Bright Mountain Media, Inc. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of December 31, 2025. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that as of the period ended December 31, 2025, our disclosure controls and procedures were effective to provide assurance at a reasonable level that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Management's Annual Report on Internal Control over Financial Reporting Our senior management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers, or persons performing similar functions, and effected by our Board, senior management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We continue to review our internal control over financial reporting and may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business. Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in “Internal Control — Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). As the Company 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. 43 Table of Contents 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. This Annual Report on Form 10-K does not include an attestation report of the Company’s registered independent public accounting firm on management’s assessment regarding internal controls over financial reporting due to the exemption from such requirements established by rules of the SEC for smaller reporting companies. Changes in Internal Control over Financial Reporting Other than the matters set forth above, there were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the year ended December 31, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Limitations on Effectiveness of Controls and Procedures In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. ITEM 9B. OTHER INFORMATION None . ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 44 Table of Contents PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Directors Our Board currently consists of five members. Each director is elected at our annual meeting of shareholders and holds office until the next annual meeting of shareholders, or until his or her successor is elected and qualified. If any director resigns, dies or is otherwise unable to serve out his or her term, or if the board increases the number of directors, the board may fill any vacancy by a vote of a majority of the directors then in office. A director elected to fill a vacancy shall serve for the unexpired term of his or her predecessor. The following table sets forth the names, ages and positions of our directors: Name Age Position Matthew Drinkwater 52 Interim Chairman of the Board and Chief Executive Officer Elaine Riddell 70 Director Joseph Pergola 51 Director and Chairman of Audit Committee Thomas Triscari 56 Director and Chairman of Compensation Committee Jeff Hirsch 67 Director and Chairman of Governance Committee Matthew Drinkwater has been a member of our Board since January 2022 and was appointed Chief Executive Officer in December 2021. He was appointed Interim Chairman of the Board on August 8, 2024. Mr. Drinkwater has an extensive track record of adding value to the companies he has worked for over his professional career in several key senior executive and sales roles at companies such as Buzzfeed Inc. (NASDAQ: BZFD), Twitter Inc., Groupon Inc. (NASDAQ: GRPN), Yahoo and America Online (AOL). Mr. Drinkwater is a digital executive with extensive, progressively advancing leadership experience at iconic high tech brands. Mr. Drinkwater was a member of Revenue Collective, a private organization for commercial growth operators, from 2020 to 2021. Mr. Drinkwater served as the Senior Vice President, International from 2017 to 2019 and General Manager, International from 2019 to 2020 for Buzzfeed Inc. He also was in Agency Development and Global Accounts at Twitter from 2015 to 2017 and head of Twitter’s Global Online Sales in San Paolo, Brazil from 2013 to 2015. Mr. Drinkwater served as Vice President of Groupon East Coast from 2011 to 2013 and Senior Director of Sales, New England and Canada at Yahoo from 2009 to 2011. Mr. Drinkwater holds a B.A. in Economics from College of the Holy Cross. We believe that Mr. Drinkwater possesses attributes that qualify him to serve as a member of our Board, including his experience serving in key management roles and extensive knowledge of the tech industry. Elaine Riddell has been a member of our Board since September 2024. Ms. Riddell has over 15 years of experience as a CEO at leading firms such as NOPWorld Health, TNS Healthcare, and Kantar Health (now Oracle LifeSciences). She currently serves as Managing Director at Oaklins DeSilva + Phillips, a leading investment bank specializing in M&A advisory within the marketing and media services sector. In addition to her advisory work, Ms. Riddell serves as a board director for the Executive Forum, a network of top executives dedicated to advancing business growth. She served as Vice President from 2012-2016 and 2018-2024 and was Chair of the Advisory Board for Themis Analytics from 2016 to its acquisition in 2017. Ms. Riddell is a McGill University alumna and holds dual Canadian and American citizenship. We believe that Ms. Riddell possesses attributes that qualify her to serve as a member of our Board, including her distinguished history of transforming established global data, analytics, and consulting firms into high-performing market leaders. Joseph Pergola has been a member of our Board since September 2024. Mr. Pergola currently serves as the Chief Financial Officer of Truckstop, a leading digital marketplace for freight. With over 25 years in the industry, Mr. Pergola has held key roles at Amazon, Criteo, The Weather Company, Yahoo, and Time Warner. As CFO of Integral Ad Science, he was instrumental in the company’s successful IPO in 2021, valued at $3.8 billion. Mr. Pergola holds a B.S. in Business Management from Saint Peter’s University and an MBA in Finance and Media and Communications from Fordham Gabelli School of Business. We believe that Mr. Pergola possesses attributes that qualify him to serve as a member of our Board, including his distinguished track record of leading and transforming finance, accounting, mergers and acquisitions, corporate development, business and sales operations, and real estate for multiple Fortune 500 Media and Ad Tech companies. 45 Table of Contents Thomas Triscari has been a member of our Board since September 2024. Mr. Triscari currently serves as a Senior Advisor at Landmark Ventures and is the founder of the Forensic AdTech Collective Thinktank (FACT), an initiative to pioneer new standards in the industry. His extensive advisory and non-executive board roles include positions at WasteNot, Br1dge, Adfidence, and Compliant. He serves as a non-executive board member at Adslot and has made significant contributions as the Founder of the Quo Vadis Newsletter, a respected resource in AdTech. Previously, Mr. Triscari held influential roles at Yahoo! EMEA, where he participated in sales operations, planning, and strategy, and at Criteo, where he served as Director of Publisher Marketplace and Business Intelligence. As an entrepreneur, Mr. Triscari founded Labmatik, a consultancy specializing in programmatic advertising, and led Yieldr, a demand-side platform (DSP) as CEO. He holds a B.A. in Economics from UCLA and an MBA in Finance and Entrepreneurship from the University of Notre Dame Mendoza College of Business. We believe that Mr. Triscari possess attributes that qualify him to serve as a member of our Board, including his extensive experience and deep understanding of the AdTech and media industries. Jeff Hirsch has been a member of our Board since August 2023. Mr. Hirsch has over 25 years in technology, business, and sales organization development, brand strategy, and investor relations. Since April 2023, he has served as a consultant and as the Managing Partner of Aperiam, a firm that invests in ad tech. From July 2016 to April 2023, he held various leadership roles at PubMatic (NASDAQ: PUBM), a digital marketing company, including serving as Chief Commercial Officer from 2019 until April 2023. He also held prior executive roles as President of CPXi (now Digital Remedy), Chief Executive Officer of AudienceScience, Chief Marketing Officer of SundaySky, SVP of ValueClick, and was a founder and Chief Revenue Officer of Fastclick (NASDAQ: FSTC). Mr. Hirsch graduated from the University of California Santa Barbara with a B.A. in Experimental Psychology. We believe that Mr. Hirsch possesses attributes that qualify him to serve as a member of our Board, including his extensive experience in management, strategy, and investor relations in our industry. Director Independence Our Board has determined that Ms. Riddell, Mr. Pergola, Mr. Triscari, and Mr. Hirsch qualify as “independent” directors within the meaning of the NYSE listing standards. The NYSE independence definition includes a series of objective tests regarding a director’s independence and requires that the Board make an affirmative determination that a director has no relationship with us that would interfere with such director’s exercise of independent judgment in carrying out the responsibilities of a director. There are currently no family relationships among any of our directors or executive officers. Executive Officers Below are the names, ages, and positions of our current executive officers: Name Age Position Matthew Drinkwater 52 Interim Chairman of the Board and Chief Executive Officer Ethan Rudin 51 Chief Financial Officer The following is certain biographical information describing the business experience of Mr. Rudin, who does not serve as a director. The biography of Mr. Drinkwater appears earlier in this section. See “Directors” above. Ethan Rudin has served as our Chief Financial Officer since October 2023. Prior to joining us, Mr. Rudin served as the Chief Financial Officer of Boundless Network, a private equity-backed promotional products distribution platform since November 2022. Mr. Rudin previously served as the Chief Financial Officer of BuildDirect Technologies, an online building materials retailer, from January 2021 to September 2022. Prior to joining BuildDirect Technologies, Mr. Rudin served as the Chief Financial Officer of Greenlane Holdings Inc., a distribution platform for premium vaporization products, from February 2019 to August 2020. Prior to joining Greenlane Holdings Inc., Mr. Rudin served in various roles at Napster/Rhapsody International Inc., an online music streaming platform, from August 2013 to December 2017, including as a special advisor to the Chief Executive Officer and as the Chief Financial Officer, Global Head of Label Relations & Business Development. Mr. Rudin earned his Bachelor of Arts in Economics from Tufts University in 1996 and his Masters of Business Administration from Columbia University Business School in 2022. 46 Table of Contents Code of Business Conduct and Ethics In order to clearly set forth our commitment to conduct our operations in accordance with our high standards of business ethics and applicable laws and regulations, our Board adopted a Code of Business Conduct and Ethics (the “Code of Conduct”), which is applicable to all directors, officers and employees. The Code of Conduct includes our insider trading policies and procedures. A copy of the Code of Conduct is available on our website under the Investor Relations tab at www.brightmountainmedia.com . You may also obtain a printed copy of our Code of Conduct, without charge, by sending a written request to our principal offices at 6400 Congress Avenue, Suite 2050, Boca Raton, Florida 33487. Amendments or waivers of the Code of Conduct will be provided on our website within four business days following the date of the amendment or waiver. Audit Committee. We have a separately designated standing audit committee of the Board (the “Audit Committee”) established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The current members of the Audit Committee are Joseph Pergola (chair) and Thomas Triscari. All members of the Audit Committee have been determined by the Board to be independent within the meaning of the NYSE corporate governance standards. The Board has determined that Mr. Pergola qualifies as an “audit committee financial expert,” as defined in Item 407 of Regulation S-K. The Audit Committee assists the Board with fulfilling its oversight responsibility relating to: • the integrity of the Company’s consolidated financial statements and financial reporting process; • the Company’s systems of internal controls; • the performance of the Company’s accounting function and independent auditors; and • the independent auditor’s qualifications and independence. Delinquent Section 16(a) Reports Section 16(a) of the Securities Exchange Act of 1934 requires that the Company’s directors, officers and persons who beneficially own 10% or more of the Company’s common stock file with the SEC initial reports of ownership and reports of changes in ownership of our stock and our other equity securities. To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations that no other reports were required, during the year ended December 31, 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 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. ITEM 11. EXECUTIVE COMPENSATION Our named executive officers for the fiscal year ended December 31, 2025 (the “named executive officers”) are: • Matthew Drinkwater, Interim Chairman of the Board and Chief Executive Officer; and • Ethan Rudin, Chief Financial Officer. Summary Compensation Table The following table summarizes the compensation paid to our named executive officers for the years ended December 31, 2025, and 2024: Name and Principal Position Year Salary Bonus Option Awards (1) Total Matthew Drinkwater 2025 400,000 200,000 * 600,000 Chief Executive Officer 2024 400,000 200,000 * 600,000 Ethan Rudin 2025 325,000 81,250 * 406,250 Chief Financial Officer 2024 325,000 81,250 * 406,250 * Indicates that the grant date fair value of the option grant was less than one dollar. (1) The amounts included in the Option Awards column reflects the aggregate fair market value of stock options to purchase our common stock on the grant date pursuant to FASB ASC Topic 718. All stock options were granted with an exercise price equal to the fair market value of the common stock on the date of the grant. 