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Item 9A. Controls and Procedures

2025-03-10 compared with 2024-04-01 · 787 added, 917 removed, 1117 unchanged (60% of the section changed)

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The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of December 31, 2024.

Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that as of the period ended December 31, 2023, our disclosure controls and procedures are adequate to provide assurance at a reasonable level that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that as of the period ended December 31, 2024, our disclosure controls and procedures were effective to provide assurance at a reasonable level that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Management's Annual Report on Internal Control over Financial Reporting

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may

We continue to review our internal control over financial reporting and may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business.

Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in “Internal Control — Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").

As the Company integrates the operations acquired through the Big Village Acquisition, there is a risk of identifying deficiencies in our overall internal controls.

Our focus is on implementing and maintaining effective financial management systems and internal controls, an ongoing process.

However, given that all such controls are not yet fully operational, management has concluded that a material weakness exists in the Company’s internal controls over financial reporting, rendering them ineffective at December 31, 2023.

Notwithstanding the material weaknesses described below, we have performed additional analyses and other procedures to enable management to conclude that our consolidated financial statements included in this Form 10-K fairly represent, in all material respects, our financial condition and results of operations as of and for the year ended December 31, 2023.

Outlined below are the material weaknesses identified by management, along with the remedial actions planned.

Material Weaknesses

A material weakness is a deficiency, or a combination of deficiencies, in internal controls over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

As of December 31, 2023, management identified certain material weaknesses.

As the Company continues to integrate the operations assumed as part of the Big Village Acquisition, we have identified deficiencies in our overall internal controls, specifically as identified below:

• Inadequate controls related to revenue recognition, cost of revenue, and the accounts payable and accrual process

leading to potential omission or misstatement of material transactions impacting financial statements;

As the Company continues to improve its accounting staff and processes, internal controls are at the forefront of our efforts to produce accurate and complete financial statements.

The Company has provided standard operating procedures to ensure each process is both functioning and performed correctly.

This allows for documented updates and improvements.

The implementation of the month end close software also elevated our internal controls and documentation.

Management does recognize that without updated systems, the manual processes will allow for possible material weaknesses in the future.

Notwithstanding the significant deficiencies described below, based on the Company’s continued improvements in its accounting staff and processes described above, the Company’s Chief Executive Officer and Chief Financial Officer evaluated our internal controls and concluded that as of the period ended December 31, 2024, they were effective, and that our consolidated financial statements included in this Form 10-K fairly represent, in all material respects, our financial condition and results of operations as of and for the year ended December 31, 2024.

Outlined below are the significant deficiencies identified by management, along with the remedial actions planned.

Significant Deficiency

A significant deficiency or a combination of deficiencies in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the Company’s financial reporting.

The presence of such a deficiency does not mean that a material misstatement has occurred, but it indicates the possibility of such an occurrence in the future.

As the Company continues to update and integrate its accounting and project systems, we have identified deficiencies in our overall internal controls, specifically as identified below:

• Inadequate controls related to revenue recognition and cost of revenue processes leading to the possibility of the misstatement of material transactions impacting financial statements.

• Ineffectiveness of the Company’s information technology systems and controls concerning financial information.

• Inadequate controls related to share cancellation processes leading to the possibility of misstatement of transactions impacting financial statements.

To address these weaknesses, the Company has initiated a remediation plan comprising the following measures:

• Updating the information technology general controls ("ITGC") risk assessment to incorporate operations from the Big Village Acquisition;

• Updating the information technology general controls ("ITGC") risk assessment to ensure reliability, integrity, security, and confidentiality of the Company’s infrastructure and data.

• Examination of information technology systems to ascertain necessary updates to support the financial reporting process.

• Collaboration with a third-party company to ensure SOX compliance, establish and document controls related to revenue recognition, accounts payable, and other processes to enhance internal controls over financial reporting;

• Expansion of our finance department through the hiring of certified public accountants with prior auditing experience, knowledge of SEC filings and technical issues.

In the year ended December 31, 2023, two additional certified public accountants were onboarded, tasked with month end close oversights and SEC reporting.

We believe this will strengthen our finance department as we work towards strong internal controls and provide guidance beyond the finance functions for those we rely on to provide information to support our financial reporting process.

We will continue to monitor and evaluate the effectiveness of our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary.

Management had previously identified the following material weaknesses, which caused management to conclude that as of December 31, 2022 our internal controls over financial reporting were not effective at the reasonable assurance level:

In conducting an analysis of the Centre Lane Senior Secured Credit Facility, errors were identified in connection with the accounting related to Amendments No.

8 – 15 of the Centre Lane Senior Secured Credit Facility, which resulted in the understatement of interest payable and interest expense for each of the interim quarterly periods ended June 30, 2022, and September 30, 2022 and the year-to-date 2022 period.

During the year ended December 31, 2023, the Company implemented its remediation plan to enhance controls relating to the accounting of its debt arrangements that includes the following:

• Internal interest calculations are prepared and compared to the model provided by the external evaluators, along with outstanding principal and carrying value;

• Quarterly statements are being received from Centre Lane Partners where the balances are compared to internal schedules;

• Monthly journal entries for interest expense and supporting documentation are being reviewed by an individual independent of its preparation as part of the month end close;

• Monthly reconciliations are being performed to support the month end close, which are being reviewed and evidenced by both preparer’s and reviewer’s signature to demonstrate independence and accountability.

Due to the measures implemented to enhance controls relating to the accounting of the Company's debt as described above, at December 31, 2023, management concluded that such weakness did not exist at December 31, 2023.

• Implementing the compliance option in Floqast to identify and document key controls.

This will create a key control matrix to establish and document controls related to revenue recognition, cost of sales, equity, and other processes to enhance internal controls over financial reporting.

• In the year ended December 31, 2024, the accounting and finance department has improved with the hiring of an experienced operational Controller and Accounting Manager as well as the VP of Finance.

These positions will compliment and collaborate with the existing SEC Reporting Manager.

We believe this will strengthen our department as we work towards strong internal controls and provide guidance beyond the finance functions for those we rely on to provide information to support our financial reporting process.

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Changes in Internal Control over Financial Reporting

Other than the matters set forth above, there were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the quarter ended December 31, 2023 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other than the matters set forth above, there were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the year ended December 31, 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

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DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Our Board currently consists of four members.

Our Board currently consists of five members.

Each director is elected at our annual meeting of shareholders and holds office until the next annual meeting of shareholders, or until his or her successor is elected and qualified.

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The following table sets forth the names, ages and positions of our directors:

75 Chairman of the Board of Directors

Matthew Drinkwater

50 Director and Chief Executive Officer

Kip Speyer has been our Chairman of the Board since May 2010.

Speyer also served as our Chief Executive Officer from May 2010 to December 2021.

From 2005 to 2009, Mr.

Speyer served as a director, the president and chief executive officer of Speyer Door and Window, LLC, which was sold to Haddon Windows, LLC (SecuraSeal, LLC, AccuWeld Corporation) in December 2009.

From October 2002 to May 2005, Mr.

Speyer was a private investor.

Speyer was president and chief executive officer of Intelligent Systems Software, Inc.

from October 2000 through June 2002, whereby Mr.

Speyer became chief executive officer of ICAD, Inc.

ICAD) which was a combination of ISSI and Howtek, Inc.

Speyer was the president and chief executive officer of Galileo Corporation (NASDAQ:

GAEO) from 1998 to 1999.

Galileo Corporation changed its name to NetOptix (NASDAQ:

OPTX) and was merged with Corning Corporation (NYSE:

GLW) in a stock purchase in May 2000.

From 1996 to 1998 Mr.

Speyer was the president of Leisegang Medical Group, three medical device companies owned by Galileo Corporation.

Prior to joining Galileo Corporation, Mr.

Speyer founded Leisegang Medical, Inc.

and served as its president and chief executive officer from 1986 to 1996.

Leisegang Medical, Inc.

was a company specializing in medical devices for women’s health.

Speyer is a graduate of Northeastern University, Boston, Massachusetts, where he earned a Bachelor of Science Degree in Business Administration in 1972.

Kip Speyer is active in many local charities and is the father of Mr.

Speyer, our Senior Vice President of Revenue Operations and previously a member of our Board through March 31, 2023.

We believe that Mr.

Speyer possesses attributes that qualify him to serve as a member of our Board, including his extensive experience as the chief executive officer and/or chairman of the board of directors of other public companies.

Interim Chairman of the Board and Chief Executive Officer

Elaine Riddell

Joseph Pergola

Director and Chairman of Audit Committee

Thomas Triscari

Director and Chairman of Compensation Committee

Director and Chairman of Governance Committee

Matthew Drinkwater has been a member of our Board since January 2022 and was appointed Chief Executive Officer in December 2021.

He was appointed Interim Chairman of the Board on August 8, 2024.

Drinkwater has an extensive track record of adding value to the companies he has worked for over his professional career in several key senior executive and sales roles at companies such as Buzzfeed Inc.

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We believe that Mr.

Drinkwater possesses attributes that qualify him to serve as a member of our Board, including his experience serving in key management roles at public companies and extensive knowledge of the tech industry.

Schulman has been a member of our Board since November 2019.

Schulman has been President of HDS Consulting LLC since 2008.

Prior to this role, Mr.

Schulman was an Operating Partner for Baird Capital Partners, a private equity firm managing over $3 billion in assets, assisting in creating sector strategy and finding executive leadership.

Schulman also formerly served as President and Chief Executive Officer of Applica Incorporated, a public company and distributor of small household appliances.

For more than 20 years, Mr.

Schulman has served on multiple boards including Baird Capital Partners, Hancock Fabrics, Inc., O2 Media, Inc., Q.E.P Co., Inc.

and HeZhong International Holdings.

Schulman holds a Master’s degree in International Business from the University of Miami and a Bachelor’s degree in Business from the University of Dayton.

Drinkwater possesses attributes that qualify him to serve as a member of our Board, including his experience serving in key management roles and extensive knowledge of the tech industry.

Elaine Riddell has been a member of our Board since September 2024.

Riddell has over 15 years of experience as a CEO at leading firms such as NOPWorld Health, TNS Healthcare, and Kantar Health (now Oracle LifeSciences).

She currently serves as Managing Director at Oaklins DeSilva + Phillips, a leading investment bank specializing in M&A advisory within the marketing and media services sector.

In addition to her advisory work, Ms.

Riddell serves as a board director for the Executive Forum, a network of top executives dedicated to advancing business growth.

She served as Vice President from 2012-2016 and 2018-2024 and was Chair of the Advisory Board for Themis Analytics from 2016 to its acquisition in 2017.

Riddell is a McGill University alumna and holds dual Canadian and American citizenship.

We believe that Ms.

Riddell possesses attributes that qualify her to serve as a member of our Board, including her distinguished history of transforming established global data, analytics, and consulting firms into high-performing market leaders.

Joseph Pergola has been a member of our Board since September 2024.

Pergola currently serves as the Chief Financial Officer of Truckstop, a leading digital marketplace for freight.

With over 25 years in the industry, Mr.

Pergola has held key roles at Amazon, Criteo, The Weather Company, Yahoo, and Time Warner.

As CFO of Integral Ad Science, he was instrumental in the company’s successful IPO in 2021, valued at $3.8 billion.

Pergola holds a B.S.

in Business Management from Saint Peter’s University and an MBA in Finance and Media and Communications from Fordham Gabelli School of Business.

We believe that Mr.

Schulman possesses attributes that qualify him to serve as a member of our Board, including his extensive experience serving on the boards of multiple companies.

Pergola possesses attributes that qualify him to serve as a member of our Board, including his distinguished track record of leading and transforming finance, accounting, mergers and acquisitions, corporate development, business and sales operations, and real estate for multiple Fortune 500 Media and Ad Tech companies.

Thomas Triscari has been a member of our Board since September 2024.

Triscari currently serves as a Senior Advisor at Landmark Ventures and is the founder of the Forensic AdTech Collective Thinktank (FACT), an initiative to pioneer new standards in the industry.

His extensive advisory and non-executive board roles include positions at WasteNot, Br1dge, Adfidence, and Compliant.

He serves as a non-executive board member at Adslot and has made significant contributions as the Founder of the Quo Vadis Newsletter, a respected resource in AdTech.

Previously, Mr.

Triscari held influential roles at Yahoo!

EMEA, where he participated in sales operations, planning, and strategy, and at Criteo, where he served as Director of Publisher Marketplace and Business Intelligence.

As an entrepreneur, Mr.

Triscari founded Labmatik, a consultancy specializing in programmatic advertising, and led Yieldr, a demand-side platform (DSP) as CEO.

He holds a B.A.

in Economics from UCLA and an MBA in Finance and Entrepreneurship from the University of Notre Dame Mendoza College of Business.

We believe that Mr.

Triscari possess attributes that qualify him to serve as a member of our Board, including his extensive experience and deep understanding of the AdTech and media industries.

Jeff Hirsch has been a member of our Board since August 2023.

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Director Independence

Our Board has determined that Mr.

Schulman and Mr.

Our Board has determined that Ms.

Triscari, and Mr.

Hirsch qualify as “independent” directors within the meaning of the NYSE listing standards.

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There are currently no family relationships among any of our directors or executive officers.

Kip Speyer serves as Chairman of the Board and is the father of Mr.

Speyer, our Senior Vice President of Revenue Operations and previously a member of our Board through March 31, 2023.

Executive Officers

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Matthew Drinkwater

50 Chief Executive Officer and Director

Interim Chairman of the Board and Chief Executive Officer

Chief Financial Officer

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In order to clearly set forth our commitment to conduct our operations in accordance with our high standards of business ethics and applicable laws and regulations, our Board adopted a Code of Business Conduct and Ethics (the “Code of Conduct”), which is applicable to all directors, officers and employees.

The Code of Conduct includes our insider

trading policies and procedures.

The Code of Conduct includes our insider trading policies and procedures.

A copy of the Code of Conduct is available on our website under the Investor Relations tab at www.brightmountainmedia.com .

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We have a separately designated standing audit committee of the Board (the “Audit Committee”) established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

The current members of the Audit Committee are Harry Schulman (chair) and Jeff Hirsch.

The current members of the Audit Committee are Joseph Pergola (chair) and Thomas Triscari.

All members of the Audit Committee have been determined by the Board to be independent within the meaning of the NYSE corporate governance standards.

The Board has determined that Mr.

Schulman qualifies as an “audit committee financial expert,” as defined in Item 407 of Regulation S-K.

Pergola qualifies as an “audit committee financial expert,” as defined in Item 407 of Regulation S-K.

The Audit Committee assists the Board with fulfilling its oversight responsibility relating to:

• the integrity of the Company’s financial statements and financial reporting process;

• the integrity of the Company’s consolidated financial statements and financial reporting process;

• the Company’s systems of internal controls;

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Section 16(a) of the Securities Exchange Act of 1934 requires that the Company’s directors, officers and persons who beneficially own 10% or more of the Company’s common stock file with the SEC initial reports of ownership and reports of changes in ownership of our stock and our other equity securities.

To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations that no other reports were required, during the year ended December 31, 2023 and for prior fiscal years, all such filing requirements applicable to any person who served as a director, officer, or greater than 10% beneficial owner during the year ended December 31, 2023 were complied with except that the following persons are in the process of filing Form 3s and/or Form 4s to report (i) joining the Company as an executive officer or director, (ii) a grant of shares of common stock in connection with their services to the Board of Directors, or (iii) a grant of options to purchase shares of common stock in connection with their employment:

Kip Speyer, Mr.

Drinkwater, Ms.

Martinez, Mr.

Schulman, Mr.

Tibbits, and Mr.

(i) a late Form 3 and two late Form 4s were filed for Matthew Drinkwater to report his appointment as an officer and director, and to report three transactions;

(ii) a Form 3 and a Form 4 were due but have not yet been filed for Jeff Hirsch to report his appointment as a director and to report three transactions;

(iii) a late Form 4 was filed for Elaine Riddell to report one transaction;

(iv) a late Form 3 and late Form 4 were filed for Thomas Triscari to report his appointment as director and one transaction;

(v) a late Form 4 was filed for Joseph Pergola to report one transaction;

and (vi) Centre Lane Partners Master Credit Fund II, L.P.

failed to file a Form 3 upon becoming a 10% shareholder.

EXECUTIVE COMPENSATION

Our named executive officers for the fiscal year ended December 31, 2024 (the “named executive officers”) are:

• Matthew Drinkwater, Chief Executive Officer and Director;

• Matthew Drinkwater, Interim Chairman of the Board and Chief Executive Officer;

• Ethan Rudin, Chief Financial Officer.

• Miriam Martinez, former Chief Financial Officer.

Summary Compensation Table

The following table summarizes the compensation paid to our named executive officers for the years ended December 31, 2024, and 2023:

Name and Principal Position Year Salary Bonus Option Awards (1)

Matt Drinkwater (2)

2023 317,500 62,679 * 380,179

Name and Principal Position

Option Awards (1)

Matthew Drinkwater (2)

Chief Executive Officer

Ethan Rudin (3)

2023 67,708 — * 67,708

Chief Financial Officer

Miriam Martinez (4)

2023 222,952 — — 222,952

Former Chief Financial Officer 2022 85,240 — * 85,240

* Indicates that the grant date fair value of the option grant was less than one dollar.

(1) The amounts included in the Option Awards column reflects the aggregate fair market value of stock options to purchase our common stock on the grant date pursuant to FASB ASC Topic 718.

All stock options set forth below were granted with an exercise price equal to the fair market value of the common stock on the date of the grant.

All stock options were granted with an exercise price equal to the fair market value of the common stock on the date of the grant.

Drinkwater's annual base salary was increased to $400,000 effective June 1, 2023.

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Rudin was appointed Chief Financial Officer effective October 18, 2023.

Martinez transitioned from Chief Financial Officer to Principal Financial Officer on October 18, 2023 for a period of 60 days and then went on a leave of absence.

On March 6, 2024, she ended her employment by the Company.

Outstanding Equity Awards at Fiscal Year End

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Number of Securities Underlying Unexercised Options Unexercisable

Option Exercise Price (in $)

Option Exercise Price

Option Expiration Date

Matthew Drinkwater 375,000 (1) 125,000 (1) $ 0.01 December 1, 2031

62,500 187,500 (2) $ 0.01 May 25, 2032

Ethan Rudin — 325,000 (3) $ 0.10 October 27, 2033

Miriam Martinez

112,500 112,500 (4) $ 0.20 August 14, 2032

Matthew Drinkwater

December 1, 2031

November 14, 2034

October 28, 2033

(1) On December 1, 2021, Mr.

Drinkwater was granted options to purchase 500,000 shares of common stock.

These options (i) vested 25% on each of November 30, 2021, November 30, 2022, and November 30, 2023, and (ii) will vest 25% on November 30, 2024.

These options vested 25% on each of December 1, 2021, December 1, 2022, December 1, 2023, and December 1, 2024.

(2) On May 26, 2022, Mr.

Drinkwater was granted options to purchase 250,000 shares of common stock.

These options (i) vested 25% on May 25, 2023 and (ii) will vest 25% on each of May 25, 2024, May 25, 2025, and May 25, 2026.

