,000 decrease in interest payable on the Centre Lane Senior Secured Credit Facility, and a $426,000 decrease in deferred revenue.

Investing Activities

Cash used in investing activities of $14,000 and $14,000 for the year ended December 31, 2023, and 2022, respectively, was due entirely to the purchase of property and equipment.

Cash used in investing activities of $110,000 and $14,000 for the years ended December 31, 2024 and 2023, respectively, was related to $14,000 used for the purchase of property and equipment in both 2023 and 2024, and $96,000 used for website enhancement during the year ended December 31, 2024.

Financing Activities

During the year ended December 31, 2023 and 2022 , the Company drew $8.6 million and $3.1 million, respectively, of debt financing from the Centre Lane Senior Secured Credit Facility, which was primarily used for working capital needs, which increased as a result of the Big Village Acquisition, offset by a $270,000 and $0 repayment of principal on the Centre Lane Senior Secured Credit Facility during the year ended December 31, 2023 and 2022, respectively .

During the year ended December 31, 2024, the Company used cash of $1.4 million in financing activities, which is largely attributable to repayment of principal on the Centre Lane Senior Secured Credit Facility of $3.1 million, partially offset by the draw of $1.9 million on the Centre Lane Senior Secured Credit Facility that we used to secure a bond in connection with our appeal of the Ladenburg litigation.

During the year ended December 31, 2023, the Company drew $8.4 million of debt financing from the Centre Lane Senior Secured Credit Facility, which was primarily used to fund our working capital needs.

Contractual Obligations and Commitments

The following table represents our contractual obligations as of December 31, 2024, aggregated by type:

Total Due in less than 1 year Due 1-3 years Due 3-5 years More than 5 years

($ in thousands)

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Finance lease

10% Convertible Promissory Notes 80 80 — — —

Interest payable - 10% Convertible Promissory Notes 39 39 — — —

Centre Lane Senior Secured Credit Facility

Interest payable - Centre Lane Senior Secured Credit Facility

$ 73,487 $ 8,570 $ 64,917 $ — $ —

The Company’s liquidity needs, and a discussion of how it intends to meet those needs, is discussed above.

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In the case of the non-cash items, management believes that investors can better assess the Company's operating performance if the measures are presented without such items because, unlike cash expenses, these adjustments do not affect the Company's ability to generate free cash flow or invest in its business.

performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our core operations.

We use, and we believe investors benefit from the presentation of, EBITDA and Adjusted EBITDA in evaluating our operating performance because it provides us and our investors with an additional tool to compare our operating performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our core operations.

We believe that EBITDA is useful to investors and other external users of our financial statements in evaluating our operating performance because EBITDA is widely used by investors to measure a company's operating performance without regard to items such as interest expense, taxes, and depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired.

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A reconciliation of net loss before taxes to non-GAAP EBITDA and Adjusted EBITDA is as follows:

Year Ended December 31,

December 31, 2024

December 31, 2023

(in thousands)

Net loss before tax plus:

$ (35,564) $ (8,125)

Net loss before tax

Depreciation expense

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Other interest expense

Interest expense - Centre Lane Senior Secured Credit Facility and Convertible Promissory Notes- related party 7,088 3,050

EBITDA (6,690) (2,266)

Interest expense - Centre Lane Senior Secured Credit Facility and Convertible Promissory Notes

Stock compensation expense

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Non-recurring legal fees

Gain on forgiveness of PPP loan — (1,137)

Non-restructuring severance expense 389 50

Adjusted EBITDA $ (3,932) $ (2,463)

Non-recurring severance expense

Adjusted EBITDA (loss)

Critical Accounting Policies

Critical Accounting Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates, judgments and assumptions.

We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made.

These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of our unaudited consolidated financial statements as well as reported amounts of revenue and expenses during the periods presented.

Our unaudited consolidated financial statements would be affected to the extent there are material differences between these estimates and actual results.

In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application.

There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result.

Significant estimates included in the accompanying consolidated financial statements include, valuation of goodwill and intangible assets, allowance for current expected credit losses, the determination of the relative selling prices of our services, percentage of completion for revenue recognition, estimates of amortization period for intangible assets, estimates of depreciation period for property and equipment, discount rates used in the valuation of right-of-use assets and lease liabilities, litigation reserves, the valuation of equity-based transactions, valuation of the Center Lane Senior Secured Facility carrying value regarding debt modification or extinguishment, and the valuation allowance on deferred tax assets.