47 Table of Contents Outstanding Equity Awards at Fiscal Year End The following table sets forth the outstanding equity awards held by our named executive officers as of December 31, 2025. Option Awards Name Number of Securities Underlying Unexercised Options Exercisable Number of Securities Underlying Unexercised Options Unexercisable Option Exercise Price Option Expiration Date Matthew Drinkwater 500,000 - (1) $ 0.010 December 1, 2031 187,500 62,500 (2) $ 0.010 May 26, 2032 31,250 93,750 (3) $ 0.035 November 14, 2034 Ethan Rudin 162,500 162,500 (4) $ 0.090 October 28, 2033 31,250 93,750 (5) $ 0.030 March 7, 2035 (1) On December 1, 2021, Mr. Drinkwater was granted options to purchase 500,000 shares of common stock. These options vested 25% on each of December 1, 2021, December 1, 2022, December 1, 2023, and December 1, 2024. (2) On May 26, 2022, Mr. Drinkwater was granted options to purchase 250,000 shares of common stock. These options (i) vested 25% on May 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 (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 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 Matthew Drinkwater Effective December 1, 2024, we entered into an Executive Employment Agreement with Matthew Drinkwater, our Chief Executive Officer. His employment contract's term is for three years, subject to successive one-year automatic extensions, unless either party provides notice of its intent not to renew the Employment Agreement at least 120 days prior to the then-current expiration date. His annual base salary is $400,000, and he is entitled to an annual bonus of up to $600,000 based on the achievement of certain performance targets by the Company. In addition to his base salary and annual bonus, Mr. Drinkwater will be eligible to participate in all the Company’s benefit plans offered to employees of the Company from time to time, subject to satisfying eligibility requirements. Additionally, Mr. Drinkwater was granted 125,000 options to purchase an equal number of shares of the Company's common stock at an exercise price of $0.035 per share. The options will vest over four years and otherwise be subject to the terms of the Bright Mountain Media, Inc. 2022 Stock Option Plan. Pursuant to the terms of the Employment Agreement, Mr. Drinkwater is bound by customary non-competition and non-solicitation covenants during his period of employment. In the event that Mr. Drinkwater is terminated without cause, which includes a termination by Mr. Drinkwater for Good Reason (as defined in the Employment Agreement), or the Employment Agreement is terminated by way of non-renewal on the part of the Company, Mr. Drinkwater will be entitled to (i) any accrued but unpaid benefits under the Employment Agreement, (ii) any earned but unpaid annual bonus amounts, and (iii) monthly severance payments for a period of 12 months equal to between 100% and 150% of his base monthly salary at the time of termination, depending on the conditions of the termination. In the event that Mr. Drinkwater is terminated with cause or the Employment Agreement is terminated by way of non-renewal on the part of Mr. Drinkwater, Mr. Drinkwater will be entitled to any accrued but unpaid benefits under the Employment Agreement. Further, notwithstanding the foregoing, if Mr. Drinkwater is terminated without cause, including a termination by Mr. Drinkwater for Good Reason, within three months before or within one year following a change in control of the Company, Mr. Drinkwater will be entitled to monthly severance payments for a period of 12 months equal to 150% of his base monthly salary at the time of termination. If Mr. Drinkwater is terminated for cause or Mr. Drinkwater terminates the Employment Agreement for any reason, Mr. Drinkwater will be bound by such non-competition covenants for a period of one year after the date his employment with the Company terminates. Mr. Drinkwater will be bound by such non-solicitation covenants for a period of two years after the date his employment with the Company terminates regardless of the reason for such termination. Additionally, pursuant to the terms of the Employment Agreement, Mr. Drinkwater is bound by certain customary non-disclosure covenants during the period of his employment and after the date his employment with the Company terminates. 48 Table of Contents Ethan Rudin On October 4, 2023, we entered into an Executive Employment Agreement with Ethan Rudin, our Chief Financial Officer. Pursuant to his employment contract, his annual base salary is $325,000, and he has a discretionary bonus target equivalent to 25% of his base salary subject to the achievement of certain performance metrics. In addition to his base salary and bonus, Mr. Rudin is eligible to participate in all of the Company's benefit plans offered from time to time, subject to satisfying eligibility requirements. Additionally, Mr. Rudin was granted options to purchase 325,000 shares of the Company's common stock with an exercise price equal to $0.09, the fair market value of our common stock on the date of grant. The options will vest over four years and otherwise be subject to the terms of the Bright Mountain Media, Inc. 2022 Stock Option Plan. If Mr. Rudin is terminated without cause, subject to complying with certain conditions, he is entitled to severance equal to his annual salary payable in six equal monthly installments. Pursuant to the terms of the employment agreement, Mr. Rudin is bound by customary non-competition and non-solicitation covenants during his period of employment and for a period of one year after the date his employment with the Company terminates. Additionally, pursuant to the terms of the employment agreement, Mr. Rudin is bound by certain customary non-disclosure covenants during the period of his employment and after the date his employment with the Company terminates. On March 7, 2025, effective January 1, 2025, we entered into an amendment to Mr. Rudin’s Executive Employment Agreement to (i) increase the target bonus he is eligible to receive for 2025 to 50% of his base salary, based on the Company’s performance and as determined by the Company’s board of directors in its sole discretion; and (ii) grant him an option to purchase 125,000 shares of the Company’s common stock that vest at a rate of 25% per year beginning on March 7, 2025, at an exercise price equal to the fair market value of our common stock on the date of grant. Director Compensation Table On August 15, 2023, our Board of Directors adopted a new compensation policy for the directors of the board. Under the terms of the director compensation policy, independent directors receive quarterly cash compensation of $10,000 for service as a director and additional cash compensation of $5,000 for service as chair of one or more of the Board's committees. The cash compensation payments were effective April 1, 2023, with payments commencing in October 2023. Commencing January 1, 2024, independent directors receive, on an annual basis, options to purchase 100,000 shares of our common stock at an exercise price equal to the fair market value of our common stock on the first business day of the year. Such options will vest in full on December 31 of the same year. Additionally, the Company reimburses each director for fees, travel, and expenses related to their attendance of Board and Committee meetings, if and when incurred. The following table summarizes the compensation earned by our directors for their services as members of our Board for the year ended December 31, 2025. The information in the following table excludes any reimbursement of out-of-pocket travel and lodging expenses which we may have paid. Name Fees Earned Option Awards (1) All Other Compensation Total Jeff Hirsch 60,000 * - 60,000 Elaine Riddell 40,000 * - 40,000 Joseph Pergola 60,000 * - 60,000 Thomas Triscari 60,000 * - 60,000 * Indicates that the grant date fair value of the option grant was less than one dollar. (1) The amounts included in the Option Awards column reflect the aggregate fair market value of stock options to purchase our common stock on the grant date pursuant to FASB ASC Topic 718. 49 Table of Contents ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Securities Authorized for Issuance Under Equity Compensation Plan The following table provides information as of March 19, 2026, with respect to all of our compensation plans under which equity securities are authorized for issuance: Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights (a) Weighted Average Exercise Price of Outstanding Options, Warrants, and Rights (1) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excl. securities reflected in column a) Equity compensation plans approved by shareholders - $ - - Equity compensation plans not approved by shareholders (2) 10,353,233 $ 0.09 12,146,767 10,353,233 $ 0.09 12,146,767 (1) This number reflects the weighted-average exercise price of outstanding options and has been calculated exclusive of outstanding restricted stock unit awards issued under our stock option plans. (2) The table below shows stock option plans not approved by stockholders under which grants remain outstanding. Stock Option Plan Outstanding Options 2013 Stock Option Plan 215,000 No further grants can be made on this plan 2015 Stock Option Plan 266,000 No further grants can be made on this plan 2019 Stock Option Plan 633,227 No further grants can be made on this plan 2022 Stock Option Plan 9,239,006 Current plan 10,353,233 2022 Stock Option Plan On April 14, 2022, the Board of Directors of the Company and the Compensation Committee of the Board adopted and approved the 2022 Bright Mountain Media Stock Option Plan (the “Stock Option Plan”). The Stock Option Plan provides for the grant of awards to eligible employees, directors and consultants in the form of stock options. The purpose of the Stock Option Plan is to provide an incentive to attract and retain directors, officers, consultants, advisors and employees whose services are considered valuable, to encourage a sense of proprietorship and to stimulate an active interest of such persons into our development and financial success. The Stock Option Plan has a term of 10 years and authorizes the issuance of up to 22,500,000 shares of the Company’s common stock. As of December 31, 2025, 12,146,767 shares were remaining under the Stock Option Plan for future issuance. Security Ownership of Certain Beneficial Owners and Management Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. In accordance with the SEC rules, shares of our common stock that may be acquired upon exercise or vesting of equity awards within 60 days of the date of the table below are deemed beneficially owned by the holders of such options and are deemed outstanding for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage of ownership of any other person. As of March 19, 2026, 183,218,504 shares of our common stock were issued and 181,032,929 shares were outstanding. The following table sets forth information with respect to the beneficial ownership of our common stock as of March 19, 2026, by (i) each of our directors and named executive officers, (ii) all of our directors and executive officers as a group, and (iii) each shareholder known by us to be the beneficial owner of more than 5% of our common stock. To the best of our knowledge, except as otherwise indicated, each of the persons named in the table has sole voting and investment power with respect to the shares of common stock beneficially owned by such person, except to the extent such power may be shared with a spouse. To our knowledge, none of the shares listed below are held under a voting trust or similar agreement, except as noted. To our knowledge, there is no arrangement, including any pledge by any person of our securities or any of our parents, the operation of which may at a subsequent date result in a change in control of our company. 50 Table of Contents Unless otherwise noted below, the address of each person listed on the table is c/o Bright Mountain Media, Inc., 6400 Congress Avenue, Suite 2050, Boca Raton, Florida 33487. Beneficial Owner (1) Amount and Nature of Beneficial Ownership Percentage of Outstanding Common Stock Owned (2) Matthew Drinkwater (3 ) 1,038,682 * Ethan Rudin (4 ) 193,750 * Jeffrey Hirsch (5 ) 238,082 * Elaine Riddell (4 ) 139,891 * Thomas Triscari (4 ) 139,891 * Joseph Pergola (4 ) 139,891 * All executive officers and directors as a group (6 persons) (6 ) 1,890,187 1.0 % Beneficial ownership of 5% or more: W. Kip Speyer (7 ) 30,299,602 16.7 % 10th Lane Partners, LP (8 ) 47,257,261 26.1 % Centre Lane Partners Master Credit Fund II, LP (9 ) 20,853,277 11.5 % BV Agency, LLC (10 ) 26,403,984 14.6 % Andrew Handwerker (11 ) 10,730,998 5.9 % * Represents beneficial ownership of less than 1%. (1) Except as otherwise indicated, the address of each beneficial owner is c/o Bright Mountain Media, Inc. 6400 Congress Avenue, Suite 2050, Boca Raton, Florida 33487. (2) The percentage of beneficial ownership of the Company is calculated based on 181,032,929 shares of common stock outstanding as of March 19, 2026. (3) Includes (i) 319,932 shares of common stock held directly by Mr. Drinkwater; and (ii) 718,750 shares underlying exercisable options to purchase shares of common stock. (4) Represents shares underlying exercisable options to purchase shares of common stock. (5) Includes (i) 38,082 shares of common stock held directly by Mr. Hirsch; and (ii) 200,000 shares underlying exercisable options to purchase shares of common stock. (6) Includes (i) 358,014 shares of common stock directly held by directors and a named executive officer; and (ii) 1,532,173 shares underlying exercisable options to purchase shares of common stock. (7) Includes 250,000 shares underlying exercisable options to purchase common stock. (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. 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. (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. (11) Mr. 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, 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. 51 Table of Contents ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Related Party Transaction Policy Under its written charter, the Audit Committee of our Board of Directors is responsible for reviewing and approving related party transactions (as defined in Item 404 of Regulation S-K). Our management is responsible for bringing any such transaction to the attention of the Audit Committee. In approving or rejecting any such transaction, the Audit Committee considers the relevant facts and circumstances, including the material terms of the transaction, risks, benefits, costs, availability of other comparable services or products and, if applicable, the impact on a director’s independence. Preferred Stock Purchases No cash dividends were paid during the year ended December 31, 2025 and 2024. At December 31, 2025, accrued unpaid preference dividends on the preferred stock were $691,000. This amount is payable to Mr. W. Kip Speyer, a former director of the Company. Convertible Notes On November 30, 2018, the Company issued 10% convertible promissory notes ("Convertible Notes") in the amount of $80,000 to our then Chairman of the Board, a related party. The Convertible Notes were unsecured and matured five years from issuance and were convertible at the option of the holder into shares of common stock at any time prior to maturity at a conversion price of $0.40 per share. A beneficial conversion feature existed on the date the Convertible Notes were issued whereby the fair value of the underlying common stock into which the Convertible Notes was convertible was in excess of the face value of the Convertible Notes of $80,000. On July 1, 2024, the Company repaid the outstanding principal of $80,000 and outstanding interest of $43,000 on the Convertible Notes due to its former Chairman of the Board. Centre Lane Partners Centre Lane Partners Master Credit Fund II, L.P. ("Centre Lane Partners"), who sold the Wild Sky business to the Company in June 2020 and beneficially owns more than 5% of the common stock of the Company, partnered and assisted the Company from a liquidity perspective during the year ended December 31, 2025. This relationship has been determined to qualify as a related party. A related party is a party that can exercise significant influence over the Company in making financial and/or operating decisions. 