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Item 9A. Controls and Procedures

2021-12-23 compared with 2020-05-14 · 3318 added, 1930 removed, 492 unchanged (91% of the section changed)

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of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures”

as such term is defined

in Rule 13a-15(e) under Exchange Act.

In designing and evaluating our disclosure controls and procedures, our management recognized

that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute,

assurance that the objectives of disclosure controls and procedures are met.

Additionally, in designing disclosure controls and

procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible

disclosure controls and procedures.

The design of any disclosure controls and procedures also is based in part upon certain assumptions

about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals

under all potential future conditions.

Based on their evaluation as of the end of the period covered by this report, our Chief

Financial Officer concluded that our disclosure controls and procedures were not effective such that the information relating

to our company, required to be disclosed in our Securities and Exchange Commission reports (i) is recorded, processed, summarized

and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to our management,

including our Chief Executive Officer, to allow timely decisions regarding required disclosure as a result of (i) our failure

to timely file our Quarterly Report on Form 10-Q for the period ended September 30, 2019, and (ii) continuing material weaknesses

in our internal control over financial reporting described below.

A material weakness is a deficiency, or combination of deficiencies,

that results in more than a remote likelihood that a material misstatement of annual or interim financial statements will not

be prevented or detected.

management, including our Chief Financial Officer has evaluated the effectiveness of the design and operations of our disclosure

controls and procedures (defined in Exchange Act Rules 13a-15(c) and 15d-15(e)) as of the end of the periods covered by this report.

Based upon the evaluation, our Chief Financial Officer who also serves as our principal financial and accounting officer has concluded

that the disclosure controls and procedures as of December 31, 2019 were not effective due to the material weaknesses identified

address these material weaknesses, management performed additional procedures to ensure the financial statements included herein

fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented.

maintain 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”)) that are designed to ensure that information required to be disclosed in our reports filed

pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules,

regulations and related forms, and that such information is accumulated and communicated to our management, including our Chief Executive

Officer and President, and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control

system are met.

Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that

all control issues, if any, within an organization have been detected.

Accordingly, our disclosure controls and procedures are designed

to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met.

management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our

disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of December 31, 2020.

on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of December 31, 2020, our disclosure

controls and procedures were not effective because of the material weakness in internal control over financial reporting (“ICFR”)

described below.

Notwithstanding

such material weakness in ICFR, our management, including our Chief Executive Officer and Chief Financial Officer, has concluded that

our consolidated financial statements as of and for the year ended December 31, 2020 and our restated consolidated balance sheet, restated

consolidated statement of operations, restated consolidated statement of changes in shareholders’

equity and restated consolidated

statement of cash flows as of and for the year ended December 31, 2019, present fairly, in all material respects, our financial

position, results of our operations and our cash flows for the periods presented in this Annual Report on Form 10-K, in conformity with

Management’s

Report on Internal Control over Financial Reporting.

management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company.

Our internal control system was designed to, in general, provide reasonable assurance to the Company’s management and board

regarding the preparation and fair presentation of published financial statements, but because of the 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.

management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2019.

The framework used by management in making that assessment was the criteria set forth in the documents entitled “2013 Internal

Controls –

Integrated Framework”

issued by the Committee of Sponsoring Organizations of the Treadway Commission.

on that assessment, management concluded that, during the period covered by this report, such internal controls and procedures

were not effective as of December 31, 2019 and the material weaknesses in internal controls over financial reporting (‘ICFR”)

existed as more fully described below.

material weakness is a deficiency, or a combination of deficiencies, within the meaning of Public Company Accounting Oversight

Board (“PCOAB”) Audit Standard No.

5, in internal control over financial reporting, such that there is a reasonable

possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or

detected on a timely basis.

Management has identified the following material weaknesses, which have caused management to conclude

that as of December 31, 2019 our ICFR were not effective at the reasonable assurance level:

segregation of duties, oversight of work performed and lack of compensating controls in our finance and accounting functions

due to limited personnel.

is responsible for establishing and maintaining adequate ICFR (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).

ICFR includes controls and procedures designed to provide reasonable assurance regarding the reliability of financial reporting and the

preparation of financial statements for external reporting purposes in accordance with GAAP.

management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined

in the Securities Exchange Act of 1934 Rule 13a-15(f).

Our management, with the participation of our Chief Executive Officer and President,

and our Chief Financial Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting based

on the 2013 Internal Control –

Integrated Framework (the “COSO Framework”).

Based on this evaluation under the COSO

Framework, management concluded that, as of December 31, 2020, our internal control over financial reporting was not effective because

of the material weaknesses described below.

material weakness is a deficiency, or a combination of deficiencies, within the meaning of Public Company Accounting Oversight Board

(“PCAOB”) Audit Standard No.

5, in internal control over financial reporting, such that there is a reasonable possibility

that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely

Management has identified the following material weaknesses, which have caused management to conclude that as of December 31,

2020 our ICFR were not effective at the reasonable assurance level:

segregation of duties, oversight of work performed and lack of compensating controls in our finance and accounting functions due

to limited personnel.

Company’s systems that impact financial information and disclosures have ineffective information technology controls.

controls surrounding revenue recognition, to ensure that all material transactions and developments impacting the financial

statements are reflected and properly recorded;

evaluation of 1) the disclosure controls and procedures and 2) internal control over financial reporting was not sufficiently

comprehensive due to limited personnel.

controls surrounding revenue recognition, to ensure that all material transactions and developments impacting the financial statements

are reflected and properly recorded;

evaluation of 1) the disclosure controls and procedures and 2) internal control over financial reporting was not sufficiently comprehensive

due to limited personnel.

controls and procedures in area of review and preparation of Form 10-K and other filings on a timely basis.

controls surrounding information provided to third party valuation reports in connection with acquisitions to ensure that

the financial information is accurate and free from misstatements.

calculation of the provision for income taxes and related deferred income taxes were not calculated correctly in accordance

with ASC 740, Income Taxes.

Management needs to gain a more precise understanding of the components of the income tax provision

and deferred income taxes and monitor the differences between the income tax basis and financial reporting basis of assets

and liabilities to effectively reconcile the deferred income tax balances.

Notwithstanding

the existence of these material weaknesses in our internal control over financial reporting, management believes that the consolidated

financial statements included in this Form 10-K present in all material respects our financial condition, results of operations

and cash flows for the periods presented.

controls surrounding information provided to third party valuation reports in connection with acquisitions to ensure that the financial

information is accurate and free from misstatements.

calculation of the provision for income taxes and related deferred income taxes were not calculated correctly in accordance with

ASC 740, Income Taxes.

Management needs to gain a more precise understanding of the components of the income tax provision and deferred

income taxes and monitor the differences between the income tax basis and financial reporting basis of assets and liabilities to

effectively reconcile the deferred income tax balances.

Control Remediation Efforts.

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has leveraged and will continue to leverage experienced consultants to assist with ongoing GAAP, U.S.

Securities, and Exchange

Commission compliance requirements.

We have expanded our finance department through the hiring of a certified public accountant

to strengthen the segregation of duties, internal controls and enhance our current staff.

Management will further expand the

accounting and finance function by hiring appropriate staff to resolve this material weakness in 2020.

of duties will be analyzed and adjusted Company-wide as part of the internal controls implementation and documentation of

Securities, and Exchange Commission

compliance requirements.

We have expanded our finance department through the hiring of a certified public accountant to strengthen

the segregation of duties, internal controls and enhance our current staff.

Management will further expand the accounting and finance

function by hiring appropriate staff to resolve this material weakness in 2021.

of duties will be analyzed and adjusted Company-wide as part of the internal controls’

implementation and documentation of

those controls and procedures that is expected to commence in 2021.

addition, we expect that the discontinuation of the E-Commerce segment will provide the opportunity for the finance department

to focus on enhancing the efficiency and effectiveness of the department functions and reporting, allowing the staff to focus

on one segment and revenue stream.

addition, we expect that the discontinuation of the E-Commerce segment will provide the opportunity for the finance department to

focus on enhancing the efficiency and effectiveness of the department functions and reporting, allowing the staff to focus on one

segment and revenue stream.

Company plans on evaluating various accounting systems to enhance our system controls.

company plans to bring in consultants as needed to assist with the preparation of financial reports to be filed and ensure

filings are made on a timely basis.

Company plans to bring in consultants as needed to assist with the preparation of financial reports to be filed and ensure filings

are made on a timely basis.

Company plan to implement controls related to the information to be provided to third party valuation firms to ensure information

is accurate and free from misstatements.

Company will provide additional training and development classes for accounting and finance staff regarding current changes

in accounting for income taxes and deferred income taxes, pursuant to ASC 740, to enhance their current skills and understanding

of the components of deferred taxation and accounting for income taxes.

will continue to monitor and evaluate the effectiveness of our internal control over financial reporting on an ongoing basis and

are committed to taking further action and implementing additional enhancements or improvements, as necessary and as funds allow.

We do not, however, expect that the material weaknesses in our disclosure controls will be remediated until such time as we have

added to our accounting and administrative staff allowing improved internal control over financial reporting.

Company will provide additional training and development classes for accounting and finance staff regarding current changes in accounting

for income taxes and deferred income taxes, pursuant to ASC 740, to enhance their current skills and understanding of the components

of deferred taxation and accounting for income taxes.

will continue to monitor and evaluate the effectiveness of our ICFR on an ongoing basis and are committed to taking further action and

implementing additional enhancements or improvements, as necessary and as funds allow.

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 ICFR due to the exemption from such requirements established by rules of the SEC for smaller

reporting companies.

in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting

during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control

over financial reporting.

stated, the steps taken in remediation were the changes in the Company’s ICFR (as defined in Rules 13a-15(f) and 15d-15(f) under

the Exchange Act) occurred during the quarter ended December 31, 2020 that has materially affected, or are reasonably likely to materially

affect, the Company’s internal control over financial reporting.

OTHER INFORMATION

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Officers and Directors

Chairman of the Board of Directors, Chief Executive Officer

President, Chief Operating Officer-Bright Mountain Media, Inc.

Chairman of the Board of Directors

Edward Cabanas*

Chief Financial Officer

Director, Chief Operating Officer-Bright Mountain, LLC

Director, Chief Executive Officer- Bright Mountain, LLC

Joey Winshman

Director, Chief Marketing Officer of S&W

Director, Chief Marketing Officer - Oceanside

Pamela Parizek

Harry Schulman

Jack Dunleavy

Kip Speyer has been our CEO, President and Chairman of the Board since May 2010 and has been serving as our principal

financial and accounting officer on an interim basis.

From 2005 to 2009 Mr.

Speyer served as a director, the president and

chief executive officer of Speyer Door and Window, LLC, which was sold to Haddon Windows, LLC (SecuraSeal, LLC, AccuWeld

Corporation) in December 2009.

Gretchen Tibbits

Named Executive Officer (“NEO”)

Kip Speyer has been our CEO, President and Chairman of the Board since May 2010.

During December 2021, he has stepped down as

CEO and transitioned Mr.

Matthew Drinkwater as the Company’s new CEO (see Subsequent Events Note 20 for further information).

2005 to 2009 Mr.

Speyer served as a director, the president and chief executive officer of Speyer Door and Window, LLC, which was sold

to Haddon Windows, LLC (SecuraSeal, LLC, AccuWeld Corporation) in December 2009.

From October 2002 to May 2005 Mr.

Speyer had been a private investor.

Speyer was president

and chief executive officer of Intelligent Systems Software, Inc.

from October 2000 through June 2002, whereby Mr.

became chief executive officer of ICAD, Inc.

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

Speyer had been a

private investor.

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

from October 2000 through

June 2002, whereby Mr.

Speyer became chief executive officer of ICAD, Inc.

NASDAQ) which was a combination of ISSI and Howtek,

(HOWT:NASDAQ).

1 unchanged sentence

NASDAQ) from 1998 to 1999.

Corporation changed its name to NetOptix (OPTX:

Galileo Corporation changed its name to NetOptix (OPTX:

NASDAQ) and was merged with Corning Corporation (GLW:

NYSE) in a stock

purchase in May 2000.

NYSE) in a stock purchase

From 1996 to 1998 Mr.

Speyer was the president of Leisegang Medical Group, three medical device

companies owned by Galileo Corporation.

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

Prior to joining Galileo Corporation, Mr.

Speyer founded Leisegang Medical, Inc.

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

and served as its president and chief executive

officer from 1986 to 1996.

Leisegang Medical, Inc.

was a company specializing in

medical devices for women’s health.

Speyer is a graduate of Northeastern University, Boston, Massachusetts, where

he earned a Bachelor of Science Degree in Business Administration in 1972.

Kip Speyer is active in many local

charities and is the father of Mr.

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

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

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

Speyer, our Chief Operating Officer –

Bright Mountain, LLC and a director.

Speyer’s experience as the Chief Executive Officer and/or Chairman of the Board of Directors of other public

companies were factors considered by our board of directors in concluding that he should be serving as a director of our

Peters is a founder, Chairman and Chief Executive Officer of Inform, Inc.

Upon the acquisition of NDN in November 2019

by the Company, Mr.

Peters became the President and Chief Operating Officer of the Bright Mountain Media, Inc.

served as the President, CEO, and Board Member of Internap Network Services Corporation (NASDAQ:

INAP) and in the 1990s, Mr.

was Vice President of International Operations for Advanced Fibre Communications (NASDAQ:

TLAB) and Adtran (NASDAQ:

he led global expansion to over 40 countries.

For nearly a decade, he held increasingly senior positions at AT&T Network Systems,

the last being Managing Director of the Middle East and Africa, headquartered in Cairo, Egypt.

Peters conducted business for

AT&T in over 60 countries and was responsible for directing the telecommunications recovery and reconstruction efforts in

the Persian Gulf Region during and after the Gulf War.

Peters holds multiple issued patents (No.

8,364,693, No.

8,849,815) focused on methods of searching, sorting and displaying video clips and sound files by relevance.

Since November

Peters led a partnership with the National Center of Missing and Exploited Children (www.missingkids.com).

relationship, NDN has assisted the Center in finding over 100 children.

Peters serves on the Board of Reggie Jackson’s

October Foundation.

Peters has served on the alumni board of the Terry School of Business at the University of Georgia,

the Technology Association of Georgia Board, the Georgia Chamber of Commerce Board, and the Advisory Board of the Metro Atlanta

Peters earned a Bachelor of Business Administration in Finance & Accounting from the University of Georgia and

an MBA from Thunderbird.

Peters has continued his educational efforts in executive programs at Harvard, Stanford and Columbia

Universities.

Bergman has served as our Chief Financial Officer since July 2019.

Prior to his appointment, from June 24, 2019 until

July 1, 2019 he provided financial and accounting services to our company on a consulting basis.

From December 2018 until May

Bergman served as Vice President Finance of Greenlane Holdings, Inc.

GNLN) where he oversaw the finance and

accounting department for a company in the wholesale and distribution industry.

From February 2018 until December 2018 he served

as Controller for Boston Proper LLC, a women’s online and catalog retailer, where he oversaw the finance and accounting

From 2013 until January 2018 Mr.

Bergman served as Controller for Woodfield Distribution, LLC, known as WDSrx, a leading

logistics services provider within the pharmaceutical industry specializing in prescription and over-the-counter medications and

related categories.

From 2011 until 2013 he served as Vice President of Finance for Latitude Solutions, Inc.

company in the water remediation industry, transitioning into Director of Finance for Walking Tree Farms, a privately-held family

office owned by select board members of Latitude Solutions, Inc.

Speyer’s experience as the Chief Executive Officer and/or Chairman of the Board of Directors

of other public companies were factors considered by our board of directors in concluding that he should be serving as a director of

Cabanas was appointed Chief Financial Officer on September 1, 2020.

Cabanas, age 49 served as the Vice President-Finance

for ACAMS, L.L.C.

(Association of Certified Anti-Money Laundering Specialists), a wholly owned subsidiary of Adtalem Global Education

ATGE) where he oversaw the finance function for the company and partnered with the operation focusing on sales management, international

expansion and product development.

From February 2017 until August 2019 Mr.

Cabanas served as Senior Vice President, Chief Financial

Officer for the connectivity segment of Global Eagle Entertainment (NASDAQ:

ENT) where he oversaw the global finance and accounting functions

for a leading provider of satellite-based connectivity to the air, sea and remote land markets.

From 2001 until 2016 Mr.

Bergman was an Audit Manager with Mallah

Furman & Co., a PCAOB-registered accounting firm which was acquired by EisnerAmper LLP in 2015, where he planned, performed

and supervised financial statement audits in accordance with GAAP, GAAS and the Sarbanes Oxley Act of 2002.

From 2005 until 2009

he was a Senior Auditor with Weinberg & Company, P.A., a PCAOB-registered accounting firm, where he planned and performed

financial statement audits in accordance with GAAP, GAAS and the Sarbanes Oxley Act of 2002.

Bergman began his accounting

career in 2000 with Deloitte & Touche LLP, a national accounting firm, serving as a Staff Associate until 2002 and a Senior

Associate from 2002 until 2005.

Since 2004 Mr.

Bergman, a certified public accountant, has served as an Adjunct Professor at Florida

Atlantic University and Millennia Atlantic University, teaching courses in Accounting Theory I, II and III, Managerial Accounting,

Advanced Accounting Information Systems and Accounting Capstone.

From 2003 to 2005 he was also a facilitator for Deloitte &

Touche LLP’s national and local training seminars.

Bergman received a B.S.

in Finance from the University of Tampa and

a Master of Accounting from the University of Miami.

Speyer has been a member of the board of directors and an employee of our company since January 2011, currently serving

as our Chief Operating Officer –

Cabanas served

in various senior finance and business development positions at Laureate Education (NASDAQ:

Cabanas received a BS in Public

Accounting from Fordham University and obtained his CPA license (currently inactive) from The State of New York.

Speyer has been a member of the board of directors and an employee of our company since January 2011, currently serving as

our Chief Executive Officer –

Bright Mountain, LLC.

Speyer is responsible for the content and operations of our owned

For over the previous five and one-half years, he has been responsible for the integration of all website organic growth

and acquisitions, including content, design and visitor traffic.

Speyer is responsible for the content and operations of our owned websites

and proprietary ad serving technology.

For over the previous five and one-half years, he has been responsible for the integration

of all website organic growth and acquisitions, including content, design and visitor traffic.

Previously, Mr.

Speyer was our Director of Business Development,

helping locate acquisitions and shaping the website portfolio.

Speyer graduated from Florida State University in 2004 with

a Bachelor of Arts Degree in English Literature.

Speyer was our Director

of Business Development, helping locate acquisitions and shaping the website portfolio.

Speyer graduated from Florida State University

in 2004 with a Bachelor of Arts Degree in English Literature.

Speyer is the son of Mr.

Kip Speyer, our CEO, President and Chairman.

Speyer’s website development experience as well as his marketing experience were factors considered by our board of

directors in concluding that he should be serving as a director of our company.

Kip Speyer, our CEO, President

and Chairman.

Speyer’s website development experience as well as his marketing experience were factors considered by our board

of directors in concluding that he should be serving as a director of our company.

Winshman has been a member of our Board of Directors since August 2019.

Winshman has served as Chief Marketing Officer

of S&W since co-founding the company in February 2015.

Since June 2018 he has also served as Chief Marketing Officer of Lumynox,

a subsidiary of S&W.

Winshman has served as Chief Marketing Officer of

S&W since co-founding the company in February 2015.

Since June 2019 he has also served as Chief Marketing Officer of Lumynox, a subsidiary

Prior to co-founding S&W, from June 2013 until January 2015 Mr.

Winshman was Media Manager for Taptica

International Ltd., now known as T remor International Ltd.

TRMR), a leader in advertising

technologies with operations in more than 60 countries.

Winshman, who is a citizen of both Israel and the U.S., received a

in Business Administration, Management Information Systems, from the University of Vermont.

Winshman was Media Manager for Taptica International

Ltd., now known as T remor International Ltd.

TRMR), a leader in advertising technologies

with operations in more than 60 countries.

Winshman, who is a citizen of both Israel and the U.S., received a B.S.

in Business Administration,

Management Information Systems, from the University of Vermont.

Parizek has been a member of our Board of Directors since October 2020.

over 30 years of experience advising corporate boards, audit committees, c-suite executives and outside counsel on complex accounting,

legal and regulatory matters.

She is a JD/CPA, certified in financial forensics, and previously served in the enforcement division of

Securities and Exchange Commission (SEC) and led the Washington, DC forensic practice of a Big Four accounting firm.

has led numerous investigations involving public companies, private entities and charitable foundations and her findings have been presented

and foreign regulatory authorities –

in compliance with restrictive data protection and privacy regimes around the world.

She has also provided forensic assistance to audit engagement teams on fraud risk, accounting irregularities and alleged illegal acts.

Pamela serves on the Board of Directors of Foundation for a Smoke-Free World and on the Board of Trustees of the National Museum of Women

She previously served on the boards of Global Kids, Inc.

and the SEC Historical Society.

Parizek holds a JD from Northwestern

University School of Law and a BA from Harvard College.

Lichtman has been a member of our board of directors since October 2014.

Lichtman is an attorney practicing law

since 1980, licensed in Illinois and Florida.

He is a founding partner of Berger Singerman LLP since 2001.

Lichtman has been

honored as a two time Lawyer of the Year by Best Lawyers in America, and noted by them for his excellence every year since 2009

in the categories of Complex Business Litigation, Securities Litigation, Bankruptcy Litigation and Commercial Litigation.

also been recognized by Chambers International and received other legal awards from various entities and periodicals.

Lichtman’s

professional experience as an attorney was the factor considered by our board of directors in concluding that he should be serving

as a director of our company.

Lichtman is an attorney practicing law since

1980, licensed in Illinois and Florida.

He is a partner of Berger Singerman LLP since 2001.

Lichtman has been honored as a two-time

Lawyer of the Year by Best Lawyers in America and noted by them for his excellence every year since 2009 in the categories of Complex

Business Litigation, Securities Litigation, Bankruptcy Litigation and Commercial Litigation.

He has also been recognized by Chambers

International and received other legal awards from various entities and periodicals.

Lichtman’s professional experience as

an attorney was the factor considered by our board of directors in concluding that he should be serving as a director of our company.

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

For more than 20 years he has served on multiple

boards including Baird Capital, a private equity firm managing over $3 billion, Hancock Fabrics, Inc., O2 Media, Inc., QEP and

HeZhong International Holdings.

He holds a Master’s degree in International Business from the University of Miami and a

Bachelor’s degree in Business from the University of Dayton.

Dunleavy has been a member of our Board of Directors since March 2020.

Dunleavy is an inactive Certified Public Accountant

spending is career with PricewaterhouseCoopers (PWC).

During his tenure with PWC, he was Chairman of the Finance Committee for

the PWC Global Firm, a Board member of the PWC US Firm, Partner In-Charge of the Consulting Strategic Accounts, Thought Leader

of the Finance and Accounting Practice and Partner In-Charge of the AT&T and Lucent accounts, the largest client engagements

Dunleavy has authored five books on Financial Management and Systems Implementation.

Dunleavy served on the

board of directors of NDN, Inc, prior to the inversion which spun-off MediaHouse.

He has served as a visiting professor at Tuck

School Dartmouth and New York College of Insurance MBA program.

Dunleavy holds a Master’s degree in Business Administration

Accounting from Columbia University, a Bachelor’s degree in English from Forham University, and completed the Executive

Program and Tuck School, Dartmouth.

boards including Baird Capital, a private equity firm managing over $3 billion, Hancock Fabrics, Inc., O2 Media, Inc., QEP and HeZhong

International Holdings.

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

degree in Business from the University of Dayton.

are no family relationships between any of the executive officers and directors other than as set forth above.

Each director is

elected at our annual meeting of shareholders and holds office until the next annual meeting of shareholders, or until his 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, although less

than a quorum exists.

Each director is elected

at our annual meeting of shareholders and holds office until the next annual meeting of shareholders, or until his 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, although less than a quorum exists.

A director elected to fill a vacancy shall serve for the unexpired term of his or her predecessor.

occurring by reason of the removal of directors without cause may only be filled by vote of the shareholders.

departure subsequent to December 31, 2019

March 25, 2020 Richard Rogers and Todd Davenport resigned from our board of directors.

Rogers had been a member of the Board

since July 2013.

Davenport had been a member of the Board since February 2012.

Vacancies occurring by reason of the

removal of directors without cause may only be filled by vote of the shareholders.

Tibbits joined the Board of Directors in February 2021.

Tibbits has over 25 years of experience in management, strategy,

and mergers & acquisitions.

She is an Investment Banker focused on the media & technology and consumer content & commerce

Previously, Ms.

Tibbits served in executive roles at LittleThings, StyleCaster, Hearst, ESPN, and WorkingWomanNetwork.

holds an M.B.A.

in Finance and Management from New York University, where she was a Stern Scholar, and a B.A.

from the University of

She currently chairs the Campaign for the Arts and the Arts Endowment at the University of Virginia and serves on the board

of the Tectonic Theater Project.

Tibbits has no arrangements or understandings with any other person pursuant to which she was appointed as a director and no family relationships

with any director or executive officer of the Company.

Tibbits has no direct or indirect beneficial ownership in the Company’s

common stock or rights to acquire common stock.

structure, independence of directors and risk oversight

Kip Speyer serves as both our Chief Executive Officer and Chairman of our board of directors.

Lichtman, Schulman, and

Dunleavy are considered independent directors within the meaning of Rule 5605 of the NASDAQ Marketplace Rules, but none are considered

a “lead”

independent director.

Kip Speyer serves as our Chairman of our board of directors.

Lichtman, Schulman, Parizek, and Tibbits are considered

independent directors within the meaning of Rule 802 of the NYSE American Company Guide.

is inherent with every business, and how well a business manages risk can ultimately determine its success.

We face a number of

risks, including credit risk, interest rate risk, liquidity risk, operational risk, strategic risk and reputation risk.

is responsible for the day-to-day management of risks we face, while the board, as a whole and through its committees, has responsibility

for the oversight of risk management.

In its risk oversight role, the board of directors has the responsibility to satisfy itself

that the risk management process designed and implemented by management are adequate and functioning as designed.

the chairman of the board meets regularly with management to discuss strategy and the risks facing our company.

Senior management

attends the board meetings and is available to address any questions or concerns raised by the board on risk management and any

other matters.

The chairman of the board and independent members of the board work together to provide strong, independent oversight

of our company’s management and affairs through its standing committees and, when necessary, special meetings of independent

We face a number of risks,

including credit risk, interest rate risk, liquidity risk, operational risk, strategic risk and reputation risk.

Management is responsible

for the day-to-day management of risks we face, while the board, as a whole and through its committees, has responsibility for the oversight

of risk management.

In its risk oversight role, the board of directors has the responsibility to satisfy itself that the risk management

process designed and implemented by management are adequate and functioning as designed.

To do this, the chairman of the board meets

regularly with management to discuss strategy and the risks facing our company.

Senior management attends the board meetings and is available

to address any questions or concerns raised by the board on risk management and any other matters.

The chairman of the board and independent

members of the board work together to provide strong, independent oversight of our company’s management and affairs through its

standing committees and, when necessary, special meetings of independent directors.

of our board of directors

May 2015, our board of directors established a standing Audit Committee and a standing Compensation Committee.

In August 2016 our

board of directors established a standing Corporate Governance and Nominating Committee.

In August 2016, our board

of directors established a standing Corporate Governance and Nominating Committee.

Each committee has a written charter.

The charters are available on our website at www.brightmountainmedia.com.

All committee members are required to be independent

are available on our website at www.brightmountainmedia.com.

All committee members are required to be independent directors.

concerning the current membership and function of each committee is as follows:

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Harry Schulman

Jack Dunleavy

Pamela Parizek

Gretchen Tibbits

Audit Committee assists the board in fulfilling its oversight responsibility relating to:

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compliance with legal and regulatory requirements;

qualifications and independence of our independent registered public accountants.

Audit Committee is composed of three directors, each of whom has been determined by the board of directors to be independent within

appointment, compensation, and oversight of our independent registered public accountants.

Audit Committee is composed of two directors, each of whom has been determined by the board of directors to be independent within

the meaning of the NYSE American Company Guide.

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Compensation Committee assists the board in:

in executive session at which our Chief Executive Officer is not present, the compensation for our CEO or President, if such

person is acting as the CEO;

in executive session at which our Chief Executive Officer is not present, the compensation for our CEO or President, if such person

is acting as the CEO;

its responsibilities for approving and evaluating our officer compensation plans, policies and programs;

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our stock compensation plans.

Compensation Committee is charged with ensuring that our compensation programs are competitive, designed to attract and retain

highly qualified directors, officers and employees, encourage high performance, promote accountability and assure that employee

interests are aligned with the interests of our shareholders.

The Compensation Committee is composed of two directors, both of

whom have been determined by the board of directors to be independent within the meaning of the NYSE American Company Guide.

Compensation Committee did not meet in 2019.

Compensation Committee is charged with ensuring that our compensation programs are competitive, designed to attract and retain highly

qualified directors, officers, and employees, encourage high performance, promote accountability and assure that employee interests are

aligned with the interests of our shareholders.

The Compensation Committee is composed of two directors, both of whom have been determined

by the board of directors to be independent within the meaning of the NYSE American Company Guide.

The Compensation Committee did not

meet in 2020.

Governance and Nominating Committee

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the composition of the board;

and recommends to the board, and annually reviews, a set of effective corporate governance policies and procedures applicable

to our company;

and recommends to the board, and annually reviews, a set of effective corporate governance policies and procedures applicable to

reviews the overall corporate governance of the Corporation and recommends improvements to the board as necessary.

purpose of the Corporate Governance and Nominating Committee is to assess the performance of the board and to make recommendations

to the board from time to time, or whenever it shall be called upon to do so, regarding nominees for the board and to ensure our

compliance with appropriate corporate governance policies and procedures.

