What changed in this filing

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Item 9A. Controls and Procedures

2026-03-24 compared with 2025-03-10 · 407 added, 506 removed, 1398 unchanged (40% of the section changed)

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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 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 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.

• 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.

As the Company continues to improve its accounting processes, management has implemented, and continues to implement, a series of measures designed to strengthen the Company's control environment, risk assessment processes, and control activities.

The Company updated its information technology general controls ("ITGC") risk assessment to better evaluate risks affecting the reliability, integrity, security, and confidentiality of the Company's information systems and underlying financial data.

During the year ended December 31, 2025, the Company implemented the compliance model within Floqast to formalize the identification, documentation, and monitoring of key internal controls.

Through this initiative, management developed a comprehensive key control matrix that documents controls related to significant financial statement areas, including revenue recognition, cost of sales, equity transactions, and other material account balances and disclosures.

This framework enhances management's ability to evaluate control design, monitor operating effectiveness, and maintain clear documentation supporting financial reporting controls.

To improve the timeliness and consistency of financial reporting, the Company optimized its month-end close process by enhancing cross-departmental coordination, automating key reconciliation and reporting activities, and reducing reliance on manual processes.

These improvements have shortened the monthly close timeline and strengthened management review controls over financial results.

In addition, the Company implemented a new accounting system, Microsoft Dynamics 365 Business Central ("Business Central"), to enhance the efficiency, accuracy, and integration of financial data across departments.

The implementation of this system supports improved segregation of duties, system-based controls, audit trail functionality, and more consistent application of accounting policies, further strengthening internal controls over financial reporting.

Management believes these remediation efforts have materially improved the design and execution of the Company's internal control framework.

The Company will continue to monitor the effectiveness of these controls and pursue additional enhancements as necessary to ensure a sustainable and effective control environment.

Based on the Company’s continued improvements in its accounting 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, 2025, 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, 2025.

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.

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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, 2025, 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, 2025, were complied with other than as follows:

(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.

(i) a late Form 3 and a late Form 4 were filed for Jeff Hirsch to report his appointment as a director and to report three transactions;

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

(iii) a Form 4 was due but was not filed for Thomas Triscari to report one transaction;

and (iv) a late Form 4 was filed for Joseph Pergola to report one transaction.

EXECUTIVE COMPENSATION

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Chief Executive Officer

Ethan Rudin (3)

Chief Financial Officer

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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.

He agreed to a 10% reduction in his base salary between September 2023 and December 31, 2023, which was contemporaneous with temporary salary reductions for Wild Sky Media employees.

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

Outstanding Equity Awards at Fiscal Year End

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October 28, 2033

March 7, 2035

(1) On December 1, 2021, Mr.

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

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.

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

These options (i) vested 25% on November 14, 2025, and (ii) will vest 25% on each of 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 (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.

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

(5) On March 7, 2025, Mr.

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

These options (i) vested 25% on March 7, 2026, and (ii) will vest 25% on each of March 7, 2027, March 7, 2028, and March 7, 2029.

Executive Employment Agreements and Other Arrangements

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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.

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

Additionally, Mr.

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All Other Compensation

Kip Speyer (2)

Pamela Parizek (3)

Elaine Riddell

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(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.

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

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

(9) 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., Centre Lane Partners Master Credit Fund II LP is the record holder of 15,150,000 shares but disclaims ownership of these shares as 10th Lane Partners LP is the Investment Adviser for this fund and has sole voting and dispositive power of these shares.

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

(10) 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., BV Agency, LLC is the record holder of 21,401,993 shares.

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.

(8) Based on a Schedule 13G/A filed on February 17, 2026, by 10th Lane Partners, LP (“10th Lane”) and Centre Lane Partners Master Credit Fund II, L.P.

(“Centre Lane”), consists of 26,403,984 shares held of record by BV Agency, LLC (“BV”) and 17,982,485 shared held of record by Centre Lane.

10th Lane is the Investment Advisor for each of BV and Centre Lane and has sole voting and dispositive power with respect to such shares.

This number has been adjusted to include 2,870,792 shares of common stock issued to Centre Lane in connection with the Twenty-Fourth Amendment to Amended and Restated Senior Secured Credit Agreement with Centre Lane.

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

(9) Based on a Schedule 13G/A filed on February 17, 2026, by 10th Lane and Centre Lane, Centre Lane is the record holder of 17,982,485 shares but disclaims ownership of these shares as 10th Lane is the Investment Advisor for Centre Lane and has sole voting and dispositive power with respect to such shares.

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

(10) Based on a Schedule 13G/A filed on February 17, 2026, by 10th Lane and Centre Lane, BV is the record holder of 26,403,984 shares.

10th Lane is the Investment Advisor for BV and has sole voting and dispositive power with respect to such shares.

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

Handwerker has sole voting and dispositive power with respect to 5,677,798 shares and shared voting and dispositive power with respect to 5,053,200 shares.

This information is based on a Schedule 13G/A filed on April 9, 2018, but has been adjusted to exclude 250,000 shares of underlying warrants that were exercisable at the time the Schedule 13G/A was filed but have since expired according to the Company's records.

This information is based on a Schedule 13G/A filed on April 9, 2018, and on the Company’s records, but has been adjusted to exclude 250,000 shares of underlying warrants that were exercisable at the time the Schedule 13G/A was filed but have since expired according to the Company's records.

The address for Andrew Handwerker is 4399 Pine Tree Drive, Boynton Beach, Florida 33436.

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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, 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.

Through December 31, 2025, the Company has entered into twenty-four amendments to the Amended and Restated Senior Secured Credit Agreement between it and Centre Lane Partners (the “Credit Agreement”).

The total related party debt owed to Centre Lane Partners was $86.1 million at December 31, 2025.

Interest paid during the year was $532,000 in cash, and $9.6 million paid in kind.

Employment Matters

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.

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.

The total compensation paid to Mr.

Kip Speyer for the year ended December 31, 2023 was $90,000.

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.

PRINCIPAL ACCOUNTING FEES AND SERVICES

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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.

(a to be formed entity), Slutzky & Winshman Ltd.

and the shareholders of Slutzky & Winshman, Ltd.

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

BMTMZ, and News Distribution Network, Inc.

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

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

Twenty-Second Amendment to Amended and Restated Senior Secured Credit Agreement, dated March 31, 2025

Annex A to the Credit Agreement, dated March 31, 2025

Twenty-Third Amendment to Amended and Restated Senior Secured Credit Agreement, dated September 30, 2025

Annex A to the Credit Agreement, dated September 30, 2025 (contained in Exhibit 10.46)

Twenty-Fourth Amendment to Amended and Restated Senior Secured Credit Agreement, dated December 31, 2025

Annex A to the Credit Agreement, dated December 31, 2025

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

Amendment to Employment Agreement dated January 1, 2025 by and between the Company and Ethan Rudin

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

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Kip Speyer, executed June 29, 2024

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

Code of Ethics

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Consent of WithumSmith+Brown, PC

Certification of the Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a)

Certification of the Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) c

Certification of the Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)

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

(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”).