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 On February 8, 2023, the Company and Mr. W. Kip Speyer memorialized Mr. W. Kip Speyer’s continued service as Chairman of the Board of Directors. Also, the Company and Mr. W. Kip Speyer memorialized the expiration date for Mr. W. Kip Speyer’s employment agreement with the Company as April 1, 2023. The total compensation paid to Mr. W. Kip Speyer for the year ended December 31, 2023 was $90,000. Mr. Todd F. Speyer, who is the son of Mr. W. Kip Speyer, our Chairman of the Board, is employed by the Company as Senior Vice President of Revenue Operations. Mr. Todd F. Speyer was previously a member of our Board through March 31, 2023. We are not a party to an employment agreement with Mr. Todd Speyer. His compensation was determined by the compensation committee, based upon industry norms. We paid Mr. 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. 52 Table of Contents ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES Principal Accountant Fees and Services WithumSmith+Brown, PC ("Withum") has served as the Company's independent registered public accounting firm since 2021. The following table sets forth the fees for professional audit services and other services rendered by Withum for the years ended December 31, 2025 and 2024, respectively. Year Ended December 31, 2025 December 31, 2024 Audit fees (1) $ 1,066,814 $ 832,900 Audit-related fees (2) 22,736 40,705 Tax fees (3) 30,890 30,739 All other fees (4) - - $ 1,120,440 $ 904,344 (1) Audit Fees. Audit Fees include fees of audits for our annual financial statements, reviews of the related quarterly financial statements, and services that are normally provided by the independent accountants in connection with statutory and regulatory filings or engagements, including reviews of documents filed with the SEC. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements. (2) Audit-Related Fees. Audit Related Fees include assurance and related services by the independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements or acquisition audits and are not reported above under “Audit Fees.” The services for the fees disclosed under this category include consultation regarding our correspondence with the Securities and Exchange Commission and other accounting consulting. (3) Tax Fees. Tax Fees consist of professional services rendered by our independent registered public accounting firm for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice. The Company’s tax return for the year ended December 31, 2025 has not been completed as of the date of this filing. (4) All Other Fees. All Other Fees consist of fees for professional services or costs not otherwise reported in Audit Fees, Audit-Related Fees or Tax Fees. No such fees were incurred during the years ended December 31, 2025 and 2024. Policy for Approval of Audit and Permitted Non-Audit Services Our Board of Directors has adopted a procedure for pre-approval of all fees charged by our independent registered public accounting firm. Under the procedure, the Audit Committee of the Board approves the engagement letter with respect to audit, tax, and review services. Other fees are subject to pre-approval by the Audit Committee. The fees paid to the auditors with respect to 2025 and 2024 were pre-approved by the Audit Committee. 53 Table of Contents PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a)(1) Financial Statements The financial statements and notes are listed in the Index to Consolidated Financial Statements on page F-1 of this Annual Report on Form 10-K and are included in Part II, Item 8 of this Annual Report on Form 10-K. (a)(2) Financial Statement Schedules All financial statement schedules are omitted because they are not applicable or the required information is included in the Consolidated Financial Statements or notes thereto listed in the Index to Consolidated Financial Statements , starting on page F-1 of this Annual Report on Form 10-K. (a)(3) Exhibits The following exhibits listed in the Exhibit Index below are filed as part of, and incorporated by reference into, this Annual Report on Form 10-K. EXHIBIT INDEX Incorporated by Reference Filed or Furnished No. Exhibit Description Form Date Filed Number Herewith 3.1 Amended and Restated Articles of Incorporation, filed March 11, 2013 10-K 4/1/24 3.1 3.2 Articles of Amendment to the Amended and Restated Articles of Incorporation , filed July 9, 2013 8-K 7/9/13 3.3 3.3 Articles of Amendment to the Amended and Restated Articles of Incorporation , filed November 21, 2013 8-K 11/16/13 3.4 3.4 Articles of Amendment to the Amended and Restated Articles of Incorporation , filed December 27, 2013 8-K 12/30/13 3.4 3.5 Articles of Amendment to the Amended and Restated Articles of Incorporation , filed February 25, 2014 10-K 3/31/14 3.5 3.6 Articles of Amendment to the Amended and Restated Articles of Incorporation , filed July 10, 2014 8-K 7/28/14 3.6 3.7 Articles of Amendment to the Amended and Restated Articles of Incorporation , filed September 24, 2014 10-K/A 4/1/15 3.5 3.8 Articles of Amendment to the Amended and Restated Articles of Incorporation, filed March 20, 2015 10-K 4/1/24 3.8 3.9 Articles of Amendment to the Amended and Restated Articles of Incorporation , filed October 27, 2015 8-K 12/4/15 3.7 3.10 Articles of Amendment to the Amended and Restated Articles of Incorporation, filed September 16, 2016 10-K 4/1/24 3.10 3.11 Articles of Amendment to the Amended and Restated Articles of Incorporation, filed September 6, 2017 10-K 4/1/24 3.11 3.12 Articles of Amendment to the Amended and Restated Articles of Incorporation, filed September 29, 2017 10-K 4/1/24 3.12 3.13 Articles of Amendment to the Amended and Restated Articles of Incorporation , filed November 5, 2018 8-K 11/13/18 3.10 3.14 Articles of Amendment to the Amended and Restated Articles of Incorporation, filed July 31, 2019 10-K 4/1/24 3.14 54 Table of Contents 3.15 Articles of Amendment to the Amended and Restated Articles of Incorporation, filed September 3, 2019 10-K 4/1/24 3.15 3.16 Articles of Amendment to the Amended and Restated Articles of Incorporation, filed December 23, 2019 10-K 4/1/24 3.16 3.17 Amended and Restated Bylaws 10 1/31/13 3.2 4.1 Specimen common stock certificate 10-K 5/14/20 4.3 4.2 Description of Securities 10-K 4/1/24 4.6 4.3 Registration Rights Agreement by and between the Company and W. Kip Speyer, executed June 28, 2024 10-Q 8/14/24 4.1 10.1 2013 Stock Option Plan 10-Q 11/13/13 10.18 10.2 201 5 Stock Option Plan 8-K 5/27/15 10.36 10.3 201 9 Stock Option Plan 10-K 12/23/21 10.4 10.4 2022 Stock Option Plan 8-K 4/20/22 10.3 10.5 Lease Agreement dated August 27, 2014 for registrant's principal executive offices (contained in Exhibit 10.7) 10-K 3/10/25 10.5 10.6 Amendment to Lease Agreement dated August 8, 2018 for registrant’s principal executive offices 10-Q 11/20/18 10.1 10.7 Amendment to Lease Agreement dated June 14, 2022 for registrant's principal executive offices 10-K 3/10/25 10.7 10.8 Sublease Agreement dated May 31, 2024 for registrant's principal executive office, suite 2050 10-K 3/10/25 10.8 10.9 Sublease Agreement dated May 31, 2024 for registrant's principal executive office, suite 2200 10-K 3/10/25 10.9 10.10 Membership Interest Purchase Agreement dated June 5, 2020 between Centre Lane Partners Master Credit Fund II and Bright Mountain Media, Inc. 8-K 6/8/20 10.1 10.11 Credit Agreement dated as of June 5, 2020 by and among CL Media Holdings, LLC, as the Borrower, the Financial Institutions thereto and Centre Lane Partners Master Fund II, L.P. as Agent 8-K 6/8/20 10 10.12 First Amendment to an Amended and Restated Senior Credit Agreement dated April 26, 2021. 8-K 4/30/21 10.1 10.13 Second Amendment to an Amended and Restated Senior Credit Facility Agreement dated May 26, 2021. 8-K 6/2/21 10.1 10.14 Third Amendment to Amended and Restated Senior Credit Facility Agreement dated December 20, 2021 8-K 8/18/21 10.1 10.15 Fourth Amendment to Amended and Restated Senior Secured Credit Agreement dated August 31, 2021 8-K 9/7/21 10.1 10.16 Fifth Amendment to Amended and Restated Senior Secured Credit Agreement dated October 8, 2021 8-K 10/8/21 10.1 10.17 Sixth Amendment to Amended and Restated Senior Secured Credit Agreement dated November 5, 2021 8-K 11/5/21 10.1 10.18 Seventh Amendment to an Amended and Restated Senior Secured Credit Agreement dated December 23, 2021 8-K 12/29/21 10.1 55 Table of Contents 10.19 Eighth Amendment to an Amended and Restated Senior Secured Credit Agreement dated January 26, 2022 8-K 1/20/22 10.1 10.20 Ninth Amendment to an Amended and Restated Senior Secured Credit Agreement dated February 11, 2022 8-K 2/17/22 10.1 10.21 Annex A to the Credit Agreement dated February 11, 2022 8-K 2/17/22 10.2 10.22 Tenth Amendment to an Amended and Restated Senior Secured Credit Agreement dated March 11, 2022 8-K 3/16/22 10.1 10.23 Annex A to the Credit Agreement dated March 11, 2022 8-K 3/16/22 10.2 10.24 Eleventh Amendment to an Amended and Restated Senior Secured Credit Agreement dated March 25, 2022 8-K 3/31/22 10.1 10.25 Annex A to the Credit Agreement dated March 25, 2022 8-K 3/31/22 10.2 10.26 Twelfth Amendment to an Amended and Restated Senior Secured Credit Agreement dated April 15, 2022 8-K 4/20/22 10.1 10.27 Annex A to the Credit Agreement dated April 15, 2022 8-K 4/20/22 10.2 10.28 Thirteenth Amendment to an Amended and Restated Senior Secured Credit Agreement dated May 10, 2022 8-K 5/16/22 10.1 10.29 Annex A to the Credit Agreement dated May 10, 2022 8-K 5/16/22 10.2 10.30 Fourteenth Amendment to an Amended and Restated Senior Secured Credit Agreement dated June 10, 2022 8-K 6/16/22 10.1 10.31 Annex A to the Credit Agreement dated June 10, 2022 8-K 6/16/22 10.2 10.32 Fifteenth Amendment to an Amended and Restated Senior Secured Credit Agreement dated July 8, 2022 8-K 7/13/22 10.1 10.33 Annex A to the Credit Agreement dated July 8, 2022 8-K 7/13/22 10.2 10.34 Sixteenth Amendment to an Amended and Restated Senior Secured Credit Agreement dated February 10, 2023 8-K 2/16/23 10.1 10.35 Annex A to the Credit Agreement dated February 10, 2023 8-K 2/16/23 10.2 10.36 Seventeenth Amendment to Amended and Restated Senior Secured Credit Agreement, dated April 20, 2023 8-K 4/23/23 10.1 10.37 Eighteenth Amendment to Amended and Restated Senior Secured Credit Agreement, dated July 28, 2023 10-K 4/1/24 10.34 10.38 Nineteenth Amendment to Amended and Restated Senior Secured Credit Agreement, dated July 28, 2023 8-K 8/3/23 10.1 10.39 Annex A to the Credit Agreement, dated July 28, 2023 8-K 8/3/23 10.2 10.40 Twentieth Amendment to Amended and Restated Senior Secured Credit Agreement, dated June 30, 2024 10-Q 8/14/24 10.1 10.41 Annex A to the Credit Agreement, dated June 30, 2024 10-Q 8/14/24 10.2 10.42 Twenty-First Amendment to Amended and Restated Senior Secured Credit Agreement, dated December 26, 2024 10-K 3/10/25 10.42 10.43 Annex A to the Credit Agreement, dated December 26, 2024 10-K 3/10/25 10.43 10.44 Twenty-Second Amendment to Amended and Restated Senior Secured Credit Agreement, dated March 31, 2025 10-Q 5/12/25 10.1 10.45 Annex A to the Credit Agreement, dated March 31, 2025 10-Q 5/12/25 10.2 10.46 Twenty-Third Amendment to Amended and Restated Senior Secured Credit Agreement, dated September 30, 2025 10-Q 11/7/25 10.1 10.47 Annex A to the Credit Agreement, dated September 30, 2025 (contained in Exhibit 10.46) 10-Q 11/7/25 10.1 10.48 Twenty-Fourth Amendment to Amended and Restated Senior Secured Credit Agreement, dated December 31, 2025 X 56 Table of Contents 10.49 Annex A to the Credit Agreement, dated December 31, 2025 X 10.50 Employment Agreement dated October 2, 2023 by and between the Company and Ethan Rudin 10-K 4/1/24 10.37 10.51 Amendment to Employment Agreement dated January 1, 2025 by and between the Company and Ethan Rudin 10-Q 5/12/25 10.3 10.52 Employment Agreement dated December 1, 2024 by and between the Company and Matthew Drinkwater 10-K 3/10/25 10.45 10.53 Separation Agreement by and between the Company and W. Kip Speyer, executed June 29, 2024 10-Q 8/14/24 10.3 14.1 Code of Ethics 10-K 3/10/25 14.1 19.1 Insider Trading Policies and Procedures (contained in Exhibit 14.1) 10-K 3/10/25 19.1 21.1 List of subsidiaries 10-K 4/1/24 21.1 23.1 Consent of WithumSmith+Brown, PC X 31.1 Certification of the Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) c X 31.2 Certification of the Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) X 32.1* Certification of the Principal Executive Officer and the Principal Financial Officer pursuant to Section 1350 X 32.2* Certification of the Chief Financial Officer and Principal Financial and Accounting Officer pursuant to Section 1350 X 101.INS Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document X 101.SCH Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents X 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) X * This certification is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference. 57 Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BRIGHT MOUNTAIN MEDIA, INC. Date: March 24, 2026 By: /s/ Matthew Drinkwater Matthew Drinkwater Interim Chairman of the Board and Chief Executive Officer (Principal Executive Officer) Date: March 24, 2026 By: /s/ Ethan Rudin Ethan Rudin Chief Financial Officer (Principal Financial and Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Date: March 24, 2026 By: /s/ Matthew Drinkwater Matthew Drinkwater Interim Chairman of the Board and Chief Executive Officer Date: March 24, 2026 By: /s/ Elaine Riddell Elaine Riddell Director Date: March 24, 2026 By: /s/ Joseph Pergola Joseph Pergola Director Date: March 24, 2026 By: /s/ Thomas Triscari Thomas Triscari Director Date: March 24, 2026 By: /s/ Jeff Hirsch Jeff Hirsch Director 58 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID #100) F - 2 Consolidated balance sheets at December 31, 2025 and 2024 F - 7 Consolidated statements of operations and comprehensive loss for the years ended December 31, 2025 and 2024 F - 8 Consolidated statements of changes in stockholders’ deficit for the years ended December 31, 2025 and 2024 F - 9 Consolidated statements of cash flows for the years ended December 31, 2025 and 2024 F - 10 Notes to the consolidated financial statements F - 11 F- 1 Table of Contents Report of Independent R egistered Public Accounting Firm Board of Directors and Shareholders of Bright Mountain Media, Inc. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Bright Mountain Media, Inc. (the “Company”) as of December 31, 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, 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 The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to Bright Mountain Media, Inc. in accordance with the U.S. 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. 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. 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. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Revenue Recognition – Refer to Note 2 and Note 13 to the Financial Statements Critical Audit Matter Description The Company derives revenue from five revenue streams which include (i) digital advertisements on its owned and managed sites and on partner website, (ii) fees for facilitating exchange of advertisements, (iii) planning and execution of creative and media marketing campaigns, (iv) provision of creative and media services to advertisers, and (v) providing primary and secondary research, intelligence, and insights to address strategic issues by providing an integrated service for such research. The Company recognizes the first and second revenue stream at a point in time as advertisements are delivered. The Company recognizes the third and fourth revenue stream as services are rendered over time based on the signed contract terms which includes the service period. The Company recognizes the fifth revenue stream as services are rendered by applying the percentage of completion method on F- 2 Table of Contents a cost-to-cost basis to measure progress toward satisfaction of performance obligation. Progress toward satisfaction of the performance obligation is measured based on costs incurred to-date relative to the total estimated costs expected to be incurred in providing services. In determining revenue recognition for these customer agreements, the Company performs the following five steps: (i) identify the contract with customer (ii) identify the performance obligation in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when the Company satisfies a performance obligation. We identified revenue recognition as a critical audit matter due to significant management estimates and judgments inherently required in determining revenue to be recognized. This in turn led to an especially high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate the reasonableness of management’s significant estimates and assumptions surrounding revenue recognition. How the Critical Audit Matter Was Addressed in the Audit Our principal audit procedures related the Company’s revenue recognition for these revenue streams included the following: • Digital Publishing and Advertising Technology o We performed a walkthrough of the design effectiveness and implementation of internal controls with respect to the Company’s revenue and cash receipts cycle. o We selected a sample of customer agreements and performed the following procedures: ▪ Obtained and read a sample of contract source documents for each selection as well as amendments thereto. ▪ We obtained an understanding of the performance obligations associated with the Company’s revenue contracts, such as number of ads displayed, consumer clicks on the ads, or consumer actions that were required by the contract. ▪ We tested the transaction price within the contract, which was represented by the amount of impressions that must be delivered by the Company. ▪ We determine that the allocation of the transaction price was to a single performance obligation. ▪ We obtained the amount of impressions delivered by the Company to the customer from the third party ad server data to test the appropriateness of recognized revenue with the terms of the contract. o We tested the mathematical accuracy of management’s calculations of revenue and the associated timing of revenue recognized in the financial statements. • Creative and Media Services o We performed a walkthrough of the design effectiveness and implementation of internal controls with respect to the Company’s revenue and cash receipts cycle. o We selected a sample of customer agreements and performed the following procedures: ▪ Obtained and read the contract source documents for each selection as well as amendments thereto. ▪ We obtained an understanding of the performance obligations associated with the Company’s revenue contracts. ▪ We tested the transaction price within the contract, which was represented by the total value for creative and media services that must be delivered by the Company. ▪ We determine that the allocation of the transaction price was to a single performance obligation. ▪ We tested the appropriateness of recognized revenue with the terms of the contract. o We tested the mathematical accuracy of management’s calculations of revenue and the associated timing of revenue recognized in the financial statements. • Consumer Insights o We performed a walkthrough of the design effectiveness and implementation of internal controls with respect to the Company’s revenue and cash receipts cycle. F- 3 Table of Contents o We selected a sample of customer agreements and performed the following procedures: ▪ Obtained and read a sample of contract source documents for each selection as well as amendments thereto. ▪ We obtained an understanding of the performance obligations associated with the Company’s revenue contracts. ▪ We tested the transaction price within the contract, which was represented by the total value for consumer insights that must be delivered by the Company. ▪ We determine that the allocation of the transaction price was to a single performance obligation. ▪ We tested the properness of recognized revenue with the terms of the contract by evaluating the underlying budgeted costs and actual costs that drive the percent of the total contract value recognized during the year. o To evaluate the completeness and accuracy of the underlying reports utilized to calculate costs incurred by project we performed the following procedures: ▪ Obtained the third-party vendor and payroll costs and agreed them to the general ledger. ▪ Tested the cost allocation by verifying the third-party vendor invoice details to project details. ▪ Compared the internal tracking system to the general ledger and recalculated the labor rate applied to projects utilizing the third-party payroll report, which was tested separately. ▪ Analyzed both the system generated and management updated percentages of completion from the reports obtained. ▪ Traced and agreed accrued amounts from the reports to the general ledger. o We tested the mathematical accuracy of management’s calculations of revenue and the associated timing of revenue recognized in the financial statements. Valuation of Intangible Assets and Goodwill - Refer to Notes 2, 6, and 7 to the Financial Statements Critical Audit Matter Description As reflected in the Company’s 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. A qualitative assessment includes consideration of the economic, industry and market conditions in addition to the overall financial performance of the Company and these assets. If the qualitative assessment does not conclude that it is more likely than not that the estimated fair value of the reporting unit is greater than the carrying value, the Company performs a quantitative analysis. In a quantitative test, the fair value of a reporting unit is determined based on a discounted cash flow analysis and further analyzed using other methods of valuation. A discounted cash flow analysis requires the Company to make various assumptions, including assumptions about future cash flows, growth rates and discount rates. The assumptions about future cash flows and growth rates are based on the Company’s long-term projections. Assumptions used in the Company’s impairment testing 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. If the fair value of the reporting unit exceeds its carrying amount, there is no impairment. To the extent the carrying amount exceeds its fair value, an impairment charge of the reporting unit’s intangible assets and goodwill would be necessary. We identified the evaluation of the Company’s impairment test of goodwill and intangible assets as a critical audit matter due to significant management estimates and judgments inherently required in determining the fair value estimates. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate the reasonableness of management’s significant estimates and assumptions, several of which extend many years into the future. Additionally, the audit effort involved the use of professionals with specialized skill and knowledge. How the Critical Audit Matter Was Addressed in the Audit We read and evaluated the impairment analysis summary report, prepared by the Company's external valuation specialists that assessed the fair value of the Company's intangible assets and goodwill as of December 31, 2025. 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 F- 4 Table of Contents 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. We evaluated these assumptions for their reasonableness considering (i) historical performance; (ii) industry and economic forecast and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit. Along with the procedures previously described, we performed the following procedures: • We utilized the knowledge, experience, and expertise of our internal valuation specialists to execute the planned audit procedures related to the valuation by assessing the reasonableness of the methodologies employed to value the intangible assets and goodwill. • We reviewed the professional qualifications and objectivity/independence of the external valuation specialist. • We tested the underlying assumptions presented in the impairment assessment as it relates to projections. Accounting and Valuation for Debt Modifications and Extinguishment - Refer to Note 10 to the Financial Statements Critical Audit Matter Description 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. 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. 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. This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate the reasonableness of management’s assumptions and calculations. Additionally, the audit effort involved the use of professionals with specialized skill and knowledge. How the Critical Audit Matter Was Addressed in the Audit We read and evaluated the 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. F- 5 Table of Contents Along with the procedures previously described, we performed the following procedures: • We agreed data from the authorized amendments to the analysis performed by the external valuation specialist. • 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 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 We have served as the Company's auditor since 2021. New York, New York March 24, 2026 PCAOB ID Number 100 F- 6 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. CONSOLIDATE D BALANCE SHEETS (in thousands, except share and per share data) December 31, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 1,371 $ 2,546 Restricted cash 1,861 1,861 Accounts receivable, net 16,287 15,033 Prepaid expenses and other current assets 1,170 859 Total current assets 20,689 20,299 Property and equipment, net 124 69 Intangible assets, net 11,542 13,406 Goodwill 6,999 7,785 Operating lease right-of-use assets, net 173 253 Other long-term assets 158 158 Total assets $ 39,685 $ 41,970 Liabilities and Stockholders' Deficit Current liabilities: Accounts payable and accrued expenses $ 24,852 $ 22,667 Other current liabilities 4,210 4,401 Interest payable - Centre Lane Senior Secured Credit Facility - related party 59 21 Deferred revenue 2,834 2,883 Note payable - Centre Lane Senior Secured Credit Facility - related party (current) 84,276 3,808 Total current liabilities 116,231 33,780 Other long-term liabilities 12 169 Note payable - Centre Lane Senior Secured Credit Facility - related party (long-term) - 71,043 Finance lease liabilities - 20 Operating lease liabilities 77 185 Total liabilities 116,320 105,197 Stockholders' deficit: Convertible preferred stock, par value $ 0.01 , 20,000,000 shares authorized, no shares issued or outstanding at December 21, 2025 and December 31, 2024, respectively - - Common stock, par value $ 0.01 , 324,000,000 shares authorized, 183,218,504 and 177,464,827 issued, and 181,032,929 and 176,114,652 outstanding at December 31, 2025 and December 31, 2024, respectively 1,832 1,775 Treasury stock at cost, 2,185,575 and 1,350,175 shares at December 31, 2025 and December 31, 2024, respectively ( 220 ) ( 220 ) Additional paid-in capital 101,988 101,798 Accumulated deficit ( 180,312 ) ( 166,857 ) Accumulated other comprehensive income 77 277 Total stockholders' deficit ( 76,635 ) ( 63,227 ) Total liabilities and stockholders' deficit $ 39,685 $ 41,970 See accompanying notes to consolidated financial statements. F- 7 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. CONSOLIDATED STATEMENTS OF OPER ATIONS AND COMPREHENSIVE LOSS (in thousands, except share and per share data) Year Ended December 31, 2025 December 31, 2024 Revenue $ 59,229 $ 56,681 Cost of revenue 43,443 40,221 Gross margin 15,786 16,460 General and administrative expenses 16,432 21,378 Impairment of goodwill and intangible assets 786 - Loss from operations ( 1,432 ) ( 4,918 ) Financing and other expense: Other income 285 547 Interest expense - Centre Lane Senior Secured Credit Facility - related party ( 12,286 ) ( 12,610 ) Interest expense - 10 % convertible promissory notes - related party - ( 4 ) Other interest expense ( 22 ) ( 39 ) Total financing and other expense, net ( 12,023 ) ( 12,106 ) Net loss before income tax ( 13,455 ) ( 17,024 ) Income tax provision - - Net loss $ ( 13,455 ) $ ( 17,024 ) Foreign currency translation ( 200 ) 15 Comprehensive loss $ ( 13,655 ) $ ( 17,009 ) Net loss per common share: Basic $ ( 0.08 ) $ ( 0.10 ) Diluted $ ( 0.08 ) $ ( 0.10 ) Weighted-average shares outstanding: Basic 176,547,907 171,199,036 Diluted 176,547,907 171,199,036 See accompanying notes to consolidated financial statements. F- 8 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (in thousands, except share and per share data) Common Stock Treasury Stock Additional Paid-in Accumulated Accumulated Other Comprehensive Total Stockholders' Shares Amount Shares Amount Capital Deficit Income Deficit Balance at December 31, 2023 172,103,134 $ 1,721 ( 825,175 ) $ ( 220 ) $ 101,405 $ ( 149,833 ) $ 262 $ ( 46,665 ) Net loss - - - - - ( 17,024 ) - ( 17,024 ) Common stock issued for options exercised 80,250 1 - - 1 - - 2 Common stock issued to Centre Lane Partners 5,001,991 50 - - 125 - - 175 Common stock issued for services rendered 279,452 3 - - 13 - - 16 Treasury stock - - ( 525,000 ) - - - - - Stock-based compensation - - - - 254 - - 254 Adjustment from foreign currency translation, net - - - - - - 15 15 Balance at December 31, 2024 177,464,827 $ 1,775 ( 1,350,175 ) $ ( 220 ) $ 101,798 $ ( 166,857 ) $ 277 $ ( 63,227 ) Net loss - - - - - ( 13,455 ) - ( 13,455 ) Common stock issued for options exercised 50,400 1 - - 1 - - 2 Common stock issued to Centre Lane Partners 5,703,277 56 - - 64 - - 120 Common stock issued for services rendered - - - - - - - - Treasury stock - - ( 835,400 ) - - - - - Stock-based compensation - - - - 125 - - 125 Adjustment from foreign currency translation, net - - - - - - ( 200 ) ( 200 ) Balance at December 31, 2025 183,218,504 $ 1,832 ( 2,185,575 ) $ ( 220 ) $ 101,988 $ ( 180,312 ) $ 77 $ ( 76,635 ) See accompanying notes to consolidated financial statements. F- 9 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. CONSOLIDATED STATEME NTS OF CASH FLOWS (in thousands, except share and per share data) For the Year Ended December 31, 2025 December 31, 2024 Cash flows from operating activities: Net loss $ ( 13,455 ) $ ( 17,024 ) Adjustments to reconcile net loss to net cash provided by operations: Depreciation expense 56 127 Interest paid-in-kind on Centre Lane Senior Secured Credit Facility - related party 9,566 9,353 Amortization of operating lease right-of-use assets 77 67 Amortization of debt discount 2,150 2,697 Amortization of intangible assets 1,864 1,924 Impairment of goodwill and intangible assets 786 - Stock-based compensation 125 254 Common stock issued for services rendered - 16 Common stock issued to Centre Lane Partners for debt modification 120 - Provision