The Corporate Governance and Nominating Committee is

composed of two directors, both of whom have been determined by the board of directors to be independent within the meaning of

the NYSE American Company Guide.

The Corporate Governance and Nominating Committee did not meet in 2019.

who would like to propose a candidate may do so by submitting the candidate’s name, resume and biographical information

to the attention of our Corporate Secretary.

All proposals for nomination received by the Corporate Secretary will be presented

to the Corporate Governance and Nominating Committee for appropriate consideration.

It is the policy of the Corporate Governance

and Nominating Committee to consider director candidates recommended by shareholders who appear to be qualified to serve on our

board of directors.

The Corporate Governance and Nominating Committee may choose not to consider an unsolicited recommendation

if no vacancy exists on the board of directors and the committee does not perceive a need to increase the size of the board of

In order to avoid the unnecessary use of the Corporate Governance and Nominating Committee’s resources, the committee

will consider only those director candidates recommended in accordance with the procedures set forth below.

To submit a recommendation

of a director candidate to the Corporate Governance and Nominating Committee, a shareholder should submit the following information

in writing, addressed to the Corporate Secretary of Bright Mountain at our main office:

purpose of the Corporate Governance and Nominating Committee is to assess the performance of the board and to make recommendations to

the board from time to time, or whenever it shall be called upon to do so, regarding nominees for the board and to ensure our compliance

with appropriate corporate governance policies and procedures.

The Corporate Governance and Nominating Committee is composed of two directors,

both of whom have been determined by the board of directors to be independent within the meaning of the NYSE American Company Guide.

The Corporate Governance and Nominating Committee met three times in 2020.

who would like to propose a candidate may do so by submitting the candidate’s name, resume and biographical information to the

attention of our Corporate Secretary.

All proposals for nomination received by the Corporate Secretary will be presented to the Corporate

Governance and Nominating Committee for appropriate consideration.

It is the policy of the Corporate Governance and Nominating Committee

to consider director candidates recommended by shareholders who appear to be qualified to serve on our board of directors.

The Corporate

Governance and Nominating Committee may choose not to consider an unsolicited recommendation if no vacancy exists on the board of directors

and the committee does not perceive a need to increase the size of the board of directors.

In order to avoid the unnecessary use of the

Corporate Governance and Nominating Committee’s resources, the committee will consider only those director candidates recommended

in accordance with the procedures set forth below.

To submit a recommendation of a director candidate to the Corporate Governance and

Nominating Committee, a shareholder should submit the following information in writing, addressed to the Corporate Secretary of Bright

Mountain at our main office:

name and address of the person recommended as a director candidate;

information relating to such person that is required to be disclosed in solicitations of proxies for election of directors

pursuant to Regulation 14A under the Exchange Act;

written consent of the person being recommended as a director candidate to be named in the proxy statement as a nominee and

to serve as a director if elected;

to the person making the recommendation, the name and address, as they appear on our books, of such person, and number of

shares of our common stock owned by such person;

provided, however , that if the person is not a registered holder of

our common stock, the person should submit his or her name and address along with a current written statement from the record

holder of the shares that reflects the recommending person’s beneficial ownership of our common stock;

statement disclosing whether the person making the recommendation is acting with or on behalf of any other person and, if

applicable, the identity of such person.

information relating to such person that is required to be disclosed in solicitations of proxies for election of directors pursuant

to Regulation 14A under the Exchange Act;

written consent of the person being recommended as a director candidate to be named in the proxy statement as a nominee and to serve

as a director if elected;

to the person making the recommendation, the name and address, as they appear on our books, of such person, and number of shares

of our common stock owned by such person;

provided, however , that if the person is not a registered holder of our common stock,

the person should submit his or her name and address along with a current written statement from the record holder of the shares

that reflects the recommending person’s beneficial ownership of our common stock;

statement disclosing whether the person making the recommendation is acting with or on behalf of any other person and, if applicable,

the identity of such person.

of Ethics and Conduct

have adopted a Code of Ethics and Conduct which applies to our board of directors, our executive officers and our employees.

Code of Ethics and Conduct outlines the broad principles of ethical business conduct we adopted, covering subject areas such as:

of Ethics and Conduct outlines the broad principles of ethical business conduct we adopted, covering subject areas such as:

opportunities;

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with applicable laws.

copy of our Code of Ethics and Conduct is available without charge, to any person desiring a copy, by written request to us at

our principal offices at 6400 Congress Avenue, Suite 2050, Boca Raton, Florida 33487.

copy of our Code of Ethics and Conduct is available without charge, to any person desiring a copy, by written request to us at our principal

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

December 2017, our board of directors adopted a compensation policy for our independent directors for 2019.

Under the terms of

the 2018 director compensation policy, independent directors will receive $500 in cash for each board meeting attended and

members of any committee of the board receive an additional $250 per committee meeting attended.

In November 2019, our board

of directors changed the compensation policy to compensate the directors 2,500 stock options for each meeting attended.

non-independent directors are not compensated for their services.

following table provides information concerning the compensation paid to our independent directors for their services as members

of our board of directors for 2018.

The information in the following table excludes any reimbursement of out-of-pocket travel

and lodging expenses which we may have paid:

incentive plan

compensation ($)

Compensation($)

Joey Winshman

Jack Dunleavy

Under the terms of the 2019

director compensation policy, independent directors will receive $500 in cash for each board meeting attended and members of any committee

of the board receive an additional $250 per committee meeting attended.

In November 2019, our board of directors changed the compensation

policy to compensate the directors 2,500 stock options for each meeting attended.

Our non-independent directors are not compensated for

their services.

At the end of 2020, our board of directors changed the compensation policy to compensate the independent directors

with 45,000 restricted shares per year on a pro-rata basis, based on their start date.

following table provides information concerning the compensation paid to our independent directors for their services as members of our

board of directors for 2020.

The information in the following table excludes any reimbursement of out-of-pocket travel and lodging expenses

which we may have paid:

Harry Schulman

Pamela Parizek

Charles Lichtman

_____________

Gretchen Tibbits (1)

Tibbits joined the board in February 2021.

She did not earn and was not paid any compensation

during the 2020 year.

with Section 16(a) of the Exchange Act

16(a) of the Exchange Act of 1934, as amended, requires our executive officers and directors, and persons who beneficially own

more than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission initial statements

of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common shares and

other equity securities, on Forms 3, 4 and 5 respectively.

Executive officers, directors and greater than 10% shareholders are

required by the Securities and Exchange Commission regulations to furnish us with copies of all Section 16(a) reports they file.

Based on our review of the copies of such forms received by us, all executive officers, directors and persons holding greater

than 10% of our issued and outstanding stock have filed the required reports in a timely manner during 2018, except for Mr.

Speyer who failed to timely file four Form 4s, three of which each reported one acquisition and the third which reported one disposition

The delinquent Form 4s have subsequently been filed.

16(a) of the Exchange Act of 1934, as amended, requires our executive officers and directors, and persons who beneficially own more than

10% of a registered class of our equity securities to file with the Securities and Exchange Commission initial statements of beneficial

ownership, reports of changes in ownership and annual reports concerning their ownership of our common shares and other equity securities,

on Forms 3, 4 and 5 respectively.

Executive officers, directors and greater than 10% shareholders are required by the Securities and

Exchange Commission regulations to furnish us with copies of all Section 16(a) reports they file.

Based on our review of the copies of

such forms received by us, all executive officers, directors and persons holding greater than 10% of our issued and outstanding stock

have filed the required reports in a timely manner during 2020, except for Mr.

Kip Speyer who failed to timely file one Form 4, related

to one disposition by gift.

The delinquent Form 4 has subsequently been filed.

EXECUTIVE COMPENSATION

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at December 31, 2020;

to two additional individuals for whom disclosure would have been required but for the fact that the individual was not serving

as an executive officer at December 31, 2019.

definitional purposes, these individuals are sometimes referred to as the “named executive officer.”

The amounts included

in the “Stock Awards”

column represent the aggregate grant date fair value of the shares of our common stock, computed

in accordance with ASC Topic 718.

to two additional individuals for whom disclosure would have been required but for the fact that the individual was not serving as

an executive officer at December 31, 2020.

Compensation Table

and principal position

Name and principal

Awards ($) (1)

incentive plan compensation ($)

Non-qualified

Chief Executive Officer

Chief Operating Officer

Alan Bergman,

Chief Financial Officer

Chief Operating Officer –

deferred compensation earnings ($)

other compensation ($)

Kip Speyer, Chairman of the Board (2)

Emily Smith, Chief Executive Officer –

Wild Sky Media (3)

Todd Speyer, Chief Executive Officer –

Bright Mountain, LLC

Edward Cabanas, Chief Financial Officer (4)

Alan Bergman, Former Chief Financial Officer (5)

Greg Peters, Former President and Chief Operating Officer (6)

amounts included in the “Stock Awards”

column represent the aggregate grant date fair value of the shares of our common

stock, computed in accordance with ASC Topic 718.

amount of compensation paid to Mr.

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respectively.

agreement with our named executive officers

Effective December 1, 2021, Mr.

Kip Speyer has transitioned Chief Executive Officer role into Chairman of the Board.

Smith joined the Company in connection with the Wild Sky acquisition on June 1, 2020.

Cabanas joined the Company as its Chief Financial Officer on September 1, 2020.

of December 31, 2020, Mr.

Bergman is no longer an officer of the Company.

Peters resigned as the President and Chief Operating Officer of the Company effective December 31, 2020.

agreement with our named executive and other executive officers

have entered into an Executive Employment Agreement with W.

Kip Speyer, our Chief Executive Officer, with an effective date of

June 1, 2014.

Under the terms of this agreement, he is serving as Chairman of the Board, Chief Executive Officer and President

of our company.

On April 1, 2017, we entered into an amendment to his employment agreement which extended the term for an additional

three years, set his base compensation at $165,000 per annum and provided the ability to earn a performance bonus beginning for

2017 based upon annual revenues above $3,000,000 per year and the certain earnings before interest, taxes and depreciation, or

“EBITDA,”

goals as follows:

Kip Speyer, our Chairman of the Board, with an effective date of June 1,

Under the terms of this agreement, he is serving as Chairman of the Board, Chief Executive Officer and President of our company.

On April 1, 2017, we entered into an amendment to his employment agreement which extended the term for an additional three years, set

his base compensation at $165,000 per annum and provided the ability to earn a performance bonus beginning for 2017 based upon annual

revenues above $3,000,000 per year and the certain earnings before interest, taxes and depreciation, or “EBITDA,”

(i) for annual revenues of $3,000,000 to $3,500,000, a bonus of 25% of his then base salary;

(ii) for annual revenues of $3,500,001 to $4,000,000 and a minimum EBITDA of $100,000, a bonus of 40% of his then base salary;

(iii) for annual revenues of $4,000,0001 to $4,500,000 and a minimum EBITDA of $150,000, a bonus of 65% of his then base salary;

and (iv) for annual revenues of $4,500,001 or greater and a minimum EBITDA of $175,000, a bonus of 80% of this then base salary.

Effective April 1, 2020, we entered into an amendment of his employment agreement to adjust his compensation to an annual rate

of $325,000 and remove the performance bonus structure.

(ii) for annual revenues of $3,500,001

to $4,000,000 and a minimum EBITDA of $100,000, a bonus of 40% of his then base salary;

(iii) for annual revenues of $4,000,0001 to $4,500,000

and a minimum EBITDA of $150,000, a bonus of 65% of his then base salary;

and (iv) for annual revenues of $4,500,001 or greater and a

minimum EBITDA of $175,000, a bonus of 80% of this then base salary.

Effective April 1, 2020, we entered into an amendment of his employment

agreement to adjust his compensation to an annual rate of $325,000 and remove the performance bonus structure.

agreement with Mr.

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to pay his beneficiary or estate an amount equal to one-year base salary plus any earned bonus at the time of his death.

event the agreement is terminated as a result of his disability, as defined in the agreement, he is entitled to continue to receive

his base salary for a period of one year.

We are also entitled to terminate the agreement either with or without case, and he

is entitled to voluntarily terminate the agreement upon one year’s notice to us.

In the event of a termination by us for

cause, as defined in the agreement, or voluntarily by Mr.

Speyer, we are obligated to pay him the base salary through the date

of termination.

In the event we terminate the agreement without cause, we are obligated to give him one years’

our intent to terminate and, at the end of the one-year period, pay an amount equal to two times his annual base salary together

with any bonuses which may have been earned as of the date of termination.

A constructive termination of the agreement will also

occur if we materially breach any term of the agreement or if a successor to our company fails to assume our obligations under

the agreement is terminated as a result of his disability, as defined in the agreement, he is entitled to continue to receive his base

salary for a period of one year.

We are also entitled to terminate the agreement either with or without case, and he is entitled to voluntarily

terminate the agreement upon one year’s notice to us.

In the event of a termination by us for cause, as defined in the agreement,

or voluntarily by Mr.

Speyer, we are obligated to pay him the base salary through the date of termination.

In the event we terminate

the agreement without cause, we are obligated to give him one years’

notice of our intent to terminate and, at the end of the one-year

period, pay an amount equal to two times his annual base salary together with any bonuses which may have been earned as of the date of

A constructive termination of the agreement will also occur if we materially breach any term of the agreement or if a successor

to our company fails to assume our obligations under Mr.

Speyer’s employment agreement.

In that event, he will be entitled to the same compensation as if we terminated the agreement

without cause.

The employment agreement contains customary non-compete and confidentiality provisions.

We have also agreed to

indemnify Mr.

Speyer pursuant to the provisions of our amended and restated articles of incorporation and amended and restated

have entered into an Executive Employment Agreement with Greg Peters, our Chief Operating Officer and President, with an effective

date of April 1, 2020.

The employment contract is for a three year period and set his annual compensation at $325,000.

The agreement

Peters will terminate upon his death or disability.

In the event we terminate the agreement without cause, we are obligated

to give him one years’

notice of our intent to terminate and, at the end of the one-year period, pay an amount equal to

two times his annual base salary together with any bonuses which may have been earned as of the date of termination.

A constructive

termination of the agreement will also occur if we materially breach any term of the agreement.

The employment agreement contains

customary non-compete and confidentiality provisions.

In that event, he will be entitled to the

same compensation as if we terminated the agreement without cause.

The employment agreement contains customary non-compete and confidentiality

We have also agreed to indemnify Mr.

Peters pursuant to the provisions of

our amended and restated articles of incorporation and amended and restated by-laws.

Speyer pursuant to the provisions of our amended and restated articles of incorporation

and amended and restated by-laws.

Effective December 1, 2021, Mr.

Kip Speyer has transitioned Chief Executive Officer role into Chairman

of the Board.

are not a party to an employment agreement with Mr.

Alan Bergman.

His compensation is determined by the board of directors, based

His compensation is determined by the compensation committee, based

upon industry norms.

Todd Speyer is Mr.

Kip Speyer’s son.

Todd Speyer’s compensation may be changed from time to

time at the discretion of the compensation committee of the board of directors.

are not a party to an employment agreement with Mr.

His compensation is determined by Mr.

Kip Speyer, our Chief

Executive Officer, based upon industry norms.

Kip Speyer is Mr.

Todd Speyer’s father.

Todd Speyer’s

compensation may be changed from time to time at the discretion of the compensation committee of the board of

His compensation is determined by the board of directors based upon industry

Cabanas’

compensation may be changed from time to time at the discretion of the compensation committee of the board

of directors.

Emily Smith has an employment

agreement which was assigned to Bright Mountain per the acquisition of CL Media Holdings, LLC (d/b/a/ Wild Sky Media) which occurred

during June 2020.

The agreement is dated August 15, 2019, subsequently amended on September 9, 2019.

Smith would be the Chief Executive

Officer of Wild Sky Media and earn an annual salary of $400,000, be eligible for an annual discretionary bonus, and be eligible for-profit

participation.

In case of termination, there is a 6-month severance clause, including continued benefits, if applicable, through the

6-month period.

During April 2020, Ms.

Smith accepted a reduction in pay to a base salary of $300,000 per year, which is still in effect

as of this writing.

December 31, 2020, the Company accepted the resignation of Mr.

Gregory Peters as its President and Chief Operating Officer and a Director

of the Company.

Effective January 1, 2021, the Board of Directors approved a Consulting Agreement with Greg Peters (“Peters Consulting

Agreement”).

The Peters Consulting Agreement replaced Mr.

Peters existing Employment Agreement.

The Peters Consulting Agreement

will expire March 31, 2023 and will pay Mr.

Peters $27,083 per month and he will provide up to 20 hours per week on matters mutually

agreed to between Mr.

Peters and the Company’s Chairman of the Board.

Peters will not participate in the Company’s benefit

programs and he is not entitled to any additional reimbursements except agreed out-of-pocket business expenses.

Peters may work for

others provided such entities do not compete with the business of the Company.

The above represents a summary of Mr.

Peters’

the complete Peters Consulting Agreement is filed as Exhibit 10.30 to this Annual Report on Form 10-K.

equity awards at fiscal year-end

following table provides information concerning unexercised stock options, stock that has not vested and equity incentive plan

awards for each named executive officer outstanding as of December 31, 2019, together with unexercised stock options, stock that

has not vested and equity incentive plan awards for each of our other executive officers outstanding as of December 31, 2019:

of Securities

following table provides information concerning unexercised stock options, stock that has not vested and equity incentive plan awards

for each named executive officer outstanding as of December 31, 2020, together with unexercised stock options, stock that has not vested

and equity incentive plan awards for each of our other executive officers outstanding as of December 31, 2020:

OPTION AWARDS

Number of Securities

Unexercised Options

Number of Securities

Unexercised Options

Unexercisable

Incentive Plan

Exercise Price

Expiration Date

of Stock That

Not Vested (#)

Value of Shares

Equity Incentive Plan

Securities Underlying

Unexercised Unearned

Option Exercise Price

Option Expiration Date

Number of Shares or

Units of Stock That

Incentive Plan

Shares, Units

Other Rights that

Incentive Plan

Shares, Units

Other Rights That

Have Not Vested (#)

Market Value of Shares

or Units of Stock That

Have Not Vested

Equity Incentive Plan

Unearned Shares, Units

or Other Rights that

Have Not Vested

Equity Incentive Plan

Payout Value of

Unearned Shares, Units

or Other Rights That

Have Not Vested

Edward Cabanas

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

May 13, 2020, we had 108,576,295 shares of our common stock issued and outstanding.

The following table sets forth information

regarding the beneficial ownership of our common stock as of that date by:

of November 17, 2021 we had 150,619,286 shares of our common stock issued and 149,794,111 shares of our common stock outstanding.

The following table sets forth information regarding the beneficial ownership of our common stock as of that date by:

person known by us to be the beneficial owner of more than 5% of our common stock;

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The percentages

in the table have been calculated on the basis of treating as outstanding for a particular person, all shares of our common stock

outstanding on that date and all shares of our common stock issuable to that holder in the event of exercise of outstanding options,

warrants, rights or conversion privileges owned by that person at that date which are exercisable within 60 days of that date.

Except as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our

common stock owned by them, except to the extent that power may be shared with a spouse.

in the table have been calculated on the basis of treating as outstanding for a particular person, all shares of our common stock outstanding

on that date and all shares of our common stock issuable to that holder in the event of exercise of outstanding options, warrants, rights

or conversion privileges owned by that person at that date which are exercisable within 60 days of that date.

Except as otherwise indicated,

the persons listed below have sole voting and investment power with respect to all shares of our common stock owned by them, except to

the extent that power may be shared with a spouse.

Name of Beneficial Owner

Kip Speyer (1)

Edward Cabanas

Joey Winshman

Harry Schulman

Jack Dunleavy

All directors and executive officers as a group (five persons) (1)(2)(3)

Pamela Parizek

Gretchen Tibbits

All directors and executive officers as a group (eight persons) (1)(2)(3)

Handwerker (4)

(1) The number

of shares of common stock beneficially owned by Mr.

Total Officers, Directors and Affiliates

number of shares of common stock beneficially owned by Mr.

Speyer includes (i) 2,375,000 shares issuable upon the conversion of shares

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of our 10% Series F-3 Convertible Preferred Stock, (v) 1,200,000 shares of our common stock issuable upon the conversion of shares

of our 10% Series A-1 Convertible Preferred Stock, and (vi) 200,000 shares of our common stock issuable upon the conversion of

convertible promissory notes in the aggregate principal amount of $80,000 which have a conversion price of $0.40 per share.

(2) The number

of shares of common stock beneficially owned by Mr.

of our 10% Series A-1 Convertible Preferred Stock, and (vi) 200,000 shares of our common stock issuable upon the conversion of convertible

promissory notes in the aggregate principal amount of $80,000 which have a conversion price of $0.40 per share.

number of shares of common stock beneficially owned by Mr.

Speyer includes 75,000 shares underlying vested stock options.

(3) The number

of shares beneficially owned by Mr.

number of shares beneficially owned by Mr.

Lichtman includes 136,599 shares underlying vested stock options.

(4) The number

of shares beneficially owned by Mr.

number of shares beneficially owned by Mr.

Handwerker includes:

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shares held individually.

Handwerker’s address is 4399 Pine Tree Drive, Boynton Beach, FL 33436.

The number of shares beneficially owned by Mr.

excludes 750,000 shares underlying common stock purchase warrants.

Under the terms of the warrants, Mr.

Handwerker may not exercise

the warrants to the extent such conversion or exercise would cause him, together with his affiliates, to beneficially own a number

of shares of our common stock which would exceed 4.99% of our then outstanding shares of our common stock following such exercise.

number of shares beneficially owned by Mr.

Handwerker excludes 750,000 shares underlying common stock purchase warrants.

Under the terms

of the warrants, Mr.

Handwerker may not exercise the warrants to the extent such conversion or exercise would cause him, together with

his affiliates, to beneficially own a number of shares of our common stock which would exceed 4.99% of our then outstanding shares of

our common stock following such exercise.

This limitation may be increased to 9.99% at Mr.

Handwerker’s option upon 61 day’s notice to us.

Handwerker’s option upon 61 days’

notice to us.

authorized for issuance under equity compensation plans

following table sets forth securities authorized for issuance under any equity compensation plans approved by our shareholders

as well as any equity compensation plans not approved by our shareholders as of December 31, 2019.

following table sets forth securities authorized for issuance under any equity compensation plans approved by our shareholders as well

as any equity compensation plans not approved by our shareholders as of December 31, 2020.

Plan category

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stock purchases

Kip Speyer purchased an aggregate of 1,200,000 shares of our 10% Series A-1 Convertible Preferred Stock at a purchase

price of $0.50 per share.

Kip Speyer purchased an aggregate of 1,200,000 shares of our 10% Series A-1 Convertible Preferred Stock at a purchase price

of $0.50 per share.

We used the proceeds from these sales for working capital.

Kip Speyer purchased an aggregate of 1,125,500 shares of our 10% Series E Convertible Preferred Stock at a purchase

price of $0.40 per share.

Kip Speyer purchased an aggregate of 1,125,500 shares of our 10% Series E Convertible Preferred Stock at a purchase price

of $0.40 per share.

We used the proceeds from these sales for working capital.

2019 and 2018 we paid cash dividends on these outstanding shares of our 10% Series E Convertible Preferred Stock and the

three sub-series of our Series F Convertible Preferred Stock described below of $180,931 and $83,232, to Mr.

respectively.

2020 and 2019 we paid cash dividends on these outstanding shares of our 10% Series E Convertible Preferred Stock and the three sub-series

of our Series F Convertible Preferred Stock described below of $55,000 and $180,931, to Mr.

Speyer, respectively.

Exchange Agreement

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Speyer lent us funds for working capital under the terms of various convertible promissory notes.

On November 7, 2019

we entered into a Note Exchange Agreement with Mr.

6 unchanged sentences

Speyer under 6% Convertible Promissory Notes maturing between April 19,

19, 2022 and July 27, 2022 for 1,408,867 shares of our newly created Series F-2 Convertible Preferred Stock in full satisfaction

of those notes;

2022 and July 27, 2022 for 1,408,867 shares of our newly created Series F-2 Convertible Preferred Stock in full satisfaction of those

principal amount and accrued but unpaid interest due Mr.

Speyer under 10% Convertible Promissory Notes maturing between August 1,

1, 2022 and August 30, 2022 for 757,197 shares of our newly created Series F-3 Convertible Preferred Stock in full satisfaction

of those notes.

2022 and August 30, 2022 for 757,197 shares of our newly created Series F-3 Convertible Preferred Stock in full satisfaction of those

November 2019, we issued and sold Mr.

2 unchanged sentences

convert into shares of our common stock on the fifth anniversary of the date of issuance.

We used the proceeds from these notes

for working capital.

Schulman, Dunleavy, and Lichtman are considered “independent”

within the meaning of meaning of Section 803 of the

NYSE American Company Guide.

We used the proceeds from these notes for working

Lichtman, Schulman, Parizek and Tibbits are considered “independent”

within the meaning of Section 802

of the NYSE American Company Guide.

PRINCIPAL ACCOUNTING FEES AND SERVICES

following table shows the fees that were billed for the audit and other services provided by for 2019 and 2018.

following table shows the fees for professional audit services and other services rendered by EisnerAmper, LLP for the audit of the Company’s

annual financial statements for the years ended December 31 2020 and 2019, and fees billed for the other services rendered during those

Audit-Related Fees

All Other Fees

This category includes the audit of our annual financial statements, review of financial statements included

in our Quarterly Reports on Form 10-Q and services that are normally provided by the independent registered public accounting

firm in connection with engagements for those fiscal years.

Included in this amount for 2019 are fees charged by our prior audit

in connection with the application of discontinued operations to our historic 2018 audited consolidated financial statements.

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.

This category includes the audit of our annual financial statements, review of financial statements included in our

Quarterly Reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection

with engagements for those fiscal years.

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.

Audit-Related

This category consists of 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.

This category consists 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.

Other Fees —

This category consists of fees for other miscellaneous items.

board of directors has adopted a procedure for pre-approval of all fees charged by our independent registered public accounting

Under the procedure, the Audit Committee of the Board approves the engagement letter with respect to audit, tax and review

This category consists of 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.

This category consists 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.

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 audit and tax fees paid to the auditors with respect

to 2019 and 2018 were pre- approved by the Audit Committee.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

Reports of Independent Registered Public Accounting Firm;

Consolidated balance sheets at December 31, 2019 and 2018;

Consolidated statement of operations for the years ended December 31, 2019 and 2018;

Consolidated statements of change in shareholders’

equity for the years ended December 31, 2019 and 2018;

Consolidated statements of cash flows for the years ended December 31, 2019 and 2018;

Notes to consolidated financial statements.

Incorporated by Reference

The audit and tax fees paid to the auditors with respect to 2020 and 2019

were pre-approved by the Audit Committee.

EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES

Financial Statements

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.

Financial Statement Schedules

financial statement schedules are listed in the Index to Consolidated Financial Statements on page F-1 of this Annual Report on

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.

exhibits are listed in the Exhibit Index attached to this Annual Report on Form 10-K.

Amended and Restated Articles of Incorporation

16 unchanged sentences

2015 Stock Option Plan

Asset Purchase Agreement dated December 16, 2016 effective December 15, 2016 by and among Bright Mountain Media, Inc., Bright Mountain, LLC, Sostre Enterprises, Inc., Pedro Sostre III and James Love

Membership Interest Purchase Agreement dated March 3, 2017, by and between Bright Mountain Media, Inc., Daily Engage Media Group LLC, Harry G.

Pagoulatos, George G.

Rezitis and Angelos Triantafillou

Amended and Restated Membership Interest Purchase Agreement dated September 19, 2017 by and among Bright Mountain Media, Inc., Daily Engage Media Group LLC and Harry G.

Pagoulatos, George G.

Rezitis and Angelos Triantafillou

2019 Stock Option Plan

Letter agreement dated September 19, 2017 with Vinay Belani

Escrow Agreement dated September 19, 2017 by and among Bright Mountain Media, Inc., Harry G.

Pagoulatos, George G.

Rezitis, Angelos Triantafillou, Vinay Belani and Pearlman Law Group LLP, as escrow agent

Employment Agreement by and between Bright Mountain Media, Inc.

and George G.

Promissory Note in the principal amount of $100,000 dated September 19, 2017 payable to Harry G.

Promissory Note in the principal amount of $100,000 dated September 19, 2017 payable to George G.

Promissory Note in the principal amount of $100,000 dated September 19, 2017 payable to Angelos Triantafillou

Promissory Note in the principal amount of $80,000 dated September 19, 2017 payable to Vinay Belani

Amendment to Amended and Restated Membership Interest Purchase Agreement dated November 14, 2017 by and among Bright Mountain Media, Inc., Daily Engage Media Group LLC, Harry g.

Pagoulatos, George G.

Rezitis and Angelos Triantafillou

Amended and Restated Escrow Agreement dated November 14, 2017 by and among Bright Mountain Media, Inc., Harry G.

Pagoulatos, George G.

Rezitis, Angelos Triantafillou, Vinay Belani and Pearlman Law Group LLP, as escrow agent

Consulting Agreement dated September 6, 2017 by and between Spartan Capital Securities, LLC and Bright Mountain Media, Inc.

2 unchanged sentences

Uplisting Advisory and Consulting Agreement dated December 11, 2018 by and between Spartan Capital Securities, LLC and Bright Mountain Media, Inc.

Note Exchange Agreement dated November 7, 2018 by and between Bright Mountain Media, Inc.