(the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ deficit and cash flows for each of the two years in the period ended December 31, 2025, 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.

as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the period ended,in conformity with accounting principles generally accepted in the United States of America.

as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt Regarding the Company’s Ability to Continue as a Going Concern

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federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Bright Mountain Media, Inc.

is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control over financial reporting.

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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.

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.

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Critical Audit Matter Description

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 reflected in the Company’s financial statements at December 31, 2025, the Company’s intangible assets and goodwill were approximately $11.5 million and $7.0 million, 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.

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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.

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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Critical Audit Matter Description

During the year ended December 31, 2024, the Company entered into various amendments to the credit facility for additional loans used for working capital.

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

During the year ended December 31, 2025, the Company entered into various amendments to its credit facility.

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.

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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.

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.

Part of the amendments include fees that would be added and capitalized into the principal amount of the debt instrument outstanding immediately prior to each respective amendment.

For each of the amendments, management 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 immediately prior to each respective amendment, reflecting all prior modifications to the credit agreement.

Management determined that none of the amendments had a present value difference exceeding 10% therefore all amendments were accounted for as a debt modification.

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.

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How the Critical Audit Matter Was Addressed in the Audit

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 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 read and evaluated the debt modification and extinguishment analysis report, prepared by management that assessed each amendment to the credit agreement.

There was a total of three amendments that were executed during the year, for which we evaluated management’s present value calculation and respective conclusion for treatment as a modification.

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

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• 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 terms subsequent to the extinguishment that took place during the year-ended December 31, 2023.

• 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 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.

• 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 the remaining contractual cash flows of the debt instrument as modified and outstanding immediately prior to each respective amendment during the year ended December 31, 2025.

• We independently performed a calculation of the present value of the debt instrument under the new terms from each of the amendments and compared it to the present value of the remaining cash flows of the debt instrument as modified and outstanding immediately prior to each respective amendment during the year ended December 31, 2025 to evaluate whether management’s conclusion were reasonable and consistent with our conclusion.

/s/ WithumSmith+Brown, PC

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Intangible assets, net

Operating lease right-of-use assets

Operating lease right-of-use assets, net

Other long-term assets

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Other current liabilities

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)

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Financing and other expense:

Interest expense - 10 % convertible promissory notes - related party

Interest expense - Centre Lane Senior Secured Credit Facility - related party

Interest expense - 10 % convertible promissory notes - related party

Other interest expense

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BRIGHT MOUNTAIN MEDIA, INC.

Consolidated Statements of Changes in Stockhold ers' Deficit

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT

(in thousands, except share and per share data)

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Balance at December 31, 2023

Adjustment to common stock for Oceanside acquisition

Common stock issued for options exercised

Stock-based compensation

Common stock issued to Centre Lane Partners

Common stock issued for services rendered

Extinguishment of Centre Lane Credit Facility

Treasury stock

Stock-based compensation

Adjustment from foreign currency translation, net

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(in thousands, except share and per share data)

For the Year Ended

December 31, 2025

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Cash flows from operating activities:

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

Adjustments to reconcile net loss to net cash provided by operations:

Depreciation expense

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Common stock issued for services rendered

Common stock issued to Centre Lane Partners for debt modification

Provision for credit losses

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Deferred revenue

Net cash provided by (used in) operating activities

Net cash provided by operating activities

Cash flows from investing activities:

Purchase of property and equipment

Capitalization of website development

Capitalization of website development costs

Net cash used in investing activities

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Proceeds from stock option exercises

Principal payments on finance lease liabilities

Principal payments on finance lease obligations

Proceeds from Centre Lane Senior Secured Credit Facility - related party

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

Net cash (used in) provided by financing activities

Net cash used in financing activities

Effect of foreign exchange rates on cash

Net increase in cash, cash equivalents, and restricted cash

Net (decrease) 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:

Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets:

Cash and cash equivalents

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Supplemental disclosure of non-cash investing and financing activities:

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

Common stock issued to Centre Lane Partners for debt financing

Common stock issued to Centre Lane Partners for debt modification

See accompanying notes to consolidated financial statements.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDA TED FINANCIAL STATEMENTS

NOTES TO CONSOLIDA TED FINANCIAL STATEMENTS

NOTE 1 – DESCRIPTION OF BUSINESS

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(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").

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

Digital Publishing

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

Our data-driven approach aims to ensure that ad placements are not only well-targeted, but also continuously optimized for maximum efficiency and return on investment ("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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company generates revenue through:

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

The Company operates in one reportable segment.

See "Segment Reporting" below.

Going Concern and Liquidity

Historically, the Company has incurred losses, which has resulted in an accumulated deficit of approximately $ 180.3 million as of December 31, 2025.

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.

Cash flows provided by operating activities were $ 1.3 million and $ 1.9 million for the years ended December 31, 2025, and 2024, respectively.

As of December 31, 2025, the Company had a working capital deficit of approximately $ 95.5 million , inclusive of $ 1.4 million in cash and cash equivalents and $ 1.9 million in restricted cash.

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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 Facility or raising equity capital.

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 ability to access the capital markets depends, in part, upon the volume and market price of the Company's stock, which cannot be assured.

Other measures include reducing or delaying certain business activities, and 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 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.

As a result, such matters create a substantial doubt regarding the Company’s ability to meet its financial obligations and 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.

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The Company considers all highly liquid investments with a maturity of three months or less when acquired, to be cash equivalents.

The Company maintains its cash with various commercial banks in the U.S.

and other foreign countries in which the Company operates.

As of December 31, 2024 , the Company exceeded the federally insured limits of $ 250,000 for interest and non-interest-bearing accounts.

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.

The Company maintains its cash with various commercial banks in the United States and other foreign countries in which the Company operates.

As of December 31, 2025 , the Company exceeded the federally insured limit of $ 250,000 for interest and non-interest-bearing accounts.

The Company held a cash balance with a single financial institution in excess of the Federal Deposit Insurance Corporation ("FDIC") insured limit in the amount of $ 994,000 as of December 31, 2025.

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, 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.

As of December 31, 2025, and 2024, the Company did not exceed the insurance limi t of $ 29,000 for i ts international bank accounts.

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

At December 31, 2025, and 2024, the Company had $ 1.4 million and $ 2.5 million , respectively, in cash and cash equivalents.

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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.

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

At December 31, 2025, and 2024, the Company had $ 1.9 million in restricted cash, for both periods, which is designated specifically for a settlement of a legal judgment.