for credit losses 283 15 Changes in operating assets and liabilities: Accounts receivable ( 1,537 ) ( 369 ) Prepaid expenses and other assets ( 311 ) 198 Operating lease liabilities ( 89 ) ( 53 ) Accounts payable and accrued expenses 1,991 5,176 Other liabilities ( 363 ) 1,201 Interest payable - Centre Lane Senior Secured Credit Facility - related party 38 21 Interest payable - 10 % convertible promissory notes - related party - ( 39 ) Deferred revenue ( 49 ) ( 1,686 ) Net cash provided by operating activities 1,252 1,878 Cash flows from investing activities: Purchase of property and equipment ( 111 ) ( 14 ) Capitalization of website development costs - ( 96 ) Net cash used in investing activities ( 111 ) ( 110 ) Cash flows from financing activities: Proceeds from stock option exercises 1 1 Principal payments on finance lease obligations ( 22 ) ( 18 ) Proceeds from Centre Lane Senior Secured Credit Facility - related party - 1,861 Repayment of principal on Centre Lane Senior Secured Credit Facility - related party ( 2,292 ) ( 3,125 ) Repayment of principal on 10 % convertible promissory notes - related party - ( 80 ) Net cash used in financing activities ( 2,313 ) ( 1,361 ) Effect of foreign exchange rates on cash ( 3 ) ( 1 ) Net (decrease) increase in cash, cash equivalents, and restricted cash ( 1,175 ) 406 Cash, cash equivalents, and restricted cash at the beginning of the period 4,407 4,001 Cash, cash equivalents, and restricted cash at the end of the period $ 3,232 $ 4,407 Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets: Cash and cash equivalents $ 1,371 $ 2,546 Restricted cash 1,861 1,861 Total cash, cash equivalents, and restricted cash $ 3,232 $ 4,407 Supplemental disclosure of cash flow information: Cash paid for interest 532 539 Interest paid-in-kind on Centre Lane Senior Secured Credit Facility - related party 9,566 9,353 Supplemental disclosure of non-cash investing and financing activities: Agency and exit fees to Centre Lane for debt financing 9 470 Annual administration fee to Centre Lane for debt financing 35 35 Common stock issued to Centre Lane Partners for debt financing - 175 Common stock issued to Centre Lane Partners for debt modification 120 - See accompanying notes to consolidated financial statements. F- 10 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. NOTES TO CONSOLIDA TED FINANCIAL STATEMENTS NOTE 1 – DESCRIPTION OF BUSINESS Organization and Nature of Operations Bright Mountain Media, Inc. (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, creative services, and media services. Digital Publishing Our digital publishing division focuses on developing content that attracts an audience and monetizes that audience through advertising. The current portfolio of owned and operated websites is focused on moms, parenting, families, and more broadly, women. The portfolio consists of popular websites including Mom.com, Cafemom.com, LittleThings.com, and MamasLatinas.com. This demographic is highly sought after by brands and their advertising agencies. We use internal and external technologies to constantly improve the effectiveness and efficiency of the content we create. Our publishing division monetizes its audiences through both direct and programmatic advertising sales. Advertising Technology Our advertising technology division focuses on delivering targeted ads to audiences on owned and operated sites as well as third-party publishers in a cost-effective manner through the deployment of proprietary technologies. By developing our own proprietary technology stack, we are able to pass along efficiencies to both the demand and supply side of the ecosystem. Our goal is to enable and support a streamlined, end-to-end advertising model that addresses both demand (buy side) and publisher supply (sell side) programmatic sales and delivery of digital advertisements using an array of audience targeting tools and advertising formats (display, audio, video, CTV, in-app). Programmatic advertising relies on software programs that leverage data and proprietary algorithms to match the optimal selection of an ad with a bid price offered by advertisers. Consumer Insights Our consumer insights division focuses on providing primary and secondary research and competitive intelligence to address customers' strategic issues. We provide cutting-edge and dynamic research, offering clients a comprehensive perspective on their consumers. This insight extends to strategic guidance on the optimal timing and channels to effectively connect with target audiences. Our cutting-edge approach combines advanced data analytics, artificial intelligence, and comprehensive market research, to uncover actionable insights that drive informed decision-making. Creative Services Our creative services division transforms data into award-winning campaigns. We are uniquely able to leverage insights teams with highly strategic media planning and buying teams to ensure brands not only position their advertising precisely, but also yield impactful business results. Our goal is to combine data-driven decisions with creativity fueled by a deep understanding of modern culture. Media Services Our media services division focuses on advertisers and agencies by providing access to premium inventory, leveraging data to optimize programmatic campaigns. 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 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. F- 11 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The Company generates revenue through: • the selling of advertisements placed on our owned and managed sites and on partner websites where we earn a share of the revenue; • fees for facilitating the seamless, real-time exchange of advertisements on a large scale, bridging networks of buyers (referred to as "DSPs") and networks of sellers (referred to as "SSPs"); • serving advertisers through providing access to premium resources and leveraging data to optimize programmatic campaigns, where revenue is derived from the planning and execution of creative and media marketing campaigns; • providing primary and secondary research, competitive intelligence, and expert insights to address customers' strategic issues, where revenue is primarily derived from providing a single integrated service for such research; and • provision of creative and media services to advertisers. NOTE 2 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation and Basis of Presentation The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and in accordance with rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and include the accounts of the Company and all its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation, including revenue and cost of revenue for services performed by a subsidiary company. 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 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. The Company’s ability to continue as a going concern is dependent upon its ability to meet its liquidity needs through a combination of factors. The Company is currently exploring several strategic alternatives, including restructuring or refinancing its debt, or seeking additional debt, including borrowing under the Centre Lane Senior Secured Credit Facility or raising equity capital. 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 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. Cash and Cash Equivalents 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 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, 2025, and 2024, the Company did not exceed the insurance limi t of $ 29,000 for i ts international bank accounts. F- 12 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. 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. Restricted Cash The Company considers cash to be restricted when withdrawal or general use is legally restricted. The Company reports restricted cash as a separate 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. Off-balance Sheet Arrangements There are no off-balance sheet arrangements as of December 31, 2025 and December 31, 2024 . Accounts Receivable and Allowances Accounts receivable represent receivables from customers in the ordinary course of business and are recorded in accordance with FASB Accounting Standards Codification No. 310, Receivables, (ASC 310) . Receivables are recorded at the invoice amount on the date revenue is recognized and are presented net of the allowance for current expected credit losses in the accompanying consolidated balance sheets. Certain receivables are subject to adjustments from traffic settlements that are deducted from open invoices. Our receivables are not interest bearing and are not collateralized. Unbilled receivables are the results of timing differences between billings to clients and are included in accounts receivable. The allowance for current expected credit losses is based on our assessment of the collectability of customer accounts. We regularly review our receivables that remain outstanding past their applicable payment terms and establish an allowance for potential write-offs by considering factors including historical experience, credit quality, age of the accounts receivable balances, and current and forecasted economic conditions that may affect a customer’s ability to pay. The allowance for current expected credit losses is accounted for in line with ASC 326. 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 Property and equipment are recorded at cost, less accumulated depreciation in accordance with FASB Accounting Standards Codification No. 360, Property, Plant and Equipment, (ASC 360) . Depreciation is computed using the straight-line method based on the estimated useful lives of the related assets. Leasehold improvements and assets under finance lease are amortized over the lesser of the lease term or the useful life of the improvements. When assets are sold or retired, the applicable cost and accumulated depreciation or amortization are removed from the accounts. The resulting gains or losses are reflected in the combined statements of operations and comprehensive loss. Goodwill We account for goodwill under FASB Accounting Standards Codification No. 350, Goodwill and Other, (ASC 350). Goodwill represents the cost in excess of the fair value of the net assets acquired in a business combination. We allocate goodwill to reporting units based on the expected benefit from a business combination. The Company categorizes goodwill into three reporting units: “Owned & Operated”, “Ad Network” and “Insights”. Goodwill is tested for impairment at the reporting unit level on an annual basis and on an interim basis if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value, which are determined through a qualitative assessment. F- 13 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. 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. If our qualitative assessment does not conclude that it is more likely than not that the estimated fair value of the reporting unit is greater than the carrying value, we perform a quantitative analysis. In a quantitative test, the fair value of a reporting unit is determined based on a discounted cash flow analysis and further analyzed using other methods of valuation. A discounted cash flow analysis requires us to make various assumptions, including assumptions about future cash flows, growth rates and discount rates. The assumptions about future cash flows and growth rates are based on our long-term projections. Assumptions used in our impairment testing are consistent with our internal forecasts and operating plans. Our discount rate is based on our debt structure, adjusted for current market conditions. If the fair value of the reporting unit exceeds its carrying amount, there is no impairment. To the extent the carrying amount exceeds its fair value, an impairment charge of the reporting unit’s goodwill would be necessary. See Note 7, Goodwill, to the consolidated financial statements for details regarding goodwill impairment. Intangible Assets We account for intangibles under FASB Accounting Standards Codification No. 350, Goodwill and Other, (ASC 350). Intangible assets acquired in a business combination or an asset acquisition are recorded at fair value on the date of acquisition and amortized over their estimated useful lives. Intangible assets include trade name, customer relationships, IP/technology and non-compete agreements. The Company’s trade name is amortized on a straight-line basis over a useful life of 2 years to 10 years. Customer relationships are amortized on a straight-line basis over a useful life of 5 years to 10 years. IP/technology is amortized on a straight-line basis over a useful life of 10 years. Non-compete agreements are amortized on a straight-line basis over the length of each agreement, typically between 3 years to 5 years. The Company reviews for impairment indicators of finite-lived intangibles and other long-lived assets as described below in “Amortization and Impairment of Long-Lived Assets.” Amortization and Impairment of Long-Lived Assets Long-lived assets, such as property, equipment, right-of-use assets, and intangible assets are reviewed for impairment 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. If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. For long-lived assets held for sale, assets are written down to fair value, less cost to sell. Fair value is determined based on discounted cash flows, appraised values or management’s estimates, depending upon the nature of the assets. Leases The Company determines whether an arrangement contains a lease at inception in accordance with FASB Accounting Standards Codification No. 842, Leases, (ASC 842) . A contract is, or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Lease ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. We do not include options to extend or terminate the lease term unless it is reasonably certain that we will exercise any such options. We recognize rent expense under our operating leases on a straight-line basis, variable lease costs such as operating costs and property taxes are expensed as incurred. For finance leases, we record interest expense on the lease liability in addition to amortizing the right-of-use asset (generally straight-line) over the shorter of the lease term or the useful life of the right-of-use asset. Finance leases are included in property and equipment, net and finance lease liabilities on our consolidated balance sheets. Revenue Recognition The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification No. 606, Revenue from Contracts with Customers, (ASC 606) . The Company recognizes revenue at a point in time when control is transferred to the customer or over time as a percentage of completion or otherwise in accordance with the terms of the contract. Cash received by the Company prior to when control of services is transferred to the customer is recorded as deferred revenue. F- 14 Table of Contents 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: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it provides to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the services promised within each contract and determines those that are performance obligations and assesses whether each promised service is distinct. The Company then recognizes revenue when (or as) the performance obligation is satisfied. The Company generates revenue through: • the