Critical accounting policies are those policies that management believes are very important to the portrayal of our financial position and results of operations, and that require management to make estimates that are difficult, subjective or otherwise complex.

Based on these criteria, management has identified the following critical accounting policies:

The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions.

Note 2, "Summary of Significant Accounting Policies," to the consolidated financial statements, describes the significant accounting policies used in preparation of the consolidated financial statements.

Management believes the most complex and sensitive judgments, because of their significance to the consolidated financial statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain.

The most significant areas involving management judgments and estimates are described below.

Actual results in these areas could differ from management's estimates.

Revenue Recognition

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Cash received by the Company prior to when control of services is transferred to the customer, is recorded as deferred revenue.

To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps:

(i) identify the contract(s) with a customer;

(ii) identify the performance obligations in the contract;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance obligations in the contract;

(v) recognize revenue when (or as) the Company satisfies a performance obligation.

The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it provides to the customer.

At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the services promised within each contract and determines those that are performance obligations and assesses whether each promised service is distinct.

The Company then recognizes revenue when (or as) the performance obligation is satisfied.

The Company generates revenue as follows:

• selling of advertisements placed on the Company’s owned and managed sites, as well as from advertisements placed on partner websites, for which the Company earns a share of the revenue;

• facilitating the real-time buying and selling of advertisements at scale between networks of buyers, known as DSPs and sellers known as SSPs;

• serving advertisers and agencies by providing access to premium resources and leveraging data to optimize programmatic campaigns, where revenue is derived from the planning and execution of creative and media marketing campaigns;

• providing primary and secondary research, competitive intelligence and expert insight to address customer's strategic issues, where revenue is primarily derived from providing a single integrated service for research.

Digital publishing and advertising technology revenues are generated by audiences seeing or clicking on digital advertisements utilizing several advertising partners.

The Company recognizes revenue once the performance obligation is satisfied at a point in time, on a gross basis, net of adjustments based on the number of advertisements delivered.

Customers are billed monthly or billing is generated via custom content production and extensions on our social media platforms.

Consumer insights revenues are generated by providing primary and secondary research, competitive intelligence, and expert insight to address customers' strategic issues.

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Some of our contracts with customers contain multiple performance obligations.

For these contracts, we account for the individual performance

obligations separately if they are distinct.

For these contracts, we account for the individual performance obligations separately if they are distinct.

If recurring services are performed, the Company recognizes revenue as the services are rendered over time, generally on a ratable basis over the contract term beginning on the date that the service is made available to the customer.

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The Company recognizes revenue as the services are rendered over time, on a ratable basis over the contract term, beginning on the date that the service is made available to the customer.

There is no significant initial cost incurred to obtain contracts with customers.

Deferred Revenue

The Company records deferred revenue when cash payments are received in advance of performance obligations.

The Company expects to recognize the deferred revenue in the following period when it transfers its services and, therefore, satisfies its performance obligation to the customer.

Cost of Revenue

Cost of revenue includes internal labor and payment to third parties for services performed to drive revenue, which includes the publisher cost paid for ad exchange on third party sites, advertising fees, personnel costs, technology and data related costs, fees paid for content creation, influencers, writers and sales commission.

The Company determines whether an arrangement contains a lease at inception in accordance with FASB Accounting Standards Codification No.

842, Leases, (ASC 842) .

A contract is, or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease.

Lease ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date.

As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments.

We do not include options to extend or terminate the lease term unless it is reasonably certain that we will exercise any such options.

We recognize rent expense under our operating leases on a straight-line basis, variable lease costs such as operating costs and property taxes are expensed as incurred.

For finance leases, we record interest expense on the lease liability in addition to amortizing the right-of-use asset (generally straight-line) over the shorter of the lease term or the useful life of the right-of-use asset.

Accounts Receivable and Allowances

Accounts receivable represent receivables from customers in the ordinary course of business and are recorded in accordance with FASB Accounting Standards Codification No.

310, Receivables, (ASC 310) .

Receivables are recorded at the invoice amount on the date revenue is recognized and are presented net of the allowance for current expected credit losses in the accompanying consolidated balance sheets.

Certain receivables are subject to adjustments from traffic settlements that are deducted from open invoices.

Our receivables are not interest bearing and not collateralized.

Unbilled receivables are the results of timing differences between billings to clients and is included in accounts receivable.

The allowance for current expected credit losses is based on our assessment of the collectability of customer accounts.