See Note 16, Commitments and Contingencies, to the consolidated financial statements.

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

Off-balance Sheet Arrangements

There are no off-balance sheet arrangements as of December 31, 2025 and December 31, 2024 .

Accounts Receivable and Allowances

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The allowance for current expected credit losses is accounted for in line with ASC 326.

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

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

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

The Company evaluates trade receivables for expected credit losses in accordance with ASC 326.

Trade receivables are considered past due based on the contractual payment terms established with each customer, which are generally net 30 or net 60 days.

The Company estimates expected credit losses over the contractual life of its receivables using a methodology that incorporates historical loss experience, current conditions, and reasonable and supportable forecasts of future economic conditions.

The allowance for credit losses is recorded as a contra-asset to accounts receivable, with the corresponding provision for credit losses recognized in general and administrative expenses in the consolidated statements of operations and comprehensive loss.

Accounts are written off when they are deemed uncollectible after consideration of collection efforts and specific customer circumstances.

Property and Equipment, net

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BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO 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.

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Amortization and Impairment of Long-Lived Assets

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

Long-lived assets, such as property, equipment, right-of-use assets, and intangible assets are reviewed for impairment on an annual basis and on an interim basis if an event occurs or circumstances indicate that the carrying amount of an asset may not be recoverable.

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

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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, 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.

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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

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

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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

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

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

The Company does not include costs that do not contribute to its progress toward satisfying its promise to the customer.

Consumer insights revenues are generated from providing primary and secondary research, competitive intelligence, expert insight, data solutions, and analytic services designed to address customers’ strategic needs.

For research engagements where services are delivered over time and progress can be measured, the Company recognizes revenue using a percentage of completion method on a cost-to-cost basis.

Under this method, progress toward satisfaction of the performance obligation is measured based on costs incurred to date relative to total estimated costs expected to be incurred.

Costs that do not contribute to progress toward satisfying the performance obligation are excluded.

For subscription-based offerings, revenue is recognized ratably over the contractual service period as the customer receives the benefits of the services.

For research deliverables, revenue is recognized at a point in time when control of the deliverable transfers to the customer.

For certain data and platform-based solutions, revenue is recognized either (i) monthly based on variable consideration as invoiced or (ii) at a point in time when the underlying service or data is made available, depending on the contractual terms.

Creative services revenues are generated by delivering campaign services to customers.

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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.

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

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Cost of Revenue

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

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

During the year ended December 31, 2025, all website development costs were expensed.

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

Advertising and Marketing

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Treasury rate in effect at the time of grant.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Treasury Stock

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

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

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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.

As such, the Chief Financial Officer does not routinely review discrete financial information, including profit measures or significant expense categories, by individual service line or business activity.

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

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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 Credit 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, 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 Centre 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.

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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.

Translation gains and losses as a result of consolidation are included in accumulated other comprehensive loss.

Transaction gains and losses are included within “general and administrative expense” on the consolidated statements of operations and comprehensive loss.

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

Translation gains and losses as a result of consolidation are included in accumulated other comprehensive income.

Transaction gains and losses are included within general and administrative expenses on the consolidated statements of operations and comprehensive loss.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Concentrations of Credit Risk

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We maintain an allowance for current expected credit losses based upon the expected collectability of accounts receivable balances.

The Company generates revenue as follows:

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

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

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

• 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:

Subsequent Events

The Company evaluated subsequent events through March 24, 2026 , the date the consolidated financial statements were issued.

The following tables provide information about concentrations that exceed 10% of revenue and accounts receivable for the years ended December 31, 2025 and 2024:

December 31, 2025

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

Off-balance Sheet Arrangements

There are no off-balance sheet arrangements as of December 31, 2024 and December 31, 2023 .

Reclassification

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 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).

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 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.

For 2024 annual reporting, we adopted ASU No.

2023-07, Segment Reporting (Topic 280):

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The adoption of ASU 2023-07 did no t have a significant impact on our consolidated financial statements for the period ended December 31, 2025 .

Consistent with ASC 280, our Chief Financial Officer reviews financial information presented on a consolidated basis for purposes of allocated resources and evaluating financial performance.

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

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

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Accounting Pronouncements Not Yet Adopted

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

Improvements to Income Tax Disclosures , which focuses on the rate reconciliation and income taxes paid.

2023-09 requires a public business entity (PBE) to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold.

In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5 % of total income tax payments, net of refunds received.

For PBEs, the new standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

For entities other than PBEs, the requirements will be effective for annual periods beginning after December 15, 2025.

An entity may apply the amendments in this ASU prospectively by providing the revised disclosures for the period ending December 31, 2025, and continuing to provide the pre-ASU disclosures for the prior periods, or may apply the amendments retrospectively by providing the revised disclosures for all period presented.

As of December 31, 2025, the Company adopted this new ASU, and it only impacts the Company's income tax disclosures with no impact to its operations, cash flows, and financial condition.

Accounting Pronouncements Not Yet Adopted

In November 2024, and as amended in January 2025, the FASB issued ASU No.

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

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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.

This guidance will be effective for annual periods beginning after December 15, 2026 (i.e., fiscal years beginning January 1, 2027, for calendar-year filers), 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.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets .

When applying the current expected credit loss model to current accounts receivable and contract assets arising from transactions accounted for under ASC 606, this standard provides a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset.

This guidance will be effective for annual and interim periods beginning after December 15, 2025 (i.e., fiscal years beginning January 1, 2026, for calendar-year filers).

The guidance is to be applied on a prospective basis and early adoption is permitted.

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

In September 2025, the FASB issued ASU No.

2025-06, Intangibles - Goodwill and Other Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software .

This update provides revised guidance aimed at refining how costs related to internal-use software are accounted for.

The update removes the concept of distinct project phases and requires that capitalization of software costs begins when management authorizes and commits to funding a computer software project, and when there is a high likelihood the project will be completed and the software will be used to perform the function as intended.

When assessing whether completion is probable, entities must consider any substantial uncertainties in development.

In addition, the guidance introduces a requirement to disclose capitalized software costs as part of property and equipment.

The new standard will be effective for annual periods beginning after December 15, 2026 (i.e., fiscal years beginning January 1, 2027, for calendar-year filers), and for interim periods thereafter.

Upon adoption, the guidance can be applied using a prospective application, retrospective application, or a modified transition approach.

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

In December 2025, the FASB issued ASU No.

2025-10, Accounting for Government Grants (Topic 832):

Accounting for Government Grants Received by Business Entities , to establish authoritative guidance on the recognition, measurement, and presentation of government grants received by business entities.

The new standard will be effective for annual periods beginning with the year ending December 31, 2028, and for interim periods beginning January 1, 2029, though early adoption is permitted.

Upon adoption, the guidance can be applied using a modified prospective, modified retrospective, or under a retrospective approach.