Lease Agreement dated August 24, 2014 for registrant’s principal executive offices

1 unchanged sentence

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

Executive Employment Agreement dated June 1, 2014 by and between W.

Kip Speyer and Bright Mountain Media, Inc.

First Amendment to Executive Employment Agreement dated April 1, 2017 by and between W.

Executive Employment Agreement effective April 1, 2020 by and between W.

Kip Speyer and Bright Mountain Media, Inc.

Consulting Agreement effective January 1, 2021 between Greg Peters and Bright Mountain Media, Inc.

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

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

and the shareholders of Slutzky & Winshman, Ltd.

Amendment dated July 31, 2019 to Finder’s Fee Agreement by and between Bright Mountain Media, Inc.

and Spartan Capital Securities, LLC

Promissory Note dated August 15, 2019 due to Joey Winshman

Promissory Note dated August 15, 2019 to Nadav Slutzky

Promissory Note dated August 15, 2019 to Eli Desatnik

Employment Agreement dated August 15, 2019 by and between Slutzky & Winshman Ltd.

and Joey Winshman

Consulting Agreement dated August 15, 2019 by and between Bright Mountain Media, Inc., Slutzky & Winshman Ltd.

and Nadav Slutzky

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

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.

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

BMTMZ, and News Distribution Network, Inc.

Form of Warrant for November 2019 Private Placement

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

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

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

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

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

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

Share Issuance Agreement between Spartan Capital Securities, LLC and Bright Mountain Media, Inc.

dated September 22, 2021

Code Conduct and Ethics

List of subsidiaries

Consent of EisnerAmper LLP

Consent of ___________

Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

7 unchanged sentences

TAXONOMY EXTENSION PRESENTATION LINKBASE

FORM 10-K SUMMARY.

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.

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.

MOUNTAIN MEDIA, INC.

Kip Speyer, Chief Executive Officer

person whose signature appears below hereby constitutes and appoints W.

Kip Speyer his true and lawful attorney-in-fact and agent,

with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign

any and all amendments (including amendments) to this Annual Report on Form 10-K for the year ended December 31, 2017, and to

file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission,

and hereby grants to such attorney-in-fact and agent, full power and authority to do and perform each and every act and thing

requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and

confirming all that said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by

virtue hereof.

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 in the capacities and on the dates indicated.

of the Board of Directors, Chief Executive Officer, principal executive officer

Operating Officer –

Bright Mountain, LLC

Jack Dunleavy

December 23, 2021

and Principal Executive Officer

December 23, 2021

Financial and Accounting Officer

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.

December 23, 2021

of the Board of Directors and Principal Executive Officer

December 23, 2021

Harry Schulman

December 23, 2021

Joey Winshman

Marketing Officer, Director

December 23, 2021

Bright Mountain, LLC., Director

December 23, 2021

Pamela Parizek

December 23, 2021

Gretchen Tibbits

MOUNTAIN MEDIA, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Consolidated balance sheets at December 31, 2019 and 2018

Consolidated statements of operations for the years ended December 31, 2019 and 2018

Consolidated balance sheets at December 31, 2020 and 2019 (As restated)

Consolidated statements of operations for the years ended December 31, 2020 and 2019 (As restated)

Consolidated statements of changes in shareholders’

equity for the years ended December 31, 2019 and 2018

Consolidated statements of cash flows for the years ended December 31, 2019 and 2018

equity for the years ended December 31, 2020 and 2019 (As restated)

Consolidated statements of cash flows for the years ended December 31, 2020 and 2019 (As restated)

Notes to consolidated financial statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and Stockholders of

Report of Independent Registered Public Accounting Firm

the Board of Directors and Shareholders of

Mountain Media, Inc.

1 unchanged sentence

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

and subsidiaries (the “Company”)

as of December 31, 2019 and 2018, and the related consolidated statements of operations, shareholders’

equity, and cash

flows for each of the years then ended and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the consolidated financial position of the

Company as of December 31, 2019 and 2018, and the consolidated results of their operations and their cash flows for each of the

years then ended, in conformity with accounting principles generally accepted in the United States of America.

(the “Company”) as of December 31,

2020 and 2019, the related consolidated statements of operations, changes in shareholders’

equity and cash flows for each of the

years ended December 31, 2020 and 2019, and the related notes (collectively referred to as the “financial statements”).

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 did not audit the financial statements of Slutzky and Winshman, Ltd., a wholly-owned subsidiary, which

statements reflect total assets and revenues constituting 3.6 percent and 18.8 percent, respectively, as of and for the

year ended December 31, 2020, and 3.6 percent and 40.5 percent, respectively, as of and for the year ended December 31,

2019, of the related consolidated totals.

Those statements were audited by other auditors whose report has been furnished to us, and

our opinion, insofar as it relates to the amounts included for Slutzky and Winshman, Ltd., is based solely on the report of the other

our opinion, based on our audits and the report of the other auditors, the consolidated financial statements referred to above present

fairly, in all material respects, the financial position of Bright Mountain Media, Inc.

as of December 31, 2020 and 2019, and the consolidated

results of their operations and their cash flows for each of the years then ended, in conformity with accounting principles generally

accepted in the United States of America.

of Financial Statements

discussed in Note 2 to the financial statements, the Company’s financial statements as of and for the year ended December 31, 2019

(which were previously audited by predecessor auditors), have been restated to correct certain misstatements.

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

in Note 2 to the financial statements, the Company has experienced recurring net losses, cash outflows from operating activities,

and has an accumulated deficit 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.

in Accounting Principle

discussed in Note 3 to the financial statements, the Company has changed its method of accounting for leases in the 2019 consolidated

financial statements due to the adoption of ASU No.

2016-02, Leases (Topic 842).

As discussed in Note

1 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

The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on

the Company’s 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 the Company

in accordance with the U.S.

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

and the PCAOB

Our responsibility is to express an opinion on the Company’s

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 the Company in accordance with the U.S.

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

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

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

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 Company’s internal control over financial reporting.

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.

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 Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

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.

EisnerAmper LLP

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.

WithumSmith+Brown, PC

have served as the Company’s auditor since 2021.

Brunswick, New Jersey

MOUNTAIN MEDIA, INC.

1 unchanged sentence

BALANCE SHEETS

(As Restated)

Current assets

Cash and cash equivalents

Accounts Receivable, net

Accounts receivable, net of allowance for doubtful accounts

of $774,826 and $505,401, at December 31, 2020 and 2019, respectively

Note receivable, net

Prepaid expenses and other current assets

Current Assets - Discontinued Operations

Current assets –

discontinued operations

Total current assets

2 unchanged sentences

Intangible assets, net

Prepaid Services/Consulting Agreements - Long Term

Prepaid services/consulting agreements –

Right-of-use asset

Other Assets - Discontinued Operations

LIABILITIES AND SHAREHOLDERS’

6 unchanged sentences

Long term debt, current portion

Operating Lease Liability –

Current Portion

Current Liabilities - Discontinued Operations

Operating lease liability, current portion

Current liabilities –

discontinued operations

Total current liabilities

Long term debt to related parties, net

Long term debt

Deferred tax liability

4 unchanged sentences

Shareholders’

Convertible Preferred stock, par value $0.01, 20,000,000 shares authorized,

Series A-1, 2,000,000 shares designated, 1,200,000 and 0 shares issued and outstanding for December 31, 2019 and 2018, respectively

Series B-1, 6,000,000 shares designated, 0 and 0 shares issued and

outstanding for December 31, 2019 and 2018, respectively

Series E, 2,500,000 shares designated, 2,500,000 and 2,500,000 issued and outstanding for December 31, 2019 and 2018, respectively

Series F, 4,344,017 shares designated, 4,344,017 and 4,344,017 issued and outstanding for December 31, 2019 and 2018, respectively

Common stock, par value $0.01, 324,000,000 shares authorized, 100,244,312 and 62,125,114 issued and 78,063,531 and 62,125,114 outstanding for December 31, 2019 and 2018, respectively

Convertible preferred stock, par value $0.01, 20,000,000 shares

Series A-1, 2,000,000 shares designated, 1,200,000 shares

issued and outstanding at December 31, 2020 and 2019

Series B-1, 6,000,000 shares designated, no shares issued

and outstanding at December 31, 2020 and 2019

Series E, 2,500,000 shares designated, 2,500,000 issued and

outstanding at December 31, 2020 and 2019

Series F, 4,344,017 shares designated, 4,344,017 issued and

outstanding at December 31, 2020 and 2019

Common stock, par value $0.01, 324,000,000 shares authorized,

118,162,150 and 100,782,956 issued and 117,336,975 and 100,782,956 outstanding at December 31, 2020 and 2019, respectively

Treasury stock, at cost;

825,175 shares at December 31, 2020

Additional paid-in capital

2 unchanged sentences

(21,217,658 )

Accumulated other comprehensive loss

Total shareholders’

4 unchanged sentences

STATEMENTS OF OPERATIONS

For the Year Ended

the Years Ended

(As Restated)

Cost of revenue:

Operating expenses:

Selling, general and administrative expenses

Impairment expense –

Total operating expenses

Loss from continuing operations

(72,925,286 )

Other income (expense)

1 unchanged sentence

Gain on settlement of liability

Loss on extinguishment of convertible debt

Interest expense

Interest expense - related party

Total other income (expense)

Loss from continuing operations before tax

Loss from discontinued operations before tax

Interest expense –

related party

Total other income

Loss before tax –

continuing operations

(73,281,936 )

Loss before tax –

Net loss before tax

(73,281,936 )

Income tax benefit

(72,714,422 )

Preferred stock dividends

Series A, Series E, and Series F preferred stock

Series A-1, Series E, and Series F

preferred stock

Total preferred stock dividends

1 unchanged sentence

(73,077,882 )

Other comprehensive loss

Comprehensive loss

$ (73,100,547 )

Basic and diluted net loss for continuing operations per share

Basic and diluted net loss for discontinued operations per share

Basic and diluted net loss for discontinued

operations per share

Basic and diluted net loss per share

Weighted average shares outstanding - basic and diluted

Weighted average shares outstanding –

accompanying notes to consolidated financial statements.

2 unchanged sentences

STATEMENTS OF CHANGES IN SHAREHOLDERS’

the years ended December 31, 2019 and 2018

Preferred Stock

Shareholders’

Balance –

January 1, 2018

Ended December 31, 2020 and 2019 (As Restated)

Other Comprehensive

Total Stockholders ’

Balance, January 1, 2019

$ (17,042,967 )

Common stock issued for 10% dividend payment pursuant to Series

A preferred stock Subscription Agreements

Issuance of Series E preferred stock ($0.40/share)

Series E preferred stock dividend

Series F preferred stock dividend

Preferred Series F issued for extinguishment of convertible debt

Stock option vesting expense

Common Stock issued for services

Debt Discount on convertible note

Units consisting of one share of common stock and one warrant issued

for cash ($0.40 per unit), net of costs

Stock issued to Spartan Capital for prepaid consulting contract

Preferred Stock Series A conversion to common stock

Net loss for the year ended December 31,

Balance –

December 31, 2018

Series A-1, E and F preferred

stock dividend

Issuance of Series A-1 preferred

Issuance of common stock:

Units consisting of one share

of common stock and one warrant issued for cash, net of costs

Units consisting of one share

of common stock and two warrants issued for cash, net of costs

Oceanside acquisition (Note 4)

MediaHouse acquisition (Note

For services rendered

Share-based compensation

Balance, December 31, 2019 (As Restated)

(21,217,658 )

Issuance of Series A-1 preferred stock ($0.50/share)

Series A-1, E, and F preferred stock dividend

Stock option vesting expense

Common stock issued for services

Common stock issued for services cancelled

Units consisting of one share of common stock and one warrant issued

for cash, net of costs

Units consisting of one share of common stock and two warrants issued

for cash, net of costs

Common stock issued in acquisition of S&W Media

Common stock and warrants to be issued in acquisition of MediaHouse

Net loss for the year ended December 31,

Balance –

December 31, 2019

(72,714,422 )

Series A-1, E and F preferred

stock dividend

Issuance of common stock:

Units consisting of one share

of common stock and two warrants issued for cash, net of costs

Exercise of stock options

Restricted Share Awards

WSM acquisition (Note 4)

For services rendered

For cashless exercise of warrants

Acquisition of treasury stock,

Share-based compensation

Adjustment from foreign currency

translation, net

Balance, December 31, 2020

$ (93,932,080 )

accompanying notes to consolidated financial statements.

2 unchanged sentences

STATEMENTS OF CASH FLOWS

For the Years Ended

Years Ended December 31,

(As Restated)

Cash flows from operating activities:

$ (72,714,422 )

$ (5,224,064 )

Loss attributable to discontinued operations

1 unchanged sentence

Amortization of debt discount

Loss on extinguishment of convertible debt

Impairment on tradename

Goodwill impairment

Intangible impairment

Write-off of tradename

Gain on settlement of liability

Stock option compensation expense

Stock option vesting expense

Common stock and warrants issued for services

Gain on sale of fixed assets

Compensation expense for stock issuances

Stock compensation for Oceanside shares

Stock issued for cashless exercise of warrants

Change in deferred taxes

7 unchanged sentences

Accrued expenses

Accrued interest - related party

Accrued interest —

related party

Deferred revenues

Cash used in continuing operations for operating activities

Cash provided by (used in) discontinued operations for operating activities

Cash provided by discontinued operations for operating activities

Net cash used in operating activities

Cash flows from investing activities:

Proceeds from sale of property and equipment

Cash paid for property and equipment

Cash (paid)/proceeds (for)/from property and equipment, net

Cash paid for website acquisitions

Cash proceeds from acquisitions of subsidiaries

Net cash provided by investing activities from continuing operations

Cash acquired in acquisition of subsidiaries

Net cash provided by investing activities from continuing

Cash flows from financing activities:

1 unchanged sentence

Proceeds from issuance of preferred stock

Increase in insurance premium notes payable

Insurance premium notes payable

Dividend payments

2 unchanged sentences

Proceeds from repayment of note receivable

Proceeds from long-term debt - related parties

Net cash provided by financing activities

Net (decrease) increase in cash and cash equivalents including cash and cash equivalents classified within assets related to continuing operations

Net (decrease) in cash and cash equivalents classified within assets related to discontinued operations

Net (decrease) increase in cash and cash equivalents

Proceeds from exercise of options

Proceeds from issuance of premium finance loan payable

Proceeds from PPP loan

Net cash provided by financing activities from continuing

Net decrease in cash and cash equivalents including cash and

cash equivalents classified within assets related to continuing operations

Net decrease in cash and cash equivalents classified within

assets related to

discontinued operations

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of year

5 unchanged sentences

Supplemental disclosure of cash flow information:

Cash paid for:

Non-cash investing and financing activities

Premium finance loan payable recorded as prepaid

Cash paid for interest

Supplemental disclosure of non-cash investing and financing

Settlement of Daily Engage liability

5 unchanged sentences

Non-cash intangible assets of MediaHouse

Beneficial conversion of debt discount to additional paid in capital

Adjustment to Goodwill for unrecorded liability assumed in the acquisition of Bright Mountain, LLC

Non-cash acquisition of WSM net assets

Non-cash acquisition of WSM net liabilities

Non-cash intangible assets of WSM

Common stock issued for acquisitions

1 unchanged sentence

Recognition of right of use lease liability for S&W

Accounts receivable charged against notes payable –

Bright Mountain, LLC

Issuance of Common Stock for prepaid consulting services

Series F Preferred Stock issued in exchange for extinguishment of $2,035,000, net of discount of $662,625

Issuance of common stock for services

Issuance of debt in accordance with legal settlement (Encoding)

accompanying notes to consolidated financial statements.

2 unchanged sentences

to the Consolidated Financial Statements

NATURE OF OPERATIONS

and Nature of Operations

NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Organization,

Nature of Operations and Liquidity

Mountain Media, Inc.

is a Florida corporation formed on May 20, 2010.

Its wholly owned subsidiaries, Bright Mountain LLC, was

formed as a Florida limited liability company in May 2011.

Its wholly owned subsidiary Bright Mountain, LLC (“BMLLC”)

F/K/A Daily Engage Media Group, LLC (“DEM”) was formed as a New Jersey limited liability company in February 2015.

In August 2019 Bright Mountain Israel Acquisition, an Israeli company was formed and acquired the wholly owned subsidiary Slutzky

& Winshman Ltd.

(“S&W”), see Note 4.

Further, on November 18, 2019, Bright Mountain Media, Inc., and its wholly

owned subsidiary BMTM2, Inc., a Florida corporation, merged with MediaHouse, LLC F/K/A/ News Distribution Network, Inc., a Delaware

When used herein, the terms “BMTM, the “Company,”

(the “Company”

or “Bright Mountain”

or “We”) is a Florida corporation formed

on May 20, 2010.

Its wholly owned subsidiary, Bright Mountain LLC, was formed as a Florida limited liability company in May 2011.

wholly owned subsidiary, Bright Mountain, LLC (“BMLLC”) F/K/A Daily Engage Media Group, LLC (“Daily Engage”)

was formed as a New Jersey limited liability company in February 2015.

In August 2019, Bright Mountain Israel Acquisition, an Israeli

company was formed and acquired the wholly owned subsidiary Slutzky & Winshman Ltd.

(“S&W”) which then changed its

name to Oceanside Media LLC (“Oceanside”), see Note 4.

Further, on November 18, 2019, Bright Mountain, through its wholly

owned subsidiary BMTM2, Inc., a Florida corporation, acquired News Distribution Network, Inc.

(“NDN”), a Delaware company,

which then changed its name to MediaHouse, Inc.

(“MediaHouse”).

On June 1, 2020, Bright Mountain acquired the wholly owned

subsidiary CL Media Holdings, LLC D/B/A “Wild Sky Media”

(“Wild Sky”).

When used herein, the terms “BMTM,

the “Company,”

“we,”

2 unchanged sentences

or “Bright Mountain”

refers to Bright Mountain Media, Inc.

refers to Bright Mountain

and its subsidiaries.

December 31, 2018 the Company discontinued the E-Commerce operations, the Products segment, as of December 31, 2018 per the determination

of Management and the Board of Directors.

Accordingly, the Company determined that the assets and liabilities of this reportable

segment met the discontinued operations criteria in Accounting Standards Codification 205-20-45 and were classified as discontinued

operations at December 31, 2018.

December 31, 2018 the Company discontinued the E-Commerce operations, the Products segment, per the determination of Management and the

Board of Directors.

Accordingly, the Company determined that the assets and liabilities of this reportable segment met the discontinued

operations criteria in Accounting Standards Codification (“ASC”) 205 and were classified as discontinued operation at December

For the year ended December 31, 2019, loss from discontinued operations before tax was $136,734.

There were no discontinued

operations in 2020.

See Discontinued Operations Note 5.

are a digital media holding company for online assets targeting and servicing the military and public safety markets and as such

we delivered impressions, which include both our targeted demographic and the larger general demographic from our ad network.

Our owned websites are dedicated to providing “those that keep us safe”

places to go online where they can do everything

from stay current on news and events affecting them, look for jobs, share information, and communicate with the public.

19 websites and manage five additional websites, for a total of 24 websites, which are customized to provide our niche users,

including active, reserve and retired military, law enforcement, first responders and other public safety employees with information,

news and entertainment across various platforms that has proven to be of interest and engaging to them.

the past several years the Company has evolved to place its emphasis on not only providing quality content on our websites to

drive traffic increases, but to increase the advertising revenue we generate from companies and brands looking to reach our audiences.

Our ad network connects general use advertisers with approximately 200 digital publications worldwide.

Bright Mountain’s

websites feature timely, proprietary and aggregated content covering current events and a variety of additional subjects that

are targeted to the specific, primarily young male, demographics of the individual website.

Our business strategy requires us

to continue to provide this quality content to our niche markets as we grow our business, operations and revenues.

The Company’s

focus is to launch its full-scale Ad Network Business platform, the Bright Mountain Media Ad Network Business.

September 19, 2017, under the terms of an Amended and Restated Membership Interest Purchase Agreement with DEM, and its members,

the Company acquired 100% of the membership interests of DEM.

Launched in 2015, DEM is an ad network that connects advertisers

with approximately 200 digital publications worldwide.

On October 1, 2019, the Company rebranded the DEM operations as Bright

Mountain, LLC

August 15, 2019, under the terms of the Share Exchange Agreement and Plan of Merger with S&W and its members, the Company

acquired 100% of the membership interests of S&W.

Launched in 2015.

S&W provided digital performance-based marketing services

to customers which include primarily advertisers and advertising agencies that promote or sell products and/or services to consumers

through digital media.

November 18, 2019, under the terms of the Share Exchange Agreement and Plan of Merger with NDN and its shareholders, the Company

acquired 100% of the ownership interests of NDN.

Launched in 2019 as a spin-off from Inform, Inc.

NDN which was rebranded as MediaHouse

partners with content producers and online news market websites to distribute video and banner advertisements throughout the United

States of America.

GOING CONCERN

accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization

of assets and the satisfaction of liabilities in the normal course of business.

The Company sustained a net loss from continuing

operations of $3,265,289, a loss of $136,734 from discontinued operations and used cash in operating activities of $2,669,726

for the year ended December 31, 2019.

The Company had an accumulated deficit of $20,444,989 at December 31, 2019.

These factors

raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period.

The Company’s

continuation as a going concern is dependent upon its ability to generate revenues, control its expenses and its ability to continue

obtaining investment capital and loans from related parties and outside investors to sustain its current level of operations.

continues raising capital through private placements and is exploring additional avenues for future fund-raising through both

Company is engaged in operating a proprietary, end-to-end digital media and advertising services platform designed to connect brand advertisers

with demographically-targeted consumers –

both large audiences and more granular segments –

across digital, social and connected

television (CTV) publishing formats.

We define “end-to-end”

as our process for taking ad buying from beginning to end, delivering

a complete functional solution, usually without requiring any involvement from a third party.

acquisitions and organic software development initiatives, we have consolidated and plan to further condense key elements of the prevailing

digital advertising supply chain through the elimination of industry “middlemen”

and/or costly redundancy of services via

our ad exchange network.

Our aim is to enable and support a streamlined, end-to-end advertising model that addresses both demand (ad

buy side) and supply (media sell side) for both direct sales teams and programmatic sales and publishing of digital advertisements that

reach specific target audiences based on what, where, when and how that specific target audience elects to access certain web and/or

streaming video content.

Programmatic advertising relies on computer programs to use data and proprietary algorithms to select which

ads to buy and for what price, while direct sales involve traditional interpersonal contact between ad buyers and advertising sales representative(s).

selling advertisements on our current portfolio of 20 owned and operated websites and 13 CTV apps, coupled with acquisition or

development of other niche web properties in the future, we are building depth in specific demographic verticals that allow us to package

audiences into targeted consumer categories valued by advertisers.

provides digital performance-based marketing services to customers which include primarily advertisers and advertising agencies that

promote or sell products and/or services to consumers through digital media.

partners with content producers and online news market websites to distribute video and banner advertisements throughout the United States

of America (“U.S.”).

Sky owns and operates a collection of websites that offer significant global reach through its content and niche audiences and has become

a wholly-owned subsidiary of the Company.

Wild Sky is the home to parenting and lifestyle brands.

accompanying consolidated financial statements have been prepared and are presented assuming the Company’s ability to continue

as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The Company has sustained a net loss of $72,714,422, used cash outflows from continuing operating activities of $6,508,935 for

the year ended December 31, 2020, and has an accumulated deficit of $93,932,080 at December 31, 2020 that raise substantial doubt

about its ability to continue as a going concern.

Company’s continuation as a going concern is dependent upon its ability to generate revenues, control its expenses and its ability

to continue obtaining investment capital and loans from related parties and outside investors to sustain its current level of operations.

Management continues raising capital through private placements and is exploring additional avenues for future fund-raising through both

public and private sources.

The Company is not currently involved in any binding agreements to raise private equity capital.

consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded

asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue

as a going concern.

The accompanying

consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset

amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going

January 30, 2020, the World Health Organization declared the COVID-19 outbreak a “Public Health Emergency of International Concern”

and on March 11, 2020, declared COVID-19 a pandemic.

The spread of COVID-19, a novel strain of coronavirus, has and continues to alter

the behavior of business and people in a manner that is having negative effects on local, regional and global economies.

pandemic has caused disruptions in the services we provide.

The COVID-19 pandemic has resulted in many states and countries imposing

orders resulting in the closure of non-essential businesses, including many companies which advertise digitally.

During 2021, we continued

seeing lower advertising dollar spend in the first half of the year, but saw a rebound during the second half of 2021 as the health crisis

improved supported by higher travel rates, national vaccination programs, higher vaccination rates for the general public and a broader

age distribution of vaccines permitting lower aged children to obtain the vaccinations.

It appears the pandemic will continue into 2022,

but the digital ad spend dollars appears to be on an uptrend which would be positive for our industry.

RESTATEMENT OF PREVIOUSLY ISSUED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2021, the Board of Directors and management, upon the recommendation of the Audit Committee of the Board of Directors (the

“Audit Committee”), concluded that the Company’s previously issued financial statements as of and for the year ended

December 31, 2019 and unaudited consolidated financial statements as of and for each of the interim quarterly periods ended September

30, 2019, March 31, 2020, June 30, 2020 and September 30, 2020, (collectively, the “Prior Period Financial Statements”),

should no longer be relied upon due to misstatements that are described below, and that we would restate such financial statements to

make the necessary accounting corrections.

Details of the restated Prior Period Financial Statements are provided below (see section

Restatement Items ”).

The Company evaluated the materiality of these errors both qualitatively and quantitatively

in accordance with Staff Accounting Bulletin (“SAB”) No.

99, Materiality and SAB No.

108, Considering the Effects of Prior

Year Misstatements in Current Year Financial Statements, and determined the effect of these corrections were material to the Prior Period

Financial Statements.

As a result of the material misstatements, we have restated our Prior Period Financial Statements, in accordance

with ASC 250, Accounting Changes and Error Corrections (the “Restated Financial Statements”).

Restatement Items reflect adjustments to correct identified errors and has restated previously issued financial statements because of

failure to properly record the following:

Finder’s

Fee accrual –

The Company maintains a Finder’s Agreement with Spartan Capital

Securities LLC (“Spartan Capital”) to identify and assist in business combinations,

including any merger, acquisition or sale of stock or assets in connection with a merger

or acquisition of other businesses.

Upon closing of any such transaction, the Company shall

pay an agreed fee relative to the consideration paid or received by the Company (the “finder’s

There were two errors:

i) the Company incorrectly used 3% instead of 5% to calculate

the final finders’

and ii) the Company determined that the consideration amount

for the acquisition of MediaHouse (defined below) was overstated and affected the

finders’

fee calculation (refer to “c”

addition, the Company incorrectly calculated the number of shares to be issued to Spartan Capital as finder’s fees in connection

with the Company’s acquisitions Slutzky & Winshman Ltd.

(which later changed its name to Oceanside Media LLC) (“Oceanside”)

and News Distribution Network, Inc.

d/b/a MediaHouse (“MediaHouse”) during the year ended December 31, 2019.

The result of the correction for the

year ended December 31, 2019 related to the Oceanside acquisition was that upon acquisition closing, accrued expenses were decreased

by $4,656 with a corresponding decrease in selling, general and administrative expenses.

The result of the correction as

of and for the year ended December 31, 2019, related to the MediaHouse acquisition was that upon acquisition closing, accrued

expense liability was increased by $1,007,921 with a corresponding increase in operating expenses.

Accrued expense liability

and accumulated deficit were also corrected in the respective quarters ended March 31, 2020, June 30, 2020, and September 30, 2020.

Stock issued in Oceanside acquisition –

In connection with the Oceanside acquisition

in August 2019, the Company issued an incorrect number of shares of Company common stock

as consideration as it used a preliminary purchase price.

Upon management’s re-evaluation

of the consideration paid, the number of shares issued in connection with the Oceanside acquisition

increased by 382,428 resulting in a correction and increase in goodwill, common stock and

additional paid-in capital in the amounts of $611,885, $3,824, and $608,058, respectively,

at September 30, 2019.

acquisition –

Upon evaluation of the final MediaHouse acquisition agreement, the

Company noted the following corrections:

was a miscalculation of the fair value of the warrants to be issued as part of consideration in the amount of $3,829,889 due to the conversion

of bridge loan and open lines of credit, as well as a valuation adjustment.

Further, the change in intangible assets valuation was

mainly driven by the use of a more updated forecast that was lower than the original forecast utilized along with an increase in

the Company’s state effective rate used to record deferred tax assets and liabilities resulted in an increase to the deferred tax

liability of $836,363 which was fully offset by an adjustment to the tax provision to adjust the Company’s valuation allowance.

The decrease of the valuation allowance was recorded as a benefit in the tax provision for the year ended December 31, 2019.

Additionally,

in connection with the MediaHouse acquisition in November 2019, the Company issued shares of Company common stock to certain of MediaHouse’s

investors as part of the consideration paid.

During September 2020, the Company determined that one investor had been issued an incorrect

number of shares as the result of a transposition mistake;

the investor should have been issued 840,000 shares but was incorrectly issued

480,000 shares.

This error resulted in a shortfall of shares of 360,000 valued at $590,400.

In addition, another investor was not issued

his shares in a timely manner amounting to 19,029 shares of the Company’s common stock valued at $31,208.

Upon management’s re-evaluation

of the MediaHouse acquisition and the number of shares issued as consideration, the number of shares increased by 379,029 resulting in

a correction and increase in Goodwill of $621,608, increase to Common stock of $3,790 and an increase to Additional paid in capital

of $617,818 at December 31, 2019.

The reduction in the warrant valuation

and equity corrections resulted in a reduction in consideration of ($3,208,282).