selling of advertisements placed on our owned and managed sites and on partner websites where we earn a share of the revenue; • fees for facilitating the seamless, real-time exchange of advertisements on a large scale, bridging networks of buyers (referred to as "DSPs") and networks of sellers (referred to as "SSPs"); • serving advertisers through providing access to premium resources and leveraging data to optimize programmatic campaigns, where revenue is derived from the planning and execution of creative and media marketing campaigns; • providing primary and secondary research, competitive intelligence, and expert insights to address customers' strategic issues, where revenue is primarily derived from providing a single integrated service for such research; and • provision of creative and media services to advertisers. Digital publishing and advertising technology revenues are generated by audiences seeing or clicking on digital advertisements utilizing several advertising partners. The Company recognizes revenue once the performance obligation is satisfied at a point in time, on a gross basis net of adjustments based on the number of advertisements delivered. Customers are billed monthly or billing is generated via custom content production and extensions on our social media platforms. Consumer insights revenues are generated 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. Some of our contracts with customers contain multiple performance obligations. For these contracts, we account for the individual performance obligations separately if they are distinct. If recurring services are performed, the Company recognizes revenue as the services are rendered over time, generally on a ratable basis over the contract term beginning on the date that the service is made available to the customer. For campaign services that require a one-time deliverable, we recognize revenue once the performance obligation is satisfied at a point in time. Media services revenues are generated through the access to programmatic campaigns. The Company recognizes revenue as the services are rendered over time, on a ratable basis over the contract term, beginning on the date that the service is made available to the customer. There is no significant initial cost incurred to obtain contracts with customers. Deferred Revenue The Company records deferred revenue when cash payments are received or amounts are invoiced in advance of performance obligations. The Company expects to recognize deferred revenue in the period when it provides its services and, therefore, satisfies its performance obligation to the customer. F- 15 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Cost of Revenue Cost of revenue includes internal labor and payment to third parties for services performed to drive revenue, which includes the publisher cost paid for ad exchange on third party sites, advertising fees, personnel costs, technology and data related costs, fees paid for content creation, influencers, writers and sales commission. Website Development Costs The Company accounts for its website development costs in accordance with FASB Accounting Standards Codification No. 350, Website Development Costs (ASC 350) . These costs, if any, are included in intangible assets in the accompanying consolidated balance sheets. Upgrades or enhancements that add functionality are capitalized while other costs during the operating stage are expensed as incurred. The Company amortizes the capitalized website development costs over an estimated life of five years . During the year ended December 31, 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 Advertising and marketing expenses are recognized as incurred and are included in general and administrative expenses on the accompanying consolidated statements of operations and comprehensive loss. For the years ended December 31, 2025 and 2024, advertising and marketing expense was $ 78,000 and $ 134,000 , respectively. Stock Based Compensation We account for stock based compensation in accordance with FASB Accounting Standards Codification No. 718, Compensation - Stock Compensation (ASC 718) . ASC 718 addresses accounting for share-based awards, including stock options, restricted stock, performance shares and warrants. Stock-based compensation for stock option grants to employees and non-employees is based on the fair value of the award on the date of grant. We record forfeitures as they occur. The Company calculates stock compensation expense using the graded vesting method, which begins expensing each tranche on the expense begin date through the vesting date. This will result in front-loaded expenses, and is included in general and administrative expenses in the consolidated statements of operations. Compensation cost is recognized over the requisite service period, which is generally the vesting period, and is included in general and administrative expenses in the consolidated statements of operations. The Company estimates the fair value of stock options using the Black-Scholes valuation model. The expected life represents the term the options granted are expected to be outstanding. The expected volatility is determined using the historical volatility of similar publicly traded companies. The risk-free interest rate is based on the U.S. Treasury rate in effect at the time of grant. Treasury Stock The Company accounts for its treasury stock as set forth in FASB Accounting Standards Codification No. 505, Treasury Stock (ASC 505-30) . Under ASC 505-30 the total amount paid to acquire the stock is recorded and no gain or loss is recognized at the time of purchase. Gains and losses are recognized at the time the treasury stock is reinstated or retired and are recorded in additional paid-in capital or retained earnings. At December 31, 2025 and 2024 , the Company owned 2,185,575 and 1,350,175 shares of treasury stock, respectively. Loss Per Share The Company computes net loss per share in accordance with FASB Accounting Standards Codification No. 260, Earnings Per Share (ASC 260) . Under the provisions of ASC 260, basic net loss per share is computed by dividing the net loss available to common shareholders by the weighted average common shares outstanding during the period. Diluted net loss per share adjusts basic net loss per share for the effect of stock options, warrants, convertible notes and restricted stock awards only in periods, or for such awards in which the effect is dilutive. ASC 260 also requires the Company to present basic and diluted loss per share information separately for each class of equity instruments that participates in any income distribution with primary equity instruments. Deferred Debt Costs Deferred debt costs include costs incurred in connection with acquiring and maintaining debt arrangements. These costs are directly deducted from the carrying amount of the liability in the consolidated balance sheets, are amortized over the life of the related debt using the effective interest method and are classified as interest expense in the accompanying consolidated statements of operations. These deferred debt costs are related to the Company's Centre Lane Senior Secured Credit Facility. F- 16 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Income Taxes We use the asset and liability method to account for income taxes. Under this method, deferred income taxes are determined based on the differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements which will result in taxable or deductible amounts in future years and are measured using the currently enacted tax rates and laws in the period those differences are expected to reverse. A valuation allowance is provided to reduce net deferred tax assets to the amount that, based on available evidence, is more likely than not to be realized. The Company follows the provisions of FASB Accounting Standards Codification No. 740, Income Taxes (ASC 740). When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax expenses are recognized as tax expenses in the consolidated statements of operations and comprehensive loss. Segment Reporting Consistent with FASB Accounting Standards Codification No. 280, Segment Reporting (ASC "280"), our Chief Financial Officer reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. The Chief Financial Officer uses consolidated net income or loss and total assets when assessing segment performance and deciding how to allocate resources. There are no segment managers who are held accountable by the Chief Financial Officer, or anyone else, for operations, operating results and planning for levels or components below the consolidated unit level. 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. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of our consolidated financial statements as well as reported amounts of revenue and expenses during the periods presented. 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, 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. Foreign Currency 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, 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. F- 17 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Concentrations of Credit Risk Financial instruments that potentially subject us to concentration of credit risk consist principally of cash, cash equivalents, restricted cash and accounts receivable. We place our cash, cash equivalents, and restricted cash with high credit-quality financial institutions. Such deposits may be in excess of federally insured limits. In addition, the Company maintains various bank accounts in Thailand and Israel, with some level of insurance. We perform periodic evaluations of the relative credit standing of financial institutions. 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. We perform credit evaluations of our customers’ financial condition and require no collateral from our customers. We maintain an allowance for current expected credit losses based upon the expected collectability of accounts receivable balances. 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: Year Ended December 31, 2025 December 31, 2024 Revenue Concentration Customers exceeding 10% of revenue 2 1 Percentage of revenue: Customer 1 13.6 % 12.2 % Customer 2 11.9 % * Total percentage of revenue 25.5 % 12.2 % * Represents a customer revenue balance less than the 10% threshold. December 31, 2025 December 31, 2024 Accounts Receivable Concentration Customers exceeding 10% of accounts receivable 2 3 Percentage of accounts receivable: Customer 1 21.5 % 13.5 % Customer 2 12.1 % 10.4 % Customer 3 * 11.1 % Total percentage of accounts receivable 33.6 % 35.0 % * Represents a customer accounts receivable balance less than the 10% threshold . Effective Accounting Pronouncements Adopted For 2024 annual reporting, we adopted ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . This new standard requires an enhanced disclosure of significant segment expenses on an annual and interim basis, effective for fiscal years beginning after December 15, 2024. The adoption of ASU 2023-07 did no t have a significant impact on our consolidated financial statements for the period ended December 31, 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. There are no segment managers who are held accountable by the Chief Financial Officer, or anyone else, for operations, operating results and planning for levels or components below the consolidated unit level. Accordingly, we have determined we have one operating and reportable segment. F- 18 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. 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 focuses on the rate reconciliation and income taxes paid. ASU No. 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): Disaggregation of Income Statement Expenses . The new guidance requires disaggregated information about certain income statement expense line items on an annual and interim basis. This guidance will be effective for annual periods beginning 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. F- 19 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 3 – ACCOUNTS RECEIVABLE Accounts receivable, net, consisted of the following: December 31, 2025 December 31, 2024 (in thousands) Accounts receivable $ 12,755 $ 12,460 Unbilled receivables (1) 3,850 2,698 16,605 15,158 Less: allowance for current expected credit losses ( 318 ) ( 125 ) Accounts receivable, net $ 16,287 $ 15,033 (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 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 EXPENSES AND OTHER ASSETS Prepaid expenses and other assets consisted of the following: December 31, 2025 December 31, 2024 (in thousands) Prepaid insurance (1) $ 351 $ 358 Prepaid software 137 93 Deposits 158 158 Subscriptions 195 213 Other current assets (2) 487 195 Total prepaid costs and other assets 1,328 1,017 Less: other long-term assets ( 158 ) ( 158 ) Prepaid expenses and other current assets $ 1,170 $ 859 (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 Property and equipment, net, consisted of the following: Useful Life December 31, 2025 December 31, 2024 (in thousands) Computer equipment 3 $ 107 $ 76 Computer software 3 286 206 393 282 Less: accumulated depreciation ( 269 ) ( 213 ) Property and equipment, net $ 124 $ 69 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. F- 20 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 6 – INTANGIBLE ASSETS, NET Website acquisitions, net, consisted of the following: December 31, 2025 December 31, 2024 (in thousands) Website acquisition assets $ 1,125 $ 1,125 Add: website development costs 96 96 1,221 1,221 Less: accumulated amortization ( 1,147 ) ( 1,127 ) Website acquisition assets, net $ 74 $ 94 Other intangible assets, net, consisted of the following: December 31, 2025 December 31, 2024 Useful Life Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (in thousands) Trade name 2 - 10 $ 8,381 $ ( 4,415 ) $ 3,966 $ 8,381 $ ( 3,795 ) $ 4,586 IP/technology 10 5,821 ( 2,970 ) 2,851 5,821 ( 2,575 ) 3,246 Customer relationships 5 - 10 13,380 ( 8,729 ) 4,651 13,380 ( 7,900 ) 5,480 Non-compete agreements 3 - 5 402 ( 402 ) - 402 ( 402 ) - Other intangible assets, net $ 27,984 $ ( 16,516 ) $ 11,468 $ 27,984 $ ( 14,672 ) $ 13,312 December 31, 2025 December 31, 2024 (in thousands) Website $ 74 $ 94 Other intangible assets 11,468 13,312 Intangible assets, net $ 11,542 $ 13,406 Amortization expense for the years ended December 31, 2025, and 2024, was approximately $ 1.9 million , and $ 1.9 million , respectively, related to both the website acquisition costs and the intangible assets, and is included in general and administrative expense in the statements of operations and comprehensive loss. As of December 31, 2025, expected remaining amortization expense of intangible assets and website acquisition by fiscal year is as follows: 2026 $ 1,788 2027 1,788 2028 1,788 2029 1,785 Thereafter 4,393 Total expected amortization expense $ 11,542 F- 21 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 7 – GOODWILL The following table represents the allocation of goodwill as of December 31, 2025 and 2024: Owned & Operated Ad Network Insights Total (in thousands) December 31, 2024 $ 2,865 $ 4,013 $ 907 $ 7,785 Additions - - - - Reclassifications 93 ( 93 ) - - Impairment ( 786 ) - - ( 786 ) December 31, 2025 $ 2,172 $ 3,920 $ 907 $ 6,999 We allocate goodwill to reporting units based on the expected benefit and synergies with our current reporting units. The Company categorizes goodwill into three reporting units: "Owned & Operated", "Ad Network", and "Insights". 