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

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements, which clarifies interim disclosure requirements and the applicability of Topic 270.

The amendments in this ASU provide a comprehensive list of interim disclosures that are required by U.S.

GAAP and include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that had a material impact on the entity.

The new standard will be effective for interim reporting periods beginning on January 1, 2028.

The guidance may be applied on a prospective or retrospective basis, and early adoption is permitted.

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

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – ACCOUNTS RECEIVABLE

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Accounts receivable, net

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

(1) Unbilled receivables represent amounts for services rendered at the end of the period pending generation of invoices to the customer.

Accounts receivable, net at January 1, 2024, was $ 14.7 million.

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

Expected credit losses were $ 283,000 , and $ 15,000 for the years ended December 31, 2025, and 2024 , respectively.

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

NOTE 4 – PREPAID EXPENSE AND OTHER ASSETS

NOTE 4 – PREPAID EXPENSES AND OTHER ASSETS

Prepaid expenses and other assets consisted of the following:

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Prepaid expenses and other current assets

(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

(1) Includes approximately $ 276,000 and $ 291,000 which is being paid over a period of time and is included in accounts payable at December 31, 2025 and 2024, respectively.

(2) Includes approximately $ 280,000 and $ 121,000 w hich is being paid over a period of time and is included in accounts payable at December 31, 2025 and 2024, respectively.

NOTE 5 – PROPERTY AND EQUIPMENT, NET

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(in thousands)

Furniture and fixtures

Computer equipment

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Property and equipment, net

Depreciation expense was $ 127,000 , and $ 125,000 for the years ending December 31, 2024, and 2023 , respectively and is included in general and administrative expenses on the consolidated statements of operations and comprehensive loss.

Depreciation and amortization expense was $ 56,000 and $ 127,000 for the years ending December 31, 2025, and 2024 , respectively and is included in general and administrative expenses in the consolidated statements of operations and comprehensive loss.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 – INTANGIBLE ASSETS, NET

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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, 2025

December 31, 2024

Impairment Loss

(in thousands)

IP/technology

Customer relationships

Non-compete agreements

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:

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Gross Carrying Amount

(in thousands)

Developed technology

Customer relationships

Acquired intangible assets

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

December 31, 2024

December 31, 2023

(in thousands)

Other intangible assets

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Total expected amortization expense

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 – GOODWILL

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December 31, 2024

December 31, 2023

Reclassifications

December 31, 2025

Goodwill acquired as part of the Big Village Acquisition totals $ 2.3 million and represents the value of unidentifiable intangible assets including assembled workforce and strategic benefits that are expected to be achieved.

We allocate goodwill to reporting units based on the expected benefit and synergies with our current reporting units.

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"Owned & Operated", "Ad Network", and "Insights".

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.

Impairment is deemed to occur when the carrying value of the goodwill associated with the reporting unit exceeds the implied value of the goodwill associated with the reporting unit.

At September 30, 2023 and December 31, 2023, an impairment assessment was performed on goodwill for Ad Network, Owned & Operating and Insights reporting units.

At October 1, 2025, an impairment assessment was performed on goodwill for Ad Network, Owned & Operated, and Insights reporting units.

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 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.

Our qualitative assessment concluded that it is more likely than not that the estimated fair value of the Owned & Operated reporting unit is less than the carrying value, and the quantitative assessment resulted in the same conclusion.

Our qualitative assessments for the Ad Network and Insights reporting units concluded that each reporting unit's fair value was potentially less than its carrying value, but our quantitative assessments did not have such conclusions.

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

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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 for the year ended December 31, 2023.

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.

Our quantitative analysis showed that the implied fair value of our goodwill for the Owned & Operated reporting units is less than its carrying value which resulted in an impairment charge of approximately $ 786,000 .

NOTE 8 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

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Total accounts payable and accrued expenses

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

(1) Accounts payable includes $ 5.4 million and $ 5.2 million at December 31, 2025, and 2024, 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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 – OTHER CURRENT LIABILITIES

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(in thousands)

Current portion of long-term lease

Current portion of long-term operating and financing leases

Dividend payable

5 unchanged sentences

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 amounts 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 statement of operations and comprehensive loss.

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 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.

Effective June 1, 2020, the Company entered into a membership interest purchase agreement to acquire 100 % of CL Media Holdings, LLC which is now a subsidiary of the Company (the “Purchase Agreement”).

To finance the acquisition, the Company obtained a first lien senior loan in the amount of $ 16.5 million, comprised of $ 15.0 million of initial indebtedness, repayment of the existing accounts receivable factoring facility of Wild Sky Media, which was a subsidiary of CL Media Holdings, of approximately $ 900,000 , and approximately $ 500,000 of expenses, from, and entered into a secured credit facility with, Centre Lane Partners Master Credit Fund II, L.P.

(“Centre Lane Partners”).

Additional Draws

As of December 31, 2025, Centre Lane Partners had loaned the Company an additional $ 39.9 million through Amendments One through Eight (the “Second Out Loans”), Amendments Nine through Sixteen and Nineteen (the “First Out Loans”), and Amendments Seventeen and Twenty-One (the “Third Out Loans”) to provide liquidity to fund operations.

The Nineteenth Amendment Term Loan had a maturity date of December 31, 2024 , and the loan balance was repaid.

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 Big Village 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 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.

The outstanding principal on these at April 20, 2023 was $ 31.0 million and $ 4.3 million, respectively.

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

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 Centre Lane Partners.

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 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,” 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 % 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.

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

The Company borrowed an additional $ 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 in December 2026.

Interest to be paid in cash accrues at a rate of 0 % per annum, and interest to be paid in kind accrues at a rate of 15 % per annum.

For further information on this judgment, see Note 16, Commitments and Contingencies, to the consolidated financial statements.

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 5,001,991 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.

The Company may, at any time, voluntarily prepay, in whole or in part (with a minimum prepayment of $ 250,000 ) 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.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

Effective March 31, 2025, the Company, the Lenders, and Centre Lane Partners entered into the Twenty-Second Amendment to the Credit Agreement, pursuant to which the following adjustments were made to the outstanding loans:

• Extending the maturity date of the First Out Loans (which no longer include the Seventeenth Amendment Term Loans and the Twenty-First Amendment Term Loans), Second Out Loans (formerly defined as the "Last Out Loans"), and Third Out Loans (comprised of the Seventeenth Amendment Term Loans and the Twenty-First Amendment Term Loans) from April 20, 2026, to December 20, 2026;

• Changing the Second Out Loans PIK rate to the Term Secured Overnight Financing Rate (" SOFR ") plus 3 % and the Second Out Loans cash interest rate to 2 %.

At December 31, 2025 , the SOFR floor was 5.00 % per annum, thus the overall PIK rate on these facilities was 8.00 % ;

• Changing the First Out Loans cash interest rate to the Term SOFR plus 2 %.