The components in the change in consideration were:

(1) reduction in warrant valuation of $3,829,889 and an increase in goodwill for two (2) investor equity corrections adding $621,608.

to Goodwill, Intangible assets –

In connection with the reevaluation of the Oceanside

acquisition, the intangibles decreased $1,535,100 and the goodwill increased $1,535,100 from

the previously filed version.

In connection with the reevaluation of the MediaHouse acquisition,

the intangibles increased $1,209,500 from the previously filed version.

compensation from Oceanside acquisition –

As part of the Oceanside acquisition,

the Company assumed a local employee and contractor option plan and converted it to the Company’s

existing equity compensation plan utilizing the existing vesting dates at the time of the

The option holders were two (2) classes of individuals:

(1) employees and (2)

The pre-acquisition Oceanside options ceased to exist as of the acquisition

date and all outstanding and unvested options for these two groups were converted using the

agreed exchange ratio.

In re-evaluating the transaction as part of the errors noted above,

management concluded the Company did not record stock compensation expense for the local

employees and contractors since the acquisition.

result of the correction was an increase to share-based compensation, which is included in selling, general and administrative expenses,

in the amount of $152,571 for the year ended December 31, 2019, with a corresponding increase in accrued expenses.

accrual for untimely registration statement filings with the Securities and Exchange Commission

(“SEC”) –

During fiscal years 2018 and 2019, the Company sold units

of its securities to various investors in several private placements.

As part of each private

placement, the Company agreed to file a registration statement with the SEC to register the

resale of the shares by the respective holder in order to permit the public resale;

filing deadlines ranged from 120 to 270 days following the closing date of the respective

placement and the Company was liable to pay a penalty fee for failure to file the resale

registration statement within the allotted timeframe.

The penalty fee is payable in cash

and is equal to 2% of the aggregate purchase price paid by the respective investor for each

30 days until the earlier of the date the deficiency was cured or the expiration of 6 months

from filing deadline.

Company did not timely file the resale registration statements pertaining to several such placements and as a result was liable for penalties

beginning in the fourth quarter of 2019 and thereafter.

These penalty fees were not properly recorded as an expense with an offset to

accrued liability as of and for the year ended December 31, 2019.

correction resulted in an increase of selling, general and administrative expenses and corresponding accrued liability of $109,200 as

of and for the year ended December 31, 2019.

Adjustments –

In addition, the Company has corrected other adjustments.

of these other adjustments may be quantitatively immaterial, individually and in the aggregate,

because the Company is correcting for the material errors above, management has decided to

correct these other adjustments as well (“Other Adjustments”):

to utilization of more updated forecasts, quarterly

amortization expense on intangible assets (trademarks, customer lists, IP technology and non-compete agreements) has been reduced

by $107,234 to reflect the changes in the intangible assets valuation.

general and administrative expenses and accrued liabilities increased by $87,670 as of December 31, 2019, to account for professional

services provided to Oceanside during 2019.

Audit related items:

entry corrections

receivable, net adjustment and/or reclasses

payable adjustments and/or reclasses

expenses adjustments and/or reclasses

notes consideration change from Oceanside acquisition –

As part of the acquisition,

the treatment of the Closing notes totaling $750,000 was incorrectly recorded and per ASC

805-30-55 was determined to be compensation expense to be recognized ratably over

the 24-month term of the Notes.

As such, starting in September 2019 and concluding in August

2021, $31,250 per month will be charged to compensation expense and a corresponding accrued

liability will be recorded until the full amount of the $750,000 is reflected on the balance

As of August 15, 2020, the Company did not make payment on the 1 st closing

notes and thereby defaulted on its obligation and the 2 nd closing note accelerated

to become payable as of August 15, 2020.

Upon default, the closing notes accrue interest

at a 1.5% per month rate, or 18% annual rate.

As a result, there was an incremental total

charge of $300,672 recorded during 2020 which was $250,000 of additional compensation expense

and $50,672 of interest expense-related party.

revenue –

As part of the audit of 2019, it was determined that $156,529 of recorded

revenue needed to be reclassified into deferred revenue as part of the review of FASB

ASC 606, Revenue from Contracts with Customers.

Company assessed the tax impact of the above restatement items, including any impact to deferred tax asset and liabilities.

determined that the impact of the changes for the finder’s fees (a), common stock issued in Oceanside acquisition (b), share-based

compensation from Oceanside acquisition (e), and penalty accrual (f) would be permanent book/tax differences, therefore had no impact

on the income tax provision or any tax assets and liabilities, current or deferred.

impact of Restatement Items and Other Adjustments to Prior Period Financial Statements

following table presents the effect of the Restatement Items and Other Adjustments, on the Company’s consolidated balance sheet

as of December 31, 2019:

of December 31, 2019

As Previously

Current Assets

Cash and cash equivalents

Accounts receivable, net

Note receivable, net

Prepaid expenses and other current

Current assets

- discontinued operations

Total Current Assets

Property and equipment, net

Website acquisition assets, net

Intangible assets, net

Prepaid services/consulting agreements

Right of use asset

$ (1,809,645 )

LIABILITIES AND SHAREHOLDERS’

Current Liabilities

Accounts payable

Accrued expenses

a, e, f, j, l

Accrued interest to related party

Premium finance loan payable

Deferred revenues

Long term debt, current portion

Share Issuance Accrued Liability New

Other current liabilities

Operating lease liability, net of current

Current liabilities

- discontinued operations

Total Current Liabilities

Long Term Debt to Related Parties,

Long term debt

Deferred tax liability

Operating lease

liability, net of current portion

Total Liabilities

Shareholders’

Convertible preferred stock, par value

$0.01, 20,000,000 shares authorized,

Series A-1, 2,000,000 shares designated,

1,200,000 and outstanding at December 31, 2019

Series B-1, 6,000,000 shares designated,

no issued and outstanding at December 31, 2019

Series E, 2,500,000 shares designated,

issued and outstanding at December 31, 2019

Series F, 4,344,017 shares designated,

issued and outstanding at December 31, 2019

Common stock, par value $0.01, 324,000,000

shares authorized, 100,782,956 shares issued and 100,782,956 outstanding at December 31, 2019

Additional paid-in capital

Accumulated deficit

(20,444,989 )

(21,217,658 )

a, c, e, f, j, m, k, l

Treasury Stock

Total shareholders’

Total Liabilities and Shareholders’

$ (1,809,645 )

of December 31, 2019 :

Finder’s

Stock issued in Oceanside acquisition

Stock issued in MediaHouse Acquisition

to Goodwill, Intangible assets

compensation from Oceanside acquisition

accrual for untimely registration statement filings

notes consideration change from Oceanside acquisition

following table presents the effect of the Restatement Items and Other Adjustments, on the Company’s consolidated statement of

operations for the year ended December 31, 2019:

the year ended December 31, 2019

As Previously

Cost of revenue

Selling, general and administrative

a, d, e, f, j, l

Loss from operations

Other income (expense)

Interest (expense) income,net

Gain on settlement of liability

Impairment Expense

Settlement of contingent consideration

Other expense

Interest expense

- related party

income (expense)

Net loss from continuing operations before tax

Income (loss) from discontinued

Net loss before tax

Income tax benefit

Preferred stock dividends

Series E, and Series F preferred stock

Net loss attributable to common

$ (3,721,375 )

$ (4,494,058 )

Basic and diluted net loss for continuing

operations per share

Basic and diluted net profit for

discontinued operations per share

Basic and diluted net loss per share

Weighted average shares outstanding - basic and diluted

the year ended December 31, 2019 :

Finder’s

Stock issued in MediaHouse Acquisition

to Goodwill, Intangible assets

compensation from Oceanside acquisition

accrual for untimely registration statement filings

notes consideration change from Oceanside acquisition

following table presents the effect of the Restatement Items and Other Adjustments, on the Company’s consolidated statement of

cash flows for the year ended December 31, 2019:

the year ended December 30, 2019

As Previously

Cash flows from operating activities:

$ (3,402,023 )

$ (4,174,691 )

a, c, d, e, f, j, k, l, m

loss attributable to discontinued operations

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

Amortization of debt discount

Impairment of tradename

Impairment of goodwill

Impairment of intangibles

Gain on settlement of liability

Gain on sale of property and equipment

Stock option compensation expense

Stock issued for services

Non-cash acquisition fee

Non-cash compensation for services

Non-cash settlement of contingent consideration

Change in Deferred taxes

Provision for bad debt

Changes in operating assets and liabilities:

Accounts receivable

Prepaid expenses and other current

Prepaid services/consulting agreements

ROU asset and lease liability

Accounts payable

Accrued expenses

a, e, f, j, l

Accrued interest to related party

Deferred rents

Deferred revenues

Net cash used in continuing operations

for operating activities

Net cash (used

in) provided by discontinued operations

used in operating activities

Cash flows from investing activities:

Purchase of property and equipment,

Cash paid for website acquisition

Cash proceeds

from acquisition of subsidiaries

(used in) provided by investing activities

Cash flows from financing activities:

Proceeds from issuance of common stock,

net of commissions

Proceeds from issuance of preferred

Payments of insurance premium loans

Dividend payments

Principal payment on notes payable

Note receivable funded

Proceeds from repayment of note receivable

Notes payable funded

Increase in Common Shares

Unlocated Difference

provided by financing activities

Net (decrease) in cash and cash equivalents classified

within assets related to continued operations

Impact of foreign exchange rates on cash

Net (decrease) in cash and cash

equivalents classified within assets related to discontinued operations

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents at beginning

Cash and cash equivalents at

end of period

the year ended December 31, 2019 :

Finder’s

Stock issued in MediaHouse Acquisition

to Goodwill, Intangible assets

compensation from Oceanside acquisition

accrual for untimely registration statement filings

notes consideration change from Oceanside acquisition

The following table presents the effect of the

Restatement Items and Other Adjustments, on the Company’s consolidated statement of cash flows supplemental information for the

year ended December 31, 2019:

For the year ended December 30,

As Previously Filed

Supplemental disclosure of cash flow information

Cash paid for:

Supplemental disclosure of non-cash investing and financing activities

Settlement of Daily Engage liability

Non-cash acquisition of S&W net assets

Non-cash acquisition of S&W net liabilities

Non-cash acquisition of intangible assets of S&W

$ (17,201,883 )

Non-cash acquisition right of use asset S&W

Common stock issued for acquisitions

$ (2,591,498 )

Recognition of right of use lease liability for S&W

Non-cash acquisition of goodwill S&W

Non-cash acquisition of goodwill NDN

Non-cash acquisition of MediaHouse net assets

Non-cash acquisition of MediaHouse net liabilities

$ (3,254,623 )

Non-cash intangible assets of MediaHouse

$ (35,781,647 )

3 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1 unchanged sentence

consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiaries.

All intercompany

accounts and transactions have been eliminated in the consolidated financial statements.

The accompanying audited financial statements

for the years ended December 31, 2019 and 2018 have been prepared in accordance with U.S.

generally accepted accounting principles

(“GAAP”).

All significant intercompany

balances and transactions have been eliminated in consolidation.

The accompanying consolidated financial statements have been prepared

in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2014-09, “

Revenue from Contracts

with Customers (Topic 606)”

(“Topic 606”) using the “modified retrospective”

method, meaning

the standard is applied only to the most current period presented in the financial statements.

Furthermore, we elected to apply

the standard only to those contracts which were not completed as of the date of the adoption.

Results for reporting periods beginning

on the date of adoption are presented under Topic 606, while prior period amounts have not been adjusted and continue to be reported

in accordance with accounting standards in effect for those periods.

Following the adoption of Topic 606, the Company will continue

to recognize revenue at a point-in-time when control of services is transferred to the customer.

This is consistent with the Company’s

previous revenue recognition accounting policy.

determine revenue recognition for arrangements that the Company determines are within the scope of Topic 606, the Company performs

the following five steps:

Revenue from Contracts with Customers

(Topic 606) ”

(“Topic 606”) using the modified retrospective method, applied only to those contracts which were

not completed as of the date of the adoption.

Following the adoption of Topic 606, the Company recognizes revenues at a point-in-time

when control of services is transferred to the customer.

The adoption of Topic 606 did not result in a material difference in accounting

compared to legacy revenue guidance and no transition adjustments were required.

determine revenue recognition for arrangements that the Company determines are within the scope of Topic 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;

determine the transaction price;

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

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

The Company only applies the five-step model

to contracts when it is probable that Company will collect the consideration it is entitled to in exchange for the advertising

services it transfers to the customer.

At contract inception, once the contract is determined to be within the scope of Topic

606, the Company assesses the advertising services promised within each contract and determines those that are performance obligations

and assesses whether each promised advertising service is distinct.

The Company then recognizes as revenue the amount of the transaction

price that is allocated to the respective performance obligation based on relative fair values, when (or as) the performance obligation

is satisfied.

Company recognizes revenue from its own advertising platform, ad network partners and websites (“Ad Network”) through

its publishing advertiser impressions and pay-for-click services.

the Company’s owned and operated sites, our ad network,

or platforms.

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 Company will collect the consideration it is entitled to in exchange for the advertising services it transfers to the

At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the advertising

services promised within each contract and determines those that are performance obligations and assesses whether each promised advertising

service is distinct.

The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance

obligation based on relative fair values, when (or as) the performance obligation is satisfied.

Company recognizes revenue from its own advertising platform, ad network partners and websites (“Ad Network”) through its

publishing advertiser impressions and pay-for-click services, the Company’s owned and operated sites, our ad network, or platforms.

Invalid traffic on the Ad Network may impact the amount collected and adjusted by our Ad Network.

Company has one revenue stream generated directly from publishing advertisements, whether on the Company’s owned and operated

sites, our ad network, or platforms.

Company has one revenue stream generated directly from publishing advertisements, whether on the Company’s owned and operated sites,

our ad network, or platforms.

The revenue is earned when the users click on the published website advertisements.

revenue recognition criteria for the advertising revenue stream is as follows:

Specific revenue recognition

criteria for the advertising revenue stream is as follows:

revenues are generated by users “clicking”

on website advertisements utilizing several ad network partners.

on or seeing website advertisements

utilizing several ad network partners.

are recognized net of adjustments based on the traffic generated and is billed monthly.

The Company subsequently settles these

transactions with publishers at which time adjustments for invalid traffic may impact the amount collected.

February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”, which sets out the principles for the recognition,

measurement, presentation and disclosure of leases for both lessees and lessors.

On January 1, 2019, the Company adopted the new

lease standard using the optional transition method under which comparative financial information has not been restated and will

continue to apply the provisions of the previous lease standard in its annual disclosures for the comparative periods.

the new lease standard provides a number of optional practical expedients in transition.

The Company elected the package of practical

As such, the Company did not have to reassess whether expired or existing contracts are or contain a lease and did

not have to reassess the lease classifications or reassess the initial direct costs associated with expired or existing leases.

The Company subsequently settles these transactions

with publishers at which time adjustments for invalid traffic may impact the amount collected.

are no significant initial costs incurred to obtain contracts with customers, and no contract assets or contract liabilities recorded

in our consolidated financial statements.

January 1, 2019, the Company adopted ASC 842, the new lease accounting standard, using the optional transition method under which comparative

financial information has not been restated and will continue to apply the provisions of the previous lease standard in its annual disclosures

for the comparative periods.

The Company elected the package of practical expedients in transition;

as such, the Company did not have

to reassess whether expired or existing contracts are or contain a lease and did not have to reassess the lease classifications or reassess

the initial direct costs associated with expired or existing leases.

new lease standard also provides practical expedients for an entity’s ongoing accounting.

The Company elected the short-term

lease recognition exemption under which the Company will not recognize right of use (“ROU”) assets or lease liabilities,

and this includes not recognizing ROU assets or lease liabilities for existing short-term leases.

The Company elected the practical

expedient to not separate lease and non-lease components for certain classes of assets (office building).

The Company elected the short-term lease

recognition exemption under which the Company will not recognize right of use (“ROU”) assets or lease liabilities, which

includes not recognizing ROU assets or lease liabilities for existing short-term leases.

The Company elected the practical expedient

to not separate lease and non-lease components for certain classes of assets (office building).

Company determines if an arrangement is a lease at inception.

1 unchanged sentence

based on the present value of the future minimum lease payments over the remaining lease terms as of January 1, 2019.

Company’s lease agreements does not provide an implicit rate, the Company estimated an incremental borrowing rate based

on the information available at January 1, 2019 in determining the present value of lease payments.

Operating lease expense is

recognized on a straight-line basis over the lease term, subject to any changes in the lease or expectations regarding the terms.

Variable lease costs such as operating costs and property taxes are expensed as incurred.

January 1, 2019, the Company recognized a ROU asset and a lease liability of approximately $588,000, of which approximately $235,000

is associated with the S&W subsidiary on the consolidated balance sheet.

consolidated financial statements are prepared in accordance with GAAP.

These accounting principles require 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.

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.

cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s

judgment in its application.

There are also areas in which management’s judgment in selecting any available alternative

would not produce a materially different result.

Significant estimates included in the accompanying consolidated financial statements

include revenue recognition, the fair value of acquired assets for purchase price allocation in business combinations, valuation

of intangible assets, estimates of amortization period for intangible assets, estimates of depreciation period for fixed assets,

the valuation of equity-based transactions, and the valuation allowance on deferred tax assets.

Since the Company’s

lease agreements does not provide an implicit rate, the Company estimated an incremental borrowing rate based on the information available

on January 1, 2019 in determining the present value of lease payments.

Operating lease expense is recognized on a straight-line basis

over the lease term, subject to any changes in the lease or expectations regarding the terms.

Variable lease costs such as operating

costs and property taxes are expensed as incurred.

On January 1, 2019, the Company recognized a ROU asset and a lease liability of approximately

$235,000 in relation to the adoption of ASC 842.

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

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

the time that these estimates, judgments, and assumptions are made.

These estimates, judgments, and assumptions can affect the reported

amounts of assets and liabilities as of the date of our 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.

In many cases, the accounting treatment of a particular transaction is specifically dictated

by GAAP and does not require management’s judgment in its application.

There are also areas in which management’s judgment

in selecting any available alternative would not produce a materially different result.

estimates included in the accompanying consolidated financial statements include revenue recognition, the fair value of acquired assets

for purchase price allocation in business combinations, valuation of goodwill and intangible assets, estimates of amortization period

for intangible assets, estimates of depreciation period for fixed assets, the valuation of equity-based transactions, and the valuation

allowance on deferred tax assets.

and Cash Equivalents

Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

Company considers all highly liquid investments with an original maturity, or remaining maturity when acquired, of three months or less

to be cash equivalents.

Cash and cash equivalents are all maintained in bank accounts in the U.S.

and other foreign countries in which

the Company operates.

Cash maintained in bank accounts outside of the U.S.

is not significant.

Company maintains certain of its cash balances in various U.S.

banks, which at times, may exceed federally insured limits.

has not incurred any losses on these accounts.

In addition, the Company maintains various bank accounts in Thailand, which are not insured.

During the years ended December 31, 2020 and 2019, we have not incurred material losses on these uninsured accounts.

The Company minimizes

the concentration of credit risk associated with its cash by maintaining its cash with high quality federally insured financial institutions.

The Company performs ongoing evaluations of its trade accounts receivable customers and generally does not require collateral.

Value of Financial Instruments and Fair Value Measurements

ASC 820 “

Fair Value Measurement and Disclosures:

(“ASU 820”) defines fair value as the price that would

be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants

on the measurement date.

ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable

inputs and minimize the use of unobservable inputs when measuring fair value.

A financial instrument’s level within the

fair value hierarchy is based on the lowest level of input significant to the fair value measurement.

Company measures its financial assets and liabilities in accordance with GAAP.

For certain of our financial instruments, including

cash, accounts payable, accrued expenses, and the short-term portion of long-term debt, the carrying amounts approximate fair

value due to their short maturities.

We adopted accounting guidance for fair values measurements and disclosures (ASC 820).

guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three

broad levels.

The following is a brief description of those three levels:

carry certain assets and liabilities at fair value.

Fair value is defined as the price that would be received to sell an asset or paid

to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date.

three-tier hierarchy for inputs used in measuring fair value, which prioritizes the inputs based on the observability as of the measurement

date, is as follows:

inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities;

other than quoted prices that are observable, either directly or indirectly.

These include quoted prices for similar assets

or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not

inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which

reflect those that a market participant would use.

instruments recognized in the consolidated balance sheets consist of cash, accounts receivable, prepaid expenses and other current

assets, note receivable, accounts payable, accrued expenses and premium finance loan payable.

The Company believes that the carrying

value of its current financial instruments approximates their fair values due to the short-term nature of these instruments.

carrying value of long-term debt to related parties and long-term debt to others approximates the current borrowing rate for similar

debt instruments.

following are the major categories of liabilities measured at fair value on a recurring basis:

as of December 31, 2019 and December

31, 2018, using significant unobservable inputs (Level 3):

Fair Value measurement using Level 3

Fair Value at December 31, 2017

Long term debt added during 2018

Principal reductions during 2018

Adjustment to fair value

Balance at December 31, 2018

Long term debt additions during 2019

Principal reductions during 2019

Adjustment to fair value

Balance at December 31, 2019

Balance Sheet Arrangements

Payable and related potential liabilities are excluded from the balance sheet when there are significant uncertainties associated

with the likelihood that the liabilities will be paid in full or until such time that the amount of the liability can be reasonably

determined or estimated.

to uncertainties associated with certain Notes Payable resulting from the acquisition of S&W, see Note 4, the Company has

not included the value of those Notes Payable within the purchase price and/or related assets acquired in the acquisition.

off-balance sheet arrangements are reasonably likely to have a current or future effect on our financial condition, changes in

financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are

material to investors.

receivable are recorded at fair value on the date revenue is recognized.

The Company provides allowances for doubtful accounts

for estimated losses resulting from the inability of its customers to repay their obligation.

If the financial condition of the

Company’s customers were to deteriorate, resulting in an impairment of their ability to repay, additional allowances may be required.

The Company provides for potential uncollectible accounts receivable based on specific customer identification and historical

collection experience adjusted for existing market conditions.

If market conditions decline, actual collection experience may

not meet expectations and may result in decreased cash flows and increased bad debt expense.

The Company is also subject to adjustments

from traffic settlements that are deducted from open invoices.

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

or net 60 days.

Once collection efforts by the Company and its collection agency are exhausted, the determination for charging

off uncollectible receivables is made.

As of December 31, 2019 and 2018, the Company has recorded an allowance for doubtful accounts

of $505,401 and $228,779, respectively.

These include quoted prices for similar assets or liabilities

in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active;

inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect

those that a market participant would use.

Company measures its financial assets and liabilities in accordance with GAAP.

For certain of our financial instruments, including cash,

accounts payable, accrued expenses, and the short-term portion of long-term debt, the carrying amounts approximate fair value due to

their short maturities.

and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Our assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the placement

of assets and liabilities being measured within the fair value hierarchy.

(See Note 13).

receivable represent receivables from customers in the ordinary course of business.

These are recorded at invoices amount on the date

revenue is recognized.

Receivables are recorded net of the allowance for doubtful accounts in the accompanying consolidated balance sheets.

The Company provides allowances for doubtful accounts for estimated losses resulting from the inability of its customers to repay their

If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability

to repay, additional allowances may be required.

The Company provides for potential uncollectible accounts receivable based on specific

customer identification and historical collection experience adjusted for existing market conditions.

If market conditions decline, actual

collection experience may not meet expectations and may result in decreased cash flows and increased bad debt expense.

The Company is

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

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

Once collection efforts by the Company and its collection agency are exhausted, the determination for charging off uncollectible

receivables is made.

and Equipment

and equipment are recorded at cost.

Depreciation is computed using the straight-line method based on the estimated useful lives

of the related assets of seven years for office furniture and equipment, and five years for computer equipment.

Leasehold improvements

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

and equipment are recorded at cost, less accumulated depreciation.

Depreciation is computed using the straight-line method based on the

estimated useful lives of the related assets.

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

of the improvements.

Development Costs

Company accounts for its website development costs in accordance with ASC 350-50, “Website Development Costs”

These costs, if any, are included in intangible assets in the accompanying consolidated financial statements.

350-50 requires the expensing of all costs of the preliminary project stage and the training and application maintenance stage

and the capitalization of all internal or external direct costs incurred during the application and infrastructure development

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

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

Company accounts for its website development costs in accordance with ASC 350-50, “

Website Development Costs ”.

costs, if any, are included in intangible assets in the accompanying consolidated financial statements.

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.

of December 31, 2020 and 2019, all website development costs have been expensed.

While it is likely that we will have significant amortization

expense as we continue to acquire websites, we believe that intangible assets represent costs incurred by the acquired website to build

value prior to acquisition and the related amortization and impairment charges of assets, if applicable, are not ongoing costs of doing

Net and Intangible Assets, Net

and Intangible assets result primarily from acquisitions.

The Company categorizes Goodwill into two reporting units:

“Owned &

Operated”

and “Ad Network”.

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

Upon the acquisition, the purchase price is first allocated to identifiable assets and liabilities, including the trade name

and other intangibles, with any remaining purchase price recorded as goodwill.

is not amortized, rather, an impairment test is conducted on an annual basis, or more frequently if indicators of impairment are present,

which are determined through a qualitative assessment.

A qualitative assessment includes consideration of the economic, industry and

market conditions in addition to the overall financial performance of the Company and these assets.

If our qualitative assessment does

not conclude that it is more likely than not that the estimated fair value of the reporting unit is greater than the carrying value,

we perform a quantitative analysis.

In a quantitative test, the fair value of a reporting unit is determined based on a discounted cash

flow analysis and further analyzed using other methods of valuation.

A discounted cash flow analysis requires us to make various assumptions,

including assumptions about future cash flows, growth rates and discount rates.

The assumptions about future cash flows and growth rates

are based on our long-term projections.

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

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.

If not, we compare the fair value with its carrying amount.

To the extent the carrying

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

The Company’s annual

assessment date is December 31.

Company’s trade name and customer relationships are amortized on a straight-line basis over a useful life of 5 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 3-5 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.”

and Impairment of Long-Lived Assets

and impairment of long-lived assets are non-cash expenses relating primarily to website acquisitions.

The Company accounts for

long-lived assets in accordance with the provisions of ASC 360, “Property, Plant and Equipment”

This requires

that long-lived assets and certain identifiable intangibles be reviewed for impairment whenever events or changes in circumstances

Company evaluates long-lived assets, including amortizable intangible assets, for impairment whenever events or changes in circumstances

indicate that the carrying amount of an asset may not be recoverable.

Website acquisition costs are amortized over five years.

Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted

net cash flows expected to be generated by the asset.

If such assets are impaired, the impairment to be recognized is measured

by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Assets to be disposed of are reported

at the lower of the carrying amount or fair value less costs to sell.

it is likely that we will have significant amortization expense as we continue to acquire websites, we believe that intangible

assets represent costs incurred by the acquired website to build value prior to acquisition and the related amortization and impairment

charges of assets, if applicable, are not ongoing costs of doing business.

Company accounts for stock-based instruments issued to employees for services in accordance with ASC Topic 718.

ASC Topic 718

requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity-based

compensation issued to employees.

The value of the portion of an employee award that is ultimately expected to vest is recognized

as an expense over the requisite service periods using the straight-line attribution method.

The Company accounts for non-employee

share-based awards in accordance with the measurement and recognition criteria of ASC Topic 505-50, “Equity-Based Payments

to Non-Employees”.

The Company estimates the fair value of stock options by using the Black-Scholes option-pricing model.

Non-cash stock-based stock option compensation is expensed over the requisite service period and are included in selling, general

and administrative expenses on the accompanying statement of operations.

For the year ended December 31, 2019 and 2018, non-cash

stock-based stock option compensation expense was $45,674 and $24,128, respectively.

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.

Company accounts for share-based compensation related to instruments issued to employees and non-employees under GAAP, which requires

the measurement and recognition compensation costs for all equity-based payment awards based on estimated fair values.

The value of the

portion of an employee award that is ultimately expected to vest is recognized as an expense over the requisite service periods using

the straight-line attribution method.

The Company estimates the fair value of stock options by using the Black-Scholes option-pricing

Share-based compensation expense is included in selling, general and administrative expenses on the accompanying consolidated

statement of operations.

We have elected to account for forfeitures as they occur.

and Marketing

and marketing expenses are expensed as incurred and are included in selling, general and administrative expenses on the accompanying

consolidated statement of operations.

consolidated statements of operations.

For the years ended December 31, 2020 and 2019, advertising and marketing expense was $27,004

and $289,018, respectively, of which $308,115 and $0, was attributable to continuing operations, respectively.

and $307,536, respectively, both attributable to continuing operations.

Currency Translation

and liabilities of the Company’s Israeli subsidiary are translated from Israeli shekels to United States dollars at exchange

rates in effect at the balance sheet date.

Income and expenses are translated at the exchange rates for the weighted average rates

for the period.

and liabilities of the Wild Sky, the Company’s Thai subsidiary are translated from Thai baht to U.S.

dollars at exchange rates

in effect at the balance sheet date.

Income and expenses are translated at the exchange rates for the weighted average rates for the

The translation adjustments for the reporting period will be included in our statements of comprehensive income.

Based on the timing of the acquisition of the Israeli subsidiary, see Note 4, the impact of the currency exchange is immaterial

for the year ended December 31, 2019.

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.

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.

Company follows the provisions of ASC 740-10, Income Taxes - Overall.

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

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 Statement of Operations.

of December 31, 2019, tax years 2018, 2017, and 2016 remain open for Internal Revenue Service (“IRS”) audit.

has received no notice of audit or any notifications from the IRS for any of the open tax years.