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 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 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. A discounted cash flow analysis requires us to make various assumptions, including assumptions about future cash flows, growth rates and discount rates. The assumptions about future cash flows and growth rates are based on our long-term projections. Assumptions used in our impairment testing are consistent with our internal forecasts and operating plans. Our discount rate is based on a market participant debt structure and cost of capital. If the fair value of the reporting unit exceeds its carrying amount, there is no impairment. To the extent the carrying amount exceeds its fair value, an impairment charge of the reporting unit’s goodwill would be necessary. 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 Accounts payable and accrued expenses consisted of the following: December 31, 2025 December 31, 2024 (in thousands) Accounts payable (1) $ 18,220 $ 14,428 Accrued wages, commissions, and bonus 812 527 Publisher cost 1,536 2,811 Professional fees 704 1,138 Subcontractor 3,369 3,438 Other 211 325 Total accounts payable and accrued expenses $ 24,852 $ 22,667 (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. F- 22 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 9 – OTHER CURRENT LIABILITIES Other current liabilities consisted of the following: December 31, 2025 December 31, 2024 (in thousands) Current portion of long-term operating and financing leases $ 116 $ 101 Dividend payable 691 691 Project advance expense (1) 1,048 1,546 Litigation reserves 2,363 2,224 Other current liabilities 4 8 Total other liabilities 4,222 4,570 Less: other long-term liabilities ( 12 ) ( 169 ) Other current liabilities $ 4,210 $ 4,401 (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 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 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. Optional Prepayment 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. F- 23 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Repayment of 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; and • 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; and • 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; and • 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. F- 24 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. 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 December 31, 2024 (in thousands) Note payable - Centre Lane Senior Secured Credit Facility - related party (current) $ 84,276 $ 3,808 Note payable - Centre Lane Senior Secured Credit Facility - related party (net of discount) - 71,043 Net principal 84,276 74,851 Add: debt discount 1,864 3,971 Outstanding principal $ 86,140 $ 78,822 The below table summarizes the movement in the outstanding principal during the years ended December 31, 2025 and 2024: December 31, 2025 December 31, 2024 (in thousands) Opening balance $ 78,822 $ 70,228 Add: Draws - 1,861 Exit and other fees 44 505 Interest capitalized 9,566 9,353 88,432 81,947 Less Payments ( 2,292 ) ( 3,125 ) Outstanding principal $ 86,140 $ 78,822 Fees 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. Amendments 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, 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. F- 25 Table of Contents 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. 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. 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. Date Draw Repayment Date Interest Rate Paid-in-Kind a Interest Rate Cash a Amendment Fee b Common Stock Issued Accounting Impact (in thousands, except share data) 1 4/26/2021 $ - 12/20/2026 8.00 % 2.00 % $ - 150,000 Extinguishment c 2 5/26/2021 1,500 12/20/2026 8.00 % 2.00 % 750 3,000,000 Modification c 3 8/12/2021 500 12/20/2026 8.00 % 2.00 % 250 2,000,000 Modification c 4 8/31/2021 1,100 12/20/2026 8.00 % 2.00 % 550 - Modification c 5 10/8/2021 725 12/20/2026 8.00 % 2.00 % 363 - Extinguishment c 6 11/5/2021 800 12/20/2026 8.00 % 2.00 % 800 7,500,000 Modification c 7 12/23/2021 500 12/20/2026 8.00 % 2.00 % 500 - Modification c $ 5,125 $ 3,213 12,650,000 8 1/26/2022 350 12/20/2026 8.00 % 2.00 % 350 - Modification c 9 2/11/2022 250 12/20/2026 0.00 % 7.00 % 13 - Modification d 10 3/11/2022 300 12/20/2026 0.00 % 7.00 % 15 - Modification d 11 3/25/2022 500 12/20/2026 0.00 % 7.00 % 25 - Modification d 12 4/15/2022 450 12/20/2026 0.00 % 7.00 % 23 - Modification d 13 5/10/2022 500 12/20/2026 0.00 % 7.00 % 25 - Modification d 14 6/10/2022 350 12/20/2026 0.00 % 7.00 % 18 - Modification d 15 7/8/2022 350 12/20/2026 0.00 % 7.00 % ( 58 ) - Modification d $ 3,050 $ 411 - 16 2/10/2023 1,500 12/20/2026 0.00 % 7.00 % 75 - Modification d 17 f 4/20/2023 26,316 12/20/2026 15.00 % 0.00 % 708 21,401,993 Extinguishment e 19 7/28/2023 2,000 12/31/2024 0.00 % 7.00 % 100 - Modification d $ 29,816 $ 883 21,401,993 20 6/5/2024 - 12/20/2026 0.00 % 0.00 % 472 - Modification g 21 f 12/26/2024 1,861 12/20/2026 15.00 % 0.00 % - 5,001,991 Modification e $ 1,861 $ 472 5,001,991 23 9/30/2025 - 12/20/2026 0.00 % 0.00 % 8 2,832,485 Modification g 24 12/31/2025 - 12/20/2026 0.00 % 0.00 % - 2,870,792 Modification g $ - $ 8 5,703,277 $ 39,852 $ 4,987 44,757,261 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 %. F- 26 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. 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 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: Year Ended December 31, 2025 December 31, 2024 (in thousands) Interest expense $ 10,136 $ 9,913 Amortization 2,150 2,697 Total interest expense $ 12,286 $ 12,610 NOTE 11 – 10% CONVERTIBLE PROMISSORY NOTES On November 30, 2018, the Company issued 10 % convertible promissory notes ("Convertible Notes") in the amount of $ 80,000 to our then Chairman of the Board, a related party. The Convertible Notes were unsecured and matured five years from issuance and were convertible at the option of the holder into shares of common stock at any time prior to maturity at a conversion price of $ 0.40 per share. A beneficial conversion feature existed on the date the Convertible Notes were issued whereby the fair value of the underlying common stock into which the Convertible Notes was convertible was in excess of the face value of the Convertible Notes of $ 80,000 . 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 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, 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. The Company has the option to renew the lease for one additional five-year term. At December 31, 2025 and 2024, the operating lease right-of-use asset was $ 173,000 and $ 253,000 , respectively, and is included under assets on the consolidated balance sheets. At December 31, 2025 and 2024, the operating lease right-of-use lease liability was $ 160,000 and $ 252,000 , respectively, including the current portion of $ 95,000 and $ 79,000 , respectively, and is included under liabilities on the consolidated balance sheets. Over the lease term, the Company is required to amortize the operating lease asset and record interest expense on the lease liability created at lease commencement. Operating lease expense was approximately $ 187,000 and $ 173,000 for the years ended December 31, 2025 and 2024. 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. F- 27 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Operating Lease Sublease 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 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 On October 1, 2023, the Company entered into a lease agreement for computer equipment with a lease term of three years . At December 31, 2025, and 2024, the finance lease asset was $ 20,000 and $ 42,000 , respectively, and is included under assets on the consolidated balance sheets. At December 31, 2025, and 2024, the finance lease liability was $ 20,000 and $ 42,000 , respectively, including the current portion of $ 20,000 and $ 22,000 , respectively, and is included under liabilities on the consolidated balance sheets. Finance lease expense for the year ended December 31, 2025 was $ 29,000 inclusive of interest of $ 7,000 and amortization of $ 22,000 , and is included in general and administrative expense in the statements of operations and comprehensive loss. Finance lease expense for the year ended December 31, 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. 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): December 31, 2025 December 31, 2024 (in thousands) Assets: Total operating lease right-of-use asset $ 173 $ 253 Total finance lease asset (1) $ 20 $ 42 Liabilities: Operating lease liability, current $ 95 $ 79 Operating sublease liability, net of current portion 12 12 Operating lease liability, net of current portion 65 173 Total operating lease liability $ 172 $ 264 Finance lease liability, current $ 20 $ 22 Finance lease liability, net of current portion - 20 Total finance lease liability $ 20 $ 42 Weighted-average remaining lease term (in years): Operating lease 1.75 2.75 Finance lease 0.75 1.75 Weighted-average discount rate: Operating lease 14.39 % 14.39 % Finance lease 21.12 % 21.12 % (1) Finance lease represents computer software, see Note 5, Property and Equipment, Net, to the consolidated financial statements. F- 28 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2025, the aggregate annual lease obligations were as follows (in thousands): Operating Leases Finance Leases (in thousands) 2026 $ 95 $ 20 2027 79 - Total lease obligations 174 20 Less: amount representing interest ( 14 ) - Net lease obligations $ 160 $ 20 NOTE 13 – REVENUE RECOGNITION The following table represents our revenue disaggregated by type: Year Ended December 31, 2025 December 31, 2024 (in thousands) Revenue: Digital publishing $ 1,482 $ 1,733 Advertising technology 21,681 18,449 Consumer insights 26,559 27,021 Creative services 8,519 7,056 Media services 988 2,422 Total revenue $ 59,229 $ 56,681 Geographic Information 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, 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 The movement in deferred revenue during the years ended December 31, 2025 and 2024, comprised the following (in thousands): December 31, 2025 December 31, 2024 (in thousands) Deferred revenue at the start of the period $ 2,883 $ 4,569 Amounts invoiced during the period 37,510 40,529 Less: revenue recognized during the period ( 37,559 ) ( 42,215 ) Deferred revenue at the end of the period $ 2,834 $ 2,883 NOTE 14 – STOCK BASED COMPENSATION 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. The purpose of the 2022 Stock Option Plan is to provide an incentive to attract and retain directors, officers, consultants, advisors and employees whose services are considered valuable, to encourage a sense of proprietorship and to stimulate an active interest of such persons into our development and financial success. The 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, 2025, 12,146,767 shares were remaining under the 2022 Stock Option Plan for the future issuance. F- 29 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Options 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. The following table presents the activity of the Company’s outstanding common stock options for the year ended December 31, 2025: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value Common stock options: Balance outstanding at December 31, 2024 10,584,033 $ 0.10 8.0 $ 79 Granted 575,000 $ 0.04 - $ - Exercised ( 50,400 ) $ - - $ - Forfeited ( 444,150 ) $ 0.08 - $ 0 Expired ( 311,250 ) $ 0.42 - $ - Balance outstanding at December 31, 2025 10,353,233 $ 0.09 7.2 $ 0 Exercisable at December 31, 2025 6,489,294 $ 0.10 7.0 $ - Unvested at December 31, 2025 3,863,939 $ 0.07 7.4 $ 0 During the years ended December 31, 2025 and 2024, 50,400 and 80,250 common stock options were exercised with an aggregate intrinsic value of $ 0 and $ 3,000 , respectively. Summarized information with respect to options outstanding under the stock option plans at December 31, 2025, is as follows: Options Outstanding Options Exercisable Range of Exercise Price Number Outstanding Weighted Average Exercise Price Remaining Contractual Life (in years) Number Exercisable Weighted Average Exercise Price 0.0001 - 0.13 9,247,006 $ 0.05 7.3 5,706,067 $ 0.05 0.14 - 0.24 867,000 $ 0.17 7.1 544,000 $ 0.17 0.25 - 0.49 - $ - - - $ - 0.50 - 0.85 106,000 $ 0.75 0.5 106,000 $ 0.75 0.86 - 1.75 133,227 $ 1.64 3.9 133,227 $ 1.64 10,353,233 $ 0.09 7.2 6,489,294 $ 0.10 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. The Company estimates the fair value of share-based compensation utilizing the Black-Scholes option pricing model, which is dependent upon several variables such as the expected option term, expected volatility of our stock price over the expected option term, expected risk-free interest rate over the expected option term, expected dividend yield rate over the expected option term, and an estimate of expected forfeiture rates. F- 30 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. 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: December 31, 2025 December 31, 2024 Expected life (years) 5.58 yrs 5.82 yrs Expected volatility 445.13 % 452.21 % Risk-free interest rate 4.34 % 4.12 % Dividend yield 0.00 % 0.00 % Expected forfeiture rate 0.00 % 0.00 % During the year ended December 31, 2025 and 2024, 575,000 and 469,673 options were issued, respectively. The expected life is computed using the simplified method, which is the average of the vesting term and the contractual term. 