We regularly review our receivables that remain outstanding past their applicable payment terms and establish an allowance for potential write-offs by considering factors including historical experience, credit quality, age of the accounts receivable balances, and current and forecasted economic conditions that may affect a customer’s ability to pay.

The policy for determining past due status is based on the contractual payment terms of each customer, which are generally net 30 or net 60 days.

Once collection efforts by the Company are exhausted, the determination for charging off uncollectible receivables is made.

Expected credit losses are recorded as general and administrative expenses on our consolidated statements of operations and comprehensive loss.

Property and Equipment, Net

Property and equipment are recorded at cost, less accumulated depreciation in accordance with FASB Accounting Standards Codification No.

360, Property, Plant and Equipment, (ASC 360) .

Depreciation is computed using the straight-line method based on the estimated useful lives of the related assets.

Leasehold improvements are amortized over the lesser of the lease term or the useful life of the improvements.

When assets are sold or retired, the applicable cost and accumulated depreciation or amortization are removed from the accounts.

The resulting gains or losses are reflected in the combined statements of operations and comprehensive loss.

We account for goodwill under FASB Accounting Standards Codification No.

350, Goodwill and Other, (ASC 350).

Goodwill represents the cost in excess of the fair value of the net assets acquired in a business combination.

We allocate goodwill to reporting units based on the expected benefit from business combination.

The Company categorizes goodwill into three reporting units:

See Note 2, "Summary of Significant Accounting Policies," to the consolidated financial statements.

We have generated goodwill as a result of our acquisitions.

At the time of acquisition, we account for business acquisitions using the purchase method of accounting, in accordance with which assets acquired and liabilities assumed are recorded at their respective fair values at the acquisition date.

The fair value of the consideration paid, including contingent consideration, is assigned to the assets acquired and liabilities assumed based on their respective fair values.

Goodwill represents the excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed.

We review our goodwill for impairment on an annual basis at September 30 or more frequently if events or a change in circumstances indicates that the carrying amount may not be recoverable.

We test goodwill for impairment at a level within the Company referred to as a reporting unit.

We have determined that there are three reporting units:

“Owned & Operated”, “Ad Network” and “Insights”.

Goodwill is tested for impairment at the reporting unit level on an annual basis and on an interim basis if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value, which are determined through a qualitative assessment.

A qualitative assessment includes consideration of the economic, industry, and market conditions in addition to the overall financial performance of the Company and these assets.

If our qualitative assessment does not conclude that it is more likely than not that the estimated fair value of the reporting unit is greater than the carrying value, we perform a quantitative analysis.

In a quantitative test, the fair value of a reporting unit is determined based on a discounted cash flow analysis and further analyzed using other methods of valuation.

A discounted cash flow analysis requires us to make various assumptions, including assumptions about future cash flows, growth rates and discount rates.

The assumptions about future cash flows and growth rates are based on our long-term projections.

Assumptions used in our impairment testing are consistent with our internal forecasts and operating plans.

Our discount rate is based on our debt structure, adjusted for current market conditions.

If the fair value of the reporting unit exceeds its carrying amount, there is no impairment.

To the extent the carrying amount exceeds its fair value, an impairment charge of the reporting unit’s goodwill would be necessary.

In accordance with FASB Accounting Standards Codification No.

350, Goodwill and Other, (ASC 350) , we initially perform a qualitative assessment (commonly known as "step zero") to determine whether further impairment testing is necessary before performing the two-step test.

The qualitative assessment requires judgment by management about economic conditions including the entity's operating environment, its industry and other market considerations, entity-specific events related to financial performance or loss of key personnel and other events that could impact the reporting unit.

If management concludes, based on assessment of relevant events, facts, and circumstances, that it is more likely than not that a reporting unit's fair value is greater than its carrying value, no further impairment testing is required.

If we determine, based on this assessment, that it is more likely than not that the fair value of the reporting unit is less than its carrying value, we perform a quantitative goodwill impairment test by comparing the reporting unit's fair value with its carrying value.

An impairment loss is recognized for the amount by which the reporting unit's carrying value exceeds its fair value, up to the total amount of goodwill allocated to the reporting unit.

No impairment loss is recognized if the fair value of the reporting unit exceeds its carrying value.

See Note 7, "Goodwill" to the consolidated financial statements for details regarding goodwill impairment.

Intangible Assets

We account for intangibles under FASB Accounting Standards Codification No.

350, Goodwill and Other, (ASC 350).

Intangible assets acquired in a business combination or an asset acquisition are recorded at fair value on the date of acquisition and amortized over their estimated useful lives.