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,

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 Statement of Operations.

Concentrations

Company generates revenues from through an Ad Exchange Network and through our Owned and Operated Ad Exchange Network.

one large customer who accounts for approximately 13% of the 2019 Ad Exchange Network Revenue.

A different customer accounts for

approximately 20% of the outstanding Accounts Receivable at December 31, 2019.

There is one large vendor who is owed approximately

11% of the Accounts Payable due.

Company minimizes the concentration of credit risk associated with its cash by maintaining its cash with high quality federally

insured financial institutions.

However, cash balances in excess of the FDIC insured limit of $250,000 are at risk.

31, 2019 and December 31, 2018, the Company had approximately $0 and $706,000, respectively, in cash balances above the FDIC insured

The Company performs ongoing evaluations of its trade accounts receivable customers and generally does not require collateral.

Concentration

the year ended December 31, 2018 a large portion of the Company’s funding was provided through the issuance of 12% convertible

notes and the sale of shares of the Company’s common stock and preferred stock to a related party officer and director, as well

as to a principal shareholder.

The Company’s

largest customer accounts for approximately 10% and 13% of the 2020 and 2019 Ad Exchange Network Revenue, respectively.

and Diluted Net Earnings (Loss) Per Common Share

accordance with ASC 260-10 , “Earnings Per Share”, basic net earnings (loss) per common share is computed by dividing

the net earnings (loss) for the period by the weighted average number of common shares outstanding during the period.

earnings (loss) per share are computed using the weighted average number of common and dilutive common stock equivalent shares

outstanding during the period.

As of December 31, 2019, and 2018 there were 2,017,727 and 1,797,000 common stock equivalent shares

outstanding as stock options, respectively;

22,151,720 and 16,319,875 common stock equivalent shares outstanding from warrants

to purchase common shares, respectively, 8,044,017 and 6,844,017 common stock equivalents from the conversion of preferred stock,

respectively;

and 200,000 and 200,000 common stock equivalents from the conversion of notes payable, respectively.

shares were not utilized as the effect is anti-dilutive.

(loss) per share is calculated and reported under the “two-class”

The “two-class”

method is an earnings

allocation method under which earnings per share is calculated for each class of common stock and participating security considering

both dividends declared or accumulated and participation rights in undistributed earnings as if all such earnings had been distributed

during the period.

The Company has convertible preferred stock which have a right to participate in dividends;

these are deemed to be

participating securities.

During periods of loss, there is no allocation required under the two-class method since the participating

securities do not have a contractual obligation to fund the losses of the Company.

applicable, basic earnings (loss) per share is calculated by dividing net income, after deducting dividends on convertible preferred

stock and participating securities as well as undistributed earnings allocated to participating securities, by the average number of

common shares outstanding during the period.

Diluted earnings (loss) per share is calculated in a similar manner after consideration

of the potential dilutive effect of common stock equivalents on the average number of common shares outstanding during the period.

stock equivalents include warrants and stock options.

Common stock equivalents are calculated based upon the treasury stock method using

an average market price of common shares during the period.

Dilution is not considered when a net loss is reported.

Common stock equivalents

that have an antidilutive effect are excluded from the computation of diluted earnings per share.

Company currently operates in one reporting segment.

The services segment is focused on producing advertising revenue generated

by users “clicking”

on website advertisements utilizing several ad network partners and direct advertisers and subscription

revenue generated by the sale of access to career postings on one of our websites.

The services segment is focused on producing advertising revenue generated by users

“clicking”

on website advertisements utilizing several ad network partners, and direct advertisers and subscription revenue

generated by the sale of access to career postings on one of our websites, however the latter, is insignificant.

Accounting Pronouncements

June 2016, the FASB issued ASU 2016-13 “Financial Instruments –

Credit Losses”

which replaces the incurred

loss model with a current expected credit loss (“CECL”) model.

The CECL model applies to financial assets subject

to credit losses and measured at amortized cost and certain off-balance sheet exposures.

Under current U.S.

GAAP, an entity reflects

credit losses on financial assets measured on an amortized cost basis only when losses are probable and have been incurred, generally

considering only past events and current conditions in making these determinations.

ASU 2016-13 prospectively replaces this approach

with a forward-looking methodology that reflects the expected credit losses over the lives of financial assets, starting when

such assets are first acquired.

Under the revised methodology, credit losses will be measured based on past events, current conditions

and reasonable and supportable forecasts that affect the collectability of financial assets.

2016-13 also revises the approach to recognizing credit losses for available-for-sale securities by replacing the direct write-down

approach with the allowance approach and limiting the allowance to the amount at which the security’s fair value is less

than the amortized cost.

In addition, ASU 2016-13 provides that the initial allowance for credit losses on purchased credit impaired

financial assets will be recorded as an increase to the purchase price, with subsequent changes to the allowance recorded as a

credit loss expense.

ASU 2016-13 also expands disclosure requirements regarding an entity’s assumptions, models and methods

for estimating the allowance for credit losses.

The amendments of this Update are effective for fiscal years, and interim periods

within those fiscal years, beginning after December 15, 2019.

Although early adoption was permitted as of January 1, 2019, the

Company has not yet adopted the guidance.

The Company is currently evaluating the impact the adoption of this new standard will

have on its consolidated financial statements.

January 2017, the FASB issued 2017-04, Intangibles - Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill

The amendments in this ASU simplify the subsequent measurement of goodwill by eliminating Step 2 from the

goodwill impairment test and eliminating the requirement for a reporting unit with a zero or negative carrying amount to

perform a qualitative assessment.

Instead, under this pronouncement, an entity would perform its annual, or interim, goodwill

impairment test by comparing the fair value of a reporting unit with its carrying amount and would recognize an impairment

change for the amount by which the carrying amount exceeds the reporting unit’s fair value;

however, the loss

recognized is not to exceed the total amount of goodwill allocated to that reporting unit.

In addition, income tax effects

will be considered, if applicable.

This ASU is effective for fiscal years, and interim periods within those fiscal years,

beginning after December 15, 2019.

Although early adoption was permitted as of January 1, 2019, the Company has not yet

adopted the guidance.

The Company is currently evaluating the impact of this ASU on its consolidated financial statements and

related disclosures.

August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement (Topic 820), - Disclosure Framework - Changes to the Disclosure

Requirements for Fair Value Measurement,”

which makes a number of changes meant to add, modify or remove certain disclosure

requirements associated with the movement amongst or hierarchy associated with Level 1, Level 2 and Level 3 fair value measurements.

This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019.

Although early adoption was permitted upon the issuance of the update, the Company has not yet adopted the guidance.

expect the adoption of this guidance to have a material impact on our consolidated Financial Statements.

Reclassification

reclassifications have been made to the December 31, 2018 consolidated balance sheet to conform to the December 31, 2019 consolidated

balance sheet presentation.

July 31, 2019, the Company executed a Share Exchange Agreement and Plan of Merger (the “Merger Agreement”) with Slutzky

& Winshman Ltd., an Israeli company (“S&W”) and the shareholders of S&W (the “Shareholders”).

The merger closed on August 15, 2019, and we acquired all of the outstanding shares of S&W.

Pursuant to the terms of the Merger

Agreement, we issued 12,130,799 shares valued at $19,409,278 to owners and employees of S&W, contingent consideration of $750,000

paid through the delivery of unsecured, interest free, one and two year promissory notes (the “Closing Notes”), and

223,841 restricted stock units held in escrow for future vested stock options valued at $185,722.

As of December 31, 2019, we

are unable to quantify the likelihood of achieving the sales objectives required for payment of the first Closing Note.

upon the Closing, we agreed to pay Spartan Capital Securities LLC (“Spartan Capital”) a broker-dealer and member of

FINRA a finder’s fee equal to issue 650,000 shares of our common stock valued at $1,040,000 and $165,000 cash.

were issued in February 2020 and the $165,000 was paid in March 2020.

The amounts due were included in the accrued expenses as

of December 31, 2019.

accordance with ASC 805 “Business Combinations”

the measurement period for the acquisition is for one year during

which the Company may reevaluate the assets acquired, liabilities assumed and the goodwill resulting from the transaction as well

as the change in amortization as a result of changes in the provisional amounts as if the accounting had been completed at the

acquisition date.

As discussed further in Note 15, the Company recognized a deferred tax liability associated with the intangible

assets acquired.

allocation of the purchase price to the assets acquired and liabilities assumed based on management’s estimate of fair values

at the date of acquisition as follows:

August 15, 2019

June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2016-13 (amended by ASU 2019-10), “

Instruments –

Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, regarding the measurement of credit

losses for certain financial instruments.

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

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

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

The Company is currently evaluating the impact this guidance will have

on the consolidated financial statements.

January 2017, the FASB issued Accounting Standards Update (“ASU”) No.

2017-04 (amended by ASU 2019-10), “

Goodwill and other (Topic 350):

Simplifying the Test for Goodwill Impairment.

Which simplifies the test for goodwill

impairment by removing the second step of the test.

There is a one-step qualitative test and does not amend the optional qualitative

assessment of goodwill impairment.

The new standard is effective January 1, 2023 and is not expected to have a material impact on the

Company’s consolidated financial statements.

August 2020, the FASB issued ASU 2020-06, “

Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives

and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) ”.

The ASU simplifies the accounting for certain

financial instruments with characteristics of liabilities and equity.

The FASB reduced the number of accounting models for convertible

debt and convertible preferred stock instruments and made certain disclosure amendments to improve the information provided to users.

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

The new standard is

not expected to have a material impact on the Company’s consolidated financial statements.

December 2019, the FASB issued ASU No.

2019-12, “

Income taxes (Topic 740):

Simplifying the Accounting for Income Taxes.

which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and clarifies

and amends the existing guidance.

The new standard is effective January 1, 2021 and the Company has adopted it effective January 1, 2020.

The new standard did not have a material impact on the Company’s consolidated financial statements.

March 2020, the FASB issued ASU No.

2020-04, “

Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate

Reform on Financial Reporting ”

which provides optional expedient and exceptions for applying generally accepted accounting

principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

In response to the concerns about structural risks of interbank offered rates (“IBORs”) and, particularly, the risk of cessation

of the LIBOR, regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative

reference rates that are more observable or transaction based and less susceptible to manipulation.

This accounting standards update

provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates

that are expected to be discontinued.

This new guidance may be adopted by the Company no later than December 1, 2022, with early adoption

The potential adoption of this guidance is not expected to have a material impact on the consolidated financial statements.

July 31, 2019, the Company executed a Share Exchange Agreement and Plan of Merger (the “Oceanside Merger Agreement”) with

Slutzky & Winshman Ltd., an Israeli company (“Oceanside”) and the shareholders of Oceanside (the “Oceanside Shareholders”).

The merger closed on August 15, 2019, and the Company acquired all of the outstanding shares of S&W.

Pursuant to the terms of the

Merger Agreement, we issued 12,513,227 shares valued at $20,021,163 to owners and employees of Oceanside and contingent consideration

of $750,000 paid through the delivery of unsecured, interest free, one and two year promissory notes (the “Closing Notes”).

At the time of the acquisition and under ASC 805, these Closing Notes were recorded ratably as compensation expense into the statement

of operations over the 24-month term and an accrued payable is being recognized over the same period.

As of August 15, 2020,

the Company did not make payment on the 1 st closing notes and thereby defaulted on its obligation and the 2 nd closing

note accelerated to become payable as of August 15, 2020.

Upon default, the closing notes accrue interest at a 1.5% per month rate, or

18% annual rate.

As a result, there was an incremental total charge of $300,672 recorded during 2020 which was $250,000 of additional

compensation expense and $50,672 of interest expense-related party.

upon the closing of the S&W Merger Agreement, the Company agreed to pay Spartan Capital Securities LLC (“Spartan Capital”),

a broker-dealer and member of FINRA, a finder’s fee in the form of Company common stock plus $165,000 cash.

Spartan Capital’s

finder’s fee amounted to 650,000 shares (valued at $1,040,000) issued in February 2020 and the $165,000 which were included in

the accrued expenses as of December 31, 2019 and paid in March 2020.

allocation of the purchase price to the assets acquired and liabilities assumed based on management’s estimate of fair values at

the date of acquisition as follows:

Tangible assets acquired

Liabilities assumed

Deferred tax liability

Net assets acquired

Cash and cash equivalents

Short-term deposit

Accounts receivable, net

Prepaid expense and other current assets

Long-term deposits

Property and equipment, net

Intangible assets acquired:

Tradename –

2 unchanged sentences

Non-compete agreements

Liabilities assumed

Trade payables

Accrued expenses and other current liabilities

Due to parent

Deferred tax liability

Net assets acquired

Total purchase price

table below summarizes the value of the total consideration given in the transaction:

(As Restated)

Shares issued to owners

1 unchanged sentence

Shares issued to employees

Preliminary purchase price

Restricted stock units held in escrow

Closing notes

Total consideration

ACQUISITIONS (CONTINUED)

November 18, 2019, the Company executed a Merger Agreement which merged Bright Mountain Media, Inc., a Florida corporation (“Bright

Mountain Media”), and its wholly-owned subsidiary BMTM2, Inc., a Florida corporation with News Distribution Network, Inc.

a Delaware Company (“NDN”).

November 18, 2019, the Company executed a Merger Agreement which merged the Company and its wholly-owned subsidiary BMTM2, Inc., a Florida

corporation with News Distribution Network, Inc.

(“NDN”), a Delaware Company.

The subsidiary then changed its name to MediaHouse,

Bright Mountain agreed to issue 22,180,761

shares of its common stock.

Each share of NDN’s outstanding Series A1 Preferred Stock and common stock, other than shares

to which holders shall have exercised dissenter’s rights in accordance with Delaware law, were cancelled and extinguished

and converted into the right to receive shares of Bright Mountain’s common stock based upon a paid-in capital basis, and

subject to a $1.75 conversion price of our common stock.

For every $1.75 of paid-in capital by an NDN stockholder, the NDN stockholder

received one share of Bright Mountain common stock.

Moreover, All NDN warrants and options outstanding at the Effective Time of

the Merger Agreement terminated and were cancelled unless exercised prior to the Effective Time of the Merger Agreement.

it pertains to outstanding promissory notes and other obligations payable to NDN, Bridge notes in the current principal amount

of $776,000 were convert into shares of Bright Mountain’s common stock at a conversion price of $0.50 per share, with one

common stock warrant exercisable at $0.75 per share and one common stock warrant exercisable at $1.00 per share issued for each

conversion share.

The principal of the bridge notes was converted into shares of Bright Mountain’s common stock at a conversion

price of $1.75 per share, and all accrued but unpaid interest were forgiven by the noteholders.

Also of note is the open line

of credit of approximately $660,000 due Mr.

Greg Peters, NDN’s Chief Executive Officer, was converted into shares of Bright

Mountain’s common stock at a conversion price of $0.50 per share, with one common stock warrant exercisable at $.75 per

share and one common stock warrant exercisable at $1.00 per share issued for each conversion share.

Total Consideration Shares are subject to lock up restrictions on resale as determined by Bright Mountain and 25% percent of the

Total Consideration Shares were placed in escrow to satisfy certain obligations including, but not limited to, (i) the delivery

of NDN audited financial statements, (ii) NDN having accounts receivable of at least $1,100,000 and (iii) certain NDN liabilities

not to exceed $4,000,000.

Effective upon the Closing, we agreed to pay Spartan Capital Securities LLC (“Spartan Capital”)

a broker-dealer and member of FINRA a finder’s fee equal to issue 660,000 shares of our common stock valued at $1,155,000.

The shares were issued in February 2020.

The value of the shares were included in the accrued expenses as of December 31, 2019.

accordance with ASC 805 “Business Combinations”

the measurement period for the acquisition is for one year during

which the Company may reevaluate the assets acquired, liabilities assumed and the goodwill resulting from the transaction as well

as the change in amortization as a result of changes in the provisional amounts as if the accounting had been completed at the

acquisition date.

As discussed further in Note 15, the Company recognized a deferred tax liability associated with the intangible

assets acquired.

allocation of the purchase price to the assets acquired and liabilities assumed based on management’s estimate of fair values

at the date of acquisition as follows:

November 18, 2019

LLC (“MediaHouse”).

The Company agreed to issue 22,559,790 shares of its common stock and 4,972,896 warrants to purchase

shares of Company stock.

Each share of NDN’s outstanding Series A1 Preferred Stock and common stock, other than shares to which

holders shall have exercised dissenter’s rights in accordance with Delaware law, were cancelled and extinguished and converted

into the right to receive shares of the Company’s common stock based upon a paid-in capital basis, and subject to a $1.75 conversion

price of our common stock.

For every $1.75 of paid-in capital by an NDN stockholder, the NDN stockholder received one share of the Company’s

common stock.

Moreover, all NDN warrants and options outstanding at the Effective Time of the Merger Agreement terminated and were cancelled

unless exercised prior to the Effective Time of the Merger Agreement.

it pertains to outstanding promissory notes and other obligations payable to NDN, Bridge notes in the current principal amount of $1,243,224

were converted into shares of Company common stock at a conversion price of $0.50 per share, with one common stock warrant exercisable

at $0.75 per share and one common stock warrant exercisable at $1.00 per share issued for each conversion share.

The principal of the

bridge notes was converted into shares of the Company’s common stock at a conversion price of $1.75 per share, and all accrued

but unpaid interest were forgiven by the noteholders.

table below summarizes the shares and warrants issued in the MediaHouse acquisition:

Shares issues in MediaHouse acquisition

(As Restated)

Common Shares:

Series A1 Preferred Stock

Bridge investors at $0.50

Bridge investors at 2X premium converted at $1.75

Total Common Shares

Bridge investors at $0.75

Bridge investors at $1.00

Total Warrants

Total Consideration Shares are subject to lock up restrictions on resale as determined by Bright Mountain and 25% percent of the Total

Consideration Shares were placed in escrow to satisfy certain obligations including, but not limited to, (i) the delivery of NDN audited

financial statements, (ii) NDN having accounts receivable of at least $1,100,000 and (iii) certain NDN liabilities not to exceed $4,000,000.

Effective upon the Closing, we agreed to pay Spartan Capital a finder’s fee equal to 1,389,160 shares of our common stock (valued

at $2,278,222) which was included in the accrued expenses as of December 31, 2019.

Of the 1,389,160 shares, 660,000 were issued in February

2020 and the remainder were issued in December 2020.

The allocation of the purchase

price to the assets acquired and liabilities assumed based on management’s estimate of fair values at the date of acquisition as

Tangible assets acquired

Liabilities assumed

Deferred tax liability

Net liabilities assumed

Tradename - trademarks

Cash & cash equivalents

Accounts receivable, net

Prepaid expense

Security deposit

Intangible assets acquired:

Tradename –

IP/Technology

1 unchanged sentence

Non-compete agreements

Liabilities assumed

Accounts payable

Accrued expenses

Compensation expense

Deferred rent

Deferred tax liability

Net assets acquired

Total purchase price

3 unchanged sentences

Total consideration

forma results

following table sets forth a summary of the unaudited pro forma results of the Company as if the acquisitions of S&W and NDN,

which was closed in August 2019 and November 2019, respectively, had taken place on the first day of the periods presented.

combined results are not necessarily indicative of the results that may have been achieved had the business been acquired as of

the first day of the periods presented.

December 31, 2019

December 31, 2018

Total revenue

Total expenses

Preferred stock dividend

Net loss attributable to common shareholders

(10,378,795 )

(17,890,144 )

Basic and diluted net loss per share

June 1, 2020, the Company entered into a membership interest purchase agreement (the “Purchase Agreement”) with Centre Lane

Partners Master Credit Fund II, L.P.

(“Centre Lane”) to purchase 100% of the membership interests of CL Media Holdings, LLC

(“Wild Sky”).

The Company issued 2,500,000 shares of restricted common stock to Centre Lane and Centre Lane issued a first

lien senior secured credit facility of $16,451,905.

Per the credit facility with Center Lane, our loan payments begin December 1, 2021.

There is no prepayment penalty associated with this credit facility.

Certain future capital raises do require partial or full prepayments

of the credit facility.

Agreement provides for a senior secured five-year loan in the initial principal amount of $16,451,905.

Pursuant to the Credit Agreement,

the loan bears interest at six percent (6%) payment–in-kind interest (“PIK Interest”) which will be added to the outstanding

principal balance.

The Credit Agreement provides for no amortization for the first 18 months and 10% thereafter.

Amortization is payable

in equal quarterly installments on the principal balance after adding the PIK Interest with a bullet payment due at maturity on June

The loan under the Credit Agreement may be prepaid in minimum amounts $250,000.

The loan balance can be prepaid with no penalty.

The loan is guaranteed by Bright Mountain and certain of its domestic subsidiaries of which became party to a Guarantee Agreement dated

as of the Effective Date and each domestic subsidiary that, subsequent to the Effective Date, becomes a subsidiary.

The Credit Agreement

contains negative covenants that, subject to certain exceptions, limits the ability of Bright Mountain and its subsidiaries to, among

other things, incur debt, engage in new lines of business, incur liens, engage in mergers, consolidations, liquidations and dissolutions,

dispose of assets of Bright Mountain and its subsidiaries, make investments, loans, advances, guarantees and acquisitions.

raised up to $15,000,000 in the first one-hundred eighty days from the Credit Agreement is excluded from the loan balance prepayment

requirements.

upon the closing of the Wild Sky Purchase Agreement, the Company agreed to pay Spartan Capital Securities LLC (“Spartan Capital”),

a broker-dealer and member of FINRA, a finder’s fee in the form of Company common stock.

Spartan Capital was issued 610,000 shares

(valued at $908,900) in December 2020.

allocation of the purchase price to the assets acquired and liabilities assumed based on management’s estimate of fair values at

the date of acquisition as follows:

Tangible assets acquired

Cash & cash equivalents

Accounts receivable, net

Prepaid expense

Fixed assets, net

Intangible assets acquired:

Tradename –

IP/Technology

Customer relationships

Liabilities assumed

Accounts payable

Accrued expenses

Other current liabilities

Long term loan payable –

Deferred tax liability

Net assets acquired

Total purchase price

table below summarizes the value of the total consideration given in the transaction:

Shares issued

Total consideration

DISCONTINUED OPERATIONS

prior to December 31, 2018 with the appropriate level of authority, determined to exit, effective December 31, 2018, its Black

Helmet business line as a result of, among other things, the change in our strategic direction to a focus solely in our advertising

Historically revenues from our product sales segment including revenues from two of our websites that operate as e-commerce

platforms, including Bright Watches and Black Helmet, as well as Bright Watches’

retail location.

prior to December 31, 2018, with the appropriate level of authority, determined to discontinue the operations of Bright Mountain

watches effective December 31, 2018.

The decisions to exit all components of our product segment will result in these businesses

being accounted for as discontinued operations.

The Company has determined that the exit of the Bright Watches business requires

the Company to liquidate the inventory and settle all obligations to wind down the business unit.

The Company anticipates selling

the inventory of remaining products at reduced prices within one year.

Accordingly, the Company determined that the assets and

liabilities of this reportable segment met the discontinued operations criteria in Accounting Standards Codification 205-20-45,

as such the results have been classified as discontinued operations.

2018 with the appropriate level of authority, management determined to exit, effective December 31, 2018, its Black Helmet and

Bright Mountain Watches business lines as a result of, among other things, the change in our strategic direction to a focus solely

in our advertising segment.

The decisions to exit all components of our product segments will result in these businesses being accounted

for as discontinued operations.

Accordingly, the Company determined that the assets and liabilities of this reportable segment met the

discontinued operations criteria in ASC 205, as such the results have been classified as discontinued operations.

March 8, 2019, the Black Helmet Apparel E-Commerce business was sold for $175,000.

At December 31, 2018, $180,000 of inventory

was considered held for sale and included in discontinued operations.

In 2020 the Company had no discontinued operations

detail of the consolidated balance sheets the consolidated statements of operations and consolidated cash flows for the discontinued

operations is as stated below:

ended December 31,

and Cash Equivalents

Current Assets –

(As restated)

Discontinued Operations

Other Assets –

Cash and cash equivalents

Accounts receivable

Total Current Assets –

Discontinued Operations

Assets - Discontinued Operations

Current Liabilities –

Total Assets –

Discontinued Operations

Assets Discontinued Operations

Year ended December 31,

Accounts payable

Total Current Liabilities –

Discontinued Operations

Net Assets –

Discontinued Operations

Cost of revenue

Selling general, and administrative expenses

Loss from operations - discontinued operations

Loss from operations –

discontinued operations

Loss from discontinued operations

$ (1,092,720 )

Basic and fully diluted net loss per share

Year ended December 31,

Cash (used in) provided by operations for discontinued operations:

Basic and fully diluted net loss per share –

Weighted average shares outstanding –

basic & diluted

Loss from discontinued operations

$ (1,092,750 )

Write-off of fixed assets

Amortization of website acquisitions and intangibles

Impairment of website acquisitions and intangibles assets

Provision for bad debts

Product refund reserve

Provision for inventory reserve

Change in Assets and Liabilities Classified as Discontinued Operations:

Change in Assets and Liabilities Classified as Discontinued

Accounts receivable

Prepaid rents

Accounts payable

Accrued Expenses

Deferred Rents

Change in cash provided by (used in) discontinued operations

Net decrease in cash and cash equivalents from discontinued operations

Deferred Rent

Change in cash provided by discontinued operations

PREPAID EXPENSES AND OTHER CURRENT ASSETS

December 31, 2019 and December 31, 2018, prepaid expenses and other current assets consisted of the following:

December 31, 2020 and 2019, prepaid expenses and other current assets consisted of the following:

Prepaid insurance

Prepaid VAT fees

consulting service agreements –

Prepaid value added tax (VAT) fees

Prepaid expenses –

Current portion of prepaid service agreements

Prepaid expenses and other current assets

NOTE 7 –

Capital is a broker-dealer that has assisted the Company with a range of services including

capital raising activities, M&A advisory, and consulting services.

The Company has a

five-year agreement with Spartan Capital for the provision of such services and any prepayments

made under the terms of this agreement starting October 2018 were capitalized and amortized

over the remaining life of the agreement.

PROPERTY AND EQUIPMENT

December 31, 2019 and December 31, 2018, property and equipment consisted of the following:

Depreciable Life

December 31, 2020 and 2019, property and equipment consisted of the following:

Estimated Useful Life

Furniture and fixtures

4 unchanged sentences

Total property and equipment, net

expense was $10,265 and $26,289, with $10,265 and $13,220 attributable to continuing operations for the years ending December

31, 2019 and 2018, respectively.

During 2019, in conjunction with acquisition of S&W, the Company acquired computer equipment

and leasehold improvements valued at $11,602 and $1,388, respectively.

As a result of the acquisition of MediaHouse in 2019, no

property or equipment was recognized.

NOTE 8 –WEBSITE ACQUISITION AND INTANGIBLE ASSETS.

At December 31, 2019 and 2018, respectively, website acquisitions, net consisted of the following:

expense was $46,369 and $10,265 for the years ending December 31, 2020 and 2019, respectively, all of which are attributable to continuing

WEBSITE ACQUISITION AND INTANGIBLE ASSETS

December 31, 2020 and 2019, respectively, website acquisitions, net consisted of the following:

Website acquisition assets

2 unchanged sentences

Website acquisition assets, net

expense related to website acquisition costs for the years ended December 31, 2020 and 2019 was $43,328 and $72,813, respectively, and

is included in selling, general and administrative costs in the statements of operations.

December 31, 2020 and 2019, respectively, intangible assets, net consisted of the following:

4 unchanged sentences

accumulated amortization

accumulated impairment loss

(16,486,929 )

Intangible assets, net

expense for the years ended December 31, 2019 and 2018 was $687,529 and $189,948, respectively, of which $0 and $165,066 was attributed

to discontinued operations, respectively, related to both the website acquisition costs and the intangibles.

in discontinued operations are impairment losses for the years ended December 31, 2019 and 2018 was $0 and $326,442, respectively.

See Note 5 for further discussion.

2019, the Company rebranded Daily Engage to Bright Mountain and wrote off the $32,000 tradename asset of Daily Engage.

2019, the Company acquired S&W in which finite lived intangible assets of $4,655,700 and Goodwill of $15,666,783 were recognized,

2019, the Company acquired NDN in which finite lived intangible assets of $15,380,700 and Goodwill of $36,991,147 were recognized,

expense related to intangible assets for the years ended December 31, 2020 and 2019 was $3,587,090 and $583,364, respectively, and is

included in selling, general and administrative costs in the statements of operations.

The table below shows the forward 5-year amortization

2025 & thereafter

2020, the finite lived intangible assets associated with Oceanside and MediaHouse were tested for impairment valuation based on indicators

of impairment noted by management, including decreased revenues.

primarily resulting from the COVID-19 global pandemic when many companies

in various industries were forced to restructure their advertising budgets and spending.

The fair value of the respective assets was

determined based on the projected future cash flows associated with the respective assets.

These fair values were compared with the carrying

values of the respective assets to determine if an impairment of the respective assets was warranted.

It was determined that the carrying

values of the finite lived intangible assets associated with Oceanside did not exceed the respective fair values of the assets, therefore

no revaluation associated with these assets has been recognized.

It was determined that the finite lived intangible assets associated

with MediaHouse were deemed impaired based on an analysis of the carrying values and fair values of the assets.

In September 2020, the

Company recorded an impairment expense of $16,486,929 within intangible assets impairment expense on the consolidated statement of operations.

following table presents changes to goodwill for the years ended December 31, 2020 and 2019:

January 1, 2019 goodwill

Additions (a)

December 31, 2019 goodwill (as Restated)

Additions (b)

Deletions (c)

Impairment loss

(42,031,510 )

(42,279,087 )

December 31, 2020 goodwill

Company recognized Goodwill of $17,568,103 and $33,394,397 in connection with the acquisitions of Oceanside and MediaHouse, respectively.

Refer to Note 4.

Company recognized Goodwill of $9,973,136 in connection with the acquisition Wild Sky.

Refer to Note 4.

Company had an adjustment to Goodwill related to purchase accounting related to the acquisition of MediaHouse for ($182,203) related

to a working capital adjustment.

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.

The year 2020 has been marked by the COVID-19 Global pandemic when many companies in various industries were

forced to restructure their advertising budgets and spending.

This is evidenced by the reduced revenues from our customers in comparison

with the 2019 year.

The fair value of the respective reporting units was determined based on both the Income Approach (Discount Cash

Flows) and the Market Multiples Approach.

In September 2020, it was determined that the carrying value of the Goodwill associated with

the Owned & Operated reporting unit was not deemed impaired;

while recorded goodwill associated with the Ad Network reporting unit

exceeded the fair value of the Goodwill and in September 2020, the Company recorded an impairment of $42,279,087.

ACCRUED EXPENSES

December 31, 2020 and 2019, respectively, accrued expenses consisted of the following:

Year ended December 31,

Contingency accrued for DEM payable settlement

Accrued dividends

ended December 31,

Accrued interest

Accrued salaries and benefits

Accrued dividends

traffic settlement (1)

legal settlement (2)

Accrued legal fees

Accrued other professional fees

issuance liability (4)

warrant penalty (3)

Other accrued expenses

Accrued compensation

Accrued service/consulting agreements

Accrued traffic settlements

Total accrued expenses

A-1, E and F dividends totaling $158,966 and $25,548 for December 31, 2019 and December 31, 2018, respectively, have been included

in the accrued expenses.

further described in Note 11, during the year ended December 31, 2019, the Company reached a settlement of $75,000 for publisher

payments in collections of $197,690 resulting in a gain on settlement of $122,500.

The settlement was paid in full as of December

2019 the Company received an additional payment of $1,239 from a former customer whose balance had been settled in a prior year.

Company negotiates with its publishing partners regarding questionable traffic to arrive at traffic settlements.

A total of $95,254

and $95,254 for December 31, 2019 and December 31, 2018, respectively were accrued for these potential future settlements.

accrued consulting fees include $2,122,400 representing cash due of $165,000 and common stock of 650,000 and 660,000 shares to

be issued to Spartan Capital Securities, LLC in the acquisition of S&W and MediaHouse, respectively.

NOTES PAYABLE

term debt to related p arties

September 2016 and August 2017 , the

Company issued a series of convertible notes payable to an executive officer and a major shareholder totaling $2,035,000.

notes mature five years from issuance at

which time all principal and interest are payable.

Interest rates on the notes ranged from 6% to 12% and the notes were

convertible at any time prior to maturity at conversion prices ranging from $0.40 to

0.50 per share .

Company recognized a beneficial conversion feature when the fair value of the underlying common stock to which the note is

convertible into was in excess of the face value of the note.

For notes payable under this criteria the intrinsic value of

the beneficial conversion features was recorded as a debt discount with a corresponding amount to additional paid in capital.

The debt discount is being amortized to interest over the five-year life of the note using the effective interest

November 7, 2018 the Company entered into a Note Exchange Agreement with Mr.

Kip Speyer, our CEO and member of our Board of

Directors, pursuant to which we exchanged our convertible notes for three new series of preferred stock as outlined below:

principal amount and accrued but unpaid interest due Mr.

Speyer under 12% Convertible Promissory Notes maturing between September

26, 2021 and April 10, 2022 for 2,177,233 shares of our newly created Series F-1 Convertible Preferred Stock in full satisfaction

of those notes;

principal amount and accrued but unpaid interest due Mr.

Speyer under 6% Convertible Promissory Notes maturing between April

19, 2022 and July 27, 2022 for 1,408,867 shares of our newly created Series F-2 Convertible Preferred Stock in full satisfaction

of those notes.

principal amount and accrued but unpaid interest due Mr.

Speyer under 10% Convertible Promissory Notes maturing between August

1, 2022 and August 30, 2022 for 757,197 shares of our newly created Series F-3 Convertible Preferred Stock in full satisfaction

of those notes.

Company determined the value of the preferred shares using a third party valuation expert.

The summary of the Exchange Transaction

as of November 7, 2018 is as follows:

Fair value of preferred Series F-1

Fair value of preferred Series F-2

Fair value of preferred Series F-3

Total consideration

Principal balance of convertible notes

Accrued interest

Discount on convertible notes

Net Carrying value of debt extinguished

Loss on extinguishment of debt

November 2018, the Company issued 10% convertible promissory notes in the amount of $80,000 to a related party, to our Chief Executive

The notes mature five years from issuance and is convertible at the option of the holder into shares of common stock

at any time prior to maturity at a conversion price of $0.40 per share.

A beneficial conversion feature exists on the date the

convertible notes were issued whereby the fair value of the underlying common stock to which the notes are convertible into is

in excess of the face value of the note of $70,000.

principal balance of these notes payable was

$ 80,000 and $80,000 at December 31, 2019 and December 31 ,

2018, respectively and discounts recognized upon respective origination

dates as a result of the beneficial conversion feature

total $ 54,311 and $68,312 .

At December 31, 2019 and 2018,

the total convertible notes payable to related party net of discounts was $25,689 and $11,688,

respectively.

expense for note payable to related party was $ 15,711

and $174,588 for the years ended December 31, 2019 and 2018, respectively and discount amortization

was $ 14,001 and $196,375, respectively.

Company has a note payable originating from a prior website acquisition.

At the time of the acquisition, the Company agreed to

pay $150,000, payable monthly in an amount equal to 30% of the net revenues from the website, when collected, with the total amount

of the earn out paid in January 2019.

The Company recorded the future monthly payments totaling $150,000 at a present value of

$117,268, net of a discount of $32,732.

The present value was calculated at a discount rate of 12% using the estimate future revenues.

The balance of the note payable at December 31, 2019 and 2018, was $0 and $57,181 net of discounts of $0 and $0, respectively.

The Company negotiates with its publishing partners regarding questionable traffic to arrive at traffic settlements.

Accrued legal settlement related to the Encoding legal matter.

Refer to Note 13.

The Company has sold units of its securities to various investors in several private placements.

As part of each private placement, the

Company agreed to file a registration statement with the SEC to register the resale of the shares by the respective holder in order to

permit the public resale;

such filing deadlines ranged from 120 to 270 days following the closing date of the respective placement and

the Company was liable to pay a penalty fee for failure to file the resale registration statement within the allotted timeframe.

Share issuance liability related to issuance of the Company’s common stock in connection with the Oceanside, MediaHouse and Wild

Sky acquisitions and Oceanside employee share issuances.

Refer to Note 4 for further information on the Company’s acquisitions.

11 –DEBT

connection with the acquisition of BMLLC, the Company issued promissory notes totaling $380,000.

The notes have no stated interest

rate and matured on September 19, 2018 and the Company is in default pending the final outcome of the legal matters.

of the notes payable at December 31, 2019 and 2018 were $165,163 and $165,163, respectively.

This note was not paid off by the

maturity date due to pending litigation.

See further discussion in Note 11, under Legal.

The notes had no stated interest rate

and matured on September 19, 2018 and the Company was in default prior to a settlement reached on July 8, 2020.

Effective July 8, 2020,

the Company executed a Settlement Agreement and Release with Harry G.

Pagoulatos, George Rezitis, and Angelo Triantafillou whereby they

relinquish their Bright Mountain common stock shares, and the Company pays them full and final settlement of $385,000 within 12 months

from the date the shares are delivered to Bright Mountain, which were received by our legal agent in December 2020.

The Company had previously

made payments against the notes resulting in a recorded liability due to the parties of $165,163.

The settlement increased the liability

to a final settlement amount of $385,000, requiring an additional liability of $219,837 which was recognized by the Company within “Notes

payable”

in the consolidated balance sheet.

The balance of the notes payable at December 31, 2020 and 2019 were $385,000 and $165,163,

respectively.

The notes are payable one year from the surrender of the note holders’

common stock of the Company, which is included

in treasury stock (Note 15).

debt to related parties

November 2018, the Company issued 10% convertible promissory notes in the amount of $80,000 to the Company’s Chairman of the Board.

The notes mature five years from issuance and are convertible at the option of the holder into shares of common stock at any time prior

to maturity at a conversion price of $0.40 per share.

A beneficial conversion feature exists on the date the convertible notes were issued

whereby the fair value of the underlying common stock to which the notes are convertible into is in excess of the face value of the note

principal balance of these notes payable was $80,000 at both December 31, 2020 and 2019 and discounts recognized upon respective origination

dates as a result of the beneficial conversion feature total $39,728 and $54,311, respectively.

At December 31, 2020 and 2019, the total

convertible notes payable to related party net of discounts was $40,272 and $25,689, respectively.

unsecured and interest free Closing Notes of $750,000 as identified in Note 4 were recorded ratably as compensation expense into the

statement of operations over the 24-month term and an accrued payable is being recognized over the same period.

As of August 15, 2020,

the Company did not make payment on the 1 st closing notes and thereby defaulted on its obligation and the 2 nd closing

note accelerated to become payable as of August 15, 2020.

Upon default, the closing notes accrue interest at a 1.5% per month rate, or

18% annual rate.

As a result, there was a total charge of $300,672 recorded during the 3 rd quarter of 2020 which was $250,000

of compensation expense and $50,672 of interest expense-related party.

The total $750,000 liability is recorded in accrued expenses.

expense for note payable to related party for the year ended December 31, 2020 and 2019 was $58,808 and $19,334, respectively.

April 24, 2020, under the Paycheck Protection Program (“PPP”) established by the Coronavirus Aid, Relief, and Economic Security

(“CARES”) Act, administered by the Small Business Administration (“SBA”),the Company entered into a promissory

note of $464,800 with Regions Bank (the “Bright Mountain PPP Loan”) and has a two-year term and bears interest at a rate

of 1.0% per annum.

Monthly principal and interest payments are deferred for six months after the date of disbursement.

The PPP Loan may

be prepaid at any time prior to maturity with no prepayment penalties.

The Promissory Note contains customary events of default provisions.

Under the terms of the CARES Act, PPP Loan recipients can apply for and be granted forgiveness for all or a portion of loans granted

under the PPP.

On January 28, 2021, the Company applied for the promissory note to be forgiven by the SBA in whole or in part;

the date of this report, the Company that application is still in process.

This loan was forgiven on July 16, 2021 by the Small Business

Administration (SBA).

See Note 20 for Subsequent events information.

June 1, 2020, the Company acquired Wild Sky and assumed the $1,706,735 promissory note (the “Wild Sky PPP Loan”) with Holcomb

Bank received under the PPP.

The Wild Sky PPP Loan has a two-year term and bears interest at a rate of 1.0% per annum.

Monthly principal

and interest payments are deferred for six months after the date of disbursement.

The Wild Sky PPP Loan may be prepaid at any time prior

to maturity with no prepayment penalties.

The Wild Sky PPP Loan contains customary events of default provisions.

Under the terms of the

CARES Act, PPP Loan recipients can apply for and be granted forgiveness for all or a portion of loans granted under the PPP.

22, 2021, the Company applied for the promissory note to be forgiven by the SBA in whole or in part and on March 29, 2021, the Company

obtained the forgiveness of the Wild Sky PPP Loan in whole.

June 1, 2020, we entered into a membership interest purchase agreement to acquire 100% of Wild Sky The seller issued a first lien senior

secured credit facility totaling $16,451,905, which consisted of $15,000,000 of initial indebtedness, repayment of Wild Sky’s existing

accounts receivable factoring facility of approximately $900,000 and approximately $500,000 of expenses.

The note bears interest at a

rate of 6.0% per annum.

Per the credit facility with the seller, our loan payments begin December 1, 2021.

There is no prepayment penalty

associated with this credit facility.

Certain future capital raises do require partial or full prepayments of the credit facility.

membership interest purchase included a requirement that the opinion of the financial statements as of and for the year ended December

31, 2020 not include a “going concern opinion”;

the Company has defaulted on this requirement but on April 26, 2021, the

Company obtained a waiver from the lender waiving this requirement.

December 31, 2020 and 2019 a summary of the Company’s debt is as follows:

non-interest bearing Note Payable issued on January 6, 2016 for the acquisition of the WarIsBoring.com website maturing on

January 4, 2019

bearing Promissory Note issued for the BMLLC acquisition on September 19, 2017 which matured on September 19, 2018.

note was $380,000 of which $35,000 was reclassified in 2018 to the Service Agreement listed below.

$45,000 non-interest

bearing Note Payable issued on August 23,2018 and maturing on April 23, 2019 associated with a Service Agreement through August

Less Short Term Debt

Non-interest bearing BMLLC acquisition debt

Wild Sky acquisition debt

short term debt and current portion of long term debt

Long term debt

expense was $581,925 and $39,411 for the years ended December 31, 2020 and December 31, 2019, respectively.

minimum annual principal payments of notes payable at December 31, 2020 were:

expense for notes payable was $ 0 and

$34,070 for the years ended December 31, 2019 and 2018, respectively and discount amortization was $0 and $10,910, respectively.

Finance Loan Payable

Company generally finances its annual insurance premiums through the use of short-term notes, payable in 10 equal monthly installments.

Coverages financed include Directors and Officers and Errors and Omissions with premiums financed in 2019 and 2018 of $179,844

Coverages financed include Directors and Officers and Errors and Omissions with premiums financed in 2020 and 2019 of $380,397 and $110,200,

respectively.

Total Premium Finance Loan Payable balance for the Company’s policies was $339,890 and $179,844 as of December 31,

2020 and 2019, respectively.

Premium Finance Loan Payable balance for all the Company’s policies was $179,844 at December 31, 2019 and $92,537 at December

FAIR VALUE MEASUREMENTS

Company’s assets and liabilities recorded at fair value are categorized based upon a fair value hierarchy that ranks the quality

and reliability of the information used to determine fair value.

Financial instruments recognized in the consolidated balance sheets

consist of cash, accounts receivable, prepaid expenses and other current assets, note receivable, accounts payable, accrued expenses

and premium finance loan payable.

The Company believes that the carrying value of its current financial instruments approximates their

fair values due to the short-term nature of these instruments.

The carrying value of long-term debt to related parties and long-term

debt to others approximates the current borrowing rate for similar debt instruments.

Company has certain non-financial assets that are measured at fair value on a non-recurring basis when there is an indicator of impairment,

and they are recorded at fair value only when impairment is recognized.

These assets include property, plant and equipment, goodwill

and intangible assets, net.

Refer to Note 9 and Note 10 for discussion on impairment of intangible assets and goodwill, respectively.

The Company does not have any non-financial liabilities measured and recorded at fair value on a non-recurring basis.

Disclosures about Fair Value of Financial Instruments

tables below set forth information related to the Company’s consolidated financial instruments (in thousands):

debt to related parties

bearing BMLLC acquisition debt

following are the major categories of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level

3) as of December 31, 2020 and 2019:

Fair Value measurement using Level 3

Balance at December 31, 2018

Principal reductions during 2019

Balance at December 31, 2019

during 2020 (1)

Balance at December 31, 2020

(1) Additions

are due to $16,451,906 related to the Wild Sky acquisition debt (Refer to Note 4) and $219,837

to settlement in relation with the acquisition of BMLLC.

Refer to “Long term debt”

COMMITMENTS AND CONTINGENCIES

Company leases its corporate offices at 6400 Congress Avenue, Suite 2050, Boca Raton, Florida 33487 under a long-term non-cancellable

lease agreement expiring on October 31, 2021.

The lease terms require base rent payments of approximately $7,260 per month for

the first twelve months commencing in September 2018, with a 3% escalation each year.

Included in other assets is a required security

deposit of $18,100.

Rent is all-inclusive and includes electricity, heat, air-conditioning, and water.

Company leases office space in Hertsliya, Israel under a long-term non-cancellable operating lease agreement expiring on December

The lease terms require base rent payments of approximately $10,896.

Included in other assets is a required security

deposit of $58,651.

right of use asset and lease liability is as follows as of December 31, 2019:

Company leases its corporate offices in Boca Raton, Florida under a long-term non-cancellable lease agreement expiring on October 31,

The lease terms require base rent payments of approximately $7,260 per month for the first twelve months commencing in September

2018, with a 3% escalation each year.

This monthly payment is all-inclusive and includes electricity, heat, air-conditioning, and water.

The lease terms require a security deposit of $4,700 which is included in other assets in the consolidated balance sheet.

right-of-use asset and lease liability are as follows as of December 31, 2020 and 2019:

Operating lease right-of-use asset

2 unchanged sentences

Total operating lease liabilities

Company’s non-lease components are primarily related to property maintenance and other operating services, which varies

based on future outcomes and is recognized in rent expense when incurred and not included in the measurement of the lease

The Company did not have any variable lease payments for its operating lease for the three or nine months ended

December 31, 2019.

Future minimum lease commitments due for facilities under non-cancellable operating leases at December 31, 2019 are as follows:

Company’s non-lease components are primarily related to property maintenance and other operating services, which vary based on

future outcomes and is recognized in rent expense when incurred and not included in the measurement of the lease liability.

did not have any variable lease payments for its operating lease for the year ended December 31, 2020.

Future minimum lease commitments

due for facilities under non-cancellable operating leases at December 31, 2020 are as follows:

Total minimum lease payments

following summarizes additional information related to the operating lease:

Weighted-average

remaining lease term

Weighted-average

discount rate

Company leased retail space for its product sales division at 4900 Linton Boulevard, Bay 17A, Delray Beach, FL 33445 under a two

long-term, non-cancellable lease agreement, which contained renewal options.

The leases commenced in January 2017 and are in effect

for a period of five years.

Minimum base rentals total approximately $6,000 per month, escalating 3% per year thereafter.

Company also provided a $10,000 security deposit and prepaid $96,940 in future rents on the facility through the funding of certain

leasehold improvements.

The Company discontinued all retail operations and has made a settlement with the landlord to terminate

the lease of approximately $55,000.

See Discontinued Operations Note 5.

December 16, 2016, under the terms of the Asset Purchase Agreement, we acquired the assets constituting the Black Helmet apparel

business including various website properties and content, social media content, inventory and other intellectual property right.

We also acquired the right to assume the lease of their warehouse facility consisting of approximately 2,667 square feet.

lease was renewed for a three-year term in April 2016 with an initial base rental rate of $1,641 per month, escalating at approximately

3% per year thereafter.

The Company vacated the premises before during 2019.

See Discontinued Operations Note 5.

expense for the years ended December 31, 2019 and 2018 was $138,427 and $350,974 of which $109,518 and $132,891 are from continuing

operations, respectively.

Rent commitments have decreased because two leases were not renewed and the Company downsized the space

rented at its corporate headquarters.

July 18, 2018 we

terminated the employment

agreements with

each of Messrs.

and George G.

Rezitis for cause.

Pagoulatos and Rezitis had been

employed by us as chief operating officer and chief technology officer, respectively, of our BMLLC subs idiary

since our acquisition of that

company in September 2017.

Todd Speyer, our Chief

Operating Officer –

Bright Mountain, LLC and a member of our board of directors ,

have assumed operating responsibilities for BMLLC.

While the malfeasance of Messrs.

Pagoulatos and George G.

Rezitis giving rise to their for-cause termination adversely affected our results

of operations for the second and third quarters, we do not expect that these terminations

will result in any material, long-term change in the operations

July of 2018, Messrs.

and Rezitis ,

along with a third party

a minority owner in BMLLC

prior to our acquisition of that

company, filed a Complaint in

District Court, District

of New Jersey

8-cv-11357-ES-SCM) against our

Company and our Chief Executive Officer, seeking

compensatory and punitive

damages and attorneys’

among other items, and alleging ,

among other items ,

fraud and breach

We vehemently

complaint and

believe them to

be without merit.

for a multitude

including, but not

restricted to, failure to state

action and jurisdictional and

venue arguments as

the acquisition

and employment agreements

provides that

any di s pute

heard in either

the state or local

courts of Palm

Beach County, Florida.

to Dismiss has been pending and ripe for a decision since October 2018.

appropriate juncture ,

we also intend

to serve a Rule 11 Motion for

Sanctions based upon

the fact that the Complaint

contains frivolo us

arguments or arguments with no

evidentiary support.

T he Company reached a settlement

with the collections lawyer to pay down the amount remaining in collections through equal monthly payments through February 1,

The parties also agreed to settle all claims through the exchange of shares from Messrs.

Pagoulatos and George G.

Rezitis for payment of $165,163.

The payment for the shares will

be made as Messrs.

Pagoulatos and George G.

shares are resold by the Company.

connection with the BMLLC acquisition, the Company entered into

three-year employment

agreements with

two former members of the entity.

Under these agreements, the Company

to pay base salaries of $65,000 and $70,000, respectively to the employees with an increase to $75,000

each in the second

year of the agreement as well

to be paid at the discretion of the board of directors.

time-to-time, we may be involved in litigation or be subject to claims arising out of our operations or content appearing on our

websites in the normal course of business.

Although the results of litigation

and claims cannot be predicted

with certainty, we currently believe that the final outcome of these ordinary course matters will not have

a material adverse effect on

our business.

Regardless of the outcome, litigation can have an adverse impact

on our company because of defense

and settlement costs , diversion

of management resources and other factors.

See Part II, Item I, Legal Proceedings

for further discussion.

September 5 , 2018

the Company entered into a Master Services Agreement with Kubient ,

pursuant to which it will

provide its programmatic technology platform to us on a nonexclusive basis for the purpose of managing our programmatic business

The Company did not pay anything to Kubient ,

for the year ended December

31, 2019 for its platform.

The Company has provided advertising services to Kubient and at December 31, 2019 the Company is owed

$ 125,387 and a note

receivable of $75,000 and we have reserved a total of $136,000 against these balances.

September 28 , 2018 Bright Mountain Media ,

entered into a

non-binding letter of intent with Kubient , Inc .

pursuant to which we may acquire

Kubient , Inc .

an all stock transaction.

The Company has completed the

due diligence process and has made a determination that it will not pursue the acquisition of Kubient, Inc.

September 6 , 2017

Bright Mountain Media , Inc .

entered into a five- year

Consulting Agreement with the

Spartan Capital Securities , LLC

Capital”), a broker-dealer and member of FINRA, which under its terms would not become effective until the closing of the

private placement in which Spartan Capital served as placement agent as described below.

The Consulting Agreement became effective

on September 28 , 2018

and, accordingly,

Spartan Capital was engaged to provide advisory services

but not limited to advice and

input with respect to raising capital, assisting us with strategic

introductions, and assisting

management with enhancing corporate and shareholder value.

The consulting agreement calls for an initial fee

of $200,000 as consideration

for the termination of a prior agreement between the Company and Spartan.

The consulting agreement also calls for payments of

$5,000 per month for a term of 60 months to be prepaid upon the effective date of the agreement.

In addition ,

the Company issued Spartan Capital

1,000,000 shares of our common stock

(the “Consulting

Shares”) in accordance with

the consulting agreement.

September 6 , 2017

a five-year M&A Advisory Agreement with Spartan Capital which became effective on September 28, 2018 upon the completion of

the private placement for sixty months.

Under the terms of the agreement, Spartan Capital will provide consulting services

to us related to potential mergers

or acquisitions, including candidates, valuations and transaction terms and structures.

As consideration for the M&A advisory

service we paid Spartan Capital a fee of $500,000 on the effective date of the agreement.

$200,000 initial consulting fee was expensed upon payment and is included in selling,

general and administrative expenses for the year ended December 31, 2018.

fees consisting of $300 , 000

in cash and 1,000 , 000

shares of common stock valued at $750,000 as well as the $500,000 M&A advisory fee

are considered prepaid expenses.

Total prepaid service/consulting fees, net were $1,472,500 ,

which $310,000 is considered short-term

is included in prepaid expenses and other current assets as of December 31, 2018.

prepaid expenses are being amortized over 60 months, the term of the respective agreements.

The amortization expense was $77,500 and $0 for the year ended December 31, 2019 and

Weighted-average remaining lease term

Weighted-average discount rate

expense for the years ended December 31, 2020 and 2019 was $377,704 and $137,152 of which $377,704 and $109,518 are from continuing operations,

respectively.

the 36 months from the final closing of this private placement, Spartan Capital has certain rights of first refusal if we decide

to undertake a future private or public offering or if we decide to engage an investment banking firm.

Company granted the purchasers in the offering demand and

piggy-back registration rights

with respect to the share s of

our common stock included in the Units and the shares of common stock issuable upon the exercise of the Private Placement Warrants.

In addition , the

Company agreed to file a resale registration statement within

120 days following the final

closing of this offering covering the shares of common stock issuable upon the exercise of the Private Placement Warrants included

in the Units.

If the Company should fail to timely file this resale registration statement,

then within five business days

of the end of month we will pay the holders an amount in cash, as partial liquidated damages, equal to 2% of the aggregate purchase

price paid by the holder for each 30 days, or portion thereof, until the earlier of the date the deficiency is cured or the expiration

of six months from filing deadline .

The Company will keep any such

registration statement effective

until the earlier of the date upon which all such securities may be sold without registration under Rule 144 promulgated under

the Securities Act or the date which is six months after the expiration

date of the Private Placement

We are obligated to pay all costs associated with this registration statement ,

other than selling expenses of

the holders .

December 11, 2018 we entered into an Uplisting Advisory and Consulting Agreement with Spartan Capital pursuant to which Spartan

Capital will provide (i) advice and input with respect to strategies to accomplish an uplisting of our common stock to the Nasdaq

Capital Market or NYSE American LLC or another national securities exchange, and the implementation of such strategies and making

introductions to facilitate the uplisting, (ii) advice and input with respect to special situation and restructuring services,

including debtor and creditor advisory services, and (iii) sell-side advisory services with respect to the sale and disposition

of non-core businesses and assets, including facilitating due diligence and identifying potential buyers and strategic partners

and positioning these businesses and assets to maximize value.

We paid Spartan Capital a fee of $200,000 for its services under

this agreement which is for a 12 month term beginning on the closing date of the offering.

The agreement also provides that we

will reimburse Spartan Capital for reasonable out-of-pocket expenses, which we must approve in advance.

The Company has included

this payment in prepaid expense at December 31, 2018 and it will be amortized over a twelve-month period.

conjunction with the intent to facilitate the uplisting, the Company agreed to compensate the law firm engaged for this service

$70,000 to be paid in common stock upon the successful outcome of the uplisting.

The fees associated with this service are considered

a cost of the uplisting and will be considered part of the expenses associated with the transaction at such time.

Company entered into an Executive Employment Agreement with our Chief Executive Officer, with an effective date of June 1,

Under the terms of this agreement, the Company will compensate the Chief Executive Officer with a base salary of

$75,000 annually, and he is entitled to receive discretionary bonuses as may be awarded by the Company’s board of directors

from time to time.

The initial term of the agreement is three years, and the Company may extend it for an additional one-year

period upon written notice at least 180 days prior to the expiration of the term.

The Company amended this agreement April 1,

2017 for an additional term of three years.

The Chief Executive Officer’s base annual salary was increased to $165,000 upon

recommendation of the Compensation Committee of the board of directors.

The employment agreement contains customary

non-compete and confidentiality provisions.

The Company also agreed to indemnify the Chief Executive Officer pursuant to the

provisions of the Company’s Amended and Restated Articles of Incorporation and Amended and Restated By-laws.

time-to-time, the Company may be involved in litigation or be subject to claims arising out of our operations or content appearing on

our websites in the normal course of business.

Although the results of litigation and claims cannot be predicted with certainty, the

Company currently believes that the final outcome of these ordinary course matters will not have a material adverse effect on our business.

Under the covenants of the Placement Agent Agreement and as disclosed in the Placement Offering Memorandum, the Company was

obligated to make a filing with a stock exchange to list the Company’s shares.

The Company was to make such filing by a listing

deadline and have stock exchange approval by a listing approval deadline.

In the event the Company was unable to meet to deadlines, the

investors in the Offering would be entitled to one additional share of common stock for each share purchased in the Offering provided,

however, that such deadlines and obligations of the Company to issue additional shares would be extended for so long as the Company was

able to demonstrate to the reasonable satisfaction of the Placement Agent, which consent shall not be reasonably withheld that it had

acted in good-faith in attempting to list such securities which included responding to comments from such exchange.

The Company believes

it has acted in good-faith and has no obligation.

No litigation has been filed by Spartan at this time or any of the shareholders in

connection with the matter.

For more information, see Note 20 Subsequent events.

2020, Synacor, Inc commenced an action against MediaHouse, LLC, Inform, Inc.

and the Company, alleging approximately $230,000 was owed

based on invoices provided in 2019 in respect to that certain Content Provider & Advertising Agreement with MediaHouse.

has filed an answer and defenses and intends to defend the alleged claims.

This is recorded as an accrued liability as of December 31,

For more information, see Note 20 Subsequent events.

former employee of the Company filed a suit against the Company MediaHouse, Inc., and Gregory A.

Peters, a former Executive, (the “Defendants”)

alleging two counts of defamation.

Any potential losses associated with this matter cannot be estimated at this time.

Encoding.com,

(“Encoding”) was a former digital media customer of MediaHouse.

Encoding had a long overdue outstanding receivable from

MediaHouse’s predecessor company, Inform, Inc.

MediaHouse did not assume the liability at acquisition.

In 2020, the Company and

Encoding agreed to settle the overdue receivable through the issuance of 175,000 warrants to purchase Company stock with a $1.00 exercise

This is recorded as an accrued liability as of December 31, 2020 and the warrants were issued in 2021.

of the outcome, litigation can have an adverse impact on our company because of defense and settlement costs, diversion of management

resources and other factors.