These options (i) vested 25% on May 26, 2023 and May 26, 2024, and (ii) will vest 25% on each of May 26, 2025, and May 26, 2026.

(3) On November 14, 2024, Mr.

Drinkwater was granted options to purchase 125,000 shares of common stock.

These options will vest 25% on each of November 14, 2025, November 14, 2026, November 14, 2027, and November 14, 2028.

(4) On October 28, 2023, Mr.

Rudin was granted options to purchase 325,000 shares of common stock.

These options will vest 25% on each of October 27, 2024, October 27, 2025, October 27, 2026, and October 27, 2027.

(4) On August 15, 2022, Ms.

Martinez was granted options to purchase 225,000 shares of common stock.

These options vested 25% on August 14, 2023.

The vesting for 25% of the unvested options was accelerated effective March 6, 2024 when she ended her employment.

These options (i) vested 25% on October 28, 2024, and (ii) will vest 25% on each of October 28, 2025, October 28, 2026, and October 28, 2027.

Executive Employment Agreements and Other Arrangements

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Effective December 1, 2024, we entered into an Executive Employment Agreement with Matthew Drinkwater, our Chief Executive Officer.

His employment contract's term is for three years.

His annual base salary is $250,000, and he has a discretionary bonus target of $250,000 subject to the achievement of certain year-over-year revenue and EBITDA performance metrics, with half of the bonus tied to the achievement of each of these goals.

His employment contract's term is for three years, subject to successive one-year automatic extensions, unless either party provides notice of its intent not to renew the Employment Agreement at least 120 days prior to the then-current expiration date.

His annual base salary is $400,000, and he is entitled to an annual bonus of up to $600,000 based on the achievement of certain performance targets by the Company.

In addition to his base salary and annual bonus, Mr.

Drinkwater will be eligible to participate in all of the Company’s benefit plans offered to employees of the Company from time to time, subject to satisfying eligibility requirements.

Additionally, Mr.

Drinkwater was granted 500,000 options to purchase an equal number of shares of the Company's common stock at $0.01 per share.

Drinkwater is terminated without cause, he is entitled to severance equal to his base salary for the balance of the term of his contract.

Finally, following Mr.

Drinkwater's termination from the Company for any reason, he will be subject to a customary non-solicitation covenant for two years.

Drinkwater was granted 125,000 options to purchase an equal number of shares of the Company's common stock at an exercise price of $0.035 per share.

The options will vest over four years and otherwise be subject to the terms of the Bright Mountain Media, Inc.

2022 Stock Option Plan.

Pursuant to the terms of the Employment Agreement, Mr.

Drinkwater is bound by customary non-competition and non-solicitation covenants during his period of employment.

In the event that Mr.

Drinkwater is terminated without cause, which includes a termination by Mr.

Drinkwater for Good Reason (as defined in the Employment Agreement), or the Employment Agreement is terminated by way of non-renewal on the part of the Company, Mr.

Drinkwater will be entitled to (i) any accrued but unpaid benefits under the Employment Agreement, (ii) any earned but unpaid annual bonus amounts, and (iii) monthly severance payments for a period of 12 months equal to between 100% and 150% of his base monthly salary at the time of termination, depending on the conditions of the termination.

In the event that Mr.

Drinkwater is terminated with cause or the Employment Agreement is terminated by way of non-renewal on the part of Mr.

Drinkwater, Mr.

Drinkwater will be entitled to any accrued but unpaid benefits under the Employment Agreement.

Further, notwithstanding the foregoing, if Mr.

Drinkwater is terminated without cause, including a termination by Mr.

Drinkwater for Good Reason, within three months before or within one year following a change in control of the Company, Mr.

Drinkwater will be entitled to monthly severance payments for a period of 12 months equal to 150% of his base monthly salary at the time of termination.

Drinkwater is terminated for cause or Mr.

Drinkwater terminates the Employment Agreement for any reason, Mr.

Drinkwater will be bound by such non-competition covenants for a period of one year after the date his employment with the Company terminates.

Drinkwater will be bound by such non-solicitation covenants for a period of two years after the date his employment with the Company terminates regardless of the reason for such termination.

Additionally, pursuant to the terms of the Employment Agreement, Mr.

Drinkwater is bound by certain customary non-disclosure covenants during the period of his employment and after the date his employment with the Company terminates.

On October 4, 2023, we entered into an Executive Employment Agreement with Ethan Rudin, our Chief Financial Officer.

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Additionally, Mr.

Rudin was granted options to purchase 325,000 shares of

the Company's common stock with an exercise price equal to the fair market value of our common stock on the date of grant.

Rudin was granted options to purchase 325,000 shares of the Company's common stock with an exercise price equal to $0.09, the fair market value of our common stock on the date of grant.

The options will vest over four years and otherwise be subject to the terms of the Bright Mountain Media, Inc.

2022 Stock Option Plan.

Rudin is terminated without cause, subject to complying with certain conditions, he is entitled to severance equal to his annual salary payable in six equal monthly installments.

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Rudin is bound by customary non-competition and non-solicitation covenants during his period of employment and for a period of one year after the date his employment with the Company terminates.

Additionally, pursuant to the terms of the employment agreement, Mr.

Rudin is bound by certain customary non-disclosure covenants during the period of his employment and after the date his employment with the Company terminates.

On March 7, 2025, effective January 1, 2025, we entered into an amendment to Mr.

Rudin’s Executive Employment Agreement to (i) increase the target bonus he is eligible to receive for 2025 to 50% of his base salary, based on the Company’s performance and as determined by the Company’s board of directors in its sole discretion;

and (ii) grant him an option to purchase 125,000 shares of the Company’s common stock that vest at a rate of 25% per year beginning on March 7, 2026 at an exercise price equal to the fair market value of our common stock on the date of grant.

Director Compensation Table

On August 15, 2023, our Board of Directors adopted a new compensation policy for the directors of the board.

Under the terms of the director compensation policy, directors will receive quarterly cash compensation of $10,000 for service as a director and additional cash compensation of $5,000 for service as chair of the board or of one or more of the Board's committees.

The cash compensation payments are effective April 1, 2023 with payments commencing in October 2023.

The director compensation policy, which was clarified on March 22, 2023, provides 100,000 shares of common stock per year for independent directors on a pro-rata basis for 2023 based on an individual's start date.

Commencing January 1, 2024, directors will receive options to purchase 100,000 shares of our common stock at an exercise price equal to the fair market value of our common stock on the first business day of the year.

Under the terms of the director compensation policy, independent directors receive quarterly cash compensation of $10,000 for service as a director and additional cash compensation of $5,000 for service as chair of one or more of the Board's committees.

The cash compensation payments were effective April 1, 2023 with payments commencing in October 2023.

Commencing January 1, 2024, independent directors receive, on an annual basis, options to purchase 100,000 shares of our common stock at an exercise price equal to the fair market value of our common stock on the first business day of the year.

Such options will vest in full on December 31 of the same year.

Additionally, the Company reimburses each director for fees, travel, and expenses related to their attendance of Board and Committee meetings, if and when incurred, and for income taxes incurred on their respective stock grants.

Additionally, the Company reimburses each director for fees, travel, and expenses related to their attendance of Board and Committee meetings, if and when incurred.

The following table summarizes the compensation earned by our directors for their services as members of our Board for the year ended December 31, 2024.

The information in the following table excludes any reimbursement of out-of-pocket travel and lodging expenses which we may have paid.

Fees Earned in Cash

Awards ($) (1)

Option Awards (1)

All Other Compensation

Kip Speyer (2)

$ 45,000 $ — $ 62,500 $ 107,500

Pamela Parizek (3)

45,000 6,000 1,800 52,800

Gretchen Tibbits (5)

— 2,482 745 3,227

Todd Speyer (6)

— 15,000 175,000 190,000

Jeff Hirsch (7)

15,000 2,285 686 17,971

(1) The stock awards column represents the aggregate grant date fair value of awards earned during the calendar year determined pursuant to FASB ASC Topic 718.

Kip Speyer is not an independent director of our board and while he will receive cash compensation of $45,000 for services provided for the period between April 1, 2023 through December 31, 2023, he will not receive any stock compensation for services provided in the year ended December 31, 2023.

Elaine Riddell (5)

Joseph Pergola (6)

Thomas Triscari (7)

* Indicates that the grant date fair value of the option grant was less than one dollar.

(1) The amounts included in the Option Awards column reflect the aggregate fair market value of stock options to purchase our common stock on the grant date pursuant to FASB ASC Topic 718.

Speyer's tenure as Chairman of the Board ended on June 30, 2024.

The amount listed for Mr.

Speyer in the All Other Compensation column represents an amount owed to Mr.

Speyer as part of a separation agreement.

Parizek resigned from the Board of Directors effective January 18, 2024.

The stock awards column for Ms.

Parizek represents 100,000 shares of Company common stock granted for services provided in the year ended December 31, 2023.

(4) The stock awards column for Mr.

Schulman represents 100,000 shares of common stock granted for services provided in the year ended December 31, 2023.

Tibbits resigned from the Board of Directors effective June 1, 2023.

Tibbits will not receive cash compensation for her service on the board as her resignation predates the changes in our compensation policy which allows for such compensation.

The stock awards column for Ms.

Tibbits represents 41,370 shares of common stock granted for services provided for the period from January 1, 2023 through May 31, 2023.

Todd Speyer resigned as a director effective March 31, 2023 and continues to be employed by the Company.

The stock awards column for Mr.

Todd Speyer represents 100,000 shares of common stock granted in connection with his resignation from the board on March 31, 2023.

Todd Speyer will not be reimbursed for income taxes incurred on his stock grant as his resignation predates the change in our compensation policy which allows for cash reimbursement.

Hirsch was appointed a member of the Board of Directors effective August 15, 2023.

The stock awards column for Mr.

Hirsch represents 38,082 shares of common stock granted for services provided for the period from August 15, 2023 through December 31, 2023.

(8) All other compensation represents (i) amounts paid to each director who received shares of the Company's common stock as 2023 director compensation to compensate such director for income taxes due with respect to the value of such stock;

and (ii) salary paid to each of Mr.

Kip Speyer and to Mr.

Todd Speyer earned during 2023 in the amount of $62,500 and $175,000, respectively.

As of December 31, 2024, Ms.

Parizek held 229,370 shares that she received as director compensation.

The shares have vested.

Schulman resigned from the Board of Directors effective June 30, 2024.

The amount listed for Mr.

Schulman in the All Other Compensation column represents an amount owed to Mr.

Schulman as part of a separation agreement.

At December 31, 2024, Mr Schulman held 265,000 shares and options to purchase 107,500 shares of common stock that he received as director compensation.

The shares and options have vested.

Riddell was appointed a member of the Board of Directors effective August 8, 2024.

Pergola was appointed a member of the Board of Directors effective August 8, 2024.

Triscari was appointed a member of the Board of Directors effective August 8, 2024.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Securities Authorized for Issuance Under Equity Compensation Plan

The following table provides information as of December 31, 2023 with respect to all of our compensation plans under which equity securities are authorized for issuance:

Number of Securities To Be Issued Upon Exercise of Outstanding Options, Warrants and Rights

Weighted Average Exercise Price of Outstanding Options, Warrants and Rights (1)

Number of Securities Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Securities Reflected in Column (a))

The following table provides information as of March 4, 2025 with respect to all of our compensation plans under which equity securities are authorized for issuance:

Plan Category

Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights (a)

Weighted Average Exercise Price of Outstanding Options, Warrants, and Rights (1)

Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excl.

securities reflected in column a)

Equity compensation plans approved by shareholders

Equity compensation plans not approved by shareholders (2)

0.12 11,771,640

(1) This number reflects the weighted-average exercise price of outstanding options and has been calculated exclusive of outstanding restricted stock unit awards issued under our Stock Option Plan.

(2) The below shows Stock Option Plans not approved by stockholders under which grants remain outstanding.

Stock Option Plan Outstanding Options

(1) This number reflects the weighted-average exercise price of outstanding options and has been calculated exclusive of outstanding restricted stock unit awards issued under our stock option plans.

(2) The table below shows stock option plans not approved by stockholders under which grants remain outstanding.

Stock Option Plan

215,000 No further grants can be made under this plan

Outstanding Options

2013 Stock Option Plan

266,000 No further grants can be made under this plan

No further grants can be made on this plan

2015 Stock Option Plan

633,227 No further grants can be made under this plan

No further grants can be made on this plan

2019 Stock Option Plan

9,614,133 Current plan

No further grants can be made on this plan

2022 Stock Option Plan

On April 14, 2022, the Board of Directors of the Company and the Compensation Committee of the Board adopted and approved the 2022 Bright Mountain Media Stock Option Plan (the “Stock Option Plan”).

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The purpose of the Stock Option Plan is to provide an incentive to attract and retain directors, officers, consultants, advisors and employees whose services are considered valuable, to encourage a sense of proprietorship and to stimulate an active interest of such persons into our development and financial success.

The Stock Option Plan has a term of 10 years and

authorizes the issuance of up to 22,500,000 shares of the Company’s common stock.

As of December 31, 2023, 11,771,640 shares were remaining under the Stock Option Plan for the future issuance.

The Stock Option Plan has a term of 10 years and authorizes the issuance of up to 22,500,000 shares of the Company’s common stock.

As of December 31, 2024, 12,040,967 shares were remaining under the Stock Option Plan for future issuance.

Security Ownership of Certain Beneficial Owners and Management

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Unless otherwise noted below, the address of each person listed on the table is c/o Bright Mountain Media, Inc., 6400 Congress Avenue, Suite 2050, Boca Raton, Florida 33487.

Name and Address of Beneficial Owner (1)

Beneficial Owner (1)

Amount and Nature of Beneficial Ownership

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Matthew Drinkwater

Ethan Rudin — *

Miriam Martinez (3)

Kip Speyer (4)

31,393,157 18.3 %

Harry Schulman (5)

Jeffrey Hirsch

Elaine Riddell

Thomas Triscari

Joseph Pergola

All executive officers and directors as a group (6 persons)

32,178,157 18.7 %

Beneficial ownership of 5% or more:

Kip Speyer (4)

31,393,157 18.3 %

10th Lane Partners, LP

36,551,993 21.3 %

Centre Lane Partners Master Credit Fund II, LP

15,150,000 8.8 %

BV Agency, LLC

21,401,993 12.5 %

Andrew Handwerker

9,060,388 5.3 %

* Represents beneficial ownership of less than 1%.

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6400 Congress Avenue, Suite 2050, Boca Raton, Florida 33487.

(2) The percentage of beneficial ownership of the Company is calculated based on 171,557,411 shares of common stock issued and outstanding as of March 29, 2024.

(2) The percentage of beneficial ownership of the Company is calculated based on 175,965,052 shares of common stock outstanding as of March 4, 2025.

(3) Includes (i) 20,432 shares of common stock held directly by Mr.

and (ii) 625,000 shares underlying exercisable options to purchase shares of common stock.

(4) Represents shares underlying exercisable options to purchase shares of common stock.

(5) Includes (i) 38,082 shares of common stock held directly by Mr.

and (ii) 100,000 shares underlying exercisable options to purchase shares of common stock.

(6) Includes (i) 58,514 shares of common stock directly held by directors and a named executive officer;

and (ii) 925,923 shares underlying exercisable options to purchase shares of common stock.

(7) Includes 250,000 shares underlying exercisable options to purchase common stock.

The amount for Mr.

Kip Speyer excludes 200,000 shares that could have been issued in connection with the conversion of $80,000 of convertible notes, which have matured and remain outstanding but are no longer convertible.

(5) Includes 7,500 shares underlying exercisable options to purchases shares of common stock.

(6) Includes 682,500 shares underlying exercisable options to purchase shares of common stock.

(8) Based on a Schedule 13G/A filed on May 10, 2023 by 10th Lane Partners, LP and Centre Lane Partners Master Credit Fund II, L.P., consists of 21,401,993 shares held of record by BV Agency, LLC and 15,150,000 shared held of record by Centre Lane Partners Master Credit Fund II, LP.

10th Lane Partners, LP is the Investment Adviser for these funds and has sole voting and dispositive power of these shares.

The total number of shares held has been adjusted to include 5,001,991 shares issued to BV Agency, LLC on December 26, 2024.

The address for 10th Lane Partners, LP is 60 East 42nd Street, Suite 2220, New York, New York 10165.

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10th Lane Partners LP is the Investment Adviser for this fund and has sole voting and dispositive power of these shares.

The total number of shares held has been adjusted to include 5,001,991 shares issued to BV Agency, LLC on December 26, 2024.

The address for 10th Lane Partners, LP is 60 East 42nd Street, Suite 2220, New York, New York 10165.

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Preferred Stock Purchases

Cash dividends paid during the year ended December 31, 2023 and 2022 was $0 and $5,000, respectively.

No cash dividends were paid during the year ended December 31, 2024 and 2023.

At December 31, 2024, accrued unpaid preference dividends on the preferred stock were $691,000.

This amount is payable to Mr.

Kip Speyer, a director of the Company.

Kip Speyer, a former director of the Company.

Convertible Notes

During November 2018, we issued and sold Mr.

Kip Speyer, a director of the Company, two five-year unsecured convertible notes in the aggregate principal amount of $80,000.

These notes, which were convertible at the option of the holder at any time prior to maturity at a conversion price of $0.40 per share, matured in November 2023, but remain outstanding.

We used the proceeds from these notes for working capital.

The highest outstanding principal amount of the convertible notes held by Mr.

Kip Speyer was $80,000 during the year ended December 31, 2023.

Accrued interest owed to Mr.

Kip Speyer was $39,000 as of December 31, 2023.

On November 30, 2018, the Company issued 10% convertible promissory notes ("Convertible Notes") in the amount of $80,000 to our then Chairman of the Board, a related party.

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

A beneficial conversion feature existed on the date the Convertible Notes were issued whereby the fair value of the underlying common stock into which the Convertible Notes was convertible was in excess of the face value of the Convertible Notes of $80,000.

On July 1, 2024, the Company repaid the outstanding principal of $80,000 and outstanding interest of $43,000 on the Convertible Notes due to its former Chairman of the Board.

Centre Lane Partners

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A related party is a party that can exercise significant influence over the Company in making financial and/or operating decisions.

Through December 31, 2023, the Company has entered into nineteen amendments to the Amended and Restated Senior Secured Credit Agreement between it and Centre Lane Partners (the “Credit Agreement”).

Through December 31, 2024, the Company has entered into twenty-one amendments to the Amended and Restated Senior Secured Credit Agreement between it and Centre Lane Partners (the “Credit Agreement”).

The highest total amount of related party debt including fees and interest paid in kind capitalized owed to Centre Lane Partners was $78.8 million at December 31, 2024.

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Employment Matters

On February 8, 2023, the Company and Mr.

Kip Speyer memorialized Mr.

Kip Speyer’s continued service as Chairman of the Board of Directors.

Also, the Company and Mr.

Kip Speyer memorialized the expiration date for Mr.

Kip Speyer’s employment agreement with the Company as April 1, 2023.

See the Director Compensation table above for Mr.

Kip Speyer’s total compensation for the year ended December 31, 2023.

Speyer, who is the son of Mr.

Kip Speyer, our Chairman of the Board, is employed by the Company as Senior Vice President of Revenue Operations.