The overall PIK rate on these facilities was 7.00 % at December 31, 2025;

• Changing the Third Out Loans PIK rate to 15 %;

• Adjusting the amortization of the Second Out Loans such that quarterly installments of 1 % of the aggregate principal amount (after giving effect to capitalized PIK interest) are paid for each quarter in 2025, and quarterly installments of 2 % of the aggregate principal amount (after giving effect to capitalized PIK interest) are paid thereafter until maturity;

• Adjusting the amortization of the First Out Loans such that an installment of $ 700,000 was paid on March 31, 2025, and quarterly installments of $ 575,000 were to be paid thereafter until maturity.

Effective September 30, 2025, the Company, the Lenders, and Centre Lane Partners entered into the Twenty-Third Amendment to the Credit Agreement, which applied the following adjustments to loans with outstanding payments due on September 30, 2025, including the following modifications:

• Converting the First Out Loans cash interest due on September 30, 2025, to interest PIK;

• Reducing the First Out Loans amortization payment from $ 575,000 to $ 250,000 due on September 30, 2025, with the difference deferred to the maturity date of the First Out Loans, which is December 20, 2026 ;

• Incurring an amendment fee equal to 25 basis points of the First Out Loans, approximately $ 8,000 , which was added to the principal balance of the First Out Loans as of September 30, 2025;

• Converting the Second Out Loans cash interest due on September 30, 2025, to interest PIK;

• Deferring the Second Out Loans amortization payment due on September 30, 2025, to the maturity date of the Second Out Loans, which is December 20, 2026 ;

• Following payments made on September 30, 2025, all loan terms, including cash interest and PIK rates, reverted to the terms established under the Twenty-Second Amendment.

Quarterly amortization payments resumed and were due on December 31, 2025.

Also in connection with the Twenty-Third Amendment, the Company agreed to issue a number of shares of the common stock of the Company, par value $ 0.01 per share, equal to 1.5 % of the fully-diluted pro forma ownership of the Company, or 2,832,485 shares of the common stock, to Centre Lane Partners.

Effective December 31, 2025, the Company, the Lenders, and Centre Lane Partners entered into the Twenty-Fourth Amendment to the Credit Agreement, which applied the following adjustments to loans with outstanding payments due on December 31, 2025, including the following temporary modifications:

• Converting the Second Out Loans cash interest due on December 31, 2025, to interest PIK;

• Deferring the Second Out Loans amortization payment due on December 31, 2025, to March 31, 2026 .

• Following payments made on December 31, 2025, all loan terms, including cash interest rates, reverted to the terms established under the Twenty-Second Amendment.

Quarterly amortization payments resumed and were due on March 31, 2026 .

Also in connection with the Twenty-Fourth Amendment, the Company agreed to issue a number of shares of the common stock of the Company, par value $ 0.01 per share, equal to 1.5 % of the fully-diluted pro forma ownership of the Company, or 2,870,792 shares of the common stock, to Centre Lane Partners.

As of December 31, 2025, BV Agency, LLC, an affiliate of the lenders, and Centre Lane Partners owned approximately 14.6 % and 11.5 % of the Company’s outstanding common stock, respectively.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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.

The Centre Lane Senior Secured Credit Facility provides that this fee shall be in all respects fully earned, due and paid-in-kind by the Company on the effective date (“Effective Date”) of the Centre Lane Senior Secured Credit Facility and on each anniversary of the Effective Date during the term of this agreement by adding and capitalizing the full amount of such fee to the outstanding principal balance of the loans.

The accumulated administrative fee since inception of the facility is $ 175,000 and is included in outstanding principal.

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:

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the years ended December 31, 2025 and 2024, the Company paid approximately $ 2.3 million and $ 3.1 million toward the principal loan balance, respectively.

For the years ended December 31, 2025 and 2024, the Company paid approximately $ 532,000 and $ 539,000 toward outstanding interest payable, respectively.

As of December 31, 2025, we owed Centre Lane $ 86.1 million under the Centre Lane Senior Secured Credit Facility.

Of this amount, $ 1.8 million is due on March 31, 2026, $ 1.4 million is due on June 30, 2026, and $ 1.4 million is due on September 30, 2026.

The remaining principal balance of $ 81.5 million is due on December 20, 2026.

The below table summarizes the loan bala nces at December 31, 2025 and 2024:

December 31, 2025

6 unchanged sentences

Outstanding principal

The below table summarizes the movement in the outstanding principal from inception through December 31, 2024:

The below table summarizes the movement in the outstanding principal during the years ended December 31, 2025 and 2024:

December 31, 2025

2 unchanged sentences

Opening balance

Exit and other fees, net

Exit and other fees

Interest capitalized

Outstanding principal

Amendments to Centre Lane Senior Secured Credit Facility

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.

Under the terms of the Centre Lane Senior Secured Credit Facility, the Company is required to pay Centre Lane Partners a non-refundable annual administration fee equal to $ 35,000 for agency services.

The Centre Lane Senior Secured Credit Facility provides that this fee shall be, in all respects, fully earned, due and paid in kind by the Company on the effective date of the Centre Lane Senior Secured Credit Facility, and on each anniversary of the effective date during the term of the agreement by adding and capitalizing the full amount of such fee to the outstanding principal balance of the loans.

The accumulated administrative fee since inception of the facility is $ 210,000 and is included in outstanding principal.

The administrative fee charged during the years ended December 31, 2025 and 2024 , was $ 35,000 for both periods, respectively.

Commencing April 2021, the Company and certain subsidiaries entered into various amendments to the Amended and Restated Senior Secured Credit Facility.

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, 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.

In addition, as part of the transaction, there are exit fees (the "Exit Fees"), which are added and capitalized to the principal amount of the original loan.

As of December 31, 2025, there w ere twenty-four amendments to the Credit Agreement.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Consistent with FASB Accounting Standards Codification ("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 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.

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.

Interest expense is recorded based on the effective interest rate of the new debt.

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.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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):

The below table summarizes the amendments that were executed by the Company from the inception of the facility to December 31, 2025 (in thousands, except for share data):

Amendment No.

Repayment Date

1 unchanged sentence

Interest Rate

Amendment Fee

Common Stock Issued

4 unchanged sentences

Extinguishment

(a) Added and capitalized to the principal amount of the original loan and the original loan terms apply.

(b) The Centre Lane Senior Secured Credit Facility was amended to permit the Company to raise up to $ 6.0 million of total cash proceeds from the sale of its preferred stock prior to December 31, 2021, without having to make a mandatory prepayment of the loans.

Additionally, the Company may issue up to $ 800,000 in dividends from the previous limit of $ 500,000 per annum.

(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.

a - New rates in effect in connection with Amendment Twenty-Two.

b - Added and capitalized to the principal amount of the original loan.

c - Second Out Loans.

d - First Out Loans.

e - Third Out Loans.

f - There was no impact on principal or interest and no fees incurred by the Company under Amendments Eighteen and Twenty-Two, thus they are excluded from the table.

g - There were no loan draws under Amendments Twenty, Twenty-Three, and Twenty-Four, thus no interest rates were incurred.

Amendments Twenty, Twenty-Three, and Twenty-Four adjusted the existing outstanding loan terms, thus the balances of the interest rate PIK and interest rate cash are 0.00 %.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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.

All amounts advanced for Amendments 9 through 16 were due on June 30, 2023 along with accrued and unpaid interest, however, the maturity date was changed to April 20, 2026 with Amendment 17.

The outstanding amount at December 31, 2024 is $ 5.2 million , inclusive of interest paid in kind.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Our debt financing arrangements, including long-term debt, expose us to counterparty credit risk as they are solely with a single related party lender.

We manage this risk by closely monitoring the related party's financial stability and ensuring it maintains a strong credit rating.

No other financial institutions are involved in our debt obligations.

As of December 31, 2025 and 2024, the carrying value of the Centre Lane Senior Secured Credit Facility was $ 84.3 million and $ 74.9 million , respectively, net of unamortized debt discount of $ 1.9 million and $ 4.0 million , respectively.

The discount is being amortized over the remaining life of the Centre Lane Senior Secured Credit facility using the effective interest method.

During the years ended December 31, 2024 and 2023, the Company recorded amortization of debt discount of $ 2.7 million and $ 2.1 million , respectively on the Centre Lane Senior Secured Credit Facility.

During the year ended December 31, 2025 and 2024, the Company recorded amortization of debt discount of $ 2.1 million and $ 2.7 million , respectively, on the Centre Lane Senior Secured Credit Facility.

Interest expense for the year ended December 31, 2025 and 2024, consisted of the following:

4 unchanged sentences

Total interest expense

The minimum annual principal payments of notes payable at December 31, 2024 were:

December 31, 2024

(in thousands)

NOTE 11 – 10% CONVERTIBLE PROMISSORY NOTES

2 unchanged sentences

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 .

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

The outstanding principal and interest of the Convertible Notes were 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.

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.

The Company accounts for its operating 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.

Operating Lease

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.

An addendum to the lease dated June 14, 2022, set 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.

5 unchanged sentences

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.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

One April 14, 2024, and July 1, 2024, the Company entered into two sublease agreements for its Boca Raton corporate office suites.

The subleases continue for the remaining term on the initial lease agreement of three 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.

The Company retains the ability to use the address as its corporate office.

At December 31, 2025 and 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 $ 137,000 and $ 84,000 for the year ended December 31, 2025 and 2024, respectively.

Finance Lease

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Finance lease expense for the year ended December 31, 2024 was $ 29,000 , inclusive of interest of $ 11,000 and amortization of $ 18,000 , 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

As of December 31, 2025 and 2024, the right-of-use asset and lease liability for the operating lease are summarized as follows (in thousands):

17 unchanged sentences

Finance lease

(1) Finance lease represents computer software, see Note 5 "Property and Equipment".

(1) Finance lease represents computer software, see Note 5, Property and Equipment, Net, to the consolidated financial statements.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2025, the aggregate annual lease obligations were as follows (in thousands):

5 unchanged sentences

Net lease obligations

NOTE 13 – BUSINESS COMBINATIONS

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.

The purpose of the acquisition was to add synergies to our existing revenue stream.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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.

Identified intangibles total $ 16.2 million inclusive of the below:

(in thousands)

Developed technology

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)

Purchase price consideration:

Centre Lane Senior Secured Credit Facility

Fair value of assets acquired:

Accounts receivable

Prepaid and other assets

Property and equipment

Fair value of liabilities assumed:

Accounts payable and accrued expenses

Deferred revenue

Other current liabilities

Total fair value of assets acquired and liabilities assumed

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 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.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 – REVENUE RECOGNITION

The following table represents our revenue disaggregated by type (in thousands):

The following table represents our revenue disaggregated by type:

December 31, 2025

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Geographic Information

Revenue by geography is generally based on the country of the Company’s contracting entity.

Revenue by geography is based on the country of the Company’s contracting entity.

Total United States revenue was approximately 100 % of total revenue for the years ended December 31, 2025, and 2024.

As of December 31, 2024, and 2023 , approximately 100 % of our long-lived assets were attributable to operations in the United States.

Long-lived assets include websites and other intangibles assets that are utilized in overall revenue generation.

As of December 31, 2025, and 2024 , approximately 100 % of our long-lived assets, including websites and other intangible assets used in revenue generation, were attributable to operations in the United States.

Deferred Revenue

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Amounts invoiced during the period

Business combination

revenue recognized during the period

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NOTE 14 – STOCK BASED COMPENSATION

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”).

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

The 2022 Stock Option Plan provides for the grant of awards to eligible employees, directors and consultants in the form of stock options.

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As of December 31, 2025, 12,146,767 shares were remaining under the 2022 Stock Option Plan for the future issuance.

As of December 31, 2024, options to purchase 10,459,033 shares of common stock were outstanding under the Stock Option Plan at a weighted average exercise price of $ 0.10 per share.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2025, options to purchase and aggregate of 10,353,233 shares of common stock were outstanding under the Company's 2013 Stock Option Plan, the 2015 Stock Option Plan, the 2019 Stock Option Plan, and the 2022 Stock Option Plan at a weighted-average exercise price of $ 0.09 per share.

No further grants can be made under any of the Company's stock option plans other than the 2022 Stock Option Plan.

Compensation expense recorded in connection with the Stock Option Plan was $ 125,000 , and $ 254,000 for the years ended December 31, 2025, and 2024, respectively.

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:

The following table presents the activity of the Company’s outstanding common stock options for the year ended December 31, 2025:

Number of Options

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0.0001 - 0.13

$ 0.14 - $ 0.24

$ 0.25 - $ 0.49

$ 0.50 - $ 0.85

$ 0.86 - $ 1.75

As of December 31, 2025, there were total unrecognized compensation costs related to non-vested share-based compensation arrangements of $ 85,000 to be recognized through July 2027.

1 unchanged sentence

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO 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, 2025 and 2024:

1 unchanged sentence

December 31, 2024

Expected term (years)

Expected life (years)

Expected volatility

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The expected life is computed using the simplified method, which is the average of the vesting term and the contractual term.

The expected volatility is based on an average of similar public company’s historical volatility, as the Company’s common stock is quoted in the over-the-counter market on the OTCQB Tier of the OTC Markets, Inc.