PREFERRED STOCK

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 previously designated five series of preferred stock, consisting of 10% Series A Convertible Preferred Stock

(“Series A Stock”), 10% Series B Convertible Preferred Stock (“Series B Stock”), 10% Series C Convertible

Preferred Stock (“Series C Stock”), 10% Series D Convertible Preferred Stock (“Series D Stock”) and 10% Series

E Convertible Preferred Stock (“Series E Stock”).

November 5, 2018 we filed Articles of Amendment to our Amended and Restated Articles of Incorporation, as amended, which:

1,000,000 shares of previously designated 10% Series B Convertible Preferred Stock, 2,000,000

shares of previously designated 10% Series C Convertible Preferred Stock and 2,000,000

shares of previously designated 10% Series D Convertible Preferred Stock to the status

of authorized but undesignated and unissued shares of our blank check preferred stock

as there were no shares of any of these series outstanding and no intention to issue

any such shares in the future;

three new series of preferred stock, 12% Series F-1 Convertible Preferred Stock (“Series

F-1”) consisting of 2,177,233 shares, 6% Series F-2 Convertible Preferred Stock

(“Series F-2”) consisting of 1,408,867 shares, and 10% Series F-3 Convertible

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 previously designated five series of preferred stock, consisting of 10% Series A Convertible Preferred Stock (“Series

A Stock”), 10% Series B Convertible Preferred Stock (“Series B Stock”), 10% Series C Convertible Preferred Stock (“Series

C Stock”), 10% Series D Convertible Preferred Stock (“Series D Stock”) and 10% Series E Convertible Preferred Stock

(“Series E Stock”).

November 5, 2018, the Company filed Articles of Amendment to Amended and Restated Articles of Incorporation, as amended, which:

1,000,000 shares of previously designated 10% Series B Convertible Preferred Stock, 2,000,000 shares of previously designated 10%

Series C Convertible Preferred Stock and 2,000,000 shares of previously designated 10% Series D Convertible Preferred Stock to the

status of authorized but undesignated and unissued shares of our blank check preferred stock as there were no shares of any of these

series outstanding and no intention to issue any such shares in the future:

three new series of preferred stock, 12% Series F-1 Convertible Preferred Stock (“Series F-1”) consisting of 2,177,233

shares, 6% Series F-2 Convertible Preferred Stock (“Series F-2”) consisting of 1,408,867 shares, and 10% Series F-3 Convertible

Preferred Stock (“Series F-3”) consisting of 757,917 shares.

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.

Series F-1 pays dividends at the rate of 12% per annum and automatically converts into shares of our common stock on April 10,

The Series F-2 pays dividends at the rate of 6% per annum and automatically converts into shares of our common on July 27,

The Series F-3 pays dividends at the rate of 10% per annum and automatically converts into shares of our common stock on

August 30, 2022.

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

designations, rights and preferences of the Series F-1, Series F-2 and Series F-3 are identical, other than the dividend rate, liquidation

preference and date of automatic conversion into shares of our common stock.

The Series F-1 pays dividends at the rate of 12% per annum

and automatically converts into shares of our common stock on April 10, 2022.

The Series F-2 pays dividends at the rate of 6% per annum

and automatically converts into shares of our common on July 27, 2022.

The Series F-3 pays dividends at the rate of 10% per annum and

automatically converts into shares of our common stock on August 30, 2022.

Additional terms of the designations, rights and preferences

of the Series F-1, Series F-2 and Series F-3 include:

shares have no voting rights, except as may be provided under Florida law;

shares pay cash dividends subject to the provisions of Florida law at the dividend rates

set forth above, payable monthly in arrears;

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.

shares pay cash dividends subject to the provisions of Florida law at the dividend rates set forth above, payable monthly in arrears;

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

shares rank junior to our 10% Series A Convertible Preferred Stock and our 10% Series

E Convertible Preferred Stock;

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;

converted will automatically convert into shares of our common stock on the dates set forth above;

shares rank junior to our 10% Series A Convertible Preferred Stock and our 10% Series E Convertible Preferred Stock;

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;

shares are not redeemable by the Company.

December 31, 2019, there were 1,200,000 shares of Series A-1 Stock and 2,500,000 shares of Series E Stock and 4,344,017 shares

July 18, 2019, the Company filed Articles of Amendment to Amended and Restated Articles of Incorporation, as amended, which:

designation of 2,000,000 shares of the preferred stock as 10% series A-1 Convertible Preferred Stock and authorized the issuance

of the Series A-1 Preferred Stock;

on the Series A-1 Preferred stock are cumulative and payable in cash;

shall be payable monthly in arrears within fifteen (15) days after the end of the month.

both December 31, 2020 and 2019, there were 1,200,000 shares of Series A-1 Stock, 2,500,000 shares of Series E Stock and 4,344,017 shares

of Series F Stock issued and outstanding.

There are no shares of Series B Stock, Series C Stock or Series D Stock issued and outstanding.

There are no shares of Series B-1 Stock issued and outstanding

Series A-1 Stock is senior to all other classes of the Company’s securities and has a stated value of $0.50 per share.

of shares of Series A-1 Stock are entitled to the payment of a 10% dividend payable in shares of the Company’s common stock

at a rate of one share of common stock for each 10 shares of Series A-1 Stock, payable annually the 10th business day of January.

The shares of Series A-1 Stock are redeemable at the Company’s option upon 20 days’

notice for an amount equal to the amount

of capital invested.

On the 10th business day of January 2018 there were 10,000 shares of common stock dividends owed and payable

to the Series A-1 Stockholder of record as dividends on the Series A-1 Stock.

These preferred shares automatically converted into

common shares on December 30, 2018 as defined above.

September 6, 2017, the board of directors designated 2,500,000 shares of Preferred Stock as Series E Stock, which such designation

was amended on September 29, 2017.

Holders of shares of Series E Stock are entitled to 10% dividends, payable monthly as may be

permitted under Florida law out of funds legally available therefor.

The shares of Series E Stock rank senior to any other class

of our equity securities, except for the Series A Stock, have a liquidation preference of $0.40 per share and are not redeemable.

remaining designations, rights and preferences of each of the Series A Stock and Series E Stock are identical, including (i) shares

do not have voting rights, except as may be permitted under Florida law, (ii) are convertible into shares of our common stock

at the holder’s option on a one for one basis, (iii) are entitled to a liquidation preference equal to a return of the capital

invested, and (iv) 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.

Kip Speyer, the Company’s Chairman and Chief Executive Officer, purchased an aggregate of 1,200,000 shares

of Series A-1 Stock at a purchase price of $0.50 per share.

Kip Speyer, the Company’s Chairman and Chief Executive Officer, purchased an aggregate of 1,125,000 shares

of Series E Stock at a purchase price of $0.40 per share.

for Series E and F Convertible Preferred Stock paid to Mr.

Kip Speyer were $180,931 and $107,294 during the years ended December

31, 2019 and 2018, respectively.

A) Stock Issued for cash

2019, the Company sold an aggregate of 163,750 units of its securities to 1 accredited investor in a private placement exempt

from registration under the Securities Act in reliance on exemptions provided by Section 4(a)(2) and Rule 506(b) of Regulation

D resulting in gross proceeds to the Company of $58,950.

Each unit, which was sold at a purchase price of $0.40, consisted of

one share of common stock and one five-year warrant to purchase one share of common stock at an exercise price of $0.65 per share.

Spartan Capital, served as placement agent for the Company in this offering.

As compensation for its services, the Company paid

Spartan Capital commissions and other fees totaling $6,550, and issued Spartan Capital Placement Agents Warrants to purchase an

aggregate of 16,375 shares of our common stock, including the cash commission and Placement Agent Warrants issued pursuant to

the final closing on January 9, 2019 included in the Company’s consolidated statement of changes in shareholders’

equity for the year ended December 31, 2019.

2019, the Company sold an aggregate of 2,570,860 units of its securities to 20 accredited investors in two private placements

exempt from registration under the Securities Act in reliance on exemptions provided by Section 4(a)(2) and Rule 506(b) of Regulation

D resulting in gross proceeds to the Company of $1,285,530.

A total of 1,270,000 units were sold under the first private placement

dated February 14, 2019 at a purchase price of $0.50 per share resulting in gross proceeds of $635,000.

Each unit was sold at

a purchase price of $0.50, and consisted of one share of common stock and one five-year warrant to purchase one share of common

stock at an exercise price of $0.75 per share.

On April 22, 2019 the Company amended the private placement to include a second

There are no shares of Series B Stock, Series B-1 Stock, Series C Stock or Series D Stock issued

and outstanding.

designations, rights and preferences of each of series of preferred stock are identical, including (i) shares do not have voting rights,

except as may be permitted under Florida law, (ii) are convertible into shares of our common stock at the holder’s option on a

one for one basis, (iii) are entitled to a liquidation preference equal to a return of the capital invested, and (iv) 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

Kip Speyer, the Company’s Chairman of the Board, purchased an aggregate of 1,200,000 shares of Series A-1 Stock

at a purchase price of $0.50 per share.

paid for Series A-1, E and F Convertible Preferred Stock were $63,136 and $180,931 for the years ended December 31, 2020 and 2019, respectively.

Total preferred stock dividend accrued amounted to $363,460 and $319,351 for the years ended December 31, 2020 and 2019, respectively.

July 8, 2020, the Company executed a Settlement Agreement and Release with the Harry G.

Pagoulatos, George Rezitis, and Angelo Triantafillou

whereby they relinquished their Bright Mountain common stock shares and the Company will pay a final settlement of $385,000 within 12

months from the date the shares are delivered to the Company, which were received by the legal agent in December 2020.

As of December 31, 2020, the parties have provided the Company with the total 825,175 shares.

The shares will

be held as Treasury Stock by the Company and will be resold at later dates.

Issued for cash

2020, the Company sold an aggregate of 10,398,700 units of its securities to 82 accredited investors, 27 of which are unduplicated, in

a private placement exempt from registration under the Securities Act in reliance on exemptions provided by Section 4(a)(2) and Rule

506(b) of Regulation D resulting in gross proceeds to the Company of $5,199,350.

Each unit, which was sold at a purchase price of $0.50,

consisted of one share of common stock and one five-year warrant to purchase one share of common stock at an exercise price of $0.75

Spartan Capital Securities, LLC (“Spartan Capital”) served as placement agent for the Company in this offering.

As compensation for its services, Spartan Capital withheld $1,621,653 of certain fees.

These include direct offering commissions of $1,179,653

which are included as an adjustment to Additional Paid-in-Capital, $165,000 of finders fees related to Oceanside acquisition and other

fees totaling $277,000, of which $250,000 is included in prepaid and other current assets, and the remaining $27,000 were recorded as

In addition, the Company issued Spartan Capital Placement Agents Warrants to purchase an aggregate of 1,039,870 shares of our

common stock at an exercise price of $1.00 per share.

2019, the Company sold an aggregate of 163,750 units of its securities to 1 accredited investor in a private placement exempt from registration

under the Securities Act in reliance on exemptions provided by Section 4(a)(2) and Rule 506(b) of Regulation D resulting in gross proceeds

to the Company of $58,950.

Each unit, which was sold at a purchase price of $0.40, consisted of one share of common stock and one five-year

warrant to purchase one share of common stock at an exercise price of $0.65 per share.

970,500 units were sold at a purchase price

of $0.50 per unit resulting in gross proceeds of $485,250.

We used $1,008,225 of the proceeds to issue 6% promissory notes to

Inform, Inc as a part of the potential acquisition.

On July 15, 2019 these two offerings were terminated and replaced with a private

placement offering units at a purchase price of $0.50 consisting of one share of common stock, one five-year warrant to purchase

one share of common stock at an exercise price of $0.75 per share, and a second warrant to purchase one share of common stock

at an exercise price of $1.00 per share.

A total of 330,360 units were sold under the private placement dated July 15, 2019 units

at a purchase price of $0.50 per share resulting in gross proceeds of $165,280.

We used $148,662 of the proceeds to issue 6% promissory

notes to Inform, Inc as a part of the potential acquisition.

The investors in the first offering dated February 14, 2019 were

required to subscribe for the second warrant offered in the April 22, 2019 amendment in a private placement dated July 11, 2019

which terminated on July 31, 2019 with no ability to extend.

A total of 980,000 warrants were issued to eleven investors in the

first private placement who subscribed for the second warrant.

Three investors did not subscribe for the second warrant.

2019, the Company sold an aggregate of 750,000 units of its securities to 3 accredited investors in a private placement exempt

from registration under the Securities Act in reliance on exemptions provided by Section 4(a)(2) and Rule 506(b) of Regulation

D resulting in gross proceeds to the Company of $300,000.

Each unit, which was sold at a purchase price of $0.40, consisted of

one share of common stock and one five-year warrant to purchase one share of common stock at an exercise price of $0.65 per share.

2018, the Company sold an aggregate of 14,836,250 units of its securities to 106 accredited investors in a private placement exempt

from registration under the Securities Act in reliance on exemptions provided by Section 4(a)(2) and Rule 506(b) of Regulation

D resulting in gross proceeds to the Company of $5,934,500.

Each unit, which was sold at a purchase price of $0.40, consisted

of one share of common stock and one five-year warrant to purchase one share of common stock at an exercise price of $0.65 per

Spartan Capital, served as placement agent for the Company in this offering.

As compensation for its services, the Company

paid Spartan Capital commissions and other fees totaling $793,450, and issued Spartan Capital Placement Agents Warrants to purchase

an aggregate of 1,483,625 shares of our common stock, including the cash commission and Placement Agent Warrants issued pursuant

to the final closing on November 30, 2018 included in the Company’s consolidated statement of changes in shareholders’

Spartan Capital served as placement agent for

the Company in this offering.

As compensation for its services, the Company paid Spartan Capital commissions and other fees totaling

$6,550 and issued Spartan Capital Placement Agents Warrants to purchase an aggregate of 16,375 shares of our common stock, including

the cash commission and Placement Agent Warrants issued pursuant to the final closing on January 9, 2019 included in the Company’s

consolidated statement of changes in shareholders’

equity for the year ended December 31, 2019

We used $1.0 million of these proceeds from this final closing for the payment of

the fees due Spartan Capital under the terms of the Consulting Agreement and M&A Advisory Agreement described in Note 11,

and are using the balance for general working capital.

Under the terms of the agreement the Company agreed to file a resale registration

agreement within 120 days after the final closing of the offering covering the common stock shares issuable upon exercise of the

Private Placement Warrants included in the Units.

The Company did not file the resale registration agreement timely and has an

obligation $3,260 per day that the filing is delinquent.

B) Stock issued for services

February 2019, the Company issued 7,000 shares of our common stock to consultants for services rendered based on the fair value

of the date of grant, or $1.00 a share valued at $7,000.

July 2019, the Company issued 22,167 shares of our common stock to a consultant for services rendered based on the fair value

of the date of grant, or $1.79 a share valued at $39,750.

November 2019, the Company issued 63,000 shares of our common stock to a consultant for services rendered based on the fair value

of the date of grant, or $1.50 a share valued at $94,455.

September 2018, the Company issued 10,000 shares of common stock to a consultant for services rendered based on the fair value

at the date of grant, or $0.75 a share valued at $7,500.

Stock issued for acquisitions

September 19, 2017, the Company issued 1,100,233 shares of its common stock in connection the acquisition of the BMLLC - (See

The common shares were valued at $429,092 or $0.85 per share, based on the fair value on the date of

August 15, 2019, the Company issued 12,354,640 shares of its common stock in connection to the acquisition of S&W Media.

common shares were values at $19,409,278 or $1.57 per share.

November 18, 2019, the Company acquired MediaHouse and agreed to issue 22,180,781 shares of common stock in the transaction.

the transaction was recorded as of November 18, 2019, due to complications associated with the identification of the shareholders

to receive the shares, the shares were not issued prior to December 31, 2019 and were issued in 2020.

Accordingly, the shares

are included within the shares outstanding, but not as issued as of December 31, 2019.

The shares are valued at $45,952,684 or

$1.64 per share.

Stock issued for dividends

January 2018, the Company issued 100,000 shares of its common stock as dividends to the holder of its Series A preferred stock.

Option Compensation

Company accounts for stock option compensation issued to employees for services in accordance with ASC Topic 718, “Compensation

Stock Compensation”.

ASC Topic 718 requires companies to recognize in the statement of operations the grant-date

fair value of stock options and other equity-based compensation issued to employees.

The value of the portion of an employee award

that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution

The Company accounts for non-employee share-based awards in accordance with the measurement and recognition criteria of

2018-07, “

Compensation –

Stock Compensation (Topic 718):

Improvements to Nonemployee Share-Based Payment

The Company estimates the fair value of stock options by using the Black-Scholes option-pricing model.

options issued to consultants and other non-employees as compensation for services provided to the Company are accounted for based

on the fair value of the services provided or the estimated fair market value of the option, whichever is more reliably measurable

in accordance with FASB ASC 505, Equity, and FASB ASC 718 , including related amendments and interpretations.

related expense is recognized over the period the services are provided.

April 20, 2011, the Company’s board of directors and majority stockholder adopted the 2011 Stock Option Plan (the “2011

Plan”), to be effective on January 3, 2011.

The Company has reserved for issuance an aggregate of 900,000 shares of common

stock under the 2011 Plan.

The maximum aggregate number of shares of Company stock that shall be subject to Grants made under

the Plan to any individual during any calendar year shall be 180,000 shares.

On April 1, 2013, the Company’s board of directors

and majority stockholder adopted the 2013 Stock Option Plan (the “2013 Plan”), to be effective on April 1, 2013.

Company has reserved for issuance an aggregate of 900,000 shares of common stock under the 2013 Plan.

As of December 31, 2019,

9,000 shares were remaining under the 2011 Plan for future issuance.

As of December 31, 2019, 25,000 shares were remaining under

the 2013 Plan for future issuance.

May 22, 2015, the Company’s board of directors and majority stockholder adopted the 2015 Stock Option Plan (the “2015

Plan”), to be effective on May 22, 2015.

The Company has reserved for issuance an aggregate of 1,000,000 shares of common

stock under the 2015 Plan.

As of December 31, 2019, 420,000 shares were remaining under the 2015 Plan for the future issuance.

2019, the Company sold an aggregate of 2,570,860 units of its securities to 20 accredited investors in two private placements exempt

from registration under the Securities Act in reliance on exemptions provided by Section 4(a)(2) and Rule 506(b) of Regulation D resulting

in gross proceeds to the Company of $1,285,530.

A total of 1,270,000 units were sold under the first private placement dated February

14, 2019 at a purchase price of $0.50 per share resulting in gross proceeds of $635,000.

Each unit was sold at a purchase price of $0.50

and consisted of one share of common stock and one five-year warrant to purchase one share of common stock at an exercise price of $0.75

On April 22, 2019, the Company amended the private placement to include a second warrant to purchase one share of common stock

at an exercise price of $1.00 per share.

970,500 units were sold at a purchase price of $0.50 per unit resulting in gross proceeds of

We used $1,008,225 of the proceeds to issue 6% promissory notes to Inform, Inc as a part of the potential acquisition.

15, 2019, these two offerings were terminated and replaced with a private placement offering units at a purchase price of $0.50 consisting

of one share of common stock, one five-year warrant to purchase one share of common stock at an exercise price of $0.75 per share, and

a second warrant to purchase one share of common stock at an exercise price of $1.00 per share.

A total of 330,360 units were sold under

the private placement dated July 15, 2019 units at a purchase price of $0.50 per share resulting in gross proceeds of $165,280.

$148,662 of the proceeds to issue 6% promissory notes to Inform, Inc as a part of the potential acquisition.

The investors in the first

offering dated February 14, 2019 were required to subscribe for the second warrant offered in the April 22, 2019 amendment in a private

placement dated July 11, 2019 which terminated on July 31, 2019 with no ability to extend.

A total of 980,000 warrants were issued to

eleven investors in the first private placement who subscribed for the second warrant.

Three investors did not subscribe for the second

2019, the Company sold an aggregate of 750,000 units of its securities to 3 accredited investors in a private placement exempt from registration

under the Securities Act in reliance on exemptions provided by Section 4(a)(2) and Rule 506(b) of Regulation D resulting in gross proceeds

to the Company of $300,000.

Each unit, which was sold at a purchase price of $0.40, consisted of one share of common stock and one five-year

warrant to purchase one share of common stock at an exercise price of $0.65 per share.

issued for services

the year ended 2019, the Company issued an aggregate 90,215 shares of our common stock to consultants for services rendered based on

the fair value of the date of grant, which range from $1.00 to $1.79 a share for an aggregate value of $141,185.

the year ended 2020, the Company issued an aggregate 2,609,160 shares of our common stock to consultants for services rendered based

on the fair value of the date of grant, which range from $1.49 to $1.90 a share for an aggregate value of $4,332,623.

2020, Spartan Capital notified Bright Mountain of a cashless exercise of 1,852,003 warrants which had previously been awarded as compensation

for facilitating private placement offerings.

A total of 1,464,691 shares were issued as follows:

1,295,806 shares at $4.00 and 168,885

shares at $4.37, for an aggregate value of $5,921,251.

2020, two Spartan Capital employees, who had previously been assigned warrants according to Spartan Capital’s internal incentive

compensation program, notified Bright Mountain of a cashless exercise 175,000 warrants.

A total of 146,563 shares were issued at a $4.00

share price, for an aggregate value of $586,252

2020, a former employee exercised 50,000 stock options for $6,950.

A current employee exercised 80,000 stock options for $11,112.

SHARE-BASED COMPENSATION

Options Plans

April 20, 2011, the Company’s board of directors and majority stockholder adopted the 2011 Stock Option Plan (the “2011 Plan”),

to be effective on January 3, 2011.

The Company has reserved for issuance an aggregate of 900,000 shares of common stock under the 2011

The maximum aggregate number of shares of Company stock that shall be subject to Grants made under the Plan to any individual during

any calendar year shall be 180,000 shares.

On April 1, 2013, the Company’s board of directors and majority stockholder adopted

the 2013 Stock Option Plan (the “2013 Plan”), to be effective on April 1, 2013.

The Company has reserved for issuance an

aggregate of 900,000 shares of common stock under the 2013 Plan.

May 22, 2015, the Company’s board of directors and majority stockholder adopted the 2015 Stock Option Plan (the “2015 Plan”),

to be effective on May 22, 2015.

The Company has reserved for issuance an aggregate of 1,000,000 shares of common stock under the 2015

November 7, 2019, the Company’s board of directors and majority stockholder adopted the 2019 Stock Option Plan (the “2019

Plan”), to be effective on November 7, 2019.

The Company has reserved for issuance an aggregate of 5,000,000 shares of common

stock under the 2019 Plan.

As of December 31, 2019, 4,884,273 shares were remaining under the 2015 Plan for the future issuance.

purpose of the 2011 Plan, 2013 Plan, 2015 Plan, and 2019 Plan (the “Plans”

are 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.

Under the 2015

Plan, the Company is authorized to issue incentive stock options intended to qualify under Section 422 of the Code, non-qualified

stock options, stock appreciation rights, performance shares, restricted stock and long-term incentive awards.

The Company’s

board of directors will administer the 2011 Plan until such time as such authority has been delegated to a committee of the board

of directors.

The material terms of each option granted pursuant to the 2011 Plan by the Company shall contain the following terms:

(i) that the purchase price of each share purchasable under an incentive option shall be determined by the Committee at the time

of grant, (ii) the term of each option shall be fixed by the Committee, but no option shall be exercisable more than 10 years

after the date such option is granted and (iii) in the absence of any option vesting periods designated by the Committee at the

time of grant, options shall vest and become exercisable in terms and conditions, consistent with the Plan, as may be determined

by the Committee and specified in the Grant Instrument.

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.

Company believes this valuation methodology is appropriate for estimating the fair value of stock options granted to employees

and directors, which is subject to ASC Topic 718 requirements.

These amounts are estimates and thus may not be reflective of actual

future results, nor amounts ultimately realized by recipients of these grants.

The Company recognizes share-based compensation

expense on a straight- line basis over the requisite service period for each award.

The following table summarizes the assumptions

the Company utilized to record compensation expense for stock options granted during the year ended December 31, 2019:

The Company has reserved for issuance an aggregate of 5,000,000 shares of common stock

under the 2019 Plan.

of December 31, 2020, 337,000 shares, 467,000 shares, 859,000 shares and 4,761,773 shares were remaining for future issuance under the

2011 Plan, 2013 Plan, 2015 Plan and 2019 Plan, respectively.

purpose of the 2011 Plan, 2013 Plan, 2015 Plan, and 2019 Plan (together, the “Plans”) are 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.

Under the 2015 Plan, the Company is authorized

to issue incentive stock options intended to qualify under Section 422 of the Code, non-qualified stock options, stock appreciation rights,

performance shares, restricted stock and long-term incentive awards.

The Company’s board of directors will administer the 2011

Plan until such time as such authority has been delegated to a committee of the board of directors.

The material terms of each option

granted pursuant to the 2011 Plan by the Company shall contain the following terms:

(i) that the purchase price of each share purchasable

under an incentive option shall be determined by the Committee at the time of grant, (ii) the term of each option shall be fixed by the

Committee, but no option shall be exercisable more than 10 years after the date such option is granted and (iii) in the absence of any

option vesting periods designated by the Committee at the time of grant, options shall vest and become exercisable in terms and conditions,

consistent with the Plan, as may be determined by the Committee and specified in the Grant Instrument.

compensation is recognized as an expense on a straight-line basis over the requisite service period, which is generally the vesting period.

Employee stock options granted under the plan generally vest ratably over a four-year period and expire on the tenth anniversary of their

Restricted Stock Awards (“RSAs”) granted under the plan generally vest [in four equal annual installments beginning

one year after the date of grant].

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.

following table summarizes the assumptions the Company utilized to record compensation expense for stock options granted during the years

ended December 31, 2020 and 2019:

Expected term (years)

4 unchanged sentences

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

expected volatility is based on an average of similar public company’s historical volatility, as the Company’s common

stock is quoted in the over the counter market on the OTCQB Tier of the OTC Markets, Inc.

The risk-free interest rate is based

Treasury yields with terms equivalent to the expected term of the related option at the time of the grant.

volatility is based on an average of similar public company’s historical volatility, as the Company’s common stock is quoted

in the over-the-counter market on the OTCQB Tier of the OTC Markets, Inc.

The 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.

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 year ended December 31, 2019, the Company issued 220,727 common stock options.

No options were granted during the year ended

December 31, 2018.

Company recorded $45,674 and $24,128 of stock option expense for the year ended December 31, 2019 and December 31, 2018 respectively.

The stock option expense for year ended December 31, 2019 and 2018 has been recognized as a component of general and administrative

expenses in the accompanying consolidated financial statements.

of December 31,2019, there were total unrecognized compensation costs related to non-vested share-based compensation arrangements

of $235,198 to be recognized through December 2023.

summary of the Company’s stock option activity during the years ended December 31, 2019 and 2018 is presented below:

Outstanding, December 31, 2017

Balance Outstanding,

December 31, 2018

Outstanding, December 31, 2019

at December 31, 2019

Summarized information with respect to options outstanding under

the two option plans at December 31, 2019 is as follows:

RELATED PARTIES

November 7, 2018 the Company entered into a Note Exchange Agreement with Mr.

Kip Speyer, our CEO and member of our Board of

Directors, pursuant to which we exchanged our convertible notes for three new series of preferred stock.

See further discussion

in Note 8 Notes Payable for more details regarding the Note Exchange Agreement and Exchange Transaction.

November 2018, Mr.

Kip Speyer, the Company’s Chairman and Chief Executive Officer, entered into two convertible note

agreements with the company totaling $80,000.

These notes have a conversion price of $0.40 per share and resulted in the recognition

of a beneficial conversion feature recorded as a debt discount.

These notes payable total $35,689 at December 31, 2019.

are reported net of their unamortized debt discount of $44,311 as of December 31, 2019.

Kip Speyer, the Company’s Chairman and Chief Executive Officer, purchased an aggregate of 1,125,500 shares

of the Company’s Series E Convertible Preferred Stock at a purchase price of $0.40 per share.

The designations, rights and

preferences of Series E Stock are described in Note 12.

2019 and 2018 we paid cash dividends on these outstanding shares of the Company’s Series E and F Preferred Stock of $44,301

and $78,340, and $141,630 and $12,653 to the shareholders of record, W Kip Speyer and Rich Rogers, respectively.

Tax Cuts and Jobs Act (the “TCJA”) was enacted on December 22, 2017.

The TCJA, among other things, contains significant

changes to corporate taxation, including reduction of the corporate tax rate from a top marginal rate of 35% to a flat rate of

22%, effective as of January 1, 2018;

limitation of the tax deduction for interest expense;

limitation of the deduction for net

operating losses to 80% of current year taxable income and elimination of net operating loss carrybacks, in each case, for losses

arising in taxable years beginning after December 31, 2017 (though any such tax losses may be carried forward indefinitely).

the years ended December 31, 2019 and 2018 there was no provision for income taxes and deferred tax assets have been entirely

offset by valuation allowances.

As of December 31, 2019, the Company has net operating loss carry

forwards of approximately $4,182,000.

As of December 31, 2019, the Company has an income tax benefit of $3,547,274 and a deferred

tax liability of $581,440 as a result of deferred tax liabilities associated with acquisitions during the year.

The deferred tax

liability associated with the S&W, a foreign entity, acquisition is $744,960.

The deferred tax liability associated with the

NDN acquisition is $3,383,754.

The Company’s net operating loss carry forwards may be subject to annual limitations if the Company

experiences a change of ownership as defined in Section 382 of the Internal Revenue Code.

The Company has not conducted a study

to determine if a change of ownership has occurred.

The Company’s net operating loss carry forwards may be subject to annual limitations

if the Company experiences a change of ownership as defined in Section 382 of the Internal Revenue Code.

The Company has not conducted

a study to determine if a change of ownership has occurred.

December 31, 2019 and 2018 the Company has not recorded any liability for uncertain tax positions.

tax effect of significant components of the Company’s deferred tax assets and liabilities at December 31, 2019 and 2018,

are as follows:

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.

Company has elected to account for forfeitures as they occur.

Company recorded $181,550 and $51,684 of stock option expense for the year ended December 31, 2020 and 2019, respectively.

option expense for year ended December 31, 2020 and 2019 has been recognized as a component of general and administrative expenses in

the accompanying consolidated financial statements.

For the year ended December 31, 2020, there was no non-cash stock-based stock option

compensation expense and for the year ended December 31, 2019 non-cash stock-based stock option compensation expense was $141,884.

of December 31, 2020, there were total unrecognized compensation costs related to non-vested share-based compensation arrangements of

$279,295 to be recognized over a weighted-average period of 1.76 years.

summary of the Company’s stock option activity during the year ended December 31, 2020 is presented below:

Balance Outstanding, December 31, 2019

Balance Outstanding, December 31, 2020

Exercisable at December 31, 2020

information with respect to options outstanding under the Plans at December 31, 2020 and 2019, respectively, is as follows:

Outstanding at December 31, 2020

Outstanding at December 31, 2019

Company recognized compensation expense for 130,081 RSAs granted to independent directors of the Company and former employees of MediaHouse

amounting to $405,943 for the year ended December 31, 2020.

There was no compensation expense for RSAs for the year ended December 31,

The restrictions on these share awards were for 1 year, hence they lapse in November and December 2021, respectively.

held in escrow

part of the Company’s acquisition of the Oceanside (Note 4), the Company assumed the existing S&W Option plan (“Israel

Sub Plan”).

The Israel Sub Plan was cancelled the and the 26 individuals who were participants in the plan had their options under

the Israel Sub Plan converted into options to purchase stock of the Company, with their original vesting period.

The grant date was determined

to be the acquisition date and the stock price on the acquisition date of $1.60 was determined to be the grant price.

As of the acquisition

date, there were a total of 546,773 shares that will be issued between acquisition date and March 31, 2023.

December 31, 2020, we had 35,848,316 common stock warrants outstanding to purchase shares of our common stock with an exercise price

ranging between $0.65 and $1.00 per share.

A summary of the Company’s warrants outstanding as of December 31, 2020 and 2019, respectively

is presented below:

2020, a total of 2,027,003 warrants were exercised in a cashless transaction with exercise prices of $0.65 and $1.00 per share.

LOSS PER SHARE

loss per share is calculated by dividing net loss for the year by the weighted average number of common shares outstanding for the period.

In computing dilutive loss per share, basic loss per share is adjusted for the assumed issuance of all applicable potentially dilutive

share-based awards, including common stock options, convertible preferred stock and warrants.

Because both periods reported a net loss,

dilution is not considered and basic loss per share equals diluted loss per share.

following common stock equivalents have been excluded from the calculation as their effect is anti-dilutive:

Common stock equivalent from:

Stock options

Convertible preferred stock

Convertibles notes payable

a dilutive perspective, existing cashless warrants, when converted, will result in a lower number of common shares.

RELATED PARTY TRANSACTIONS

discussed in Note 11, notes payable to the CEO amounted to $39,728 and $25,689 as of December 31, 2020 and 2019 respectively, and are

reported net of their unamortized debt discount of $40,272 and $54,311 as of December 31, 2020 and 2019, respectively.

See Note 11 further

discussion on these notes payable.

paid cash dividends on the outstanding shares of the Company’s Series E and F Preferred Stock amounting to $54,922 and $180,931

to the CEO in 2020 and 2019, respectively, and $5,100 and $5,100 to Mr.

Richard Rogers, a former member of the board of directors, in

2020 and 2019, respectively.

Company is subject to federal and various state income taxes in the U.S.

as well as income taxes in various foreign jurisdictions.

regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations.

March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES”) was signed into law and it amended some

of the tax provisions introduced by the Tax Cuts and JOBS Act previously enacted on December 22, 2017.

Specifically, the CARES

Act temporarily relaxed the business interest limitation for tax years 2019 and 2020, and temporarily eliminated the 80% taxable income

limitation for net operating loss deductions and provided a five-year carryback for net operating losses generated in tax years 2018,

2019, and 2020.

On December 27, 2020, the Consolidated Appropriations Act (“CAA”) was signed into law and largely extended

and expanded many of the provisions introduced by the CARES Act, and also included extensions for expiring tax deductions, credits, and

incentives that were scheduled to expire on December 31, 2020.

The tax effects of the various provisions from the CARES Act and the CAA

have been accounted for, however, neither tax law change had a material impact to the consolidated financial statements.

Company’s loss before income taxes from continuing operations consists of the following:

ended December 31,

Deferred tax assets:

operating loss carryforward

to tax difference –

intangible assets

gross deferred tax assets

asset valuation allowance

net deferred tax assets

tax liability:

intangible assets

deferred liability

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

2019, the Company completed the acquisitions of S&W and NDN, see Note 4.

In each acquisition, the Company recognized acquired

intangible assets, and in accordance with ASC 740 resulted in the recognition of deferred tax liabilities associated with these

intangible assets.

The acquisition of S&W included $4,655,700 of intangible assets and a deferred tax liability of $744,960.

The acquisition of NDN included $15,380,700 of intangible assets and a deferred tax liability of $3,383,754.

of the historical earnings history of the Company, the net deferred tax assets less deferred tax liabilities for 2019 and 2018

were fully offset by the deferred tax liability and a 100% valuation allowance on the remaining balance.

The change in the valuation

allowance was a decrease of approximately $2,345,000 and an increase of $596,000 for the years December 31, 2019 and 2018, respectively.

The Company recorded a tax benefit for discontinued operations of $34,785 and $241,412 offset by a similar valuation allowance

for the years December 31, 2019 and 2018, respectively.

the years ended December 31, the provision for income taxes differs from the expected tax provision computed by applying the U.S.

federal statutory rate to loss before taxes as a result of the following:

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

(As Restated)

United States

$ (53,116,100 )

$ (7,108,543 )

(20,165,836 )

Total loss before provision for income

$ (73,281,936 )

$ (8,422,103 )

provision for income taxes consists of the following:

ended December 31,

(As Restated)

$ (3,483,942 )

Discontinued Operations

reconciliation of the federal statutory income tax rate to the effective tax rate is as follows:

(As Restated)

Federal tax expense (benefit) at the statutory

rate from continuing operations

$ (15,389,206 )

$ (1,768,642 )

State tax benefit, net of federal income tax benefit

Foreign tax at federal statutory rate

Federal deferred tax expense

State deferred tax expense

Effect of tax rate change

Effect of foreign taxes

Non-deductible expenses

Other adjustments

Transaction costs

Stock compensation

Other permanent differences

Change in valuation allowance

Total tax provision (benefit)

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

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

State tax benefit, net of federal income tax benefit

1 unchanged sentence

Total - discontinued operations

$ (3,340,629 )

goodwill and intangible impairments recorded during the year ended December 31, 2020 (see Notes 9 and 10) are non-deductible for tax

As the Company does not have significant tax basis in the impaired goodwill, in accordance with ASC 740, there was historically

no deferred taxes recorded for the goodwill basis difference, therefore, the goodwill impairment charge results in a permanent difference

and a reconciling item for our effective tax rate for the year.

tax effect of significant components of the Company’s deferred tax assets and liabilities at December 31, 2020 and 2019, are as

ended December 31,

(As Restated)

Deferred tax assets:

Net operating loss carryforward

Total gross deferred tax assets

Deferred tax asset valuation

(11,579,703 )

tax benefit from continuing operations before valuation

Total net deferred tax assets

Property and equipment

Intangible assets

Net deferred tax liability

of December 31, 2020, the Company had U.S.

federal net operating loss carryforwards of $39.5 million that expire at various dates from

2030 through 2037, and include $29.2 million that have an unlimited carryforward period.

As of December 31, 2020, the Company had state

and local net operating loss carryforwards of $57.4 million that expire at various dates from 2030 through 2040, and includes

$22.9 million that have an unlimited carryforward period.

As of December 31, 2020, the Company had foreign net operating loss carryforwards

of $3.8 million, primarily in Israel that have an unlimited carryforward period.

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.”

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 2020 were

fully offset by the deferred tax liability and a valuation allowance on the remaining balance.

Based on all available evidence, management

determined that is it more likely than not that the Company’s net deferred tax assets will not be realized.

The change in the valuation

allowance was an increase of approximately $10.7 million for the year ended December 31, 2020, primarily as a result of the current

year tax loss and the acquisition of Wild Sky.

2020, the Company completed the acquisitions of Wild Sky, see Note 4.

In connection with the acquisition of Wild Sky, the Company recorded

additional net deferred tax assets of $3.3 million primarily related to estimated NOLs incurred by Wild Sky Media prior to the acquisition.

In addition, a valuation allowance of $3.6 million was recorded against Wild Sky Media’s deferred tax assets due to limitations

on the ability to utilize their NOLs stemming the timing of the reversals of the deferred tax liabilities from the intangibles.

impact of the above adjustments, which totaled a net DTL of $0.2 million was recorded as an adjustment to goodwill in acquisition accounting.

in connection with the acquisition, as a result of the net deferred tax liability from Wild Sky, the Company was able to release a portion

of its historical valuation allowance in the amount by the same amount as the Wild Sky Media net deferred tax liability.

of the valuation allowance was recorded as a benefit in the tax provision for the year ending December 31, 2020.

2019, the Company completed the acquisitions of Oceanside and MediaHouse, see Note 4.

In each acquisition, the Company recognized acquired

intangible assets and, in accordance with ASC 740, resulted in the recognition of deferred tax liabilities associated with these intangible

As a result of the acquisition of MediaHouse, the Company reduced its historical federal and state valuation allowance by approximately

$3.2 million, which was recorded as a tax benefit in the Company’s income statement.

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.

Company records tax positions as liabilities and adjusts these liabilities when its judgement changes as a result of the evaluation of

new information not previously available.

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.

differences will be reflected as increases or decreases to income tax expense in the period in which new information is available.

of December 31, 2020 and 2019, the Company has not recorded any liabilities for uncertain tax positions in its consolidated financial

Company records interest and penalties related to unrecognized tax benefits in the provision for income taxes.

As of December 31, 2020

and 2019, no accrued interest or penalties are recorded on the balance sheet, and the Company has not recorded any related expenses.

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 are still open under statute from 2017 to the present in the U.S.

2019 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.

SUBSEQUENT EVENTS

disclosed in Note 12, on January 22, 2021, the Company applied for the Wild Sky PPP Loan to be forgiven by the SBA in whole or in part

and on March 29, 2021, the Company obtained the forgiveness of the Wild Sky PPP Loan in whole.

Further, on May 26, 2021, the Company

applied for the Bright Mountain PPP Loan to be forgiven by the SBA in whole or in part and on July 16, 2021, the Company obtained the

forgiveness of the Bright Mountain PPP Loan in whole.

April 26, 2021, the Company and certain of its subsidiaries entered into a First Amendment to Amended and Restated Senior Secured Credit

Agreement (the “First Amendment to Credit Agreement”).

The Company and its subsidiaries are parties to a credit agreement

between itself and Centre Lane Partners Master Credit Fund II, L.P.

(“Center Lane Partners”) as Administrative Agent and

Collateral Agent dated June 5, 2020 (the “Credit Agreement”).

The Credit Agreement was amended to permit the Company to raise

up to $6,000,000 of total cash proceeds from the sale of its preferred stock prior to December 31, 2021 without having to make a mandatory

prepayment of the loans (the “Loans”) under the Credit Agreement.

The interest rate on the Loans after April 26, 2021 was

increased to 10.00% per annum from 6.00%, which can continue to be paid in-kind in lieu of cash payment.

The Credit Agreement was further

amended to permit the Company to provide audited financial statements for the year ended December 31,2020 on or before June 14, 2021.

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

May 2021, the Company settled an outstanding debt with Encoding.com, Inc.

(“Encoding”) was a former digital media customer

of MediaHouse.

Encoding had a long overdue outstanding receivable from MediaHouse’s predecessor company, Inform, Inc.

did not assume the liability at acquisition.

In 2020, the Company and Encoding agreed to settle the overdue receivable through the issuance

of 175,000 warrants to purchase Company stock with a $1.00 exercise price.

This is recorded as an accrued liability as of December 31,

2020 and the warrants were issued in May of 2021.

May 26, 2021 and November 5, 2021, the Company and certain of its subsidiaries entered into five amendments to the Amended and Restated

Senior Secured Credit Agreement between itself and Centre Lane Partners Master Credit Fund II, L.P.

(“Centre Lane Partners”).

The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and

Collateral Agent dated June 5, 2020, as amended (the “Credit Agreement”).

The Credit Agreement was amended to provide for

an additional loan amount of $4.625 million, in the aggregate.

This term loan shall be repaid by February 15, 2022.

In addition, and

as part of the transaction, there is an Exit Fee (“the Exit Fee”) totaling $2.712 million which will be added and capitalized

to the principal amount of the original loan and the original loan terms apply.

In addition, the Company has issued 12.5 million common

shares to Centre Lane Partners as part of these transactions.

June 28, 2021 Bright Mountain Media, Inc (the “Company”) issued a press release that effective at the close of business on

June 30, 2021, Bright Mountain Media, Inc’s., common stock (“BMTM”) ceased trading on the OTCQB and its shares began

trading on the OTC Pink Market on July 1, 2021.

The common stock will continue to trade with the symbol BMTM.

Furthermore, on September

28, 2021, Bright Mountain Media, Inc.

shares of common stock began trading on the Expert Market from the OTC Pink Sheets.

The Company’s

Common Stock will continue to be on the Expert Market until such time as the Company has become current in its filings with the Securities

and Exchange Commission at which point it will seek to have its shares restored to the OTC markets.

August 31, 2021, the Company’s Chairman of the Board, W.

Kip Speyer, converted his preferred shares into common shares of the Company.

In that transaction, he converted 7,919,017 preferred shares into 7,919,017 common shares of the Company.

As of said date, the Company

has an accrued dividend liability due to Mr.

Kip Speyer recorded totaling $695,773.

September 22, 2021, the Company entered into a Share Issuance Settlement with Spartan Capital Securities, LLC (“Spartan”).

Under the terms of the Agreement, the Company agreed to issue a total of 10,398,700 of its common stock (the “Shares”) to

seventy-five accredited investors who participated in the Company’s Private Placement Offering, which began in November 2019 and

was completed in August 2020 (the “Private Placement”).

As previously disclosed, under the terms of Private Placement, if

the Company did not file a listing application of its common stock on the NYSE American Exchange within an agreed time period after the

Company had received at least $1,500,000 of net proceeds, contemplated by the Placement Agent Agreement (the “Listing Application

Deadline”) and obtained listing approval from the NYSE American within a 120 days from the Listing Application Deadline the Company

would issue to each Investor in such Offering an additional share of common stock provided that if the Listing was not obtained by Listing

Approval Deadline, the Listing Approval Deadline would be extended for so long and to the extent that the Company could demonstrate to

Spartan’s reasonable satisfaction that it has used and continuing to use good faith efforts to obtain Listing Approval.

believes it has acted in good faith, but in order to avoid protracted and expensive litigation as to whether the Company was obligated

to issue the Shares to the private placement investors, and without admitting or denying that the Company had any such obligation, the

Company has agreed to issue the Shares to the private placement investors as set forth above.

December 1, 2021, the Company appointed Mr.

Matthew Drinkwater as its new Chief Executive Officer (CEO).

Drinkwater joins the Company

with an extensive track record of adding value to the Company’s he has worked for over his professional career in several Key Senior

Executive and Sales roles at companies such as Buzzfeed, Twitter, Groupon Inc., Yahoo and America Online (AOL).

Kip Speyer will

remain with the Company in his role of Chairman of the Board and transition his CEO role to Mr.

On or about December 1, 2021,

there was an understanding reached in principle related to a legal proceeding between Synacor and MediaHouse, subject to finalization

and execution of a definitive agreement.

December 3, 2021, the Company received formal notification that an event of default had occurred under the Closing Notes as part of the

Oceanside acquisition.

The Company is reviewing its obligations under the Notes.

QUARTERLY FINANCIAL INFORMATION (unaudited) (as restated)

Company has restated the accompanying unaudited condensed consolidated quarterly financial information in accordance with the requirements

of the Securities and Exchange Commission and U.S.

GAAP for interim financial information and with the instructions to Form 10-Q and

Article 8 of Regulation S-X.

The condensed consolidated quarterly financial information includes all adjustments, consisting only of

normal, recurring adjustments, necessary for a fair presentation of the financial position of the Company and the results of its operations

and its cash flows.

The condensed consolidated quarterly financial information should be read in conjunction with the consolidated financial

statements and notes included in this Form 10-K as well as previously filed Quarterly Reports on Form 10-Q relating to accounts and disclosures

not subject to these restatements.

Restatements Items reflect adjustments to correct errors for several financial statements captions on the Company’s balance sheet,

statements of operations, statements of changes in stockholders equity and statements of cash flows, in connection with accounting for

the Company’s acquisitions.

In addition, we are correcting other errors identified related to accrued dividends, penalty fees for

late registration with the SEC and a prepaid investor relations consulting agreement.

The nature and impact of these adjustments are

described below and also detailed in the tables included below.

discussion of the impact of restatement items in the annual period ended December 31, 2020, refer to Note 2.

Finder’s

Fee accrual –

The Company maintains a Finder’s Agreement with Spartan Capital Securities LLC (“Spartan Capital”)

to identify and assist in business combinations, including any merger, acquisition or sale of stock or assets in connection with

a merger or acquisition of other businesses.

Upon closing of any such transaction, the Company shall pay an agreed fee relative to

the consideration paid or received by the Company (the “finder’s fee”).

There were two errors:

i) the Company incorrectly

used 3% instead of 5% to calculate the final finders’

and ii) the Company determined that the consideration amount for

the acquisition of MediaHouse was overstated and affected the finders’

fee calculation (refer to “c”

addition, the Company incorrectly calculated the amount of shares to be issued to Spartan Capital as finder’s fees in connection

with the Company’s acquisitions Slutzky & Winshman Ltd.

(which later changed its name to Oceanside Media LLC) (“Oceanside”)

and News Distribution Network, Inc.

d/b/a MediaHouse (“MediaHouse”) during the third and fourth quarters of 2019, respectively,

and the acquisition of CL Media Holdings (known as Wild Sky Media) (“Wild Sky”) in the second quarter of 2020.

result of the correction as of and for the three and nine months ended September 30, 2019 related to the Oceanside acquisition

was that accrued expenses were decreased by $4,656 with a corresponding decrease in operating expenses.

Accrued expenses and accumulated

deficit were also corrected in the respective quarters ended March 31, 2020, June 30, 2020, and September 30, 2020.

result of the correction as of and for three and six months ended June 30, 2020, related to the Wild Sky acquisition was that

upon acquisition closing, accrued expenses were increased by $909,954 with a corresponding increase in operating expenses.

expenses and accumulated deficit were also corrected in the quarter ended September 30, 2020.

result of the correction for the year ended December 31, 2019, related to the MediaHouse acquisition was that upon acquisition closing,

accrued expense liability was increased by $1,007,921 with a corresponding increase in operating expenses.

Accrued expense

liability and accumulated deficit were also corrected in the respective quarters ended March 31, 2020, June 30, 2020, and September

Stock issued in Oceanside acquisition –

In connection with the Oceanside acquisition in August 2019, the Company issued

an incorrect number of shares of Company common stock as consideration as it used a preliminary purchase price.

Upon management’s

re-evaluation of the purchase price, the number of shares issued in connection with the Oceanside acquisition increased by 382,428

resulting in a correction and increase in goodwill, common stock, and additional paid-in capital in the amounts of $611,885, $3,824,

and $608,058, respectively, at September 30, 2019.

Stock issued in MediaHouse acquisition –

Upon re-evaluation of the final MediaHouse acquisition agreement, the Company

noted the following corrections:

was a miscalculation of the fair value of the warrants to be issued as part of consideration in the amount of $3,829,889 due to the

conversion of bridge loan and open lines of credit, as well as a valuation adjustment.

Further, the change in intangible assets valuation

was mainly driven by the use of a more updated forecast that was lower than the original forecast utilized along with an increase

in the Company’s state effective rate used to record deferred tax assets and liabilities resulted in an increase to the deferred

tax liability of $836,363 which was fully offset by an adjustment to the tax provision to adjust the Company’s valuation allowance.

The decrease of the valuation allowance was recorded as a benefit in the tax provision for the year ended December 31, 2019.

Additionally,

in connection with the MediaHouse acquisition in November 2019, the Company issued shares of Company common stock to certain of MediaHouse’s

investors as part of the consideration paid.

During September 2020, the Company determined that one investor had been issued an incorrect

number of shares as the result of a transposition mistake;

the investor should have been issued 840,000 shares but was incorrectly

issued 480,000 shares.

This error resulted in a shortfall of shares of 360,000 valued at $590,400.

In addition, another investor

was not issued his shares in a timely manner amounting to 19,029 shares of the Company’s common stock valued at $31,208.

management’s re-evaluation of the MediaHouse acquisition and the number of shares issued as consideration, the number of shares

increased by 379,029 resulting in a correction and increase in Goodwill of $621,608, increase to Common stock of $3,790 and an

increase to Additional paid in capital of $617,818 at December 31, 2019.

reduction in the warrant valuation and equity corrections resulted in a reduction in consideration of ($3,208,282).

The components

in the change in consideration were:

(1) reduction

in warrant valuation of $3,829,889 and an increase in goodwill for two (2) investor equity corrections adding $621,608.

and intangible assets impact of additional share issuance and correction, respectably, of MediaHouse and Oceanside acquisitions –

In connection with the re-evaluation of the Oceanside and MediaHouse acquisitions described in letters “b”

and “c”

above, the Company also re-evaluated the impairment charge it had recorded during the three and nine months ended September 30, 2020

(see Note 10).

As a result of this re-evaluation, the impairment charge was increased by $4,769,472 for the three and nine months

ended September 30, 2020.

The net increase was comprised of an increase in impairment charge of $4,935,356 related to intangible

assets and a decrease in impairment charge of $165,884 related to Goodwill.

compensation from Oceanside acquisition –

As part of the Oceanside acquisition, the Company assumed a local employee and

contractor option plan and converted it to the Company’s existing equity compensation plan utilizing the existing vesting dates

at the time of the acquisition.

The option holders were two (2) classes of individuals:

(1) employees and (2) contractors.

The pre-acquisition

Oceanside options ceased to exist as of the acquisition date and all outstanding and unvested options for these two groups were converted

using the agreed exchange ratio.

In re-evaluating the transaction as part of the errors noted above, management concluded the Company

did not record stock compensation expense for the local employees and contractors since the acquisition.

result of the correction of the adjustment was an increase to share-based compensation and accrued expenses as follows:

of September 30, 2019, $98,261 as of March 31, 2020, $189,795 as of June 30, 2020, and $277,950 as of September

30, 2020, respectively.

accrual for untimely registration statement filings with the Securities and Exchange Commission (“SEC”) –

fiscal years 2018 and 2019, the Company sold units of its securities to various investors in several private placements.

of each private placement, the Company agreed to file a registration statement with the SEC to register the resale of the shares

by the respective holder in order to permit the public resale;

such filing deadlines ranged from 120 to 270 days following the closing

date of the respective placement and the Company was liable to pay a penalty fee for failure to file the resale registration statement

within the allotted timeframe.

The penalty fee is payable in cash and is equal to 2% of the aggregate purchase price paid by the

respective investor for each 30 days until the earlier of the date the deficiency was cured or the expiration of 6 months from filing

Company did not timely file the resale registration statements pertaining to three private placements made in fiscal years 2018 and

2019 and as a result was liable for penalties beginning in the fourth quarter of 2019 on the first two placements and the third quarter

of 2020 on the third placement.

These penalty fees were not properly recorded as an expense with an offset to accrued liability in

their respective accounting period.

The correction resulted in an increase in accrued liability

of $109,200 as of December 31, 2019 with a corresponding offset to selling, general and administrative expenses for the year

ended December 31, 2019 and which remains as a liability as of March 31, 2020, June 30, 2020, and September 30, 2020 for the

first two placements, and an increase of selling, general and administrative expenses and corresponding accrued liability in the additional

amount of $76,856 as of and for the three and nine months ended September 30, 2020, relating to the third placement.

September 30, 2020, the accumulated liability totaled $186,056.

stock dividends –

Between August 2, 2019, and December 23, 2019, a related party purchased an aggregate of 1,200,000 shares

of Series A-1 Preferred Stock at a purchase price of $0.50 per share.

Series A-1 Preferred Stock pays dividends at the rate of 10%

dividends are cumulative and payable in cash monthly in arrears within fifteen (15) days after the end of the month.

It was subsequently determined that the 2020 dividends on these shares were calculated incorrectly due to a mathematical

error in the computation and were incorrectly reported.

The correction resulted

in a reduction of accrued dividends payable and an increase in additional paid-in capital amounting to $29,119 as of March 31,

2020, $88,157 as of June 30, 2020, and $177,330 as of September 30, 2020.

stock issued for investor relations agreement –

The Company entered into an investor relations consulting agreement with

MZ Group (“MZ”) in January 2020 for a period of 12 months.

As part of compensation for these services, the Company agreed

to issue 60,000 shares of Company common stock to MZ at $1.50 per share in May 2020 totaling $90,000 and recorded it during March

2020 and failed to properly record a prepaid expense and a corresponding accrued expense for share issuance liability in the amount

of $114,000, using a $1.90 per share price from January 2020 when the contract was signed.

Consequently, the Company failed to i)

record the share issuance that ultimately occurred in May 2020 and ii) amortize the prepaid expense monthly over the 12-month term

of the contract.

The correction of this

error as of and for the three months ended March 31, 2020, resulted in the following adjustments:

accrued expenses increased by

$114,000, additional paid-in capital decreased by $89,400, common stock decreased by $600, prepaid expenses and other current

assets increased by $85,500, and selling, general and administrative expenses decreased by $61,500.

The correction of this error as

of and for the three months ended June 30, 2020, resulted in the following adjustments:

accrued expenses decreased by $114,000, additional

paid-in capital increased by $113,400, common stock increased by $600, prepaid expenses and other current assets decreased by $28,500,

selling, general and administrative expenses increased by $28,500.

The correction of this error as of and for the three months

ended September 30, 2020, resulted in the following adjustments:

prepaid expenses and other current assets decreased by $28,500, selling,

general and administrative expenses increased by $28,500.

For the six months ended June 30, 2020, the adjustment was $57,000 and for

the nine months ended September 30, 2020, the adjustment was $85,500.

Advisory Fee –

During November 2019, the Company signed a placement agent agreement with Spartan Capital to raise funds

for funding of the Company.

Earlier, during July 2019, the Company signed an M&A advisory agreement that had a $250,000 fee that

contemplated the provision of consulting services related to potential M&A transactions, including, but not limited to valuations,

transaction terms and structures, evaluation and due diligence of candidate business, and other.

The $250,000 fee would be deducted

from the private placement closings once a minimum of $1.5 million of net funds were received by the Company.

This agreement became

effective as of the closing date of the sale of units in the private placement resulting in net proceeds to the Company of at least

$1.5 million and had a duration of 60 months.

By the 3rd closing of the private placement during March 2020, the Company realized

the minimum net proceeds requirement of $1.5 million and the $250,000 fee was deducted from the net proceeds to the Company.

In accounting

for this transaction, the Company did not correctly capitalize the $250,000 fee as a prepaid asset in March 2020, when it became

probable that the amount would be owed, subject to amortization over the remaining contractual term of 43 months.

correction of this error resulted in an increase to prepaid expenses of $250,000 as of March

31, 2020, and a corresponding decrease in other expense for the three months ended March

In addition, the correction of this error resulted in an increase in other expenses

and corresponding decrease in prepaid expenses for the amortization of $5,814, $17,442, and

$17,442 for the three months ended March 31, 2020, June 30, 2020, and September 30, 2020,

respectively.

The cumulative effect of this correction resulted in an increase in other expenses

and a corresponding decrease in prepaid expenses of $5,814, $23,256 and $40,698 as of March

31, 2020, as of June 30, 2020, and as of September 30, 2020, respectively.

Adjustments –

In addition, the Company has corrected other adjustments.

While some of these other adjustments may be quantitatively

immaterial, individually and in the aggregate, because the Company is correcting for the material errors above, management has decided

to correct these other adjustments as well (“Other Adjustments”):

Due to utilization of

more updated forecasts, quarterly amortization expense on intangible assets (trademarks, customer lists, IP technology and non-compete

agreements) decreased by $24,423 in the three months ended March 31, 2020, decreased $6,348 in the three months ended June

30, 2020, and increased $29,802 in the three months ended September 30, 2020, to reflect the changes in the intangible assets

For the six months ended June 30, 2020, the amortization expense decreased $30,771 and for the nine months ended September

30, 2020, the amortization expense decreased $969.

general and administrative expenses and accrued liabilities decreased by $87,670 as of and for the three months ended March 31, 2020,

to correct an error relating to previously recorded professional services provided to Oceanside during 2019.

What changed 10-K

Item 9A. Controls and Procedures