Speyer was previously a member of our Board through March 31, 2023.

We are not a party to an employment agreement with Mr.

His compensation was determined by the compensation committee, based upon industry norms.

Todd Speyer $175,000 for his services as an employee of the Company during the year ended December 31, 2023.

We did not pay Mr.

Todd Speyer any amounts for his services as a director during the year ended December 31, 2023.

Effective as of June 29, 2024, the Company entered into a Separation and Release Agreement (the “Separation Agreement”) with W.

Kip Speyer, the Company’s former Chairman of the Board, pursuant to which, among other things, the Company agreed to make the following payments to Mr.

• within two business days of June 29, 2024, the Company would pay (a) 100% of the principal and interest owed to Mr.

Speyer pursuant to (1) the 10% Convertible Promissory Note issued by the Company to Mr.

Speyer on November 12, 2018 and (2) the 10% Convertible Promissory Note issued by the Company to Mr.

Speyer on November 20, 2018 and (b) $15,000 to Mr.

Speyer for his services as a director of the Company for the quarter ended June 30, 2024;

• twelve monthly payments of $5,000 each commencing on July 1, 2024 and ending on June 1, 2025, for an aggregate payment over the twelve-month period of $60,000.

The Company also agreed to accelerate vesting of 125,000 unvested stock options held by Mr.

Speyer, such that 100% of such options would be fully vested on June 30, 2024.

Further, the Company agreed to cooperate with Mr.

Speyer to lift any restrictions on the sale of any shares of Common Stock held by Mr.

Speyer, subject to certain conditions.

In exchange for the foregoing, Mr.

Speyer agreed to release and waive certain claims he may have had against the Company related to his employment with the Company and certain securities he owned in the Company.

Speyer also agreed to assist the Company in any legal matters arising from his employment with the Company or made by or against a third party.

Speyer also agreed to certain non-disparagement, non-solicitation, and confidentiality provisions.

In connection with the Separation Agreement, the Company and Mr.

Speyer also entered into a piggyback registration rights agreement, pursuant to which Mr.

Speyer is entitled to certain piggyback registration rights with respect to any proposed registrations of Common Stock to be made by the Company, aside from those to be made on Form S-4, those made on Form S-8, those made in connection with the resale of Common Stock issued pursuant to a PIPE investment or equity line of credit, or those made in connection with the issuance of securities of the Company in a non-underwritten registered direct offering that serves as an equivalent to a PIPE investment.

PRINCIPAL ACCOUNTING FEES AND SERVICES

Principal Accountant Fees and Services

WithumSmith+Brown, PC ("Withum") has served as the Company's independent registered public accounting firm for the years ended December 31, 2023 and 2022.

WithumSmith+Brown, PC ("Withum") has served as the Company's independent registered public accounting firm since 2021.

The following table sets forth the fees for professional audit services and other services rendered by Withum for the years ended December 31, 2024 and 2023, respectively.

December 31, 2023 December 31, 2022

December 31, 2024

December 31, 2023

Audit fees (1)

$ 790,261 $ 450,137

Audit-related fees (2)

32,319 48,854

All other fees (4)

$ 860,284 $ 499,886

(1) Audit Fees.

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EXHIBIT INDEX

Incorporated by Reference Filed or

Exhibit Description Form Date Filed Number Herewith

Incorporated by Reference

Exhibit Description

Share Exchange Agreement and Plan of Merger dated July 31, 2019 by and among Bright Mountain Media, Inc., Bright Mountain Israel Acquisition Ltd.

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and the shareholders of Slutzky & Winshman, Ltd.

8-K 8/1/19 2.1

Merger Agreement and Plan of Merger dated November 8, 2019 by and among Bright Mountain Media, Inc.

BMTMZ, and News Distribution Network, Inc.

8-K 11/21/19 2.1

Amended and Restated Articles of Incorporation, filed March 11, 2013

Articles of Amendment to the Amended and Restated Articles of Incorporation , filed July 9, 2013

8-K 7/9/13 3.3

Articles of Amendment to the Amended and Restated Articles of Incorporation , filed November 21, 2013

8-K 11/16/13 3.4

Articles of Amendment to the Amended and Restated Articles of Incorporation , filed December 27, 2013

8-K 12/30/13 3.4

Articles of Amendment to the Amended and Restated Articles of Incorporation , filed February 25, 2014

10-K 3/31/14 3.5

Articles of Amendment to the Amended and Restated Articles of Incorporation , filed July 10, 2014

8-K 7/28/14 3.6

Articles of Amendment to the Amended and Restated Articles of Incorporation , filed September 24, 2014

10-K/A 4/1/15 3.5

Articles of Amendment to the Amended and Restated Articles of Incorporation, filed March 20, 2015

Articles of Amendment to the Amended and Restated Articles of Incorporation , filed October 27, 2015

8-K 12/4/15 3.7

Articles of Amendment to the Amended and Restated Articles of Incorporation, filed September 16, 2016

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Articles of Amendment to the Amended and Restated Articles of Incorporation , filed November 5, 2018

8-K 11/13/18 3.10

Articles of Amendment to the Amended and Restated Articles of Incorporation, filed July 31, 2019

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Amended and Restated Bylaws

10 1/31/13 3.2

4.1 Form of unit warrant 2018 private placement

10-K 4/2/18 4.1

4.2 Form of placement agent warrant 2018 private placement

10-K 4/2/18 4.2

Specimen common stock certificate

10-K 5/14/20 4.3

4.4 Form of unit warrant 2019 private placement

8-K 1/14/19 4.1

4.5 Form of placement agent warrant 2019 private placement

8-K 1/14/19 4.2

Description of Securities

Registration Rights Agreement by and between the Company and W.

Kip Speyer, executed June 28, 2024

2013 Stock Option Plan

11/13/13 10.18

201 5 Stock Option Plan

5/27/15 10.36

201 9 Stock Option Plan

12/23/21 10.4

2022 Stock Option Plan

8-K 4/20/22 10.3

Lease Agreement dated August 27, 2014 for registrant's principal executive offices (contained in Exhibit 10.7)

Amendment to Lease Agreement dated August 8, 2018 for registrant’s principal executive offices

10-Q 11/20/18 10.1

Amendment to Lease Agreement dated June 14, 2022 for registrant's principal executive offices

Sublease Agreement dated May 31, 2024 for registrant's principal executive office, suite 2050

Sublease Agreement dated May 31, 2024 for registrant's principal executive office, suite 2200

Membership Interest Purchase Agreement dated June 5, 2020 between Centre Lane Partners Master Credit Fund II and Bright Mountain Media, Inc.

8-K 6/8/20 10.1

Credit Agreement dated as of June 5, 2020 by and among CL Media Holdings, LLC, as the Borrower, the Financial Institutions thereto and Centre Lane Partners Master Fund II, L.P.

8-K 6/8/20 10

10.8 Form of Warrant for November 2019 Private Placement

8-K 2/4/20 10.2

First Amendment to an Amended and Restated Senior Credit Agreement dated April 26, 2021.

8-K 4/30/21 10.1

Second Amendment to an Amended and Restated Senior Credit Facility Agreement dated May 26, 2021.

8-K 6/2/21 10.1

Third Amendment to Amended and Restated Senior Credit Facility Agreement dated December 20, 2021

8-K 8/18/21 10.1

Fourth Amendment to Amended and Restated Senior Secured Credit Agreement dated August 31, 2021

8-K 9/7/21 10.1

Fifth Amendment to Amended and Restated Senior Secured Credit Agreement dated October 8, 2021

8-K 10/8/21 10.1

Sixth Amendment to Amended and Restated Senior Secured Credit Agreement dated November 5, 2021

8-K 11/5/21 10.1

Seventh Amendment to an Amended and Restated Senior Secured Credit Agreement dated December 23, 2021

8-K 12/29/21 10.1

Eighth Amendment to an Amended and Restated Senior Secured Credit Agreement dated January 26, 2022

8-K 1/20/22 10.1

Ninth Amendment to an Amended and Restated Senior Secured Credit Agreement dated February 11, 2022

8-K 2/17/22 10.1

Annex A to the Credit Agreement dated February 11, 2022

8-K 2/17/22 10.2

Tenth Amendment to an Amended and Restated Senior Secured Credit Agreement dated March 11, 2022

8-K 3/16/22 10.1

Annex A to the Credit Agreement dated March 11, 2022

8-K 3/16/22 10.2

Eleventh Amendment to an Amended and Restated Senior Secured Credit Agreement dated March 25, 2022

8-K 3/31/22 10.1

Annex A to the Credit Agreement dated March 25, 2022

8-K 3/31/22 10.2

Twelfth Amendment to an Amended and Restated Senior Secured Credit Agreement dated April 15, 2022

8-K 4/20/22 10.1

Annex A to the Credit Agreement dated April 15, 2022

8-K 4/20/22 10.2

Thirteenth Amendment to an Amended and Restated Senior Secured Credit Agreement dated May 10, 2022

8-K 5/16/22 10.1

Annex A to the Credit Agreement dated May 10, 2022

8-K 5/16/22 10.2

Fourteenth Amendment to an Amended and Restated Senior Secured Credit Agreement dated June 10, 2022

8-K 6/16/22 10.1

Annex A to the Credit Agreement dated June 10, 2022

8-K 6/16/22 10.2

Fifteenth Amendment to an Amended and Restated Senior Secured Credit Agreement dated July 8, 2022

8-K 7/13/22 10.1

Annex A to the Credit Agreement dated July 8, 2022

8-K 7/13/22 10.2

Sixteenth Amendment to an Amended and Restated Senior Secured Credit Agreement dated February 10, 2023

8-K 2/16/23 10.1

Annex A to the Credit Agreement dated February 10, 2023

8-K 2/16/23 10.2

Seventeenth Amendment to Amended and Restated Senior Secured Credit Agreement, dated April 20, 2023

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Annex A to the Credit Agreement, dated July 28, 2023

10.37 Employment Agreement by and between the Company and Ethan Rudin

10.38 E mployment Agreement by and between the Company and Matthew Drinkwater

12/17/21 10.1

Twentieth Amendment to Amended and Restated Senior Secured Credit Agreement, dated June 30, 2024

Annex A to the Credit Agreement, dated June 30, 2024

Twenty-First Amendment to Amended and Restated Senior Secured Credit Agreement, dated December 26, 2024

Annex A to the Credit Agreement, dated December 26, 2024

Employment Agreement dated October 2, 2023 by and between the Company and Ethan Rudin

Employment Agreement dated December 1, 2024 by and between the Company and Matthew Drinkwater

Separation Agreement by and between the Company and W.

Kip Speyer, executed June 29, 2024

Separation Agreement by and between the Company and Harry Schulman, executed June 30, 2024

Code of Ethics

Insider Trading Policies and Procedures (contained in Exhibit 14.1)

List of subsidiaries

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Certification of the Chief Financial Officer and Principal Financial and Accounting Officer pursuant to Section 1350

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* This certification is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.

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BRIGHT MOUNTAIN MEDIA, INC.

April 1, 2024

March 10, 2025

/s/ Matthew Drinkwater

Matthew Drinkwater

Chief Executive Officer and Director

Interim Chairman of the Board and Chief Executive Officer

(Principal Executive Officer)

April 1, 2024

March 10, 2025

/s/ Ethan Rudin

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Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

April 1, 2024

Chairman of the Board of Directors

April 1, 2024

March 10, 2025

/s/ Matthew Drinkwater

Matthew Drinkwater

Director and Chief Executive Officer

April 1, 2024

/s/ Harry Schulman

Harry Schulman

April 1, 2024

Interim Chairman of the Board and Chief Executive Officer

March 10, 2025

/s/ Elaine Riddell

Elaine Riddell

March 10, 2025

/s/ Joseph Pergola

Joseph Pergola

March 10, 2025

/s/ Thomas Triscari

Thomas Triscari

March 10, 2025

/s/ Jeff Hirsch

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Consolidated statements of cash flows for the years ended December 31, 2024 and 2023

Notes to consolidated financial statements

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

Notes to the consolidated financial statements

Report of Independent R egistered Public Accounting Firm

Board of Directors and Shareholders of

Bright Mountain Media, Inc.

Opinion on the Financial Statements

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Bright Mountain Media, Inc.

(the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ deficit and cash flows for each of the years ended December 31, 2023 and 2022, and the related notes (collectively referred to as the “financial statements”).

(the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, change in stockholders’ deficit and cash flows for each of the years ended December 31, 2024 and 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of Bright Mountain Media, Inc.

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Revenue Recognition – Refer to Note 2 and Note 14 to the consolidated financial statements

Revenue Recognition – Refer to Note 2 and Note 14 to the financial statements

Critical Audit Matter Description

The Company derives revenue from three revenue streams which include (i) digital advertisements on its owned and operating publishing websites, as well as advertising on partner mobile apps and digital streaming services such as CTV (Connected Television) Channels in its customer agreements, (ii) providing creative and media services to customers, and (iii), consumer insights over time as the research, intelligence, and insight services are performed for the customer.

The Company recognizes the first revenue stream at a point in time when control of services is transferred to the customer.

The Company recognizes the second revenue stream over time based on the signed contract terms which includes the service period.

The Company recognizes the third revenue stream as a percentage of total budgeted project costs as the underlying project costs are incurred for signed contracts.

The Company derives revenue from five revenue streams which include (i) digital advertisements on its owned and managed sites and on partner website, (ii) fees for facilitating exchange of advertisements, (iii), planning and execution of creative and media marketing campaigns, (iv) provision of creative and media services to advertisers, and (v), providing primary and secondary research, intelligence, and insights to address strategic issues by providing an integrated service for such research.

The Company recognizes the first and second revenue stream at a point in time as advertisements are delivered.

The Company recognizes the third and fourth revenue stream as services are rendered over time based on the signed contract terms which includes the service period.

The Company recognizes the fifth revenue stream as services are rendered by applying the percentage of completion method on a cost-to-cost basis to measure progress toward satisfaction of performance obligation.

Progress toward satisfaction of the performance obligation is measured based on costs incurred to-date relative to the total estimated costs expected to be incurred in providing services.

In determining revenue recognition for these customer agreements, the Company performs the following five steps:

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Our principal audit procedures related the Company’s revenue recognition for these revenue streams included the following:

• Digital Advertising

◦ We performed a walkthrough of the design effectiveness and implementation of internal controls with respect to the Company’s revenue and cash receipts cycle.

◦ We selected a sample of customer agreements and performed the following procedures:

• Digital Publishing and Advertising Technology

o We performed a walkthrough of the design effectiveness and implementation of internal controls with respect to the Company’s revenue and cash receipts cycle.

o We selected a sample of customer agreements and performed the following procedures:

▪ Obtained and read a sample of contract source documents for each selection as well as amendments thereto.

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▪ We obtained the amount of impressions delivered by the Company to the customer from the third party ad server data to test the appropriateness of recognized revenue with the terms of the contract.

◦ We tested the mathematical accuracy of management’s calculations of revenue and the associated timing of revenue recognized in the financial statements.

o We tested the mathematical accuracy of management’s calculations of revenue and the associated timing of revenue recognized in the financial statements.

• Creative and Media Services

◦ We performed a walkthrough of the design effectiveness and implementation of internal controls with respect to the Company’s revenue and cash receipts cycle.

◦ We selected a sample of customer agreements and performed the following procedures:

o We performed a walkthrough of the design effectiveness and implementation of internal controls with respect to the Company’s revenue and cash receipts cycle.

o We selected a sample of customer agreements and performed the following procedures:

▪ Obtained and read the contract source documents for each selection as well as amendments thereto.

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▪ We tested the appropriateness of recognized revenue with the terms of the contract.

◦ We tested the mathematical accuracy of management’s calculations of revenue and the associated timing of revenue recognized in the financial statements.

o We tested the mathematical accuracy of management’s calculations of revenue and the associated timing of revenue recognized in the financial statements.

• Consumer Insights

◦ We performed a walkthrough of the design effectiveness and implementation of internal controls with respect to the Company’s revenue and cash receipts cycle.

◦ We selected a sample of customer agreements and performed the following procedures:

▪ Obtained and read the contract source documents for each selection as well as amendments thereto.

o We performed a walkthrough of the design effectiveness and implementation of internal controls with respect to the Company’s revenue and cash receipts cycle.

o We selected a sample of customer agreements and performed the following procedures:

▪ Obtained and read a sample of contract source documents for each selection as well as amendments thereto.

▪ We obtained an understanding of the performance obligations associated with the Company’s revenue contracts.

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▪ We determine that the allocation of the transaction price was to a single performance obligation.

▪ We tested the appropriateness of recognized revenue with the terms of the contract by evaluating the underlying budgeted costs and actual costs that drive the percent of the total contract value recognized during the year.

◦ We tested the mathematical accuracy of management’s calculations of revenue and the associated timing of revenue recognized in the financial statements.

Valuation of Intangible Assets and Goodwill - Refer to Notes 2, 6, and 7 to the consolidated financial statements

▪ We tested the properness of recognized revenue with the terms of the contract by evaluating the underlying budgeted costs and actual costs that drive the percent of the total contract value recognized during the year.

o To evaluate the completeness and accuracy of the underlying reports utilized to calculate costs incurred by project we performed the following procedures:

▪ Obtained the third-party vendor and payroll costs and agreed them to the general ledger.

▪ Tested the cost allocation by verifying the third-party vendor invoice details to project details.

▪ Compared the internal tracking system to the general ledger and recalculated the labor rate applied to projects utilizing the third-party payroll report, which was tested separately.

▪ Analyzed both the system generated and management updated percentages of completion from the reports obtained.

▪ Traced and agreed accrued amounts from the reports to the general ledger.

o We tested the mathematical accuracy of management’s calculations of revenue and the associated timing of revenue recognized in the financial statements.

Valuation of Intangible Assets and Goodwill - Refer to Notes 2, 6, and 7 to the financial statements

Critical Audit Matter Description

As reflected in the Company’s consolidated financial statements at December 31, 2023 the Company’s intangible assets and goodwill was approximately $ 15 million and $ 7.8 million, respectively.

As disclosed in Note 2 to the consolidated financial statements, the Company tests goodwill 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.

As reflected in the Company’s financial statements at December 31, 2024 the Company’s intangible assets and goodwill were approximately $13.4m and $7.8m, respectively.

As disclosed in Note 2 to the financial statements, the Company tests intangible assets at the asset group level and goodwill at the reporting unit level for impairment 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.

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

We identified the evaluation of the Company's impairment test of goodwill and intangible assets as a critical audit matter due to significant management estimates and judgements inherently required in determining the fair value of estimates.

This in turn led to a high degree of auditor judgement, subjectivity, and effort in performing procedures to evaluate the reasonableness of management's significant estimates and assumptions, several of which extend many years into the future.

We identified the evaluation of the Company’s impairment test of goodwill and intangible assets as a critical audit matter due to significant management estimates and judgments inherently required in determining the fair value estimates.

This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate the reasonableness of management’s significant estimates and assumptions, several of which extend many years into the future.

Additionally, the audit effort involved the use of professionals with specialized skill and knowledge.

How the Critical Audit Matter Was Addressed in the Audit

We read and evaluated the impairment analysis summary report, prepared by the Company's external valuation specialists that assessed the fair value of the Company's goodwill as of December 31, 2023.

We performed a walk-through of the design effectiveness and implementation of internal controls related to financial reporting of the goodwill.

Additional procedures included testing management's process for developing their impairment estimate, which included evaluating the appropriateness of the method used by the Company to develop cash flow projections for goodwill, as well as testing the completeness and accuracy of the underlying data used in the estimates.

We read and evaluated the impairment analysis summary report, prepared by the Company's external valuation specialists that assessed the fair value of the Company's intangible assets and goodwill as of December 31, 2024.

We performed a walk-through of the design effectiveness and implementation of internal controls related to financial reporting of the intangible assets and goodwill.

Additional procedures included testing management's process for developing their impairment estimate, which included evaluating the appropriateness of the method used by the Company to develop cash flow projections for intangible assets and goodwill, as well as testing the completeness and accuracy of the underlying data used in the estimates.

In addition, we evaluated the reasonableness of significant assumptions including future sales, long-term growth rates, and future economic conditions and performed sensitivity testing on some assumptions.

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Along with the procedures previously described, we performed the following procedures:

• We utilized the knowledge, experience, and expertise of our internal valuation specialists to execute the planned valuation procedures related to the valuation by assessing the reasonableness of the methodologies employed to value the goodwill.

• We utilized the knowledge, experience, and expertise of our internal valuation specialists to execute the planned audit procedures related to the valuation by assessing the reasonableness of the methodologies employed to value the intangible assets and goodwill.

• We reviewed the professional qualifications and objectivity/independence of the external valuation specialist.

• We tested the underlying assumptions presented in the impairment assessment as it relates to projections.

Accounting and Valuation for Debt Modifications and Extinguishment - Refer to Note 10 to the consolidated financial statements

Accounting and Valuation for Debt Modifications and Extinguishment - Refer to Note 10 to the financial statements

Critical Audit Matter Description

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If the debt is extinguished, the old debt is derecognized and the new debt is recorded as fair value, which becomes the new carrying value.

We identified the evaluation of the Company’s accounting for debt modifications as a critical audit matter due to significant complex calculations inherently required in determining proper accounting treatment.

We identified the evaluation of the Company's accounting for debt modification and the valuation of the debt as a critical audit matter due to due to significant complex calculations inherently required in determining proper accounting treatment and the fair value of debt.

This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate the reasonableness of management’s assumptions and calculations.

2 unchanged sentences

We read and evaluated the debt modification and extinguishment analysis report, prepared by the Company's external valuation specialist that assessed each amendment to the credit agreement.

There were a total of 4 amendments that were executed during the year.

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

There was a total of two amendments that were executed during the year.

For each of the amendments, the external valuation specialist calculated the present value of the cash flows under the terms of each amendment and determined if it was considered substantially different by at least a 10% difference from the present value of the remaining cash flow of the debt instrument subsequent to the extinguishment that took place during the year ended December 31, 2023.

We performed a walk-through of the design effectiveness and implementation of internal controls related to financial reporting of the debt cycle.

2 unchanged sentences

• We tested the external valuation analysis for clerical accuracy and completeness.

• We utilized the knowledge, experience, and expertise of our internal valuation specialists to assess the reasonableness of the methodologies employed to value the calculate the present values of the debt instrument under the amended terms and original terms.

• We reviewed the professional qualifications and objectivity/independence of the external valuation specialist.

• We independently performed a calculation of the present value of the debt instrument under the new terms from the amendment and the original terms of the debt instrument to evaluate whether the external valuation specialist’s conclusion were reasonable and consistent with our conclusion.

Business Combination - Refer to Note 13 to the consolidated financial statements

Critical Audit Matter Description

As reflected in the Company’s consolidated financial statements at December 31, 2023, the Company completed a business combination on April 20, 2023, for approximately $20.0 million.

As disclosed in Note 13 to the consolidated financial statements, the Company allocated the purchase price to acquired assets and liabilities, including intangibles and the residual value being assigned to goodwill.

The fair value assigned to the acquired intangibles is based on a discounted flow analysis, in which the Company makes 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 the Company’s long-term projections.

Assumptions used in the Company’s fair value calculations are consistent with the Company’s internal forecasts and operating plans.

The Company’s discount rate is based on the Company’s debt structure, adjusted for current market conditions.

We identified the evaluation of the Company's fair value valuation of acquired intangibles and residual goodwill as a critical audit matter due to significant management estimates and judgements inherently required in determining the fair

value estimates.

Additionally, the audit effort involved the use of professionals with specialized skill and knowledge.

How the Critical Audit Matter Was Addressed in the Audit

We identified the evaluation of the fair value measurement of the acquired Trade Name, Customer Relationships, and Developed Technology as a critical audit matter.

A high degree of subjective auditor judgment was required to evaluate certain key assumptions used to estimate the acquisition-date fair value of the acquired intangible assets.

Specifically, the key assumptions for certain intangible assets, including revenue growth rates and the discount rate, represented subjective determinations of future market and economic conditions.

Changes to those assumptions could have had a significant effect on the determination of the fair value measurements.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s acquisition-date valuation process, including controls related to the development of the key assumptions for certain tangible and intangible assets.

We performed sensitivity analyses over the key assumptions for revenue growth rates to assess the impact of changes in those key assumptions on the Company’s determination of the fair value of the intangible assets, respectively.

We evaluated the reasonableness of the Company’s forecasted revenue growth rates by comparing them to historical results for comparable products and peer companies, analyst expectations, and industry related third-party data.

We evaluated the data sources used by management in determining the key assumptions for the intangible assets by comparing to industry standards and evidence obtained in other areas of the audit.

In addition, we involved valuation professionals with specialized skills and knowledge, who assisted in:

(1) evaluating the discount rates used by the Company for the intangible assets by comparing them against discount rate ranges that were independently developed using publicly available market data for comparable entities

(2) testing the source information underlying the determination of the discount rates

Along with the procedures previously described, we performed the following procedures:

• We evaluated management's assessment that the acquisition accurately represented a business combination and properly identified the accounting acquirer of the underlying transaction

• We reviewed the professional qualifications and objectivity/independence of the external valuation specialist.

• We tested the underlying assumptions presented in the business combination as it relates to projections

• We independently performed a calculation of the present value of the debt instrument under the new terms from each of the amendments and the terms subsequent to the extinguishment that took place during the year-ended December 31, 2023.

of the debt instrument to evaluate whether the external valuation specialist’s conclusion were reasonable and consistent with our conclusion.

/s/ WithumSmith+Brown, PC

We have served as the Company's auditor since 2021.

East Brunswick, New Jersey

April 1, 2024

New York, New York

March 10, 2025

PCAOB ID Number 100

BRIGHT MOUNTAIN MEDIA, INC.

CONSOLIDATED BALANCE SHEETS

CONSOLIDATE D BALANCE SHEETS

(in thousands, except share and per share data)

December 31, 2024

December 31, 2023

Current assets:

Cash and cash equivalents

Restricted cash

Accounts receivable, net

3 unchanged sentences

Intangible assets, net

Operating lease right-of-use asset 306 367

Other assets, non-current

Total Assets $ 43,417 $ 29,200

Operating lease right-of-use assets

Other long-term assets

Liabilities and Stockholders' Deficit

3 unchanged sentences

Interest payable - 10 % convertible promissory notes - related party

Interest payable - Centre Lane senior secured credit facility - related party

Deferred revenue

Note payable - 10 % convertible promissory notes, net of discount - related party

Note payable – Centre Lane Senior Secured Credit Facility – related party (current portion) 5,592 4,860

Note payable - Centre Lane senior secured credit facility - related party (current)

Total current liabilities

Other liabilities, non-current 325 —

Note payable – Centre Lane Senior Secured Credit Facility, net of discount – related party (non-current)

58,674 25,101

Finance lease obligations, non-current

Operating lease liabilities, non-current

Other long-term liabilities

Note payable - Centre Lane senior secured credit facility - related party (long-term)

Finance lease liabilities

Operating lease liabilities

Total liabilities

Stockholders' deficit:

Convertible preferred stock, par value $ 0.01 , 20,000,000 shares authorized, no shares issued or outstanding at December 31, 2023 and December 31, 2022

Convertible preferred stock, par value $ 0.01 , 20,000,000 shares authorized, no shares issued or outstanding at December 31, 2024 and December 31, 2023, respectively

Common stock, par value $ 0.01 , 324,000,000 shares authorized, 177,464,827 and 172,103,134 issued, and 176,114,652 and 171,277,959 outstanding at December 31, 2024 and December 31, 2023, respectively

Treasury stock, at cost;

825,175 shares at December 31, 2023 and December 31, 2022, respectively

( 220 ) ( 220 )

Treasury stock at cost, 1,350,175 and 825,175 shares at December 31, 2024 and December 31, 2023, respectively

Additional paid-in capital

5 unchanged sentences

BRIGHT MOUNTAIN MEDIA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

CONSOLIDATED STATEMENTS OF OPER ATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share data)

For the Years Ended December 31,

Revenue $ 44,546 $ 19,580

December 31, 2024

December 31, 2023

Cost of revenue

Gross margin 12,780 9,087

General and administrative expenses

Impairment of goodwill and intangibles 17,070 —

Impairment of goodwill and intangible assets

Loss from operations

( 26,812 ) ( 5,068 )

Financing (expense) income

Gain on forgiveness of PPP loan — 1,137

Other income 437 69

Interest expense - Centre Lane Senior Secured Credit Facility- related party ( 9,142 ) ( 4,227 )

Financing and other expense:

Interest expense - 10 % convertible promissory notes - related party

Interest expense - Centre Lane senior secured credit facility - related party

Other interest expense

Total financing (expense) ( 8,752 ) ( 3,057 )

Total financing and other expense, net

Net loss before income tax

( 35,564 ) ( 8,125 )

Income tax provision

( 35,564 ) ( 8,125 )

Preferred stock dividends — ( 5 )

Net loss attributable to common stockholders $ ( 35,564 ) $ ( 8,130 )

Foreign currency translation

1 unchanged sentence

Net loss per common share:

Basic and diluted $ ( 0.22 ) $ ( 0.05 )

Weighted average shares outstanding:

Basic and diluted 164,845,671 149,191,057

See accompanying notes to consolidated financial statements.

Bright Mountain Media, Inc.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

Consolidated Statements of Changes in Stockhold ers' Deficit

(in thousands, except share and per share data)

Years Ended December 31, 2023 and 2022

Preferred Stock Common Stock Treasury Stock Additional

Capital Accumulated

Deficit Accumulated

Comprehensive

Stockholders’

Shares Amount Shares Amount Shares Amount

Treasury Stock

Additional Paid-in

Accumulated Other Comprehensive

Total Stockholders'

Balance at December 31, 2022

Net loss — — — — — — — ( 8,125 ) — ( 8,125 )

Series E preferred stock dividend — — — — — — ( 5 ) — — ( 5 )

Series E preferred stock conversion ( 125,000 ) ( 1 ) 125,000 1 — — — — — —

Adjustment to common stock for Oceanside acquisition

Common stock issued for options exercised

Stock-based compensation

Common stock issued for Oceanside acquisition — — 174,253 2 — — 277 — — 279

Warrants issued in settlement of liability — — — — — — 216 — — 216

Issue of common stock for services rendered — — 235,000 2 — — 36 — — 38

Common stock issued to Centre Lane Partners

Common stock issued for services rendered

Extinguishment of Centre Lane Credit Facility

Adjustment from foreign currency translation, net

Balance, December 31, 2022 — — 150,444,636 1,504 ( 825,175 ) ( 220 ) 98,797 ( 114,269 ) 117 ( 14,071 )

Net loss — — — — — — — ( 35,564 ) — ( 35,564 )

Adjustment to common stock issued for Oceanside acquisition

— — ( 23,495 ) — — — — — — —

Balance at December 31, 2023

Common stock issued for options exercised

— — 90,000 1 — — — — — 1

Stock based compensation — — — — — — 196 — — 196

Common stock issued to Centre Lane Partners

— — 21,401,993 214 — — 1,712 — — 1,926

Issue of common stock for services rendered

— — 190,000 2 — — 29 — — 31

Extinguishment of Centre Lane Credit Facility

— — — — — — 671 — — 671

Common stock issued for services rendered

Treasury stock

Stock-based compensation

Adjustment from foreign currency translation, net

Balance, December 31, 2023

— $ — 172,103,134 $ 1,721 ( 825,175 ) $ ( 220 ) $ 101,405 $ ( 149,833 ) $ 262 $ ( 46,665 )

Balance at December 31, 2024

See accompanying notes to consolidated financial statements.

BRIGHT MOUNTAIN MEDIA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

CONSOLIDATED STATEME NTS OF CASH FLOWS

(in thousands, except share and per share data)

For the Years Ended December 31,

December 31, 2024

December 31, 2023

Cash flows from operating activities:

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

Adjustments to reconcile net loss to net cash used in operations:

Depreciation 125 38

Interest paid-in kind on Centre Lane Credit Facility 6,656 3,104

Amortization of operating lease right-of-use asset 61 15

Depreciation expense

Interest paid-in-kind on Centre Lane senior secured credit facility - related party

Amortization of operating lease right-of-use assets

Amortization of debt discount

Amortization of intangibles 2,490 1,558

Impairment of goodwill and intangibles 17,070 —

Amortization of intangible assets

Impairment of goodwill and intangible assets

Stock-based compensation

Common stock issued for services rendered

Stock compensation for Oceanside shares — 89

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

Expected credit losses

Provision for credit losses

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expenses and other current assets 360 695

Operating lease liability ( 54 ) ( 25 )

Prepaid expenses and other assets

Operating lease liabilities

Accounts payable and accrued expenses

1 unchanged sentence

Interest payable - Centre Lane senior secured credit facility - related party

Interest payable – 10% Convertible Promissory note - related party

Interest payable - 10 % convertible promissory notes - related party

Deferred revenue

( 701 ) ( 426 )

Net cash used in operating activities ( 4,658 ) ( 3,115 )

Net cash provided by (used in) operating activities

Cash flows from investing activities:

Purchase of property and equipment

Capitalization of website development

Net cash used in investing activities

( 14 ) ( 14 )

Cash flows from financing activities:

Preference dividend payments — ( 5 )

Proceeds from stock option exercises

Principal payments on finance lease liabilities

Proceeds from Centre Lane senior secured credit facility - related party

Repayment of principal on Centre Lane senior secured credit facility - related party

Repayments of debt — ( 250 )

Principal payments received for notes receivable — 21

Principal payments on finance lease obligations

Payment of interest on Centre Lane Senior Secured Credit Facility, related party — (153)

Proceeds from stock option exercises 1 1

Net cash provided by financing activities 8,353 2,664

Effect of foreign exchange rates on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

3,685 ( 466 )

Cash and cash equivalents at beginning of year 315 781

Cash and cash equivalents at end of year $ 4,000 $ 315

Repayment of principal on 10 % convertible promissory notes - related party

Net cash (used in) provided by financing activities

Effect of foreign exchange rates on cash

Net increase in cash, cash equivalents, and restricted cash

Cash, cash equivalents, and restricted cash at the beginning of the period

Cash, cash equivalents, and restricted cash at the end of the period

Reconcilation of cash, cash equivalents, and restricted cash to the consolidated balance sheet:

Cash and cash equivalents

Restricted cash

Total cash, cash equivalents, and restricted cash

Supplemental disclosure of cash flow information:

Cash paid for interest

Interest paid-in-kind on Centre Lane Credit Facility $ 6,656 $ 3,104

Interest paid-in-kind on Centre Lane senior secured credit facility - related party

Supplemental disclosure of non-cash investing and financing activities:

Recognition of right-of-use asset and lease liability

Conversion of Preferred shares to Common shares $ — $ 1

Common stock issued to Oceanside to settle share liability $ — $ 279

Common stock issued to Centre Lane for debt issuance $ 1,926 $ —

Recognition of right-of-use assets and operating lease liabilities

Agency and exit fees to Centre Lane for debt financing

Annual administration fee to Centre Lane for debt financing

Issuance of common stock to Centre Lane for debt financing

Issuance of debt to finance acquisition of Big Village Entities

Extinguishment of Centre Lane credit facility

Warrants issued to settle liability $ — $ 216

See accompanying notes to consolidated financial statements.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO THE CONSOLIDA TED FINANCIAL STATEMENTS

NOTE 1 – DESCRIPTION OF BUSINESS

1 unchanged sentence

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.

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

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

During the year ended December 31, 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")), in an all-cash transaction funded by the Centre Lane senior secured credit facility (the "Big Village Acquisition").

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.

The Company generates revenue through:

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.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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"),

• 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, and

• 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");

• 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;

Asset Purchase Agreement

On April 3, 2023, in accordance with certain procedures (the “Bidding Procedures”) adopted by the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) in In re Big Village Holding LLC , et al., jointly-administered under case No.

23-10174 (the “Bankruptcy Case”), the “Company” submitted a bid (the “Bid”) for the acquisition of certain assets of Big Village Insights, Inc., a Delaware corporation f/k/a Engine International, Inc., Big Village Agency LLC, a Delaware limited liability company f/k/a Engine USA LLC, Big Village Group Inc., a Delaware corporation f/k/a Engine Group Inc., Deep Focus, Inc., a New York corporation, EMX Digital Inc., a Delaware corporation, Balihoo, Inc., a Delaware corporation, and Big Village Media LLC, a Delaware limited liability company f/k/a Engine Media LLC in the Bankruptcy Case (collectively, the “Sellers”) related to the Sellers’ Agency Business and Insights Business (as defined in the APA) (collectively, the “Business”).

On April 10, 2023, the Company entered into a definitive asset purchase agreement to acquire the assets of two business units of Big Village (Big Village Insights, Inc and Big Village Agency LLC, (together, the “Big Village Entities”)) for approximately $ 20.0 million, plus assumed liabilities, in an all-cash transaction funded by a senior secured credit facility (the "Big Village Acquisition").

On April 20, 2023, the Company completed 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 incorporate the assets acquired in the transactions.

Additionally, letters of employment were extended to certain legacy employees of the Big Village Entities, resulting in a total of 203 employees accepting an offer of employment by the Company.

Centre Lane Senior Secure Credit Facility

The Company and its subsidiaries are parties to the Amended and Restated Senior Secured Credit Agreement between itself, the lender party thereto, and Centre Lane Partners Master Credit Fund II, L.P., as Administrative Agent and Collateral Agent (“Centre Lane Partners”), dated June 5, 2020, as amended (the “Credit Agreement”).

On April 4, 2023, the Company entered into a commitment letter (the “Commitment Letter”) with Centre Lane Solutions Partners, LP (together with any designated affiliates thereof, the “CLP Lenders”), pursuant to which CLP Lenders would provide financing in the form of a senior secured credit facility for the Big Village Acquisition.

On April 20, 2023, the Company and its subsidiaries CL Media Holdings LLC, Bright Mountain LLC, Mediahouse, Inc., Big-Village Agency LLC, and BV Insights LLC, and Centre Lane Partners entered into the Seventeenth Amendment to the Credit Agreement (the “Seventeenth Amendment”).

The Credit Agreement was amended, as provided in the Seventeenth Amendment, to provide for an additional term loan amount of $ 26.3 million to, among other things, finance the Big Village Acquisition.

This term loan, which was provided by BV Agency, LLC, (an affiliate of Centre Lane Solutions Partners, LP) matures on April 20, 2026 and was issued at a discount of 5 % or $ 1.3 million.

Interest of 15 % is payable under the note, payable-in-kind in lieu of cash payments through April 30, 2024, then 5 % is payable quarterly in cash and 10 % payable-in-kind in lieu of cash payments until maturity of April 20, 2026.

Also, in connection with the Seventeenth Amendment, on April 20, 2023, the Company issued 21,401,993 shares of common stock of the Company to BV Agency, LLC, an entity beneficially owned by CLP Lenders.

The issuance of the shares of common stock were not registered under the Securities Act of 1933, as amended (the “Securities Act”), in accordance with Section 4(a)(2) of the Securities Act as a transaction by an issuer not involving a public offering.

As of December 31, 2023, BV Agency, LLC and Centre Lane Partners own approximately 12.4 % and 8.8 % of the Company’s outstanding common stock, respectively.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

• provision of creative and media services to advertisers.

NOTE 2 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and include the accounts of the Company and all its wholly owned subsidiaries.

The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and in accordance with rules and regulations of the U.S.

Securities and Exchange Commission (“SEC”) and include the accounts of the Company and all its wholly owned subsidiaries.

All significant intercompany balances and transactions have been eliminated in consolidation, including revenue and cost of revenue for services performed by a subsidiary company.

1 unchanged sentence

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.

The Company is currently exploring several strategic alternatives, including restructuring or refinancing its debt, or seeking additional debt, including borrowing under the Centre Lane Senior Secured Credit Agreement or raising equity capital.

The ability to access the capital market is also dependent upon the stock volume and market price of the Company's stock, which cannot be assured.

The ability to access the capital markets is also dependent upon the stock volume and market price of the Company's stock, which cannot be assured.

Other measures include reducing or delaying certain business activities, reducing general and administrative expenses, including a reduction in headcount.

The ultimate success of these plans is not guaranteed.

The Company's current cash and working capital, as of the filing of this Annual Report on Form 10-K, is not expected to be sufficient to fund its anticipated level of operations over the next twelve months.

The Company's current cash and working capital is not expected to be sufficient to fund its anticipated level of operations over the next twelve months.

As a result, such matters create a substantial doubt regarding the Company’s ability to meet its financial needs and continue as a going concern.

The accompanying condensed consolidated financial statements are prepared on a going concern basis and do not include any adjustments that might result from uncertainty about the Company’s ability to continue as a going concern.

The accompanying consolidated financial statements are prepared on a going concern basis and do not include any adjustments that might result from uncertainty about the Company’s ability to continue as a going concern.

Cash and Cash Equivalents

4 unchanged sentences

The Company held a cash balance with a single financial institution in excess of the FDIC insured limit in the amount of $ 2.3 million as of December 31, 2024.

As of December 31, 2022, the Company's interest and non-interest-bearing accounts were within the federally insured limit.

As of December 31, 2023 and 2022, the Company exceeded the insurance limit of $ 29 ,000 for one of its international bank accounts by $ 31 ,000 and $ 66 ,000, respectively.

The Company held a cash balance with a single financial institution in excess of the FDIC insured limit in the amount of $ 3.7 million as of December 31, 2023.

As of December 31, 2023, the Company exceeded the insurance li mit of $ 29,000 for o ne of its international bank accounts by $ 31,000 .

The Company did not exceed the insurance limit of its international bank accounts as of December 31, 2024.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company's financial condition, results of operations, and cash flows.

At December 31, 2023, and 2022, the Company had $ 4.0 million and $ 316 ,000, respectively, in cash and cash equivalents.

At December 31, 2024, and 2023, the Company had $ 2.5 million and $ 4.0 million , respectively, in cash and cash equivalents.

Restricted Cash

The Company considers cash to be restricted when withdrawal or general use is legally restricted.

The Company reports restricted cash as a separate item in the consolidated balance sheets.

At December 31, 2024, the Company had $ 1.9 million in restricted cash, consisting of cash restricted for settlement of judgment purposes.

See Note 17, Commitments and Contingencies, to the consolidated financial statements.

At December 31, 2023, the Company did no t have restricted cash.

Accounts Receivable and Allowances

5 unchanged sentences

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

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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 allowance for current expected credit losses is accounted for in line with ASC 310.

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.

11 unchanged sentences

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.

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

The Company categorizes goodwill into three reporting units:

1 unchanged sentence

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.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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.

18 unchanged sentences

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.”

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Amortization and Impairment of Long-Lived Assets

4 unchanged sentences

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.

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

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

7 unchanged sentences

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.

Finance leases are included in property and equipment, net, finance lease obligations, and finance lease obligations, non-current on our consolidated balance sheets.

Finance leases are included in property and equipment, net and finance lease liabilities on our consolidated balance sheets.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Revenue Recognition

13 unchanged sentences

The Company generates revenue through:

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

• 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.

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

10 unchanged sentences

For campaign services that require a one-time deliverable, we recognize revenue once the performance obligation is satisfied at a point in time.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Media services revenues are generated through the access to programmatic campaigns.

12 unchanged sentences

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

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

assets represent costs incurred by the acquired website to build value prior to an acquisition, and any related amortization and impairment expenses are not representative of ongoing costs of doing business.

During the year ended December 31, 2024, the Company performed enhancements to its website of approximately $ 96,000 .

During the year ended December 31, 2023 , all website development costs were expensed.

Advertising and Marketing

15 unchanged sentences

Treasury rate in effect at the time of grant.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Treasury Stock

3 unchanged sentences

Gains and losses are recognized at the time the treasury stock is reinstated or retired and are recorded in additional paid-in capital or retained earnings.

At December 31, 2023 and 2022, the Company owned 825,175 shares of treasury stock.

At December 31, 2024 and 2023 , the Company owned 1,350,175 and 825,175 shares of treasury stock, respectively.

Loss Per Share

7 unchanged sentences

These costs are directly deducted from the carrying amount of the liability in the consolidated balance sheets, are amortized over the life of the related debt using the effective interest method and are classified as interest expense in the accompanying consolidated statements of operations.

These deferred debt costs are related to the Company's Centre Lane Secured Credit Facility.

These deferred debt costs are related to the Company's Centre Lane Senior Secured Credit Facility.

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

1 unchanged sentence

A valuation allowance is provided to reduce net deferred tax assets to the amount that, based on available evidence, is more likely than not to be realized.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Company follows the provisions of FASB Accounting Standards Codification No.

5 unchanged sentences

The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

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

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

Segment Reporting

1 unchanged sentence

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.

The Chief Financial Officer uses consolidated net income or loss and total assets when assessing segment performance and deciding how to allocate resources.

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.

The factors used to determine the Company’s reportable segments follow the guidance of ASC 280-10-50-21 and 280-10-50-22 and include consideration of the type of services delivered, the customers and end markets served, the applicable revenue recognition methodology and the length of time it takes to deliver services to customers.

Our divisions are digital publishing, advertising technology, consumer insights, creative services, and media services, and due to their similar economic characteristics, we have determined that we have one operating and reportable segment.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Use of Estimates

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

The preparation of consolidated 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.

1 unchanged sentence

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

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.

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 Credit Facility carrying value regarding debt modification or extinguishment, and the valuation allowance on deferred tax assets.

While these estimates are based on our best knowledge of current events and actions that may affect us in the future, actual results may differ materially from these estimates.

Foreign Currency

We translate the financial statements of our foreign subsidiaries, which have a functional currency in the respective country’s local currency, to U.S.

We translate the consolidated financial statements of our foreign subsidiaries, which have a functional currency in the respective country’s local currency, to U.S.

dollars using month-end exchange rates for assets and liabilities and actual exchange rates for revenue, costs and expenses on the date of the transaction.

2 unchanged sentences

Concentrations of Credit Risk

Financial instruments that potentially subject us to concentration of credit risk consist principally of cash and cash equivalents and accounts receivable.

We place our cash and cash equivalents with high credit-quality financial institutions.

Financial instruments that potentially subject us to concentration of credit risk consist principally of cash, cash equivalents, restricted cash and accounts receivable.

We place our cash, cash equivalents, and restricted cash with high credit-quality financial institutions.

Such deposits may be in excess of federally insured limits.

2 unchanged sentences

Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company's financial condition, results of operations, and cash flows.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

We perform credit evaluations of our customers’ financial condition and require no collateral from our customers.

5 unchanged sentences

• providing primary research 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.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The following table provides information about customer and vendor concentration that exceeds 10% of revenue, accounts receivable and accounts payable for the years ended December 31, 2024 and 2023:

December 31, 2024

December 31, 2023

Revenue Concentration

Customers exceeding 10% of revenue

% of overall revenue

Customer 1 13.0 % — %

Customer 2 10.0 % 37.7 %

Total % of revenue 23.0 % 37.7 %

Percentage of revenue:

Total percentage of revenue

* Represents a customer revenue balance less than the 10% threshold.

December 31, 2024

December 31, 2023

Accounts Receivable Concentration

Customers exceeding 10% of receivable 2 1

% of accounts receivable

Customer 1 15.7 % — %

Customer 2 10.5 % 43.5 %

Total % of accounts receivable 26.2 % 43.5 %

Accounts Payable Concentration

Vendors exceeding 10% of payable — 2

% of accounts payable

Customer 1 — % 11.0 %

Customer 2 — % 10.8 %

Total % of accounts payable — % 21.8 %

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Customers exceeding 10% of accounts receivable

Percentage of accounts receivable:

Total percentage of accounts receivable

* Represents a customer accounts receivable balance less than the 10% threshold.

Off-balance Sheet Arrangements

1 unchanged sentence

Reclassification

As of and for the year ending December 31, 2023, certain amounts have been reclassified for comparative purposes.

Changes were made for foreign currency translation from operating activities to showing the cash and cash equivalent impact only as a separate line item below financing activities, right of use asset and liability showing a net position instead showing a separate line item for asset and liabilities and reclassification on other operating activities line items for accounts payable and accrued expenses on the consolidated statement of cash flows.

Changes were made for other expenses under finance income (expense), to general and administrative expense, which impacted our loss from operations

As of and for the year ended December 31, 2024, reclassification of certain accounts has been made to previously reported amounts to conform to their treatment to the current period.

Specifically, the Company identified a reclassification for non-direct project cost from personnel cost under general and administrative expenses to cost of revenue on the consolidated statements of operations and comprehensive loss.

These reclassifications had no impact on the previously reported net loss for the year ended December 31, 2023 .

Effective Accounting Pronouncements Adopted

In June 2016, the FASB issued Accounting Standards Update (“ASU”) No.

2016-13 (amended by ASU 2019-10), Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, regarding the measurement of credit losses for certain financial instruments.

which replaces the incurred loss model with a current expected credit loss (“CECL”) model.

The CECL model is based on historical experience, adjusted for current conditions and reasonable and supportable forecasts.

The Company was required to adopt the new guidance on January 1, 2023.

Based on the nature of our business, the adoption of this standard did not have a material impact on our consolidated financial statements for the year ended December 31, 2023.

In October 2021, the FASB issued Accounting Standards Update (“ASU”) No.

2021-08, Business Combinations (Topic 805):

Accounting for Contract Assets and Contract Liabilities from Contracts with Customer s.

The amendments in this update require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606.

At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts.

For public business entities, the amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

The amendments in this update should be applied prospectively to business combinations occurring on or after the effective date of the amendments.

Early adoption of the amendments is permitted, including adoption in an interim period.

An entity that early adopts in an interim period should apply the amendments (1) retrospectively to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of early application and (2) prospectively to all business combinations that occur on or after the date of initial application.

The Company adopted this standard in accounting for its Big Village Acquisition.

Recent Accounting Pronouncements Not Yet Adopted

In August 2020, the FASB issued Accounting Standards Update (“ASU”) No.

In August 2020, the FASB issued ASU No.

2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40).

The ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity.

This ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity.

The FASB reduced the number of accounting models for convertible debt and convertible preferred stock instruments and made certain disclosure amendments to improve the information provided to users.

The new standard is effective January 1, 2024 (early adoption is permitted, but not earlier than January 1, 2021).

The Company is currently evaluating the impact this guidance will have on the Company’s consolidated financial statements.

The new standard was effective January 1, 2024 (early adoption was permitted, but not earlier than January 1, 2021).

This standard did not have an impact on our consolidated financial statements for the period ended December 31, 2024.

For 2024 annual reporting, we adopted Accounting Standards Update ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

This new standard requires an enhanced disclosure of significant segment expenses on an annual and interim basis, effective for fiscal years beginning after December 15, 2024.

The adoption of ASU 2023-07 did no t have a significant impact on our consolidated financial statements for the period ended December 31, 2024.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Accounting Pronouncements Not Yet Adopted

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction.

It also includes certain other amendments to improve the effectiveness of income tax disclosures.

This new standard will be effective for the annual periods beginning the year ended December 31, 2025.

The new standard permits early adoption and can be applied prospectively or retrospectively.

We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

In November 2024, the FASB issued ASU No.

2024-03, Income Statement Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses .

The new guidance requires disaggregated information about certain income statement expense line items on an annual and interim basis.

This guidance will be effective for annual periods beginning the year ended December 31, 2027 and for interim periods thereafter.

The new standard permits early adoption and can be applied prospectively or retrospectively.

We are evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.

NOTE 3 – ACCOUNTS RECEIVABLE

Accounts receivable, net, consisted of the following:

December 31, 2024

December 31, 2023

(in thousands)

Accounts receivable

Unbilled receivables ( A )

Unbilled receivables (1)

allowance for current expected credit losses

( 372 ) ( 586 )

Accounts receivable, net

(A) - Unbilled receivable represents amounts for services rendered at the end of the period pending generation of invoice to the customer.

(1) Unbilled receivable represents amounts for services rendered at the end of the period pending generation of invoice to the customer.

Accounts receivable, net at January 1, 2023 was $ 3.6 million.

Expected credit losses was $ 58,000 , and $ 84,000 for the years ended December 31, 2023, and 2022, respectively.

Expected credit losses (recoveries) were $ 15,000 , and $ 58,000 for the years ended December 31, 2024, and 2023 , respectively.

These amounts are included in general and administrative expenses in the consolidated statements of operations and comprehensive loss.

1 unchanged sentence

Prepaid expenses and other assets consisted of the following:

December 31, 2024

December 31, 2023

(in thousands)

Prepaid insurance (1)

Prepaid consulting service

Prepaid software

Deposits 156 137

Subscriptions

Other current assets (2)

Total prepaid expense and other assets 1,213 737

other assets, non-current

( 156 ) ( 137 )

Total prepaid costs and other assets

other long-term assets

Prepaid expenses and other current assets

(1) The amount of $ 618,000 is being paid over a period of time and is also included in accounts payable at December 31, 2023.

(1) Includes $ 291,000 and $ 618,000 which is being paid over a period of time and is included in accounts payable at December 31, 2024 and 2023, respectively.

(2) Includes approximately $ 121,000 which is being paid over a period of time and is included in accounts payable at December 31, 2024 .

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

(Years) December 31,

NOTE 5 – PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following:

December 31, 2024

December 31, 2023

(in thousands)

7 unchanged sentences

Website acquisitions, net, consisted of the following:

December 31, 2024

December 31, 2023

(in thousands)

Website acquisition assets

website development costs

accumulated amortization

Website acquisition assets, net

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Other intangible assets, net, consisted of the following:

December 31, 2023 December 31, 2022

($ in thousands) Useful Life (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount

Trade name 2 - 10

$ 8,381 $ ( 3,167 ) $ 5,214 $ 2,759 $ ( 1,617 ) $ 1,142

December 31, 2024

December 31, 2023

(in thousands)

IP/technology

Customer relationships

13,380 ( 7,002 ) 6,378 6,680 ( 4,419 ) 2,261

Non-compete agreements

402 ( 402 ) — 402 ( 381 ) 21

Total $ 27,984 $ ( 12,751 ) $ 15,233 $ 11,824 $ ( 7,316 ) $ 4,508

The Company performed an impairment assessment at September 30, 2023 and December 31, 2023, and recorded an impairment loss of $ 2.9 million.

There was no impairment loss for the year ended December 31, 2022.

Impairment loss is included in the below table:

(in thousands) Accumulated Amortization

Other intangible assets, net

The Company performed an impairment assessment during the period ended December 31, 2023, and recorded an impairment loss of $ 2.9 million.

There was no triggering event or impairment loss for the year ended December 31, 2024.

December 31, 2023

December 31, 2024

Impairment Loss

Accumulated Amortization

December 31, 2022 Twelve Months Ended

December 31, 2023 December 31, 2023

Trade name $ 1,617 $ 742 $ 808 $ 3,167

(in thousands)

IP/technology

1 unchanged sentence

Non-compete agreements

Total $ 7,316 $ 2,946 $ 2,489 $ 12,751

Other intangible assets, net

During the year ended December 31, 2023, the Company acquired intangible assets through the acquisition of the Big Village Entities as follows:

(in thousands) Useful Life

(Years) Amount

Trade name 7 to 10

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Gross Carrying Amount

(in thousands)

Developed technology

Customer relationships 7 to 10

Total $ 16,160

Customer relationships

Acquired intangible assets

For further details on the Big Village Acquisition, see Note 13 , Business Combinations to the consolidated financial statements.

Website $ 1 $ 2

Other intangibles 15,233 4,508

Total intangible, net $ 15,234 $ 4,510

December 31, 2024

December 31, 2023

(in thousands)

Other intangible assets

Intangible assets, net

Amortization expense for the years ended December 31, 2024, and 2023 was approximately $ 1.9 million , and $ 2.5 million , respectively, related to both the website acquisition costs and the intangible assets, and is included in general and administrative expense in the statements of operations and comprehensive loss.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2024, expected remaining amortization expense of intangible assets and website acquisition by fiscal year is as follows:

($ in thousands) Amount

Total $ 15,234

Total expected amortization expense

NOTE 7 – GOODWILL

The following table represents the allocation of goodwill as of December 31, 2024 and 2023:

($ in thousands) Owned & Operated Ad Network Insights

Owned & Operated

(in thousands)

December 31, 2022

December 31, 2023

Additions 1,357 — 907 2,264

Impairment ( 8,217 ) ( 5,907 ) — ( 14,124 )

December 31, 2024

4 unchanged sentences

See Note 13, Business Combinations to the consolidated financial statements.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Goodwill is tested for impairment at least annually and if triggering events are noted prior to the annual assessment.

2 unchanged sentences

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

Our qualitative assessment concluded that it is more likely than not that the estimated fair value of the Ad Network and Owned & Operating reporting units is less than the carrying value, hence, we performed a quantitative analysis.

Our qualitative assessment concluded that it is more likely than not that the estimated fair value of the Ad Network and Owned & Operating reporting units was less than the carrying value, hence, we performed a quantitative analysis.

Our assessment for Insights reporting unit did not have such conclusion, hence a quantitative analysis was not required.

6 unchanged sentences

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

Our quantitative analysis showed that the implied fair value of our goodwill for Ad Network and Owned & Operating reporting units is less than its carrying value which resulted in an impairment charge of approximately $ 14.1 million .

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

At September 30, 2024, an impairment assessment was performed on goodwill for Ad Network, Owned & Operating and Insights reporting units.

The assessment used a qualitative assessment, including consideration of the economic, industry and market conditions in addition to the overall financial performance of the Company and these assets.

Our qualitative assessment concluded that it is more likely than not that the estimated fair value of the Ad Network, Owned & Operating and Insights reporting units exceeds its carrying amount.

Since the assets are considered recoverable, no impairment charge was recognized for the year ended December 31, 2024.

NOTE 8 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following:

December 31, 2024

December 31, 2023

(in thousands)

Accounts payable (A)

$ 11,391 $ 8,585

Accounts payable (1)

Accrued wages, commissions, and bonus

2 unchanged sentences

Subcontractor

Other 265 116

Total accounts payable and accrued expenses

Accounts payable includes $ 5.2 million, and $ 5.9 million at December 31, 2023 and, 2022, respectively, for Slutzky & Winshman Ltd and Mediahouse, whose operations were terminated during the year ended December 31, 2023.

(1) Accounts payable includes $ 5.2 million at both December 31, 2024 and December 31, 2023, respectively, for Slutzky & Winshman Ltd.

and Mediahouse Inc., whose operations were terminated during the year ended December 31, 2023.

Accounts payable includes $ 266,000 at December 31, 2024 for Wild Sky Media Co.

Ltd., whose operations were terminated during the year ended December 31, 2024.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 – OTHER CURRENT LIABILITIES

Other current liabilities consisted of the following:

(in thousands) December 31, 2023 December 31, 2022

December 31, 2024

December 31, 2023

(in thousands)

Current portion of long-term lease

3 unchanged sentences

Other current liabilities

Total other current liabilities 3,350 1,838

other liabilities, non-current ( 325 ) —

Total other liabilities

other long-term liabilities

Other current liabilities

(1) Represents amount advanced by customers to cover third party expenses specifically related to their project, these expenses are offset against the advance and are not part of the Company's income statement.

(1) Represents amount advanced by customers to cover third party expenses specifically related to their project.

These expenses are offset against the advance and are not part of the Company's income statement.

NOTE 10 – CENTRE LANE SENIOR SECURED CREDIT FACILITY

Effective June 1, 2020, the Company entered into a membership interest purchase agreement to acquire 100 % of Wild Sky Media, a subsidiary (the “Purchase Agreement”).

Effective June 1, 2020, the Company entered into a membership interest purchase agreement to acquire 100 % of Wild Sky Media, a subsidiary of the Company (the “Purchase Agreement”).

To finance this acquisition, the Company obtained a first lien senior secured credit facility from Centre Lane Partners Master Credit Fund II, L.P.

(“Centre Lane Partners”) in the amount of $ 16.5 million, comprised of $ 15.0 million of initial indebtedness, repayment of Wild Sky’s existing accounts receivable factoring facility of approximately $ 900,000 and approximately $ 500,000 of expenses.

As of December 31, 2024, Centre Lane Partners had loaned the Company an additional $ 39.9 million to provide liquidity to fund operations.

The Centre Lane Senior Secured Credit Facility has been determined to qualify as a related party transaction as shares were issued to Centre Lane Partners as part of the transaction.

A related party is a party that can exercise significant influence over the Company in making financial and/or operating decisions.

On April 4, 2023, the Company entered into a commitment letter (the “Commitment Letter”) with Centre Lane Partners, pursuant to which they would provide financing in the form of a senior secured credit facility for the acquisition of the Big Village Entities.

On April 20, 2023, the Company and its subsidiaries entered into the Seventeenth Amendment to the Credit Agreement (the “Seventeenth Amendment”) with Centre Lane Partners.

The Credit Agreement was amended, as provided in the Seventeenth Amendment, to provide for an additional term loan amount of $ 26.3 million to, among other things, finance the Acquisition.

This term loan, which was provided by BV Agency, LLC, matures on April 20, 2026 and was issued at a discount of 5 % or $ 1.3 million.

Interest of 15 % payable under the note is payable-in-kind in lieu of cash

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

payment up to April 30, 2024, then 5 % payable quarterly in cash and 10 % payable-in-kind in lieu of cash payment until maturity of April 20, 2026.

Interest of 15 % payable under the note is payable-in-kind in lieu of cash payment up to April 30, 2024, then 5 % payable quarterly in cash and 10 % payable-in-kind in lieu of cash payment until maturity of April 20, 2026.

As a result of the Twentieth Amendment (as described below), interest payable on the loans under the Seventeenth Amendment from April 2024 until June 30, 2025 was converted 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 to transition to payments made 10 % PIK and 5 % in cash.

As part of the Seventeenth Amendment, the Company is required to pay an amendment fee of 2 % of the principal amount of the existing initial principal plus amendments one to eight ("First In Last Out Loans") and amendments nine to sixteen ("Last In First Out Loans"), totaling $ 706,000 , additionally, an exit fee of $ 18,000 of the loan to finance the Big Village Acquisition.

1 unchanged sentence

These fees total $ 724,000 and are due and payable at maturity.

Additionally, the maturity dates were extended to April 20, 2026.

The shares valued $ 1.9 million, based on a per share price of $ 0.09 , which was the closing price of the Company’s common stock at close of market on April 19, 2023.

The issuance of the shares of common stock were not registered under the Securities Act of 1933, as amended (“Securities Act”), in accordance with Section 4(a)(2) of the Securities Act as a transaction by an issuer not involving a public offering.

As of December 31, 2023, BV Agency, LLC and Centre Lane Partners own approximately 12.4 % and 8.8 % of the Company’s outstanding common stock, respectively.

On July 28, 2023, the Company and its subsidiaries entered into the Nineteenth Amendment to the Credit Agreement (the “Nineteenth Amendment”) with Centre Lane Partners.

The Credit Agreement was amended, as provided in the Nineteenth Amendment, to provide for an additional term loan amount of $ 2.0 million to, among other things, finance the integration and further growth of the Company post-Acquisition.

This term loan is part of the last in first out loans and matures on June 28, 2024 .

Including the Nineteenth Amendment, Centre Lane Partners subsequently loaned the Company an additional $ 38.0 million to provide liquidity to fund operations beginning in April 2021 (as amended, the “Centre Lane Senior Secured Credit Facility”).

This Centre Lane Senior Secured Credit Facility has been determined to qualify as a related party transaction as shares were issued to Centre Lane Partners as part of the transaction.

A related party is a party that can exercise significant influence over the Company in making financial and/or operating decisions.

The shares were valued at $ 1.9 million, based on a per share price of $ 0.09 , which was the closing price of the Company’s common stock at close of market on April 19, 2023.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

On July 28, 2023, the Company and its subsidiaries entered into the Nineteenth Amendment to the Credit Agreement (the “Nineteenth Amendment”) with Centre Lane Partners to provide for an additional term loan amount of $ 2.0 million to, among other things, finance the integration and further growth of the Company post-Big Village Acquisition.

This term loan was part of the Last In First Out Loans and matured on June 28, 2024.

On June 30, 2024 the Company and its subsidiaries entered into the Twentieth Amendment to the Credit Agreement (the "Twentieth Amendment" and together with the Credit Agreement and all other amendments thereto, the "Centre Lane Secured Credit Facility") with Centre Lane Partners to provide, among other things, for the extension of the maturity date of the term loan under the Nineteenth Amendment to December 31, 2024.

Beginning September 30, 2024, the Company commenced repayment by making four monthly payments of principal and interest with the balance paid on December 31, 2024.

The original note issued under the Centre Lane Senior Secured Credit Facility initially bore interest at a rate of 6.0 % per annum, with payments of 2.5 % of outstanding principal beginning on June 30, 2023.

The interest rate was increased to 10.0 % pursuant to the first amendment to the Centre Lane Senior Secured Credit Facility and interest payable under the note is payable-in-kind (“PIK Interest”) in lieu of cash payment.

The interest rate was increased to 10.0 % pursuant to the first amendment to the Centre Lane Senior Secured Credit Facility and interest payable under the note is PIK in lieu of cash payment.

Commencing with the Ninth Amendment, the interest rate was increased to 12 % per annum on all subsequent draws with 8 % per annum payable quarterly in cash and 4 % per annum payable-in-kind in lieu of cash payment.

These last in first out loans, totals $ 6.9 million inclusive of exit fees at December 31, 2023, due and payable on April 20, 2026, excluding the Nineteenth Amendment which is due and payable on June 28, 2024.

These “last in first out loans,” totaling $ 5.2 million inclusive of exit fees at December 31, 2024, are due and payable on April 20, 2026, excluding the amounts due under the Nineteenth Amendment which were due and payable on December 31, 2024.

In connection with the Nineteenth Amendment, adjustments were made to the interest rate for outstanding loans with the exception of the draw under the Seventeenth Amendment as follows:

• The interest rate per annum changed to 7.0 % per annum plus the Secured Overnight Financing Rate ("SOFR").

At December 31, 2023, the SOFR was 5.39 % per annum, overall interest on these facilities was 12.39 %, per annum at December 31, 2023;

• The cash pay rate for the last in first out loans was changed to the SOFR plus 3.0 % per annum, at December 31, 2023, the rate was 8.39 %, per annum;

• Effective July 1, 2024, the first in last out loans PIK Rate per annum will be 7.0 % per annum plus SOFR plus 5.0 % per annum.

There is no prepayment penalty associated with this Centre Lane Senior Secured Credit Facility.

However, partial or full prepayments of the Centre Lane Senior Secured Credit Facility would be required in the event of certain future capital raises.

• The interest rate per annum changed to 7.0 % plus the Secured Overnight Financing Rate ("SOFR").

At December 31, 2024, the SOFR was 4.71 % , thus the overall interest rate on these facilities was 11.71 % , per annum;

• The cash pay rate for the last in first out loans was changed to the SOFR plus 3.0 % per annum.

At December 31, 2024, the rate was 7.71 % per annum.

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

• Adjusting the amortization of the last out loans with quarterly installments of $ 100,000 commencing on September 30, 2024, with quarterly payments increasing to 2.5 % of the amount outstanding under the loans (including capitalized PIK interest) commencing on March 31, 2025.

The amount outstanding under the last out loans was $ 37.5 million at December 31, 2024.

• 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;

• Converting interest payable on the Seventeenth Amendment loan 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 to 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;

• Agreeing to pay an amendment fee equal to 2 % of the principal amount of the Seventeenth Amendment term loan and Nineteenth Amendment term loan, which amount was paid-in-kind by adding the amount of such amendment fee to the outstanding principal balance.

This fee was $ 672,000 at June 30, 2024.

On December 26, 2024, the Company and its subsidiaries entered into the Twenty-First Amendment to the Credit Agreement (the "Twenty-First Amendment") with Centre Lane Partners for the purpose of securing a bond (the "Bond") to stay execution of a judgment in the amount of approximately $ 1.7 million that was entered into against the Company as a result of certain disclosed litigation (the "Ladenburg litigation"), as the Company intends to appeal the judgment.

See Note 17, Commitments and Contingencies.

On December 26, 2024, the Company borrowed an additional approximately $ 1.9 million from the lenders, which funds were used to secure the Bond.

Amounts drawn pursuant to the Twenty-First Amendment, including all accrued but unpaid principal and interest thereon, will mature and become payable on the earlier of (i) the date upon which the Ladenburg litigation is resolved and results in the Company being obligated to pay less than the judgment, and (ii) April 20, 2026.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Interest included 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 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 to the lenders, then the interest rate will remain 0 % per annum.

Interest to be paid in kind will accrue at (i) a rate of 15 % per annum from the date the loan amounts are funded until June 30, 2025 and (ii) 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.

In connection with the Twenty-First Amendment and as consideration therefore, the Company agreed to issue a number of shares of the common stock of the Company, par value $ 0.01 per share, equal to 2.5 % of the fully-diluted pro forma ownership of the Company, or 5,0001,991 shares of the common stock, to an affiliate of the lenders.

Following such issuance, Centre Lane Partners and its affiliates collectively beneficially own approximately 23.6 % of the Company's common stock.

As of December 31, 2024, BV Agency, LLC, and Centre Lane Partners beneficially own approximately 15.0 % and 8.6 % of the Company’s outstanding common stock, respectively.

Optional Prepayment

The Company may, at any time, voluntarily prepay, in whole or in part, a minimum of $ 250,000 of the outstanding principal of the loans, plus any accrued but unpaid interest on the aggregate principal amount of the loans being prepaid.

There is no prepayment penalty associated with the Centre Lane Senior Secured Credit Facility.

However, partial or full prepayments of the Centre Lane Senior Secured Credit Facility is required in the event of certain future capital raises.

Repayment of Loans

With respect to the last out loans, the Company was initially required to repay in cash to Centre Lane Partners (i) commencing with the fiscal quarter ended on June 30, 2023, in consecutive quarterly installments to be paid on the last day of each fiscal quarter of the Company, an amount equal to 2.5 % of the outstanding aggregate principal amount of the original principal plus draws advanced by amendments 2 through 8 along with accrued and unpaid interest (after giving effect to capitalized PIK Interest) and (ii) on the maturity date all outstanding obligations (including, without limitation, all accrued and unpaid principal and interest on the principal amounts of the Loans (including any accrued but uncapitalized PIK Interest)) of the loan parties that are due and payable on such date.

As a result of the Twentieth Amendment, the Company will commence amortization of the first in last out loans with quarterly installments of $ 100,000 commencing on September 30, 2024, with quarterly payments increasing to 2.5 % of the amount outstanding under the loans (including capitalized PIK interest) commencing on March 31, 2025.

On June 30, 2023, the Company and its subsidiaries entered into its Eighteenth Amendment with Centre Lane Partners to change the timing of certain installment payments which were due on June 30, 2023.

The Eighteenth Amendment deferred these payments into equal monthly installments due on July 3, 2023, August 7, 2023, and September 5, 2023, respectively.

There was no impact on principal or interest and no fees incurred by the Company as a result of this amendment.

In connection with the Nineteenth Amendment, and prior to the execution of the Twentieth Amendment, quarterly installments equal to 2.5 % of the outstanding aggregate principal were due on the first in last out loans commencing March 31, 2024.

For the year ended December 31, 2024, the Company paid $ 3.1 million toward the principal loan balance.

For the year ended December 31, 2023, the Company paid $ 270,000 toward the principal loan balance.

The amount outstanding under the first in last out loans was $ 37.5 million at December 31, 2024.

Interest payable on the last in first out loans at December 31, 2024 was $ 21,000 .

During the year ended December 31, 2024, the Company paid approximately $ 539,000 towards outstanding interest on the last in first out loans.

During the year ended December 31, 2023, the Company paid approximately $ 425,000 towards outstanding interest on the last in first out loans.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Repayment of Loans

The Company is required to repay in cash to Centre Lane Partners (i) commencing with the fiscal quarter ending on June 30, 2023, in consecutive quarterly installments to be paid on the last day of each fiscal quarter of the Company, an amount equal to 2.5 % of the outstanding aggregate principal amount of the original principal plus draws advanced by amendments 2 through 8 along with accrued and unpaid interest (after giving effect to capitalized PIK Interest) and (ii) on the maturity date all outstanding obligations (including, without limitation, all accrued and unpaid principal and interest on the principal amounts of the Loans (including any accrued but uncapitalized PIK Interest)) of the loan parties that are due and payable on such date.

The outstanding amount for these draws at December 31, 2023 is $ 34.1 million, inclusive of interest paid in kind.

On June 30, 2023, the Company and its subsidiaries entered into its Eighteen th Amendment with Centre Lane Partners regarding installment payments which were due on June 30, 2023.

The Eighteenth Amendment required equal monthly installments on July 3, 2023, August 7, 2023 and September 5, 2023, respectively.

There was no impact on principal or interest and no fees incurred by the Company for this amendment.

In connection with the Nineteenth Amendment, quarterly installments equal to 2.5 % of the outstanding aggregate principal are due on the first in last out loans commencing March 31, 2024.

During the years ended December 31, 2023, and 2022, the Company paid approximately $ 425,000 and $ 153,000 , respectively, toward outstanding interest payable.

During the years ended December 31, 2023, and 2022, the Company paid approximately $ 270,000 and $ 0 , respectively, toward outstanding principal.

Under the terms of the Centre Lane Senior Secured Credit Facility, the Company is also required to pay Centre Lane Partners a non-refundable annual administration fee equal to $ 35,000 for agency services provided under this agreement.

1 unchanged sentence

The accumulated administrative fee since inception of the facility is $ 175,000 and is included in outstanding principal.

The administrative fee charged for the years ended December 31, 2023, and 2022 was $ 35,000 , respectively.

The administrative fee charged during the years ended December 31, 2024 and 2023 was $ 35,000 for both periods, respectively.

The below table summarizes the loan balances and accrued interest for the years ended December 31, 2024 and 2023:

December 31, 2024

December 31, 2023

(in thousands)

Note payable – Centre Lane Senior Secured Credit Facility, related party (current portion) $ 5,592 $ 4,860

Note payable – Centre Lane Senior Secured Credit Facility – net of discount, related party 58,674 25,101

Net principal at December 31, 2023 and 2022

64,266 29,961

Note payable - Centre Lane senior secured credit facility - related party (current)

Note payable - Centre Lane senior secured credit facility - related party (net of discount)

Net principal

debt discount

Outstanding principal at December 31, 2023 and 2022

$ 70,228 $ 33,109

Outstanding principal

The below table summarizes the movement in the outstanding principal from inception through December 31, 2024:

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

December 31, 2023

(in thousands)

Opening balance

Draws 29,816 3,050

Exit and other fees 917 621

Exit and other fees, net

Interest capitalized

70,498 33,109

Payment ( 270 ) —

Outstanding principal

1 unchanged sentence

Commencing April 2021, the Company and certain of its subsidiaries entered into various amendments to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners.

The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent.

The Credit Agreement was amended to provide for additional loans used for working capital.

The Credit Agreement was amended a number of times to provide for additional loans used for working capital and acquisitions.

In addition, and as part of the transaction, there are exit fees (the “Exit Fees”), which will be added and capitalized to the principal amount of the original loan.

As of December 31, 2023, there were nineteen amendments to the Centre Lane Senior Secured Credit Facility.

As of December 31, 2024, there were twenty-one amendments to the Centre Lane Senior Secured Credit Facility.

Consistent with FASB ASC Topic 470 Debt , (“ASC 470”), the Company is required to perform an analysis of the change in each amendment to determine whether the change is 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 derecognized and the new debt is recorded as fair value, which becomes the new carrying value.

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

A gain or loss is recorded for the difference between the net carrying value of the original debt and the fair value of the new debt, additionally, in the event the transaction is with a related party, this gain or loss should be recognized against additional paid in capital.

1 unchanged sentence

A debt is considered extinguished if the present value of the new cash flows under the term of the new debt is at least 10% different from the present value of the remaining cash flows under the terms of the old debt.

In connection with the Seventeenth Amendment, the Company determined that the change was an extinguishment consistent with ASC 470, Debt , the old debt of $ 35.5 million was derecognized and the new debt of $ 62.7 million was recognized at estimated fair value.

A gain on extinguishment was recognized against additional paid in capital of $ 671,000 , as Centre Lane Partners is a related party.

The below table summarizes the amendments that were executed by the Company since the inception of the facility to December 31, 2023, (in thousands, except for share data):

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Number Date Draw $'000 Repayment Date Interest Rate (PIK) (D)

Interest Rate (Cash) Agency Fee Exit Fee (A)

Common Stock Issued Accounting Impact

1 4/26/2021 $ — 4/20/2026 12.39 % — % $ — $ — 150,000 Extinguishment (B)

2 5/26/2021 1,500 4/20/2026 12.39 % — % — 750 3,000,000 Modification (F)

3 8/12/2021 500 4/20/2026 12.39 % — % — 250 2,000,000 Modification (F)

4 8/31/2021 1,100 4/20/2026 12.39 % — % — 550 — Modification (F)

5 10/08/2021 725 4/20/2026 12.39 % — % — 363 — Extinguishment (F)

6 11/05/2021 800 4/20/2026 12.39 % — % — 800 7,500,000 Modification (F)

7 12/23/2021 500 4/20/2026 12.39 % — % 70 500 — Modification (F)

$ 5,125 $ 70 $ 3,213 12,650,000

8 1/26/2022 350 4/20/2026 12.39 % — % — 350 — Modification (F)

9 2/11/2022 250 4/20/2026 4.00 % 8.39 % — 13 — Modification (G)

10 3/11/2022 300 4/20/2026 4.00 % 8.39 % — 15 — Modification (G)

11 3/25/2022 500 4/20/2026 4.00 % 8.39 % — 25 — Modification (G)

12 4/15/2022 450 4/20/2026 4.00 % 8.39 % — 23 — Modification (G)

13 5/10/2022 500 4/20/2026 4.00 % 8.39 % 35 25 — Modification (G)

14 6/10/2022 350 4/20/2026 4.00 % 8.39 % — 18 — Modification (G)

15 7/08/2022 350 4/20/2026 4.00 % 8.39 % — 18 — Modification (G)

$ 3,050 $ 35 $ 487 —

16 2/10/2023 1,500 4/20/2026 4.00 % 8.39 % — 75 — Modification (G)

17 4/20/2023 26,316 4/20/2026 15.00 % — % 35 708 21,401,993 Extinguishment (C)

19 7/28/2023 2,000 6/28/2024 4.00 % 8.39 % $ — 100 — Modification (G)

$ 29,816 $ 35 $ 883 21,401,993

Total $ 37,991 $ 140 $ 4,583 34,051,993

In connection with the Seventeenth Amendment, the Company determined that the change was an extinguishment consistent with ASC 470, Debt, the old debt of $ 35.5 million was de-recognized and the new debt of $ 62.7 million was recognized at estimated fair value.

A gain on extinguishment was recognized against additional paid in capital of $ 671,000 , as Centre Lane Partners is a related party.

The below table summarizes the amendments that were executed by the Company since the inception of the facility to December 31, 2024, (in thousands, except for share data):

Repayment Date

Interest Rate

Common Stock Issued

Accounting Impact

(in thousands, except share data)

Extinguishment

(a) Added and capitalized to the principal amount of the original loan and the original loan terms apply.

2 unchanged sentences

(D) New rates in effect in connection with amendment nineteen, Amendment 1 through 8 PIK rate was 10 %.

(E) New rates in effect in connection with amendment nineteen, Amendment 9 through 16 cash rate was 8 %.

First In Last Out Loans.

Last In First Out Loans.

As discussed above, there was no impact on principal or interest and no fees incurred by the Company for amendment 18, hence not included in above table.

Draws advanced by amendments 2 through 8 totaling $ 5.5 million and exit fees totaling $ 3.6 million, were due for full repayment on February 28, 2022;

prior to this date, the loan agreement allowed the Company to waive accrual of

(d) New rates in effect in connection with Amendment 19, Amendment 1 through 8 PIK rate was 10 %.

(e) New rates in effect in connection with Amendment 19, Amendment 9 through 16 cash rate was 8 %.

(f) Last Out Loans.

(g) Last In First Out Loans.

(h) As discussed above, there was no impact on principal or interest and no fees incurred by the Company for Amendment 18, hence not included in above table.

(i) New rates and repayment terms in connection with Amendment 20.

(j) 0 % cash rate until June 30, 2025, then 5 % per annum thereafter.

15 % paid-in-kind rate until June 30, 2025 then 10 % paid-in-kind thereafter.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

interest on these amounts.

Draws advanced by Amendments 2 through 8 totaling $ 5.5 million and exit fees totaling $ 3.6 million, were due for full repayment on February 28, 2022;

prior to this date, the loan agreement allowed the Company to waive the accrual of interest on these amounts.

There was no repayment of these amounts, and as a result, on March 11, 2022, Amendment 10 was executed, changing the repayment date of the outstanding principal, and commencing interest accrual on the exit fees.

5 unchanged sentences

Interest expense for the year ended December 31, 2024 and 2023 consisted of the following:

December 31, 2024

December 31, 2023

(in thousands)

Interest expense

Amortization 2,062 1,185

Total interest expense

The minimum annual principal payments of notes payable at December 31, 2024 were:

December 31, 2024

(in thousands)

Total $ 70,228

NOTE 11 – 10% CONVERTIBLE PROMISSORY NOTES

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

The Convertible Notes are unsecured and mature five years from issuance and are convertible at the option of the holder into shares of common stock at any time prior to maturity at a conversion price of $ 0.40 per share.

A beneficial conversion feature exists on the date the Convertible Notes were issued whereby the fair value of the underlying common stock to which the Convertible Notes are convertible is in excess of the face value of the Convertible Notes of $ 80,000 .

The principal balance of these Convertible Notes payable was $ 80,000 at December 31, 2023 and 2022.

The total Convertible Notes payable was $ 80,000 and $ 68,000 , net of discount of $ 0 and $ 12,000 , at December 31, 2023 and 2022, respectively.

Interest expense for the Convertible Notes was $ 20,000 and $ 22,000 , inclusive of interest of $ 8,000 and discount amortization of $ 12,000 and $ 14,000 for the years ended December 31, 2023, and 2022, respectively.

The outstanding principal and interest of the Convertible Notes was due and payable November 2023, the loan remains unpaid at December 31, 2023 with outstanding principal of $ 80,000 and interest payable of $ 39,000 .

The outstanding principal continues to accrue interest.

NOTE 12 – LEASES

The Company accounts for its lease under FASB ASC Topic 842, Leases (“ASC 842”), which requires lessees to recognize on the balance sheet at lease commencement, the lease assets and the related lease liabilities for the rights and obligations created by operating and finance leases with lease terms of more than 12 months.

On November 30, 2018, the Company issued 10 % convertible promissory notes ("Convertible Notes") in the amount of $ 80,000 to our then Chairman of the Board, a related party.

The principal balance of these Convertible Notes payable was $ 80,000 at December 31, 2023.

The total Convertible Notes payable was $ 80,000 at December 31, 2023.

Interest expense for the Convertible Notes was $ 20,000 , inclusive of interest of $ 8,000 and discount amortization of $ 12,000 for the year ended December 31, 2023.

The outstanding principal and interest of the Convertible Notes was due and payable in November 2023, and on July 1, 2024, the Company repaid the outstanding principal of $ 80,000 and outstanding interest of $ 43,000 on the Convertible Notes due to its former Chairman of the Board.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 – LEASES

Operating Lease

The Company leases its corporate offices in Boca Raton, Florida under a long-term non-cancellable lease agreement which was signed on June 14, 2022, with lease term for five years beginning upon completion of improvements to the office space by the landlord, which was completed on September 12, 2022.

The annual base rent is $ 100,000 , with a provision for a 3 % increase on each anniversary of the rent commencement date.

The Company leases its corporate offices in Boca Raton, Florida under a long-term non-cancellable lease agreement.

An addendum to the lease dated June 14, 2022 sets a lease renewal term of five years beginning upon completion of improvements to the office space by the landlord, which were completed on September 12, 2022.

The annual base rent as of the beginning of this renewal term is approximately $ 143,000 , with a provision for a 3 % increase on each anniversary of the rent commencement date.

The Company has the option to renew the lease for one additional five-year term.

3 unchanged sentences

Operating lease expense was approximately $ 173,000 and $ 161,000 for the years ended December 31, 2024 and 2023.

Rent expense prior to commencement of the lease was $ 110,000 , net of landlord incentives of $ 95,000 for the year ended December 31, 2022, and is included in general and administrative expense in the statements of operations and comprehensive loss.

The Company’s non-lease components are primarily related to property maintenance and other operating services, which vary based on future outcomes and are recognized in rent expense when incurred and not included in the measurement of the lease liability.

Operating Lease Sublease

During the year ended December 31, 2024 , the Company entered into two sublease agreements for its Boca Raton corporate office suites.

The subleases will continue for the remaining term on the initial lease agreement of 3 years with no option to extend.

The aggregate minimum annual rental income under the subleases is approximately $ 137,000 with 3 % escalations per annum.

The Company retained the ability to use the address as its corporate office.

At December 31, 2024, the operating lease subleases right-of-use liability was $ 12,000 and is included as an offset to right-of-use assets within other non-current liabilities on the consolidated balance sheet.

Operating lease sublease income was approximately $ 84,000 for the year ended December 31, 2024.

Finance Lease

On October 1, 2023, the Company entered into a lease agreement for computer equipment with a lease term of three years .

At December 31, 2023, the finance lease asset was $ 60 ,000 and is included under assets on the consolidated balance sheets.

At December 31, 2023, the finance lease liability was $ 60 ,000, including the current portion of $ 18 ,000, and is included under liabilities on the consolidated balance sheets.

Finance lease expense for the year ended December 31, 2023 was $ 7,000 , inclusive of interest of $ 3,000 and amortization of $ 4,000 , included in general and administrative expense the statements of operations and comprehensive loss.

As of December 31, 2023 and 2022, the right-of-use asset and lease liability for the operating lease are summarized as follows (in thousands):

At December 31, 2024, and 2023, the finance lease asset was $ 42,000 and $ 60,000 , respectively, and is included under assets on the consolidated balance sheets.

At December 31, 2024, and 2023, the finance lease liability was $ 42,000 and $ 60,000 , respectively, including the current portion of $ 22,000 and $ 18,000 , respectively, and is included under liabilities on the consolidated balance sheets.

Finance lease expense for the year ended December 31, 2024 was $ 28,900 , inclusive of interest of $ 11,000 and amortization of $ 17,900 , and is included in general and administrative expense in the statements of operations and comprehensive loss.

Finance lease expense for the year ended December 31, 2023 was $ 7,000 , inclusive of interest of $ 3,000 and amortization of $ 4,000 , and is included in general and administrative expense in the statements of operations and comprehensive loss.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Operating lease

Finance lease (1)

As of December 31, 2024 and 2023, the right-of-use asset and lease liability for the operating lease are summarized as follows (in thousands):

December 31, 2024

December 31, 2023

(in thousands)

Total operating lease right-of-use asset

Total finance lease asset (1)

Operating lease liability, current

Operating sublease liability, net of current portion

Operating lease liability, net of current portion

Total operating lease liabilities $ 303 $ 357

Finance lease obligations, current

Finance lease obligations, net of current portion

Total finance lease obligations

Weighted average remaining lease terms (in years)

Total operating lease liability

Finance lease liability, current

Finance lease liability, net of current portion

Total finance lease liability

Weighted average remaining lease term (in years):

Operating lease

5 unchanged sentences

As of December 31, 2024, the aggregate annual lease obligations were as follows (in thousands):

Operating Lease

Finance Lease

2024 $ 64 $ 18

Operating Leases

Finance Leases

(in thousands)

Total lease obligations

3 unchanged sentences

On April 20, 2023, the Company completed the Big Village Acquisition of two business units of Big Village Holding LLC for approximately $ 20.0 million, plus assumed liabilities, in an all-cash transaction funded by a senior secured credit facility.

As part of the Big Village Acquisition, the Company formed BV Insights, LLC ("Insights") and Big-Village Agency, LLC ("Agency") to incorporate the assets acquired in the transactions, additionally, letters of employment were extended to certain legacy employees of the Big Village Entities, resulting in a total of 203 employees accepting the offer of employment by the Company.

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

Additionally, letters of employment were extended to certain legacy employees of the Big Village Entities, resulting in a total of 203 employees accepting the offer of employment by the Company.

The purpose of the acquisition was to add synergies to our existing revenue stream.

The purchase price has been allocated to the assets acquired and liabilities assumed based on their estimated fair value at the date of acquisition.

The excess of the purchase price over the fair value of the net assets acquired was allocated

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

to goodwill and intangibles.

The purchase price has been allocated to the assets acquired and liabilities assumed based on their estimated fair value at the date of acquisition.

The excess of the purchase price over the fair value of the net assets acquired was allocated to goodwill and intangibles.

The goodwill of $ 2.4 million recognized was attributable to assembled workforce and strategic benefits that are expected to be achieved and is tax deductible for a period of 15 years.

1 unchanged sentence

(in thousands)

(Years) Amount

Trade name 7 to 10

Developed technology

Customer relationships 7 to 10

Customer relationships

The following table summarizes the allocation of the purchase price based on the estimated fair value of the acquired assets and assumed liabilities at the date of the Big Village Acquisition and subsequent adjustment:

(in thousands) Balance

(in thousands)

Purchase price consideration:

2 unchanged sentences

Accounts receivable

Intangibles 16,160

Goodwill 2,264

Prepaid and other assets

6 unchanged sentences

We incurred costs related to the Big Village Acquisition of approximately $ 2.2 million during the year ended December 31, 2023.

Additionally, $ 2.8 million in cure claims was paid to accepted vendors on the closing date and $ 1.2 million was subsequently paid to employees representing bonus.

Additionally, $ 2.8 million in cure claims was paid to accepted vendors on the closing date and $ 1.2 million was subsequently paid to employees representing bonuses.

Amounts for cure claims and bonuses are included above as part of assumed liability.

All acquisition related costs were expensed as incurred and have been recorded in general and administrative expenses in our consolidated statements of operations and comprehensive loss.

The final allocation of purchase price has changed from the preliminary allocation because of a reduction in the fair value of assets acquired of $ 2.4 million and liabilities assumed of $ 1.4 million, resulting in an increase in goodwill of approximately $ 1.0 million.

Proforma Results

Our results for the year ended December 31, 2023 include results from the Big Village Acquisition between April 20, 2023 to December 31, 2023.

Standalone revenue related to the entities acquired in the Big Village Acquisition was $ 31.0 million, for the year ended December 31, 2023.

The following unaudited pro forma information presents the Company's results of operations as if the Big Village Acquisition had occurred on January 1, 2022.

The proforma results do not purport

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

to represent what the Company's results of operations actually would have been if the transaction had occurred on January 1, 2022 or what the Company's operating results will be in future periods.

Supplemental pro forma information is as follows:

Years Ended December 31,

Revenue $ 56,780 $ 75,948

Net loss $ 36,741 $ ( 6,640 )

Basic and diluted net loss per share $ 0.22 $ ( 0.05 )

NOTE 14 – REVENUE RECOGNITION

The following table represents our revenue disaggregated by type (in thousands):

Year Ended December 31,

December 31, 2024

December 31, 2023

(in thousands)

Digital publishing

5 unchanged sentences

Geographic Information

Revenue by geographical region consist of the following (in thousands):

Year Ended December 31,

United States

$ 44,546 $ 18,400

Total revenue $ 44,546 $ 19,580

Revenue by geography is generally based on the country of the Company’s contracting entity.

Total United States revenue was approximately 100 %, and 94 % of total revenue for the years ended December 31, 2023, and 2022, respectively.

Total United States revenue was approximately 100 % of total revenue for the years ended December 31, 2024, and 2023.

As of December 31, 2024, and 2023 , approximately 100 % of our long-lived assets were attributable to operations in the United States.

2 unchanged sentences

The movement in deferred revenue during the years ended December 31, 2024 and 2023, comprised the following (in thousands):

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2023 December 31, 2022

Deferred revenue at start of the year $ 737 $ 1,162

Amounts invoiced during the year 31,864 588

Business combinations

revenue recognized during the year ( 32,566 ) ( 1,013 )

Deferred revenue at end of the year $ 4,569 $ 737

December 31, 2024

December 31, 2023

(in thousands)

Deferred revenue at the start of the period

Amounts invoiced during the period

Business combination

revenue recognized during the period

Deferred revenue at the end of the period

NOTE 15 – STOCK BASED COMPENSATION

6 unchanged sentences

Compensation expense recorded in connection with the Stock Option Plan was $ 254,000 , and $ 196,000 for the years ended December 31, 2024, and 2023, respectively.

These amounts have been recognized as a component of general and administrative expenses in the accompanying condensed consolidated financial statements.

These amounts have been recognized as a component of general and administrative expenses in the accompanying consolidated financial statements.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the activity of the Company’s outstanding stock options of common stock for the year ended December 31, 2024:

Options Weighted

Price Weighted

(in years) Aggregate

(in thousands)

Balance Outstanding, December 31, 2022 6,517,660 $ 0.33 7.8 $ 552

Granted 6,128,200 0.09 9.2 198

Exercised ( 90,000 ) 0.01 0 10

Forfeited ( 1,426,375 ) 0.02 0 136

Expired ( 401,125 ) 0.07 0 38

Balance Outstanding, December 31, 2023 10,728,360 $ 0.12 8.7 $ 568

Number of Options

Weighted Average Exercise Price

Weighted Average Remaining Contractual Term

Aggregate Intrinsic Value

Common stock options:

Balance outstanding at December 31, 2023

Balance outstanding at December 31, 2024

Exercisable at December 31, 2024

Unvested at December 31, 2024

8,811,406 $ 0.07 9.2 $ 447

During the years ended December 31, 2024 and 2023, 80,250 and 90,000 common stock options were exercised with an aggregate intrinsic value of $ 3,000 and $ 10,000 , respectively.

Summarized information with respect to options outstanding under the stock option plans at December 31, 2024, is as follows:

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Options Outstanding Options Exercisable

Exercise Price Number

Outstanding Weighted Average

Exercise Price Remaining

Life (In Years) Number

Exercisable Weighted Average

Exercise Price

8,922,133 $ 0.06 9.1 1,110,977 $ —

Options Outstanding

Options Exercisable

Range of Exercise Price

Number Outstanding

Weighted Average Exercise Price

Remaining Contractual Life (in years)

Number Exercisable

Weighted Average Exercise Price

$ 0.002 - $ 0.13

5 unchanged sentences

The Company estimates the fair value of share-based compensation utilizing the Black-Scholes option pricing model, which is dependent upon several variables such as the expected option term, expected volatility of our stock price over the expected option term, expected risk-free interest rate over the expected option term, expected dividend yield rate over the expected option term, and an estimate of expected forfeiture rates.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The following table provides the weighted average assumptions used in determining the fair value of the stock-based awards for the year ended December 31, 2024 and 2023:

December 31, 2023 December 31, 2022

December 31, 2024

December 31, 2023

Expected term (years)

3 unchanged sentences

Expected forfeiture rate

During the year ended December 31, 2024 and 2023, 469,673 and 6,128,200 options were issued, respectively.

The expected life is computed using the simplified method, which is the average of the vesting term and the contractual term.

9 unchanged sentences

The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Valuation is based on unadjusted quoted prices in active markets for identical assets and liabilities that are accessible at the reporting date.

8 unchanged sentences

The Company believes that the carrying value of its current financial instruments approximates their fair value due to the short-term nature of these instruments.

The carrying value of the Centre Lane Senior Secured Credit Facility and the 10 % Convertible Promissory Note approximates the fair value due to their nature and level of risk.

The carrying value of the Centre Lane Senior Secured Credit Facility approximates the fair value due to the nature and level of risk.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Assets Measured at Fair Value on a Nonrecurring Basis

2 unchanged sentences

The below table shows the quantitative information for assets measured at fair value on a non-recurring basis:

($ in thousands)

Quantitative Information about Level 3 Fair Value Measurements

Fair Value Valuation Technique Unobservable Input Rate (Weighted Average Cost of Capital

Goodwill $ 7,785 Discounted cash flow Discount rate 21.12 %

Intangible assets, net $ 15,234 Discounted cash flow Discount rate 21.12 %

Valuation Technique

Unobservable Input

(Weighted Average Cost of Capital)

(in thousands)

Discounted cash flow

Discount rate

Intangible assets, net

Discounted cash flow

Discount rate

Goodwill and Intangibles Assets

Goodwill and intangible assets are tested for impairment at least annually, and if triggering events are noted prior to the annual assessment.

Impairment is deemed to occur when the carrying value associated with the reporting unit exceeds the implied value associated with the reporting unit.

We estimate the fair value of our reporting units utilizing an income approach (discounted cash flow method), which incorporates significant unobservable Level 3 inputs.

At September 30, 2023 and December 31, 2023 an impairment assessment was performed on goodwill and intangibles for Ad Network, Owned & Operating and Insights reporting units.

7 unchanged sentences

Goodwill represents the residual value after the fair value of the intangibles were identified.

At September 30, 2024, an impairment assessment was performed on goodwill and intangibles for Ad Network, Owned & Operating and Insights reporting units.

We estimated the fair value of our reporting units utilizing an income approach (discounted cash flow method), which incorporated significant unobservable Level 3 inputs.

The assessment indicated that the carrying value was not in excess of its implied fair value, resulting in no impairment charge for the year ended December 31, 2024.

Centre Lane Senior Secured Credit Facility

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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

1 unchanged sentence

If the debt is extinguished, the old debt is derecognized and the new debt is recorded as fair value, which becomes the new carrying value.

Amendment seventeen was considered an extinguishment, the company utilize a third party valuation company to calculate the present value of the cash flows under the terms of the amendment and determine if it was considered substantially different by at least a 10 % difference from the present value of the remaining cash flow of the original debt instrument.

Amendment Seventeen was considered an extinguishment.

The Company utilized a third party valuation company to calculate the present value of the cash flows under the terms of the amendment and determined that it was substantially different by at least 10 % from the present value of the remaining cash flow of the original debt instrument.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17 – COMMITMENTS AND CONTINGENCIES

7 unchanged sentences

On July 11, 2023, Ladenburg Thalmann & Co.

(“Ladenburg”) filed an action against the Company for breach of contract in the United States District Court for the Southern District of Florida, Case No.

(“Ladenburg”) filed an action against the Company for breach of contract in the United States District Court for the Southern District of Florida (the “District Court”), Case No.

9:23-cv-81019-AMC.

2 unchanged sentences

Ladenburg alleges that the Agreement entitles them to a fee for any financing transactions (debt financing or merger and acquisition transactions) that the Company engages in during the term of the contract.

In April 2023, the Company informed Ladenburg of an impending Big Village Acquisition.

In April 2023, the Company informed Ladenburg of the impending Big Village Acquisition.

Ladenburg now seeks $ 1.5 million, plus interest, costs and attorneys’ fees and expenses as a result of that acquisition and debt financing, claiming that it is entitled to a fee.

The Company disputes the allegations and disputes that Ladenburg is entitled to receive any fee since it did not perform any work pertaining to such acquisition.

The outcome of this matter is not determinable as of the date of issuance of these financial statements.

On November 27, 2024, the District Court entered a judgment in favor of Ladenburg and against the Company granting damages of $ 1.7 million to Ladenburg.

On December 26, 2024, the Company filed a motion with the District Court requesting that the District Court reconsider its judgment.

This motion was denied on January 30, 2025.

The Company plans to appeal the judgment.

The outcome of this matter is not determinable as of the date of issuance of these consolidated financial statements.

Other Litigation

2 unchanged sentences

The Company is party to various other legal proceedings that arise in the ordinary course of business, separate from normal course accounts receivable collections matters.

Due to the inherent difficulty of predicting the outcome of these litigations and other legal proceedings, the Company cannot predict the eventual outcome of these matters, and it is reasonably possible that some of them could be resolved unfavorably to the Company.

Due to the inherent difficulty of predicting the outcome of these other legal proceedings, the Company cannot predict the eventual outcome of these matters, and it is reasonably possible that some of them could be resolved unfavorably to the Company.

As a result, it is possible that the Company’s results of operations or cash flows in a particular fiscal period could be materially affected by an unfavorable resolution of pending litigation or contingencies.

The outcome is not determinable as of the issuance of these financial statements.

NOTE 18 - STOCKHOLDER S' DEFICIT

NOTE 18 - STOCKHOLDERS' DEFICIT

Preferred Stock

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The Company has authorized 20,000,000 shares of preferred stock with a par value of $ 0.01 (the “Preferred Stock”), issuable in such series and with such designations, rights and preferences as the board of directors may determine.

6 unchanged sentences

10% Series F Convertible Preferred Stock (“Series F Stock”).

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The designations, rights and preferences of the Series F-1, Series F-2 and Series F-3 are identical, other than the dividend rate, liquidation preference and date of automatic conversion into shares of our common stock.

The Series F-1 pays dividends at the rate of 12 % per annum and automatically converted into shares of our common stock on April 10, 2022.

The Series F-2 pays dividends at the rate of 6 % per annum and automatically converted into shares of our common on July 27, 2022.

The Series F-3 pays dividends at the rate of 10 % per annum and automatically converted into shares of our common stock on August 30, 2022.

The Series E pays dividends at the rate of 10 % per annum and automatically converted into shares of our common stock on November 21, 2022.

Additional terms of the designations, rights and preferences of the Series F-1, Series F-2 and Series F-3 include:

4 unchanged sentences

Any shares not previously converted will automatically convert into shares of our common stock on the dates set forth above;

• the shares rank junior to our 10 % Series A Convertible Preferred Stock and our 10 % Series E Convertible Preferred Stock;

• the shares rank junior to the 10 % Series A Convertible Preferred Stock and our 10 % Series E Convertible Preferred Stock;

• in the event of a liquidation or winding up of the Company, the shares have a liquidation preference of $ 0.50 per share for the Series F-1, $ 0.50 per share for the Series F-2 and $ 0.40 per share for the Series F-3;

2 unchanged sentences

• shares do not have voting rights, except as may be permitted under Florida law;

• are convertible into shares of our common stock at the holder’s option on a one for one basis;

• are entitled to a liquidation preference equal to a return of the capital invested;

• shares are convertible into our common stock at the holder’s option on a one for one basis;

• shares are entitled to a liquidation preference equal to a return of the capital invested;

• each share will automatically convert into shares of common stock five years from the date of issuance or upon a change in control.

1 unchanged sentence

There were no shares of preferred stock issued or outstanding at December 31, 2024, and 2023.

The Series E stock automatically converted into shares of our common stock on November 21, 2022, and 1,250 shares were transferred to common stock to satisfy this transaction.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Dividends for Series E Convertible Preferred Stock were $ 5,000 , for the year ended December 31, 2022, There were no preferred stock dividends paid in the year ended December 31, 2023.

At December 31, 2024 and 2023, accrued unpaid preference dividend was $ 691,000 .

This amount is payable to the Company's Chairman, Mr.

Kip Speyer and is included under other liabilities in the consolidated balance sheet at December 31, 2023.

This amount is payable to the Company's former Chairman, Mr.

Kip Speyer, and is included under other current liabilities in the consolidated balance sheet at December 31, 2024.

Shares of Common Stock under the Stock Option Plan

4 unchanged sentences

During the year ended December 31, 2024, the Company issued 5,361,693 shares of our common stock for the following concepts (in thousands, except share data):

Shares (#) Value $'000

December 31, 2024

Shares issued to Centre Lane related to debt financing

Common stock issued for services rendered 190,000 31

Common stock issued for options exercised

Adjustment to Oceanside shares issued (A)

Total 21,658,498 $ 1,958

(A) -represents an adjustment to reconcile shares actually issued related to the Oceanside acquisition in 2019.

During the year ended December 31, 2022, the Company issued 634,253 shares of our common stock for the following concepts (in thousands, except share data):

Shares (#) Value $'000

Common stock issued for services rendered

Common stock issued for options exercised 100,000 1

Conversion of Preferred Stocks 125,000 1

Shares issued to Oceanside employees per the acquisition agreement valued at $ 1.60

Total 634,253 $ 319

Treasury Stocks

During the year ended December 31, 2021, three shareholders relinquished their Bright Mountain common stock shares.

A total of 825,175 shares were acquired with a value of $ 220,000 .

The shares are being held as Treasury Stock by the Company.

Shares of common stock issued, net

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

At December 31, 2023 and 2022, we had 21,362,066 and 35,998,316 common stock warrants outstanding to purchase shares of our common stock, respectively, with an exercise price ranging between $ 0.65 and $ 1.00 per share.

Approximately 14,636,250 common stock warrants expired during the year ended December 31, 2023, there was no expiration for the year ended December 31, 2022.

During the year ended December 31, 2023 , the Company issued 21,658,498 shares of our common stock for the following concepts (in thousands, except share data):

December 31, 2023

Shares issued to Centre Lane related to debt financing

Oceanside share adjustment (1)

Common stock issued for options exercised

Common stock issued for services rendered

Shares of common stock issued, net

(1) Represents an adjustment to reconcile shares actually issued related to the Oceanside acquisition in 2019.

Treasury Stock

During the year ended December 31, 2024 , one shareholder relinquished their Bright Mountain common stock shares.

A total of 525,000 shares were acquired at no cost to the Company.

A total of 1,350,175 shares of the Company's common stock, with a value of $ 220,000 , are being held as Treasury Stock by the Company.

At December 31, 2024 and 2023, we had 10,573,700 and 21,362,066 common stock warrants outstanding to purchase shares of our common stock, respectively, with an exercise price ranging between $ 0.65 and $ 1.00 per sh are.

Of the 10,573,700 common stock warrants outstanding at December 31, 2024 , 10,398,700 will expire in 2025, and 175,000 will expire in 2030.

Approximately 10,788,366 and 14,636,250 common stock warrants expired during the years ended December 31, 2024 and 2023, respectively.

A summary of the Company’s warrants outstanding as of December 31, 2024 and 2023 is presented below:

December 31, 2024

Warrants Exercise Price Number

Outstanding Gross cash proceeds

Exercise Price

Number Outstanding

Gross Cash Proceeds

(if exercised)

$ 1.00 4,992,308 $ 4,992

$ 0.75 15,456,008 $ 11,592

$ 0.65 913,750 $ 594

21,362,066 $ 17,178

December 31, 2023

Warrants Exercise Price Number

Outstanding Gross cash proceeds

Exercise Price

Number Outstanding

Gross Cash Proceeds

(if exercised)

$ 1.00 4,992,308 $ 4,992

0.65 15,550,000 10,108

$ 0.75 15,456,008 11,592

35,998,316 $ 26,692

NOTE 19 – LOSS PER SHARE

As of December 31, 2024 and 2023, there were 177,464,827 and 172,103,134 shares of common stock issued, respectively, and 176,114,652 and 171,277,959 shares of common stock outstanding, respectively.

Outstanding shares as of December 31, 2023, and 2022, have been adjusted to reflect 825,175 treasury shares.

Outstanding shares as of December 31, 2024 and 2023, have been adjusted to reflect 1,350,175 and 825,175 treasury shares, respectively.

Basic net loss per share is computed by dividing the net earnings attributable to common shareholders by the weighted average number of common shares outstanding during the period.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Diluted loss per share is computed by dividing net income attributable to common shareholders by the weighted average number of common shares outstanding, increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued.

2 unchanged sentences

The following tables reconcile actual basic and diluted earnings per share for the years ended December 31, 2024 and 2023 (in thousands except shares and per share data):

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Loss per share:

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

Preferred stock dividends — ( 5 )

Net loss available to common stockholders $ ( 35,564 ) $ ( 8,130 )

December 31, 2024

December 31, 2023

(in thousands, except per share data)

Weighted-average common shares outstanding:

Basic and diluted 164,845,671 149,191,057

Net loss per common share

Basic and diluted

$ ( 0.22 ) $ ( 0.05 )

The anti-dilutive securities excluded from the weighted-average shares used to calculate the diluted net loss per common share for the years ended December 31, 2024 and 2023 were as follows:

Common stock equivalent from:

December 31, 2024

December 31, 2023

Shares unvested and subject to exercise of stock options

Shares subject to warrants stock conversion 21,362,066 35,998,316

Shares subject to warrants stock exercise

Shares subject to convertible notes stock conversion

1 unchanged sentence

Centre Lane Partners

Centre Lane Partners, who sold the Wild Sky business to the Company in June 2020 has partnered and assisted the Company from a liquidity perspective during 2022 and through the year ended December 31, 2023.

Additionally, in connection with the Seventeenth Amendment, on December 31, 2023, the Company issued 21,401,993 shares of common stock of the Company to BV Agency, LLC, an entity beneficially owned by Centre Lane Partners.

This relationship has been determined to qualify as a related party, BV Agency, LLC and Centre Lane Partners own approximately 12.4 % and 8.8 % of the Company’s outstanding common stock, respectively.

A related party is a party that can exercise significant influence over the Company in making financial and/or operating decisions.

Centre Lane Partners has provided, and continues to provide, funding to assist the Company with its liquidity needs through the Centre Lane Senior Secured Credit Facility.

In connection with the Seventeenth Amendment, on April 20, 2023, the Company issued 21,401,993 shares of common stock of the Company to BV Agency, LLC, an entity beneficially owned by Centre Lane Partners.

In connection with the Twenty-First Amendment, on December 26, 2024, the Company issued an additional 5,0001,991 shares of common stock of the Company to BV Agency, LLC, an entity beneficially owned by Centre Lane Partners.

BV Agency, LLC, and Centre Lane Partners beneficially own approximately 15.0 % and 8.6 % of the Company’s outstanding common stock, respectively.

SEC rules define a related party as including (i) any director or executive officer of the Company, or any immediate family member thereof, (ii) any director nominee, or any immediate family member thereof, and (iii) a 5% or greater shareholder of the Company, or any immediate family member thereof.

As a result, BV Agency, LLC, and Centre Lane Partners together are considered to be related parties of the Company.

Through December 31, 2024 , the Company has entered into 21 amendments to the Credit Agreement between itself and Centre Lane Partners.

1 unchanged sentence

See Note 10, Centre Lane Senior Secured Credit Facility for details on this facility.

Convertible Promissory Note

As discussed in Note 11, 10 % Convertible Promissory Note, the note payable to the Chairman of the Board amounted to $ 80,000 as of December 31, 2023, and 2022, respectively.

See Note 11, 10 % Convertible Promissory Note for further discussion on these notes payable.

Preferred Stocks

During the years ended December 31, 2023 and 2022, the Company paid cash dividends on the outstanding shares of the Company’s Series E and F Preferred Stock of $ 0 and $ 5,000 , respectively, held by affiliates of the Company.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Preferred Stock

At December 31, 2024 and 2023, accrued unpaid preference dividend was $ 691,000 .

These amounts are payable to the Company's Chairman, Mr.

These amounts are payable to the Company's former Chairman, Mr.

NOTE 21 – INCOME TAXES

1 unchanged sentence

Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations.

On December 27, 2020, the Consolidations Appropriations Act, 2021 (“CAA” or the “Act”) was signed into law and included government appropriations and additional economic stimulus.

Notable provisions of the CAA included changes to the PPP including legislation concluding that expenses used to obtain loan forgiveness are tax deductible.

The Company evaluated the various aspects of the Act and determined that it was eligible for the PPP.

During the year ended December 31, 2021, the Company obtained two PPP loans for $ 296,000 and $ 842,000 .

These loans were forgiven in 2022.

The Cancellation of Debt Income ("CODI") from these loans were deemed excludable from taxable income and therefore deducted as a permanent book tax difference during the year ended December 31, 2022.

The Company’s loss before income taxes consists of the following:

1 unchanged sentence

United States

Foreign 242 ( 529 )

Total loss before provision for income taxes

A reconciliation of the federal statutory income tax rate to the effective tax rate is as follows:

Amount Rate Amount Rate

Federal tax expense (benefit) at the statutory rate from operations

State tax benefit, net of federal income tax benefit

PPP loan forgiveness — — % ( 62 ) 0.76 %

Other adjustments

Effect of foreign taxes

Impairment 2,944 ( 8.28 ) % — — %

Stock compensation

1 unchanged sentence

Total tax provision (benefit)

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The tax effect of significant components of the Company’s deferred tax assets and liabilities at December 31, 2024 and 2023, are as follows:

3 unchanged sentences

Lease liability

Other 732 1,028

Total gross deferred tax assets

1 unchanged sentence

Total net deferred tax assets

Deferred tax liabilities:

Property and equipment

2 unchanged sentences

Net deferred tax liability

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2024 , the Company had U.S.

18 unchanged sentences

As of December 31, 2024, the Company capitalized a substantial amount of R&D expenditures primarily related to research and development activities performed in the U.S.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations for both federal taxes and the many states in which it operates or does business in.

A tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation, on the basis of the technical merits.

The Company records tax positions as liabilities and adjusts these liabilities when its judgement changes as a result of the evaluation of new information not previously available.

The Company records tax positions as liabilities and adjusts these liabilities when its judgment changes as a result of the evaluation of new information not previously available.

Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company’s current estimate of the recognized tax benefit liabilities.

2 unchanged sentences

The Company records interest and penalties related to unrecognized tax benefits in the provision for income taxes.

As of December 31, 2023 and 2022, no accrued interest or penalties are recorded on the balance sheets, and the Company has not recorded any related expenses.

As of December 31, 2024 and 2023, no accrued interest or penalties are recorded on the balance sheets, and the Company has no t recorded any related expenses.

The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates.

4 unchanged sentences

To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service and state and local tax authorities to the extent utilized in a future period.

NOTE 22 – SUBSEQUENT EVENTS

Departure of Director

On January 18, 2024, Pamela J.

Parizek, a director, notified the Company that she was resigning from the Board of Directors, effective immediately.

At the time of her resignation, Ms.

Parizek was the Chair of the Company's Audit Committee.

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 9A. Controls and Procedures