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. Treasury yields with terms equivalent to the expected term of the related option at the time of the grant. Dividend yield is based on historical trends. While the Company believes these estimates are reasonable, the compensation expense recorded would increase if the expected life was increased, a higher expected volatility was used, or if the expected dividend yield increased. The Company has elected to account for forfeitures as they occur. NOTE 15 – FAIR VALUE MEASUREMENTS The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1: Valuation is based on unadjusted quoted prices in active markets for identical assets and liabilities that are accessible at the reporting date. Because valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment. Level 2 : Valuation is determined from pricing inputs that are other than quoted prices in active markets that are either directly or indirectly observable as of the reporting date. Observable inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and interest rates and yield curves that are observable at commonly quoted intervals. Level 3 : Valuation is based on inputs that are both significant to the fair value measurement and unobservable. Level 3 inputs includes situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value generally require significant management judgment or estimation. Fair Value Considerations 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 their nature and level of risk. F- 31 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Assets Measured at Fair Value on a Non-Recurring 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 when impairment is recognized. These assets include goodwill and intangible assets, net. The below table shows the quantitative information for assets measured at fair value on a non-recurring basis: Quantitative Information about Level 3 Fair Value Measurements Fair Value Valuation Technique Unobservable Input Rate (Weighted-Average Cost of Capital) (in thousands) Goodwill $ 6,999 Discounted cash flow Discount rate 18.29 % Goodwill and Intangibles Assets Goodwill and intangible assets are tested for impairment at least annually, and if triggering events are noted prior to the annual assessment. Impairment is deemed to occur when the carrying value associated with the reporting unit exceeds the implied value associated with the reporting unit. We estimate the fair value of our reporting units utilizing an income approach (discounted cash flow method), which incorporates significant unobservable Level 3 inputs. At 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 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 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 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 Litigation In accordance with applicable accounting guidance, the Company establishes an accrued liability for litigation and regulatory matters when those matters present loss contingencies that are both probable and estimable. In such cases, there may be exposure to loss in excess of any amounts accrued. When a loss contingency is not both probable and estimable, the Company does not establish an accrued liability. As a litigation or regulatory matter develops, the Company, in conjunction with any outside counsel handling the matter, evaluates on an ongoing basis whether such matter presents a loss contingency that is probable and estimable. If, at the time of evaluation, the loss contingency related to a litigation or regulatory matter is not both probable and estimable, the matter will continue to be monitored for further developments that would make such loss contingency both probable and estimable. When a loss contingency related to a litigation or regulatory matter is deemed to be both probable and estimable, the Company will establish an accrued liability with respect to such loss contingency and record a corresponding amount of litigation-related expense. The Company will then continue to monitor the matter for further developments that could affect the amount of any such accrued liability. F- 32 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ladenburg On July 11, 2023, Ladenburg Thalmann & Co. Inc. (“Ladenburg”) filed an action against the Company for breach of contract in the United States District Court for the Southern District of Florida (the “District Court”), Case No. 9:23-cv-81019-AMC. Ladenburg alleges that it entered into an Investment Banking Agreement (the “Agreement”) with the Company on September 1, 2020. According to Ladenburg, that Agreement provided that Ladenburg would be the exclusive investment advisor and banker for the Company. 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 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. The Company disputes the allegations and disputes that Ladenburg is entitled to receive any fee since it did not perform any work pertaining to such acquisition. On November 27, 2024, the District Court entered a judgment in favor of Ladenburg and against the Company granting damages of $ 1.7 million to Ladenburg. On December 26, 2024, the Company filed a motion with the District Court requesting that the District Court reconsider its judgment. This motion was denied on January 30, 2025. 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. Other Litigation Other litigation is defined as smaller claims or litigation that are neither individually nor collectively material. It does not include lawsuits that relate to collections. The Company is party to various other legal proceedings that arise in the ordinary course of business, separate from normal course accounts receivable collections matters. Due to the inherent difficulty of predicting the outcome of these other legal proceedings, the Company cannot predict the eventual outcome of these matters, and it is reasonably possible that some of them could be resolved unfavorably to the Company. As a result, it is possible that the Company’s results of operations or cash flows in a particular fiscal period could be materially affected by an unfavorable resolution of pending litigation or contingencies. The outcome is not determinable as of the issuance of these consolidated financial statements. NOTE 17 - STOCKHOLDERS' DEFICIT Preferred Stock The Company has authorized 20,000,000 shares of preferred stock with a par value of $ 0.01 (the “Preferred Stock”), issuable in such series and with such designations, rights and preferences as the board of directors may determine. The Company’s board of directors has designated six series of preferred stock, consisting of: 1. 10% Series A Convertible Preferred Stock; 2. 10% Series B Convertible Preferred Stock; 3. 10% Series C Convertible Preferred Stock; 4. 10% Series D Convertible Preferred Stock; 5. 10% Series E Convertible Preferred Stock; and 6. 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. F- 33 Table of Contents 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: • the shares have no voting rights, except as may be provided under Florida law; • the shares pay cash dividends subject to the provisions of Florida law at the dividend rates set forth above, payable monthly in arrears; • the shares are convertible at any time at the option of the holder into shares of our common stock on a 1:1 basis. The conversion ratio is proportionally adjusted in the event of stock splits, recapitalization or similar corporate events. Any shares not previously converted will automatically convert into shares of our common stock on the dates set forth above; • the shares rank junior to the 10 % Series A Convertible Preferred Stock and our 10 % Series E Convertible Preferred Stock; • in the event of a liquidation or winding up of the Company, the shares have a liquidation preference of $ 0.50 per share for the Series F-1, $ 0.50 per share for the Series F-2 and $ 0.40 per share for the Series F-3; and • the shares are not redeemable by the Company. 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; • shares are convertible into our common stock at the holder’s option on a one for one basis; • shares are entitled to a liquidation preference equal to a return of the capital invested; and • each share will automatically convert into shares of common stock five years from the date of issuance or upon a change in control. Both the voluntary and automatic conversion formulas are subject to proportional adjustment in the event of stock splits, stock dividends and similar corporate events. There were no shares of preferred stock issued or outstanding at December 31, 2025, and 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. Common Stock Shares of Common Stock under the 2022 Stock Option Plan On April 14, 2022, the Board and the Compensation Committee of the Board adopted and approved the 2022 Stock Option Plan. 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, 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, 2025, the Company issued 5,753,677 shares of our common stock as follows (in thousands, except share data): Year Ended December 31, 2025 Shares (#) Value Common stock issued to Centre Lane related to debt financing 5,703,277 $ 120 Common stock issued for options exercised 50,400 $ 2 Shares of common stock issued, net 5,753,677 $ 122 F- 34 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. 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): Year Ended December 31, 2024 Shares (#) Value Common stock issued to Centre Lane related to debt financing 5,001,991 $ 175 Common stock issued for options exercised 80,250 $ 2 Common stock issued for services rendered 279,452 $ 16 Shares of common stock issued, net 5,361,693 $ 193 F- 35 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Treasury Stock 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. Warrants 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. A summary of the Company’s warrants outstanding as of December 31, 2025 and 2024 is presented below: December 31, 2025 Exercise Price Number Outstanding Gross Cash Proceeds (if exercised, in thousands) $ 0.75 - $ - $ 1.00 175,000 $ 175 175,000 $ 175 December 31, 2024 Exercise Price Number Outstanding Gross Cash Proceeds (if exercised, in thousands) $ 0.75 10,398,700 $ 7,799 $ 1.00 175,000 $ 175 10,573,700 $ 7,974 NOTE 18 – LOSS PER SHARE As of December 31, 2025 and 2024, there were 183,218,504 and 177,464,827 shares of common stock issued, respectively, and 181,032,929 and 176,114,652 shares of common stock outstanding, respectively. Outstanding shares as of December 31, 2025 and 2024, have been adjusted to reflect 2,185,575 and 1,350,175 treasury shares, respectively. Basic net loss per share is computed by dividing the net earnings attributable to common shareholders by the weighted average number of common shares outstanding during the period. 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. Conversion or exercise of the potential common shares is not reflected in diluted earnings per share unless the effect is dilutive. 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. F- 36 Table of Contents 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): Year Ended December 31, 2025 December 31, 2024 (in thousands, except per share data) Numerator: Net loss $ ( 13,455 ) $ ( 17,024 ) Denominator: Weighted-average common shares outstanding: Basic 176,547,907 171,199,036 Diluted 176,547,907 171,199,036 Net loss per common share Basic $ ( 0.08 ) $ ( 0.10 ) Diluted $ ( 0.08 ) $ ( 0.10 ) The anti-dilutive securities excluded from the weighted-average shares used to calculate the diluted net loss per common share for the years ended December 31, 2025 and 2024 were as follows: December 31, 2025 December 31, 2024 Shares unvested and subject to exercise of stock options 10,353,233 10,459,033 Shares subject to exercise of warrants 175,000 10,573,700 NOTE 19 – RELATED PARTY TRANSACTIONS Centre Lane Partners 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 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. As a result, BV Agency, LLC, and Centre Lane Partners together are considered to be related parties of the Company. Through December 31, 2025 , the Company has entered into 24 amendments to the Credit Agreement between itself and Centre Lane Partners. 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, to the consolidated financial statements for details on this facility. Preferred Stock 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. F- 37 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 20 – INCOME TAXES The Company is subject to federal and various state income taxes in the United States as well as income taxes in various foreign jurisdictions. Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations. The Company’s loss before income taxes consists of the following: Year Ended December 31, 2025 2024 United States $ ( 12,663 ) $ ( 15,653 ) Foreign ( 792 ) ( 60 ) Total loss before provision for income taxes $ ( 13,455 ) $ ( 15,713 ) A reconciliation of the federal statutory income tax rate to the effective tax rate is as follows: December 31, 2025 2024 Amount Rate Amount Rate Federal tax expense (benefit) at the statutory rate from operations $ ( 2,826 ) 21.00 % $ ( 3,300 ) 21.00 % State and local tax benefit, net of federal income tax benefit - 0.00 % - 0.00 % Effect of foreign taxes: Foreign rate differential 8 - 0.05 % - 0.00 % Foreign change in valuation allowance 158 - 1.17 % - 0.00 % Change in valuation allowance 2,497 - 18.56 % 3,202 - 20.38 % Nontaxable or nondeductible items: Impairment 165 - 1.23 % - 0.00 % Other 34 - 0.25 % 62 - 0.39 % Other adjustments: Deferred tax assets (liabilities) true-up - other ( 26 ) 0.19 % 19 - 0.12 % Deferred tax assets (liabilities) true-up - net operating loss 251 - 1.87 % - 0.00 % Return to provision ( 261 ) 1.94 % 17 - 0.11 % Total tax provision (benefit) $ - 0.00 % $ - 0.00 % The tax effect of significant components of the Company’s deferred tax assets and liabilities at December 31, 2025 and 2024, are as follows: December 31, 2025 2024 Deferred tax assets: Net operating loss carryforward $ 24,878 $ 23,568 Intangible assets 2,108 2,223 Lease liability 50 88 Interest limitation 2,813 - Other 1,374 991 Total gross deferred tax assets 31,223 26,870 Less: Deferred tax asset valuation allowance ( 30,983 ) ( 26,392 ) Total net deferred tax assets $ 240 $ 478 Deferred tax liabilities: Right-of-use asset ( 53 ) ( 89 ) Debt modification ( 187 ) ( 389 ) Net deferred tax liabilities $ - $ - F- 38 Table of Contents BRIGHT MOUNTAIN MEDIA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS As of December 31, 2025 , the Company had U.S. 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. federal limitation due to the “change in ownership provisions” under Section 382 of the Internal Revenue Code and other similar limitations in various state jurisdictions. Such limitations may result in the expiration of net operating loss carryforwards before their utilization. The Company has not completed a study to assess whether an “ownership change” as defined in Section 382 has occurred or whether there have been multiple ownership changes since the Company’s inception. Future changes in the Company’s stock ownership, which may be outside of the Company’s control, may trigger an “ownership change.” In addition, future equity offerings or acquisitions that have equity as a component of the purchase price could result in an “ownership change.” In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Because of the historical earnings history of the Company and its foreign subsidiaries, the net deferred tax assets less deferred tax liabilities for 2025 were fully offset by the deferred tax liability and a 100% valuation allowance on the remaining balance. Based on all available evidence, management determined that it is more likely than not that the Company's net deferred tax assets will not be realized. As a result, the Company continues to maintain a full valuation against its net deferred tax assets. 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. F- 39 Table of Contents 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. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company’s current estimate of the recognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available. As of December 31, 2025, and 2024, the Company has not recorded any liabilities for uncertain tax positions in its consolidated financial statements. The Company records interest and penalties related to unrecognized tax benefits in the provision for income taxes. As of December 31, 2025, and 2024, no accrued interest or penalties are recorded on the balance sheets, and the Company has no t recorded any related expenses. The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examinations by federal, foreign, and state and local jurisdictions, where applicable. There are currently no pending tax examinations. The Company’s tax years currently open under statute from 2022 to the present in the U.S. and from 2021 to present in the Company’s foreign operations. 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. F- 40