The expected volatility is based on an average of similar public companies' historical volatility, as the Company's common stock is quoted in the over-the-counter market on the OTCQB Tier of the OTC Markets, Inc.

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

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Fair Value Considerations

Financial instruments recognized in the consolidated balance sheets consist of cash, accounts receivable, other liabilities and accounts payable.

Financial instruments recognized in the consolidated balance sheets consist of cash, cash equivalents, restricted cash, accounts receivable, other liabilities and accounts payable.

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 approximates the fair value due to the nature and level of risk.

The carrying value of the Centre Lane Senior Secured Credit Facility approximates the fair value due to their nature and level of risk.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Assets Measured at Fair Value on a Nonrecurring Basis

The Company has certain non-financial assets that are measured at fair value on a non-recurring basis when there is an indicator of impairment, and they are recorded at fair value only when impairment is recognized.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Assets Measured at Fair Value on a Non-Recurring Basis

These assets include goodwill and intangible assets, net.

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Discount rate

Intangible assets, net

Discounted cash flow

Discount rate

Goodwill and Intangibles Assets

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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.

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 in excess of its implied fair value, resulting in an impairment charge of $ 14.1 million and $ 2.9 million for goodwill and intangible assets, respectively.

During the year ended December 31, 2023, goodwill and intangibles acquired by the Company were $ 2.3 million and $ 16.2 million, respectively.

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.

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.

At October 1, 2025, an impairment assessment was performed on goodwill for Ad Network, Owned & Operated, 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.

The assessment indicated that the carrying value was in excess of its implied fair value, resulting in an impairment charge of $ 786,000 for goodwill.

Centre Lane Senior Secured Credit Facility

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.

The Company is required to perform an analysis of the change in each amendment to the Centre Lane Senior Secured Credit Facility 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.

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

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.

The Company calculates the present value of the cash flows under the terms of each new amendment and determines if it is substantially different by at least 10 % from the present value of the remaining cash flow of the original debt instrument.

Amendments Twenty-Two, Twenty-Three, and Twenty-Four were considered modifications.

For further information on modifications and extinguishments, see the amendments table within Note 10, Centre Lane Senior Secured Credit Facility, to the consolidated financial statements.

NOTE 16 – COMMITMENTS AND CONTINGENCIES

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The Company will then continue to monitor the matter for further developments that could affect the amount of any such accrued liability.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

On July 11, 2023, Ladenburg Thalmann & Co.

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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 the impending Big Village Acquisition.

In April 2023, the Company informed Ladenburg of the impending acquisition of Big Village Insights, Inc.

and Big Village Agency, LLC (together, the "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.

3 unchanged sentences

This motion was denied on January 30, 2025.

The Company plans to appeal the judgment.

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

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

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

On May 9, 2025, the Company appealed to the United States Court of Appeals for the Eleventh Circuit Court of Appeals.

Ladenburg filed a response on July 9, 2025, and the Company accrued an additional $ 242,000 to cover fees related to this matter.

The Company replied to Ladenburg's response on August 29, 2025.

The Eleventh Circuit Court of Appeals has tentatively scheduled our appeal for oral argument for the week of April 6, 2026.

The outcome of this matter is not determinable as of the date of issuance of these consolidated financial statements.

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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.

The outcome is not determinable as of the issuance of these consolidated financial statements.

NOTE 17 - STOCKHOLDERS' DEFICIT

2 unchanged sentences

The Company’s board of directors has designated six series of preferred stock, consisting of:

10% Series A Convertible Preferred Stock (“Series A Stock”);

10% Series B Convertible Preferred Stock (“Series B Stock”);

10% Series C Convertible Preferred Stock (“Series C Stock”);

10% Series D Convertible Preferred Stock (“Series D Stock”);

10% Series E Convertible Preferred Stock (“Series E Stock”);

10% Series F Convertible Preferred Stock (“Series F Stock”).

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

10% Series A Convertible Preferred Stock;

10% Series B Convertible Preferred Stock;

10% Series C Convertible Preferred Stock;

10% Series D Convertible Preferred Stock;

10% Series E Convertible Preferred Stock;

10% Series F Convertible Preferred Stock.

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.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Additional terms of the designations, rights and preferences of the Series F-1, Series F-2 and Series F-3 include:

7 unchanged sentences

• the shares are not redeemable by the Company.

Other designations, rights and preferences of each of series of preferred stock are identical, including:

Other designations, rights and preferences of each series of preferred stock are identical, including:

• shares do not have voting rights, except as may be permitted under Florida law;

4 unchanged sentences

There were no shares of preferred stock issued or outstanding at December 31, 2025, and 2024.

At December 31, 2024 and 2023, accrued unpaid preference dividend was $ 691,000 .

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.

At December 31, 2025 and 2024, there was an accrued unpaid preference dividend of $ 691,000 .

This amount is payable to the Company's former Chairman of the Board, Mr.

Kip Speyer, and is included under other current liabilities in the consolidated balance sheets at December 31, 2025.

Shares of Common Stock under the 2022 Stock Option Plan

1 unchanged sentence

The 2022 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 2022 Plan for the future issuance.

As of December 31, 2025 , 12,146,767 shares were remaining under the 2022 Stock Option Plan for future issuance.

Issue of Common Stock

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):

During the year ended December 31, 2025, the Company issued 5,753,677 shares of our common stock as follows (in thousands, except share data):

December 31, 2025

Shares issued to Centre Lane related to debt financing

Common stock issued to Centre Lane related to debt financing

Common stock issued for options exercised

Common stock issued for services rendered

Shares of common stock issued, net

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

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):

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the year ended December 31, 2024 , the Company issued 5,361,693 shares of our common stock as follows (in thousands, except share data):

December 31, 2024

Shares issued to Centre Lane related to debt financing

Oceanside share adjustment (1)

Common stock issued to Centre Lane related to debt financing

Common stock issued for options exercised

1 unchanged sentence

Shares of common stock issued, net

(1) Represents an adjustment to reconcile shares actually issued related to the Oceanside acquisition in 2019.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

During the year ended December 31, 2025, three shareholders relinquished their Bright Mountain common stock shares.

A total of 835,400 shares were acquired by the Company at no cost to the Company.

A total of 2,185,575 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.

At December 31, 2025 and 2024, we had 175,000 and 10,573,700 common stock warrants outstanding to purchase shares of our common stock, respectively, with exercise prices ranging between $ 0.75 and $ 1.00 per sh are.

Of the 175,000 common stock warrants outstanding at December 31, 2025 , all 175,000 will expire in 2030.

Approximately 10,398,700 and 10,788,366 common stock warrants expired during the years ended December 31, 2025 and 2024, respectively.

4 unchanged sentences

Gross Cash Proceeds

(if exercised)

(if exercised, in thousands)

December 31, 2024

2 unchanged sentences

Gross Cash Proceeds

(if exercised)

(if exercised, in thousands)

NOTE 18 – LOSS PER SHARE

2 unchanged sentences

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.

1 unchanged sentence

The dilutive effect, if any, of outstanding common share equivalents is reflected in diluted earnings per share by application of the treasury stock method, and if-converted method as applicable.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables reconcile actual basic and diluted earnings per share for the years ended December 31, 2025 and 2024 (in thousands except shares and per share data):

8 unchanged sentences

Shares unvested and subject to exercise of stock options

Shares subject to warrants stock exercise

Shares subject to convertible notes stock conversion

Shares subject to exercise of warrants

NOTE 19 – RELATED PARTY TRANSACTIONS

1 unchanged sentence

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.

In connection with the Twenty-First Amendment, on December 26, 2024, the Company issued 5,001,991 shares of common stock of the Company to BV Agency, LLC, an entity beneficially owned by Centre Lane Partners.

In connection with the Twenty-Third Amendment, on September 30, 2025, the Company issued an additional 2,832,485 shares of common stock of the Company to Centre Lane Partners.

In connection with the Twenty-Fourth Amendment, on December 31, 2025, the Company issued an additional 2,870,792 shares of common stock of the Company to Centre Lane Partners.

BV Agency, LLC, and Centre Lane Partners own approximately 14.6 % and 11.5 % 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.

2 unchanged sentences

The total related party debt owed to Centre Lane Partners was $ 86.1 million and $ 78.8 million as of December 31, 2025 and 2024, respectively.

See Note 10, Centre Lane Senior Secured Credit Facility for details on this facility.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

See Note 10, Centre Lane Senior Secured Credit Facility, to the consolidated financial statements for details on this facility.

Preferred Stock

At December 31, 2024 and 2023, accrued unpaid preference dividend was $ 691,000 .

These amounts are payable to the Company's former Chairman, Mr.

At December 31, 2025 and 2024, there was an accrued unpaid preference dividend of $ 691,000 .

This amount is payable to the Company's former Chairman of the Board, Mr.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 20 – INCOME TAXES

7 unchanged sentences

Federal tax expense (benefit) at the statutory rate from operations

State tax benefit, net of federal income tax benefit

Other adjustments

State and local tax benefit, net of federal income tax benefit

Effect of foreign taxes:

Stock compensation

Foreign rate differential

Foreign change in valuation allowance

Change in valuation allowance

Nontaxable or nondeductible items:

Other adjustments:

Deferred tax assets (liabilities) true-up - other

Deferred tax assets (liabilities) true-up - net operating loss

Return to provision

Total tax provision (benefit)

4 unchanged sentences

Lease liability

Interest limitation

Total gross deferred tax assets

2 unchanged sentences

Deferred tax liabilities:

Property and equipment

Right-of-use asset

Debt modification

Net deferred tax liability

Net deferred tax liabilities

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2025 , the Company had U.S.

federal net operating loss carryforwards of $ 88.1 million that expire at various dates from 2030 through 2038 , and includes $ 77.8 million that have an unlimited carryforward period.

As of December 31, 2024, the Company had state and local net operating loss carryforwards of $ 109.8 million that expire at various dates from 2030 through 2042 , and includes $ 36 million that have an unlimited carryforward period.

As of December 31, 2024, the Company had foreign net operating loss carryforwards of $ 4.7 million primarily in Israel that have an unlimited carryforward period.

federal net operating loss carryforwards of $ 87.5 million which include $ 77.2 million that have an unlimited carryforward period and the remainder expire at various dates from 2030 through 2038 .

As of December 31, 2025, the Company had state and local net operating loss carryforwards of $ 117.2 million which includes $ 42.7 million that have an unlimited carryforward period and the remainder expire at various dates from 2030 through 2042 .

As of December 31, 2025, the Company had foreign net operating loss carryforwards of $ 5.5 million which include $ 4.6 million that have an unlimited carryforward period and the remainder expire in 2029 and 2030 .

The utilization of the Company’s net operating losses may be subject to a U.S.

9 unchanged sentences

As a result, the Company continues to maintain a full valuation against its net deferred tax assets.

For the years ended December 31, 2024, and 2023, the change in the valuation allowance was an increase of approximately $ 3.6 million and an increase of approximately $ 5.2 million, respectively.

The Tax Cuts and Jobs Act (TCJA) resulted in significant changes to the treatment of research and developmental (R&D) expenditures under Section 174 of the IRC.

For tax years beginning after December 31, 2021, taxpayers are required to capitalize and amortize all R&D expenditures that are paid or incurred in connection with their trade or business.

Specifically, costs for U.S.-based R&D activities must be amortized over five years and costs for foreign R&D activities must be amortized over 15 years —both using a midyear convention.

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.

For the years ended December 31, 2025, and 2024, the change in the valuation allowance was an increase of approximately $ 4.6 million and $ 3.6 million, respectively.

The Company does not provide for U.S.

Federal, state, and applicable foreign income and withholding taxes on the financial reporting basis over the tax basis of its foreign subsidiary investment because the Company does have the intentions and ability to indefinitely reinvest the undistributed earnings of its foreign subsidiaries.

As a result, deferred taxes have not been recorded for the outside basis differences in its foreign subsidiary as of December 31, 2025, to the extent such differences are expected to result in future taxable income upon repatriation.

The Company reviews its ability and intentions to indefinitely reinvest its foreign earnings at each balance sheet.

The One Big Beautiful Bill Act ("OBBBA") was passed and became effective for the Company during 2025.

The legislation includes, among other provisions, permanent full expensing for certain business assets, changes to the interest deduction limitation under Section 163(j), amendments to international tax provisions including the global intangible low-taxed income (“GILTI”) and foreign-derived intangible income (“FDII”) regimes, the permanent extension of the controlled foreign corporation (“CFC”) look-through rule, as well as modifications to the treatment of research and development expenditures mentioned above.

Congress modified the treatment for research and development expenditures by adding new Section 174A, which applies for tax years beginning after December 31, 2024.

Section 174A permits the immediate deduction of domestic R&D expenditures or, at the taxpayer’s election, capitalization and amortization over a period of at least five years beginning when the related benefits are first realized.

Foreign R&D expenditures continue to be capitalized and amortized over 15 years .

Transition provisions allow taxpayers either to continue amortizing amounts capitalized under the TCJA rules or to deduct remaining unamortized domestic R&D expenditures in the first tax year beginning after December 31, 2024.

The Company has elected to amortize previously capitalized domestic R&D expenditures over two years which is permitted under OBBBA and immediately expense any current year Section 174A costs.

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.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

10 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.

The Company did no t pay income taxes, net of refunds, during the year ended December 31, 2025.

As no income taxes were paid, disaggregation by federal, state, or foreign jurisdiction was not applicable for the period presented.

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