Intangible assets include trade name, customer relationships, IP/technology and non-compete agreements.

The Company’s trade name and customer relationships are amortized on a straight-line basis over a useful life of five to ten years.

IP/technology is amortized on a straight-line basis over a useful life of ten years.

Non-compete agreements are amortized on a straight-line basis over the length of each agreement, typically between three to five years.

The Company reviews for impairment indicators of finite-lived intangibles and other long-lived assets as described below in “Amortization and Impairment of Long-Lived Assets.”

Amortization and Impairment of Long-Lived Assets

Long-lived assets, such as property, equipment, right-of-use assets, and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Upon such an occurrence, recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to forecasted undiscounted future net cash flows expected to be generated by the asset.

If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset.

For long-lived assets held for sale, assets are written down to fair value, less cost to sell.

Fair value is determined based on discounted cash flows, appraised values or management’s estimates, depending upon the nature of the assets.

See Note 6, Intangibles, to the consolidated financial statements for details regarding impairment of intangibles.

Website Development Costs

The Company accounts for its website development costs in accordance with FASB Accounting Standards Codification No.

350, Website Development Costs (ASC 350) .

These costs, if any, are included in intangible assets in the accompanying consolidated balance sheets.

Upgrades or enhancements that add functionality are capitalized while other costs during the operating stage are expensed as incurred.

The Company amortizes the capitalized website development costs over an estimated life of five years.

During the year ended December 31, 2023, and 2022, all website development costs have been expensed.

While it is likely that we will have significant amortization expense as we continue to acquire websites, we believe that intangible assets represent costs incurred by the acquired website to build value prior to acquisition and the related amortization and impairment charges of assets, if applicable, are not ongoing costs of doing business.

Stock-Based Compensation

We account for stock based compensation in accordance with FASB Accounting Standards Codification No.

718, Compensation - Stock Compensation (ASC 718) .

ASC 718 addresses accounting for share-based awards, including stock options, restricted stock, performance shares and warrants.

Stock-based compensation for stock option grants to employees and non-employees is based on the fair value of the award on the date of grant.

We record forfeitures as they occur.

The Company calculates stock compensation expense using the graded vesting method, which begins expensing each tranche on the expense begin date through the vesting date.

This will result in front-loaded expenses, and is included in general and administrative expenses in the consolidated statements of operations.

Compensation cost is recognized over the requisite service period, which is generally the vesting period, and is included in general and administrative expenses in the consolidated statements of operations.

The Company estimates the fair value of stock options using the Black-Scholes valuation model.

The expected life represents the term the options granted are expected to be outstanding.

The expected volatility is determined using the historical volatility of similar publicly traded companies.

The risk-free interest rate is based on the U.S.

Treasury rate in effect at the time of grant.

Valuation for Debt Modifications and Extinguishment

The Company enters into various amendments to our credit facility for additional loans used for working capital.

Part of the amendments include fees that would be added and capitalized to the principal amount of the original loan.

The Company is required to perform an analysis of the change in each amendment to determine whether the change represents a modification or an extinguishment of debt.

Under a modification, no gain or loss is recorded, and a new effective interest rate is established based on the carrying value of the debt and revised cash flow.

If the debt is extinguished, the old debt is de-recognized and the new debt is recorded at fair value, which becomes the new carrying value.

Significant, complex calculations are inherently required in determining the proper accounting treatment.

For each amendment, we calculate the present value of the cash flows under the terms of the amendment, and determine if it is considered substantially different by at least a 10% difference from the present value of the remaining cash flow of the original debt instrument.

See Note 10, "Centre Lane Senior Secured Credit Facility" to the consolidated financial statements.

We use the asset and liability method to account for income taxes.

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Interest and penalties associated with unrecognized tax expenses are recognized as tax expenses in the consolidated statements of operations and comprehensive loss.

See Note 21, "Income Taxes" to the consolidated financial statements.

Segment Reporting

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280, Segment Reporting (ASC 280), our Chief Financial Officer reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance.

Our components are digital publishing, advertising technology, consumer insights, creative and media services.

There are no segment managers who are held accountable by the Chief Financial Officer, or

anyone else, for operations, operating results and planning for levels or components below the consolidated unit level.

Our components are digital publishing, advertising technology, consumer insights, creative services, and media services.

There are no segment managers who are held accountable by the Chief Financial Officer, or anyone else, for operations, operating results and planning for levels or components below the consolidated unit level.

Accordingly, we determined we have one operating and reportable segment.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis