What changed in this filing

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Item 9A. Controls and Procedures

2022-06-13 compared with 2021-12-23 · 1154 added, 2464 removed, 1346 unchanged (73% of the section changed)

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of Disclosure Controls and Procedures

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.

maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under 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.

A control 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

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on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of December 31, 2021, our disclosure

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

described below.

controls and procedures were not effective because of the material weakness in internal control over financial reporting ICFR described

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

our consolidated financial statements as of and for the years ended December 31, 2021 and 2020, 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 GAAP.

Report on Internal Control over Financial Reporting.

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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.

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

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,

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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

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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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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

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.

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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

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

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, 2021 that has materially affected, or are reasonably likely to materially

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

OTHER INFORMATION

Disclosure Regarding Foreign Jurisdictions the Prevent Inspections

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Officers and Directors

Chairman of the Board of Directors

Edward Cabanas*

Chief Financial Officer

Director, Chief Executive Officer- Bright Mountain, LLC

Joey Winshman

Director, Chief Marketing Officer - Oceanside

Pamela Parizek

Harry Schulman

Gretchen Tibbits

Named Executive Officer (“NEO”)

of the Board of Directors

Executive Officer

Financial Officer

Chief Executive Officer- Bright Mountain, LLC

Named Executive Officer (“NEO”)

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

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CEO and transitioned Mr.

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

2005 to 2009 Mr.

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Leisegang Medical, Inc.

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

Drinkwater Mr.

Drinkwater was appointed Chief Executive Officer on December 1, 2021.

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).

Drinkwater, 48, is a digital

executive with extensive, progressively advancing leadership experience at iconic high tech brands.

From 2017 to the present, he served

as the Senior Vice President, International for BuzzFeed.

He also was in Agency Development and Global Accounts at Twitter from 2015

to 2017 and head of Twitter’s Global Online Sales in San Paolo, Brazil from 2013 through 2015.

Drinkwater served as Vice President

of Groupon East Coast from 2011 to 2013 and, Senior Director of Sales, New England and Canada at Yahoo from 2009 to 2011.

in Economics from College of the Holy Cross.

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

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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.

our Chief Executive Officer – Bright Mountain, LLC.

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.

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 was our Director of

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

Speyer graduated from Florida State University

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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.

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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

S&W since co-founding the company in February 2015 through April 15, 2022.

Since June 2019 he has also served as Chief Marketing

Officer of Lumynox, a subsidiary of S&W.

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 B.S.

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

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

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

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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.

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.

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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.

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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.

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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

at our annual meeting of stockholders and holds office until the next annual meeting of stockholders, or until his successor is elected

and qualified.

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Vacancies occurring by reason of the

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

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

Tibbits joined the Board of Directors in February 2021.

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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.

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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.

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.

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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.

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

Governance and

Harry Schulman

Pamela Parizek

Gretchen Tibbits

On January 14, 2022, Mr.

Lichtman stepped down as compensation

committee member, and Ms.

Tibbits was appointed Chairperson of the Compensation Committee.

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

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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.

Two of the members of the Audit Committee are qualified as an “audit committee

financial expert”

as defined by the SEC.

The Audit Committee met four times during 2020.

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.

Two of the members of the Audit Committee are qualified as an “audit committee financial

expert” as defined by the SEC.

The Audit Committee met eight times during 2021.

Compensation Committee assists the board in:

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

aligned with the interests of our shareholders.

aligned with the interests of our stockholders.

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.

The Compensation Committee did met

two times in 2021.

Governance and Nominating Committee

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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

The Corporate Governance and Nominating Committee met four 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.

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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.

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

The Corporate

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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

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

Mountain at our main office:

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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,

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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.

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

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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.

She did not earn and was not paid any compensation during the 2020 year.

with Section 16(a) of the Exchange Act

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on Forms 3, 4 and 5 respectively.

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

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

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

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Compensation Table

Name and principal

and principal position

Awards ($) (1)

incentive plan compensation ($)

equity incentive plan compensation ($)

Non-qualified

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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.

Smith, Chief Executive Officer – Wild Sky Media (3)

Speyer, Chief Executive Officer – Bright Mountain, LLC

Drinkwater, Chief Executive Officer (7)

Cabanas, Chief Financial Officer (4)

Bergman, Former Chief Financial Officer (5)

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 “Compensation - Stock Compensation”.

amount of compensation paid to Mr.

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

Drinkwater joined the Company on December 1, 2021

agreement with our named executive and other executive officers

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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,”

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

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

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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,

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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

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

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to our company fails to assume our obligations under Mr.

Speyer’s employment agreement.

In that event, he will be entitled to the

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of the Board.

have entered into an Executive Employment Agreement with Matthew Drinkwater, our CEO.

His employment contract’s term is for 3 years.

The annual base salary is for $250,000 and he has a discretionary bonus target equivalent to 100% of his base salary subject to achievement

of performance metrics.

Lastly, he was granted 500,000 options of the Company’s common stock, which will vest at a rate of 25%

per year beginning, December 1, 2021.

For more information, please see the employment agreement attached.

are not a party to an employment agreement with Mr.

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Todd Speyer is Mr.

Kip Speyer’s son.

Todd Speyer’s compensation may be changed from time to

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.

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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

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.

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.

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.

Smith accepted a reduction in pay to a base salary of $300,000 per

year, which is still in effect as of this writing.

equity awards at fiscal year-end

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and equity incentive plan awards for each of our other executive officers outstanding as of December 31, 2021:

OPTION AWARDS

Number of Securities

Unexercised Options

Number of Securities

Unexercised Options

of Securities

Unexercisable

Equity Incentive Plan

Securities Underlying

Unexercised Unearned

Option Exercise Price

Option Expiration Date

Number of Shares or

Incentive Plan

Exercise Price

Expiration Date

of Stock That

Not Vested (#)

Value of Shares

Units of Stock 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

Incentive Plan

Shares, Units

Other Rights that

Incentive Plan

Shares, Units

Other Rights That

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

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:

of May 10, 2022 we had 151,154,970 shares of our common stock issued and 150,329,795 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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named executive officers and directors as a group.

specified below, the business address of each shareholder is c/o 6400 Congress Avenue, Suite 2050, Boca Raton, FL 33487.

specified below, the business address of each stockholder is c/o 6400 Congress Avenue, Suite 2050, Boca Raton, FL 33487.

The percentages

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Name of Beneficial Owner

Kip Speyer (1)

Edward Cabanas

Joey Winshman

Harry Schulman

Pamela Parizek

Gretchen Tibbits

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

Handwerker (4)

Total Officers, Directors and Affiliates

Kip Speyer - Chairman of the Board

Todd Speyer - CEO and Board member

Edward Cabanas - CFO

Matt Drinkwater - CEO

Gretchen Tibbits - Board Member

Pamela Parizek - Board Member

Joey Winshman - Board Member

Harry Schulman - Board Member

Chuck Lichtman - Board Member

Officers and Directors - TOTAL

Andy Handwerker - Affiliate

TOTAL - Officers, Directors, and Affiliates (OD&A)

number of shares of common stock beneficially owned by Mr.

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

of our 10% Series E convertible preferred stock, (ii) 2,177,233 shares of our common stock issuable upon the conversion of shares

of our 12% Series F-1 Convertible Preferred Stock, (iii) 1,408,867 shares of common stock issuable upon the conversion of shares

of our 6% Series F-2 Convertible Preferred Stock, (iv) 757,917 shares of our common stock issuable upon the conversion of shares

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.

Speyer includes 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.

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This limitation may be increased to 9.99% at Mr.

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, 2020.

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

as any equity compensation plans not approved by our stockholders as of December 31, 2021.

Plan category

Number of securities to be

securities to be

issued upon exercise of

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and rights (a)

Weighted average exercise price

Weighted average

exercise price

of outstanding options,

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plans (excluding

securities reflected in column

Plans approved by our shareholders:

reflected in column (a))

Plans approved by our stockholders:

2011 Stock Option Plan

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2019 Stock Option Plan

Plans not approved by shareholders:

Plans not approved by stockholders:

April 14, 2022, the Board of Directors adopted and approved a new 2022 Stock Option plan, subject to Stockholder approval at the next

Annual Meeting.

This new plan would eliminate all these prior plans (2011-2019) and the new plan adds 22.5M shares available for option

awards which is approximately 15% of the outstanding shares of 151m.

See 8-K in April 2022.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

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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.

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.

We used the proceeds from these sales for working capital.

2021 and 2020 we paid cash dividends on these outstanding shares of our 10% Series E Convertible Preferred Stock and the three sub-series

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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.

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 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

following table shows the fees for professional audit services and other services rendered by WithumSmith+Brown, PC for the audit of

the Company’s annual financial statements for the years ended December 31, 2021 and 2020, and fees billed for the other services

rendered during those periods.

Audit-Related Fees

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

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

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Audit-Related

This category consists of assurance and related services by the independent registered public accounting firm that are

Fees — 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

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

Fees — This category consists of professional services rendered by our independent registered public accounting firm for tax

compliance and tax advice.

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2019 Stock Option Plan

2022 Stock Option Plan

Letter agreement dated September 19, 2017 with Vinay Belani

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M&A Advisory Agreement dated September 6, 2017 by and between Spartan Capital Securities, LLC and Bright Mountain Media, Inc.

Finder’s Agreement dated October 31, 2018 by and between Spartan Capital Securities, LLC and Bright Mountain Media, Inc.

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

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

Addendum to Lease dated August 5, 2015 for registrant’s principal executive offices

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

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

Addendum to Lease dated August 5, 2015 for registrant’s principal executive offices

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

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

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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

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

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

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

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

A to the Credit Agreement dated February 11, 2022

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

A to the Credit Agreement dated March 11, 2022

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

Annex A to the Credit Agreement dated April 15, 2022

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

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List of subsidiaries

Consent of ___________

of WithumSmith+Brown, PC

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

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TAXONOMY EXTENSION PRESENTATION LINKBASE

Cover Page Interactive Data File (embedded within the Inline XBRL document)

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

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MOUNTAIN MEDIA, INC.

December 23, 2021

June 10, 2022

Matthew Drinkwater

and Principal Executive Officer

December 23, 2021

June 10, 2022

Financial and Accounting Officer

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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

June 10, 2022

of the Board of Directors

June 10, 2022

Matthew Drinkwater

and Principal Executive Officer

June 10, 2022

Harry Schulman

December 23, 2021

June 10, 2022

Joey Winshman

Marketing Officer, Director

December 23, 2021

June 10, 2022

Bright Mountain, LLC., Director

December 23, 2021

June 10, 2022

Pamela Parizek

December 23, 2021

June 10, 2022

Gretchen Tibbits

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TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

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, 2020 and 2019 (As restated)

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

of Independent Registered Public Accounting Firm (PCAOB ID # 100 )

Consolidated balance sheets at December 31, 2021 and 2020

Consolidated statements of operations and comprehensive loss for the years ended December 31, 2021 and 2020

Consolidated statements of changes in stockholders’ equity for the years ended December 31, 2021 and 2020

Consolidated statements of cash flows for the years ended December 31, 2021 and 2020

Notes to consolidated financial statements

Report of Independent Registered Public Accounting Firm

of Independent Registered Public Accounting Firm

the Board of Directors and Shareholders of

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

(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.

(the “Company”) as of December 31,

2021 and 2020, the related consolidated statements of operations, changes in shareholders’ equity and cash flows for each of the

years ended December 31, 2021 and 2020, 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.

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

of and for the year ended December 31, 2020, 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, 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 auditors.

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, 2021 and 2020, 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.

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

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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 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.

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

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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.

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WithumSmith+Brown, PC

have served as the Company’s auditor since 2021.

Brunswick, New Jersey

PCAOB ID Number 100

MOUNTAIN MEDIA, INC.

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BALANCE SHEETS

(As Restated)

Current assets

Cash and cash equivalents

Accounts receivable, net of allowance for doubtful accounts

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

Accounts receivable, net of allowance for doubtful accounts of $ 495,396 and $ 774,826 , at December 31, 2021 and 2020, respectively

Note receivable, net

Prepaid expenses and other current assets

Current assets –

discontinued operations

Total current assets

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Intangible assets, net

Prepaid services/consulting agreements –

Prepaid services/consulting agreements – long term

Right-of-use asset

LIABILITIES AND SHAREHOLDERS’

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY

Current liabilities

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Long term debt, current portion

Long term debt to related parties, current portion, net

Other current liabilities

Operating lease liability, current portion

Current liabilities –

discontinued operations

Total current liabilities

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Long term debt

Deferred tax liability

Operating lease liability –

net of current portion

Total liabilities

Commitments and Contingencies

Shareholders’

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

Stockholders’ (deficit) equity

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

Series A-1, 2,000,000 shares designated, 0 and 1,200,000 shares issued and outstanding at December 31, 2021 and 2020, respectively;

liquidation preference of ($ 0.50 per share)

Series B-1, 6,000,000 shares designated, no shares issued and outstanding at December 31, 2021 and 2020

Series E, 2,500,000 shares designated, 125,000 and 2,500,000 shares issued and outstanding at December 31, 2021 and 2020, respectively;

liquidation preference of ($ 0.40 per share)

Series F, 4,344,017 shares designated, 0 and 4,344,017 shares issued and outstanding at December 31, 2021 and 2020, respectively;

liquidation preference of ($ 0.50 per share for Series F-1 and F-2 and $ 0.40 per share for Series F-3)

Preferred stock, value

Common stock, par value $ 0.01 , 324,000,000 shares authorized, 149,810,383 and 118,162,150 issued and 148,985,208 and 117,336,975 outstanding at December 31, 2021 and 2020, respectively

Treasury stock, at cost;

825,175 shares at December 31, 2020

825,175 shares at December 31, 2021 and 2020

Additional paid-in capital

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( 93,932,080 )

Accumulated other comprehensive loss

Total shareholders’

Total liabilities and shareholders’

Accumulated other comprehensive income (loss)

Total stockholders’ (deficit) equity

( 6,723,140 )

Total liabilities and stockholders’ (deficit) equity

accompanying notes to consolidated financial statements.

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AND SUBSIDIARIES

STATEMENTS OF OPERATIONS

the Years Ended

(As Restated)

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Years Ended

Cost of revenue:

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Selling, general and administrative expenses

Impairment expense –

Impairment expense – Goodwill

Impairment expense – Intangible assets

Total operating expenses

Loss from continuing operations

Loss from operations

( 11,906,951 )

( 72,925,286 )

Other income (expense)

Interest income

Gain on settlement of liability

Gain on forgiveness of PPP loan

Other (expense) income

Interest expense

Interest expense –

related party

Total other income

Loss before tax –

continuing operations

Interest expense – related party

( 1,944,794 )

Loss before tax –

Total other expense

Net loss before tax

( 12,000,237 )

( 73,281,936 )

Income tax benefit

( 12,000,237 )

( 72,714,422 )

Preferred stock dividends:

Series A-1, Series E, and Series F

preferred stock

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

Deemed dividends

Total Preferred stock dividends

Net loss attributable to common shareholders

Net loss attributable to common stockholders

( 12,453,888 )

Other comprehensive loss

( 73,077,882 )

Other comprehensive income (loss)

Comprehensive loss

$ ( 12,418,762 )

Basic and diluted net loss for continuing operations per share

Basic and diluted net loss for discontinued

operations per share

$ ( 73,100,547 )

Basic and diluted net loss per share

Weighted average shares outstanding –

Weighted average shares outstanding – basic and diluted

accompanying notes to consolidated financial statements.

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AND SUBSIDIARIES

STATEMENTS OF CHANGES IN SHAREHOLDERS’

Ended December 31, 2020 and 2019 (As Restated)

Other Comprehensive

Total Stockholders ’

Balance, January 1, 2019

$ (17,042,967 )

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)

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

Ended December 31, 2021 and 2020

Additional Paid-in

Accumulated Other

Comprehensive

Stockholders’

Balance, December 31, 2019

$ ( 21,217,658 )

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( 72,714,422 )

Series A-1, E and F preferred

stock dividend

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

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

cash, net of costs

Exercise of stock options

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For cashless exercise of warrants

Acquisition of treasury stock,

Acquisition of treasury stock, at cost

Share-based compensation

Adjustment from foreign currency

translation, net

Adjustment from foreign currency translation, net

Balance, December 31, 2020

$ ( 219,837 )

$ ( 93,932,080 )

$ ( 219,837 )

$ ( 93,932,080 )

( 12,000,237 )

Series A-1, E and F preferred stock dividend

Issuance of common stock:

Services rendered

Exercise of stock options

Exercise of warrants

To Centre Lane Partners as part of debt financing

Conversion of preferred to common shares

( 7,919,017 )

Deemed dividends

To Oceanside personnel as part of acquisition agreement

Share-based compensation

Adjustment from foreign currency translation, net

Balance, December 31, 2021

$ ( 219,837 )

$ ( 106,144,065 )

$ ( 6,723,140 )

$ ( 219,837 )

$ ( 106,144,065 )

$ ( 6,723,140 )

accompanying notes to consolidated financial statements.

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STATEMENTS OF CASH FLOWS

Years Ended December 31,

(As Restated)

For the Years Ended December 31,

Cash flows from operating activities:

$ ( 12,000,237 )

Loss attributable to discontinued operations

( 72,714,422 )

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

Amortization of debt discount

Non-cash interest expense

Goodwill impairment

Intangible impairment

Write-off of tradename

Gain on settlement of liability

Stock issued for services rendered

Stock option vesting expense

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Stock compensation for Oceanside shares

Stock issued for cashless exercise of warrants

Change in deferred taxes

Write off doubtful accounts

Gain on forgiveness of PPP loan

( 2,171,535 )

Provision for bad debt

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Accounts payable

( 1,195,875 )

Accrued expenses

Accrued interest —

related party

( 2,331,213 )

Accrued interest — related party

Deferred revenues

Cash used in continuing operations for operating activities

( 5,927,418 )

( 6,508,935 )

Cash provided by discontinued operations for operating activities

Net cash used in operating activities

( 5,927,418 )

( 6,507,821 )

Cash flows from investing activities:

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

Cash paid for website acquisitions

Cash paid for property and equipment, net

Cash acquired in acquisition of subsidiaries

Net cash provided by investing activities from continuing

Net cash (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 stock

Insurance premium notes payable

Dividend payments

Principal payment on notes payable

Note receivable funded

Proceeds from repayment of note receivable

Proceeds from debt financing

Repayments of debt

Principal payments received (funded) for notes receivable

Proceeds from exercise of options

Proceeds from issuance of premium finance loan payable

Proceeds from issuance of (payments 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

Net cash provided by financing activities

Net increase in cash and cash equivalents classified within assets related to discontinued

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of year

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Cash paid for interest

Supplemental disclosure of non-cash investing and financing

Supplemental disclosure of non-cash investing and financing activities

Conversion of Preferred shares to Common shares

Issuance of debt in accordance with legal settlement

Settlement of Daily Engage liability

Non-cash acquisition of S&W net assets

Non-cash acquisition of MediaHouse net assets

Non-cash acquisition of S&W net liabilities

Non-cash acquisition of MediaHouse net liabilities

Non-cash intangible assets of S&W

Non-cash intangible assets of MediaHouse

Issuance of common stock to Centre Lane for debt issuance

Non-cash acquisition of WSM net assets

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Common stock issued for acquisitions

Recognition of right of use asset for S&W

Recognition of right of use lease liability for S&W

Issuance of common stock for services

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Mountain Media, Inc.

(the “Company”

or “Bright Mountain”

or “We”) is a Florida corporation formed

(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.

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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,”

“us,”

“our”

or “Bright Mountain”

refers to Bright Mountain

and its subsidiaries.

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.

(“S&W”) which then changed its

name to Oceanside Media LLC (“Oceanside”).

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,” “us,” “our” or “Bright Mountain” refers to Bright Mountain Media, Inc.

subsidiaries.

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

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

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

digital advertising supply chain through the elimination of industry “middlemen” and/or costly redundancy of services via

our ad exchange network.

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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.

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

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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

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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

consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the settlement

of liabilities and commitments in the normal course of business.

The Company’s management has evaluated whether there is substantial

doubt about the Company’s ability to continue as a going concern and has determined that substantial doubt existed as of the date

of the end of the period covered by this report.

This determination was based on the following factors:

(i) the Company used cash of

approximately $ 5.9 million in operations in 2021; (ii) the Company’s available cash as of the date of this filing will

not be sufficient to fund its anticipated level of operations for the next 12 months; (iii) the Company will require additional

financing for the fiscal year ending December 31, 2022 to continue at its expected level of operations; and (iv) if the Company

fails to obtain the needed capital, it will be forced to delay, scale back, or eliminate some or all of its development activities or

perhaps cease operations.

In the opinion of management, these factors, among others, raise substantial doubt about the ability of the

Company to continue as a going concern as of the date of the end of the period covered by this report and for one year from the issuance

of these consolidated financial statements.

Company has sustained a net loss of $ 12,000,237 , used cash outflows from continuing operating activities of $ 5,927,418 for the year ended

December 31, 2021, and has an accumulated deficit of $ 106,144,065 at December 31, 2021 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.

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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.

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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

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Consolidation and Basis of Presentation

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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, 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.

in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

Company recognizes revenue in accordance with FASB ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”).

Company recognizes revenues at a point-in-time when control of services is transferred to the customer.

Cash received by the Company

prior to when control of services is transferred to the customer is recorded as deferred revenue.

determine revenue recognition for arrangements that the Company determines are within the scope of Topic 606, the Company performs the

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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.

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.

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criteria for the advertising revenue stream is as follows:

revenues are generated by users “clicking”

on or seeing website advertisements

utilizing several ad network partners.

revenues are generated by users “clicking” on or seeing website advertisements utilizing several ad network partners.

are recognized net of adjustments based on the traffic generated and is billed monthly.

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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, 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 records leases in accordance with FASB ASC Topic 842, Leases.

Company determines if an arrangement is a lease at inception.

Operating lease ROU assets and operating lease liabilities are recognized

based on the present value of the future minimum lease payments over the remaining lease terms as of January 1, 2019.

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.

Operating lease right-of-use assets and operating lease liabilities are

recognized based on the present value of the future minimum lease payments over the remaining lease terms as of lease inception.

the Company’s lease agreements does not provide an implicit rate, the Company estimated an incremental borrowing rate based on

the information available at lease inception 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.

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

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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

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.

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is not significant.

At December 31, 2021 and 2020, the Company

had $ 781,320 and $ 736,046 , respectively, in cash equivalents.

Company maintains certain of its cash balances in various U.S.

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Value of Financial Instruments and Fair Value Measurements

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.

carry 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

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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.

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Development Costs

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.

Company accounts for its website development costs in accordance with ASC Topic 350-50, “ Website Development Costs ”.

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

Upgrades or enhancements that

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The Company categorizes Goodwill into two reporting units:

“Owned &

Operated”

and “Ad Network”.

Operated” and “Ad Network”.

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

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To the extent the carrying

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

The Company’s annual

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

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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

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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.

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and marketing expenses are expensed as incurred and are included in selling, general and administrative expenses on the accompanying

consolidated statements of operations.

For the years ended December 31, 2020 and 2019, advertising and marketing expense was $27,004

and $307,536, respectively, both attributable to continuing operations.

consolidated statements of operations and comprehensive loss.

For the years ended December 31, 2021 and 2020, advertising and

marketing expense was $ 58,445

and $ 27,004 ,

respectively.

Currency Translation

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.

and liabilities of 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 period.

The translation adjustments for the reporting period is included in our statements of comprehensive income.

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

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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,

Company follows the provisions of ASC Topic 740-10, Income Taxes – Overall (“ASC 740-10”).

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.

accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during

which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination,

including the resolution of appeals or litigation processes, if any.

Tax positions taken are not offset or aggregated with other positions.

Tax positions that meet the more-likely-than-not recognition

threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with

the applicable taxing authority.

The portion of the benefits associated with tax positions taken that exceeds the amount measured as

described above should be reflected as a liability for unrecognized tax benefits in the accompanying consolidated balance sheets along

with any associated interest and penalties that would be payable to the taxing authorities upon examination.

Interest and penalties associated

with unrecognized tax expenses are recognized as tax expenses in the Statement of Operations.

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.

The Company’s

largest customer accounts for approximately 10% and 13% of the 2020 and 2019 Ad Exchange Network Revenue, respectively.

Company generates revenues from Advertising revenue.

The Company’s largest customer accounts for approximately 8.6 % and 9.6 % of

the 2021 and 2020 Advertising revenue, respectively.

of December 31, 2021, two customers accounted for more than 10 %

of the accounts receivable balance, at 13.1 %

As of December 31, 2020, no customers accounted for more than 10 %

of the accounts receivable balance.

As of December

31, 2021, one vendor accounted for more than 10% of the accounts payable balance, at 11.2 % .

As of December 31, 2020, no vendors accounted for more than 10 %

of the accounts payable balance.

and Diluted Net Earnings (Loss) Per Common Share

(loss) per share is calculated and reported under the “two-class”

The “two-class”

method is an earnings

(loss) per share is calculated and reported under the “two-class” method.

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

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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

applicable, basic earnings (loss) per share is calculated by dividing net income (loss), after deducting dividends on convertible preferred

stock and participating securities as well as undistributed earnings allocated to participating securities, by the average number of

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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

“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 Financial Accounting Standards Board (“FASB”) issued ASU No.

2016-13 (amended by ASU 2019-10), “

Instruments –

Credit Losses (Topic 326):

June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No.

2016-13 (amended by ASU 2019-10), “ Financial

Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, regarding the measurement of credit

losses for certain financial instruments.

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

” 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.

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on the consolidated financial statements.

January 2017, the FASB issued Accounting Standards Update (“ASU”) No.

2017-04 (amended by ASU 2019-10), “

January 2017, the FASB issued Accounting Standards Update (“ASU”) No.

2017-04 (amended by ASU 2019-10), “ Intangibles

– Goodwill and other (Topic 350):

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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) ”.

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

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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.

The Company is currently

evaluating the impact on the Company’s consolidated financial statements.

March 2020, the FASB issued ASU No.

2020-04, “

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

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

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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

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 –

IP/Technology

Customer relationships

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

Shares issued for vested options

Shares issued to employees

Total consideration

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,

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

Cash & cash equivalents

Accounts receivable, net

Prepaid expense

Security deposit

Intangible assets acquired:

Tradename –

IP/Technology

Customer relationships

Non-compete agreements

Liabilities assumed

Accounts payable

Accrued expenses

Compensation expense

Deferred rent

Deferred tax liability

Net assets acquired

Total purchase price

table below summarizes the value of the total consideration given in the transaction:

Shares issued to owners

Warrants issued

Total consideration

June 1, 2020, the Company entered into a membership interest purchase agreement (the “Purchase Agreement”) with Centre Lane

3 – ACQUISITIONS

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”).

(“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

4 unchanged sentences

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.

Credit 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

is payable in equal quarterly installments on the principal balance after adding the PIK Interest with a bullet payment due at maturity

on June 1, 2025.

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.

The loan balance can be prepaid with

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.

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.

Any equity 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:

SCHEDULE OF PURCHASE PRICE ALLOCATION TO ASSETS ACQUIRED AND LIABILITIES ASSUMED

Tangible assets acquired

4 unchanged sentences

Intangible assets acquired:

Tradename –

Tradename – Trademarks

IP/Technology

4 unchanged sentences

Other current liabilities

Long term loan payable –

Long term loan payable – PPP

( 1,706,735 )

Deferred tax liability

2 unchanged sentences

table below summarizes the value of the total consideration given in the transaction:

SCHEDULE OF TOTAL CONSIDERATION TRANSACTION

Shares issued

Total consideration

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.

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:

(As restated)

Discontinued Operations

Cash and cash equivalents

Accounts receivable

Total Current Assets –

Discontinued Operations

Total Assets –

Discontinued Operations

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 discontinued operations

Basic and fully diluted net loss per share –

Weighted average shares outstanding –

basic & diluted

Loss from discontinued operations

Write-off of fixed assets

Change in Assets and Liabilities Classified as Discontinued

Accounts receivable

Accounts payable

Deferred Rent

Change in cash provided by discontinued operations

4 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

December 31, 2020 and 2019, prepaid expenses and other current assets consisted of the following:

December 31, 2021 and 2020, respectively, prepaid expenses and other current assets consisted of the following:

OF PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid insurance

consulting service agreements –

Prepaid value added tax (VAT) fees

Prepaid expenses –

Prepaid consulting service agreements – Spartan (1)

Prepaid expenses – other

Prepaid expenses and other current assets

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.

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.

5 – PROPERTY AND EQUIPMENT

December 31, 2020 and 2019, property and equipment consisted of the following:

Estimated Useful Life

December 31, 2021 and 2020, respectively, property and equipment consisted of the following:

OF PROPERTY AND EQUIPMENT

Furniture and fixtures

4 unchanged sentences

Total property and equipment, net

expense was $46,369 and $10,265 for the years ending December 31, 2020 and 2019, respectively, all of which are attributable to continuing

expense was $ 48,365 and

the years ending December 31, 2021 and 2020, respectively and is included in selling, general and administrative expenses on the consolidated

statements of operations and comprehensive loss.

6 – WEBSITE ACQUISITION AND INTANGIBLE ASSETS

December 31, 2021 and 2020, respectively, website acquisitions, net consisted of the following:

OF WEBSITE ACQUISITIONS, NET

Website acquisition assets

3 unchanged sentences

expense related to website acquisition costs for the years ended December 31, 2021 and 2020 was $ 1,600 and $ 43,328 , respectively, and

is included in selling, general and administrative costs in the statements of operations.

is included in selling, general and administrative costs in the statements of operations and comprehensive loss.

December 31, 2021 and 2020, respectively, intangible assets, net consisted of the following:

OF INTANGIBLE ASSETS

Customer relationships

3 unchanged sentences

accumulated amortization

( 5,759,636 )

( 4,170,454 )

accumulated impairment loss

( 16,486,929 )

Intangible assets, net

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

expense related to intangible assets for the years ended December 31, 2021 and 2020 was $ 1,589,182 and $ 3,587,090 , respectively, and

is included in selling, general and administrative costs in the statements of operations and comprehensive loss.

The table below shows

the forward 5-year amortization table.

OF FINITE LIVED INTANGIBLE ASSET

2020, the finite lived intangible assets associated with Oceanside and MediaHouse were tested for impairment valuation based on indicators

14 unchanged sentences

following table presents changes to goodwill for the years ended December 31, 2021 and 2020:

OF CHANGES GOODWILL

Owned & Operated

January 1, 2020 goodwill

Additions (a)

December 31, 2019 goodwill (as Restated)

Additions (b)

Deletions (c)

Deletions (b)

Impairment loss

2 unchanged sentences

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.

December 31, 2021 goodwill

Company recognized Goodwill of $ 9,973,136 in connection with the acquisition Wild Sky.

12 unchanged sentences

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.

In September 2020, recorded goodwill associated with Owned & Operated and the Ad Network

reporting unit exceeded the fair value of the Goodwill and the Company recorded an impairment of $ 247,577 and $ 42,031,510 , respectively.

8 – ACCRUED EXPENSES

December 31, 2021 and 2020, respectively, accrued expenses consisted of the following:

ended December 31,

OF ACCRUED EXPENSES

Year ended December 31,

Accrued interest

1 unchanged sentence

Accrued dividends

traffic settlement (1)

legal settlement (2)

Accrued traffic settlement (1)

Accrued legal settlement (2)

Accrued legal fees

Accrued other professional fees

issuance liability (4)

warrant penalty (3)

Share issuance liability (4)

Accrued warrant penalty (3)

Other accrued expenses

Total accrued expenses

The Company negotiates with its publishing partners regarding questionable traffic to arrive at traffic settlements.

Accrued legal settlement related to the Encoding legal matter.

Company negotiates with its publishing partners regarding questionable traffic to arrive at traffic settlements.

legal settlement related to the Encoding legal matter.

Refer to Note 11.

The Company has sold units of its securities to various investors in several private placements.

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

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.

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 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).

Refer to Note 3 for further information on the Company’s acquisitions.

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

Lane Partners Master Credit Fund II, L.P.

(“Center Lane Partners”), who sold the Company the Wild Sky business in June 2020

has partnered and assisted the Company from a liquidity perspective starting in April 2021.

This relationship has been determined to

qualify as a related party.

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

operating decisions.

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

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

The note bears interest at a rate of 6.0 % per annum.

Per the credit facility with the seller, our loan payments begin December

There is no prepayment penalty associated with this credit facility.

Certain future capital raises do require partial or full

prepayments of the credit facility.

The 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 defaulted on this requirement

and on April 26, 2021, the Company obtained a waiver of this requirement from the lender.

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”).

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 (the “Credit Agreement”).

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.

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

In addition, the Company has issued 150,000 common shares to Centre Lane Partners as part of this transaction.

May 26, 2021, the Company and certain of its subsidiaries entered into a Second amendment to the Amended and Restated Senior Secured

Credit Agreement between itself and Centre Lane Partners (“the Second Amendment”).

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 $ 1.5 million, in the aggregate.

term loan shall be repaid by June 30, 2023.

In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”)

totaling $ 750,000 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 3.0 million common shares to Centre Lane Partners as part of this transaction.

August 12, 2021, the Company and certain of its subsidiaries entered into a Third amendment to the Amended and Restated Senior Secured

Credit Agreement between itself and Centre Lane Partners (“the Third Amendment”).

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 $ 500,000 , in the aggregate.

loan shall be repaid by February 28, 2022.

In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”)

totaling $ 250,000 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 2.0 million common shares to Centre Lane Partners as part of this transaction.

August 31, 2021, the Company and certain of its subsidiaries entered into a Fourth amendment to the Amended and Restated Senior Secured

Credit Agreement between itself and Centre Lane Partners (“the Fourth Amendment”).

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 approximately $ 1,100,000 , in the aggregate.

This term loan shall be repaid by February 28, 2022.

In addition, and as part of the transaction, there is an Exit Fee (“the Exit

Fee”) totaling $ 550,000 which will be added and capitalized to the principal amount of the original loan and the original loan

There was no issuance of common shares as part of this amendment.

October 8, 2021, the Company and certain of its subsidiaries entered into a Fifth amendment to the Amended and Restated Senior Secured

Credit Agreement between itself and Centre Lane Partners (“the Fifth Amendment”).

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 $ 725,000 , in the aggregate.

loan shall be repaid by February 28, 2022.

In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”)

totaling $ 800,000 which will be added and capitalized to the principal amount of the original loan and the original loan terms apply.

There was no issuance of common shares as part of this amendment.

November 5, 2021, the Company and certain of its subsidiaries entered into a Sixth amendment to the Amended and Restated Senior Secured

Credit Agreement between itself and Centre Lane Partners (“the Sixth Amendment”).

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 $ 800,000 ,

in the aggregate.

This term loan shall be repaid by February 28, 2022.

In addition, and as part of the transaction, there is an Exit

Fee (“the Exit Fee”) totaling $ 800,000

which will be added and capitalized to the principal

amount of the original loan and the original loan terms apply.

This amendment required the Company to issue 7,500,000

shares of the Company’s common stock to

Centre Lane Partners prior to November 30, 2021.

December 23, 2021, the Company and certain of its subsidiaries entered into a Seventh amendment to the Amended and Restated Senior Secured

Credit Agreement between itself and Centre Lane Partners (“the Seventh Amendment”).

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 $ 500,000 ,

in the aggregate.

This term loan shall be repaid by February 28, 2022.

In addition, and as part of the transaction, there is an Exit

Fee (“the Exit Fee”) totaling $ 500,000

which will be added and capitalized to the principal

amount of the original loan and the original loan terms apply.

There was no issuance of common shares as part of this amendment.

Note 18 for amendments to the Amended and Restated Senior Secured Credit Agreement subsequent to December 31, 2021.

part of these transactions and given that Centre Lane was determined to be a related party, an independent fair value analysis was performed

by the Company and all related transactions were recorded accordingly.

As of the First Amendment dated April 26, 2021, the Company evaluated

the debt for extinguishment or debt modification under FASB ASC Topic 470-50, Debt – Modifications and Extinguishments ,

and determined extinguishment was applicable.

Under the rules, the Company extinguished the debt, which included the capitalized interest

through April 26, 2021, and recorded it net of the debt discount, including all applicable fees and stock issuances.

The debt discount

determined for the First Amendment totaled $ 2,363,986 and is amortized over the remaining life of the loan and is included in interest

expense – related party on the accompanying consolidated statement of operations or until the next debt modification or extinguishment

is determined.

For the Second Amendment, which occurred on May 26, 2021, the Company determined it was a debt modification.

Amendment provided the Company with debt financing of $ 1,500,000 , an Exit fee of $ 750,000 , and issuance of 3,000,000 shares of common

stock issued to Centre Lane.

The debt discount determined for the Second Amendment totaled $ 904,637 .

For the Third Amendment, which occurred

on August 12, 2021, the Company determined it was a debt modification.

The Third Amendment provided the Company with debt financing of

$ 500,000 , an Exit fee of $ 250,000 , and issuance of 2,000,000 shares of common stock issued to Centre Lane.

The debt discount determined

for the Third Amendment totaled $ 322,529 .

For the Fourth Amendment, which occurred on August 31, 2021, the Company determined it was

a debt modification.

The Fourth Amendment provided the Company with debt financing of $ 1,100,000 , an Exit fee of $ 550,000 , and no common

share issuance.

The debt discount determined for the Fourth Amendment totaled $ 560,783 .

For the Fifth Amendment, which occurred on October

8, 2021, the Company determined it was a debt extinguishment.

The Fifth Amendment provided the Company with debt financing of $ 725,000 ,

an Exit fee of $ 362,500 , and no common share issuance.

The debt discount determined for the Fifth Amendment totaled $ 2,635,013 .

Sixth Amendment, which occurred on November 5, 2021, the Company determined it was a debt modification.

The Sixth Amendment provided

the Company with debt financing of $ 800,000 , an Exit fee of $ 800,000 , and no common share issuance.

The debt discount determined for

the Sixth Amendment totaled $ 902,745 .

For the Seventh Amendment, which occurred on December 23, 2021, the Company determined it was a

debt modification.

The Seventh Amendment provided the Company with debt financing of $ 500,000 , an Exit fee of $ 500,000 , and no common

share issuance.

The debt discount determined for the Seventh Amendment totaled $ 510,783 .

accumulated gross debt discount as of December 31, 2021 totaled $ 8,200,476

and will be amortized into the consolidated statement

of operations and included in the interest expense – related party over the remaining life of the loan or until the next debt modification

or extinguishment is determined.

Interest expense for notes payable to related party for the years ended December 31, 2021 and 2020 was

respectively, and amortization of debt discount was $ 4,371,804

respectively.

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, the Company 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, Business Combinations , 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.

August 15, 2020, the Company did not make payment on the one year closing note and thereby defaulted on its obligation and the two-year

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 third 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.

Interest expense for note payable to related party for the years ended December 31, 2021 and 2020 was $ 135,000 and $ 50,671 , respectively.

November 2018, the Company issued 10% convertible promissory notes in the amount of $ 80,000 to a related party, the Chairman of the Board.

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.

1 unchanged sentence

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

of $ 70,000 .

principal balance of these notes payable was $ 80,000 at December 31, 2021 and 2020, and discounts recognized upon respective origination

dates as a result of the beneficial conversion feature total $ 26,271 and $ 40,272 , respectively.

1 unchanged sentence

convertible notes payable to related party net of discounts was $ 53,729 and $ 39,728 , 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.

expense for note payable to related party was $ 8,113 for the years ended December 31, 2021 and 2020 and discount amortization was $ 14,039 .

April 24, 2020, under the Paycheck Protection Program (“PPP”) established by the 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 %

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

The PPP Loan may be

prepaid at any time prior to maturity with no prepayment penalties.

The Promissory Note contains customary events of default

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

as of 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), and recorded as PPP loan forgiveness on the consolidated statement of operations and

comprehensive loss.

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.

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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

February 17, 2021, under the 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 $ 295,600 with Regions Bank (the

“Second 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 Second Bright Mountain PPP Loan may be prepaid

at any time prior to maturity with no prepayment penalties.

The Promissory Note contains customary events of default provisions.

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

This was the second tranche available under the PPP program.

March 23, 2021, under the PPP,

the Company’s Wild Sky subsidiary entered into a promissory note of $ 841,540 with Holcomb Bank (the “Second Wild Sky 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 Second Wild Sky PPP Loan may be prepaid at any time prior to maturity with no prepayment

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.

This was the second tranche available under

the PPP program.

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.

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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 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.

December 31, 2021 and 2020 a summary of the Company’s debt is as follows:

OF LONG-TERM DEBT

bearing BMLLC acquisition debt

Sky acquisition debt

payable debt to the Company’s Chairman of the Board

debt discount, related party

current portion of long-term debt

current portion of long-term debt, related party

term debt to related parties, net and long term debt, respectively

expense was $ 2,266,966

and $ 640,731

for the years ended December 31, 2021 and

2020, respectively.

minimum annual principal payments of notes payable at December 31, 2021 were:

OF MATURITIES OF LONG-TERM OBLIGATION

Finance Loan Payable

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respectively.

Total Premium Finance Loan Payable balance for the Company’s policies was $339,890 and $179,844 as of December 31,

Total Premium Finance Loan Payable balance for the Company’s policies was $ 334,284 and $ 339,890 as of December 31,

2021 and 2020, respectively.

10 – 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’s assets and liabilities recorded at fair value on a recurring basis 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, 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,

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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

tables below set forth information related to the Company’s consolidated financial instruments (in thousands):

OF CONSOLIDATED FINANCIAL INSTRUMENT

Level in Fair

December 31, 2021

December 31, 2020

Long-term debt

Long-term debt to related parties

Non-interest 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, 2021 and 2020:

SCHEDULE OF LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS

Fair Value measurement using Level 3

Balance at December 31, 2019

Principal reductions during 2019

Balance at December 31, 2019

during 2020 (1)

Additions 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”

Reclassification (2)

Extinguishment (3)

( 16,451,905 )

Acquisition debt, Wild Sky, related party

Related party debt (4)

Related party debt (5)

Related party debt discount and amortization (6)

( 3,880,093 )

Total long term debt to related parties at December 31, 2021

are due to $ 16,451,906 related to the Wild Sky acquisition debt (Refer to Note 3) and $ 219,837 to settlement in relation with

the acquisition of BMLLC.

Refer to “Long term debt” in Note 12.

to reclassification of Bright Mountain PPP loan

Lane determined to be related party (see note 14) and applying ASC 470 guidance

Lane debt financing from May 26, 2021 through December 23, 2021

payable to the Company’s Chairman of the Board

discount and amortization on related party financings

11 – COMMITMENTS AND CONTINGENCIES

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

Company leases its corporate offices in Boca Raton, Florida under a long-term non-cancellable lease agreement that expired on October 31, 2021 .

The lease terms required 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.

This monthly payment was 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 sheets.

currently operates on a month-to-month basis with the landlord.

right-of-use asset and lease liability are as follows as of December 31, 2021 and 2020:

SCHEDULE OF RIGHT OF USE ASSET AND LEASE LIABILITY

Operating lease right-of-use asset

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Total operating lease liabilities

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

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,

did not have any variable lease payments for its operating lease for the years ended December 31, 2021 and 2020.

expense for the years ended December 31, 2021 and 2020 was $ 203,340

and $ 377,704 ,

respectively.

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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

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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

No litigation has been filed by Spartan at this time or any of the stockholders in

connection with the matter.

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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.

Mountain has been sued by plaintiffs Joey Winshman, Eli Desatnik and Nadav Slutzy (“Plaintiffs”) in a lawsuit filed in the

United States District Court for the Southern District of Florida on December 17, 2021 (the “Lawsuit”).

Plaintiffs allege

that BMM defaulted on its obligations to Plaintiffs under three promissory notes that arose from the merger between Bright Mountain Israel

Acquisition Ltd., a wholly owned subsidiary of Bright Mountain, and Slutzky & Winshman Ltd.

Plaintiffs seek to recover from Bright

Mountain the principal balance of the promissory notes, interest, attorney’s fees, and costs.

Discovery in the Lawsuit is underway

and the parties continue to intermittently explore the possibility of settlement.

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.

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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.

This was 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

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12 – PREFERRED STOCK

Company has authorized 20,000,000 shares of preferred stock with a par value of $0.01 (the “Preferred Stock”), issuable in

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.

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”).

designations, rights and preferences of the Series F-1, Series F-2 and Series F-3 are identical, other than the dividend rate, liquidation

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shares are not redeemable by the Company.

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 B-1 Stock, Series C Stock or Series D Stock issued

and outstanding.

December 31, 2021 and 2020, there were 0 and 1,200,000 shares of Series A-1 Stock, 125,000 and 2,500,000 shares of Series E Stock, and

0 and 4,344,017 shares of Series F Stock issued and outstanding, respectively.

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

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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.

2021, 7,919,017 shares of Series A-1, E and F convertible preferred stock were converted to 7,919,017 common shares.

paid for Series A-1, E and F Convertible Preferred Stock were $ 2,522 and $ 63,136 for the years ended December 31, 2021 and 2020, respectively.

Total preferred stock dividend accrued amounted to $ 691,861 and $ 363,460 for the years ended December 31, 2021 and 2020, respectively.

13 – COMMON STOCK

July 8, 2020, the Company executed a Settlement Agreement and Release with the Harry G.

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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.

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

the year ended December 31, 2021, the Company did not sell any of its securities through a private placement.

2020, the Company sold an aggregate of 10,398,700 units of its securities to 82 accredited investors, 27 of which are unduplicated, in

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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.

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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.

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

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 December 31, 2021, the Company issued 13,330,516 shares of our common stock for the following concepts:

SCHEDULE OF COMMON SHARES ISSUED DURING THE PERIOD

Shares issued to Centre Lane related to debt financing

Services rendered

Options exercised by employees

Warrants exercised

Shares issued to Oceanside employees per the acquisition agreement valued at $ 1.60

the year ended 2020, the Company issued an aggregate 2,609,160 shares of our common stock to consultants for services rendered based

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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.

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A current employee exercised 80,000 stock options for $ 11,112 .

issued for acquisitions

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 .

The common shares were valued at $ 3,725,000 or $ 1.49 per share.

issued for deemed dividend

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 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.

issuance was determined to be a deemed dividend.

issued for conversion of preferred shares

August 31, 2021, the Company converted 7,919,017 of preferred shares to 7,919,017 common shares.

14 – 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.

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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.

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.

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

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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

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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.

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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

Restricted Stock Awards (“RSAs”) granted under the plan generally vest in four equal annual installments beginning

one year after the date of grant.

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ended December 31, 2021 and 2020:

SCHEDULE OF ASSUMPTIONS USED IN VALUING STOCK OPTIONS

Expected term (years)

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Risk-free interest rate

0.31 – 0.51 %

Dividend yield

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

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.

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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.

Company recorded $ 207,272 and

stock option expense for the year ended December 31, 2021 and 2020, respectively.

The stock option expense for year ended December 31,

2021 and 2020 has been recognized as a component of general and administrative expenses in the accompanying consolidated financial statements.

of December 31, 2021, there were total unrecognized compensation costs related to non-vested share-based compensation arrangements of

$ 205,773 to be recognized over a weighted-average period of 1.85 years.

summary of the Company’s stock option activity during the year ended December 31, 2020 is presented below:

summary of the Company’s stock option activity during the year ended December 31, 2021 is presented below:

SCHEDULE OF STOCK OPTION ACTIVITY

Balance Outstanding, December 31, 2020

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information with respect to options outstanding under the Plans at December 31, 2021 and 2020, respectively, is as follows:

Outstanding at December 31, 2020

Outstanding at December 31, 2019

SCHEDULE OF OPTIONS OUTSTANDING UNDER OPTION PLANS

Options Outstanding at December 31, 2021

Options Exercisable

Exercise Price

Weighted Average

Exercise Price

Life (In Years)

Weighted Average

Exercise Price

Options Outstanding at December 31, 2020

Options Exercisable

Exercise Price

Weighted Average

Exercise Price

Life (In Years)

Weighted Average

Exercise Price

Company recognized compensation expense for 176,250 RSAs granted to independent directors amounting to $ 1,762 for the year ended December

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.

The restrictions on these share awards were for 1 year, hence they lapsed

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.

part of the Company’s acquisition of the Oceanside, 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

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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

A summary of the Company’s warrants outstanding as of December 31, 2021 and 2020, respectively

is presented below:

SCHEDULE OF WARRANT OUTSTANDING

Warrants as of

December 31, 2021

Gross cash proceeds

Exercise Price

Warrants as of

December 31, 2020

Gross cash proceeds

Exercise Price

2021, a total of 25,000 warrants were exercised in a cashless transaction with exercise prices of $ 0.65 and $ 1.00 per share.

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.

15 – 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 both 2021 and 2020, net loss was reduced by deemed dividends of $ 241,903 and $ 363,460 , respectively, to calculate basic loss per share.

In computing dilutive loss per share, basic loss per share is adjusted for the assumed issuance of all applicable potentially dilutive

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following common stock equivalents have been excluded from the calculation as their effect is anti-dilutive:

SCHEDULE OF LOSS PER SHARE

Common stock equivalent from:

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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.

paid cash dividends on the outstanding shares of the Company’s Series E and F Preferred Stock amounting to $ 0 and $ 54,922 to the

CEO in 2021 and 2020, respectively, and $ 5,000 and $ 5,100 to Mr.

Richard Rogers, a former member of the board of directors, in 2021 and

2020, respectively.

Lane Partners Master Credit Fund II, L.P.

(“Center Lane Partners”), who sold the Company the Wild Sky business in June 2020

(see Note 3) has partnered and assisted the Company from a liquidity perspective during 2021.

This relationship has been determined to

qualify as a related party.

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

operating decisions.

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”).

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 (the “Credit Agreement”).

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.

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

In addition, the Company has issued 150,000 common shares to Centre Lane Partners as part of this transaction.

May 26, 2021, the Company and certain of its subsidiaries entered into a Second Amendment to the Amended and Restated Senior Secured

Credit Agreement between itself and Centre Lane Partners (the “Second Amendment”).

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 $ 1.5 million, in the aggregate.

term loan shall be repaid by December 31, 2021.

In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”)

totaling $ 0.750 million which will be added and capitalized to the principal amount of the original loan and the original loan terms

In addition, the Company has issued 3.0 million common shares to Centre Lane Partners as part of this transaction.

August 12, 2021, the Company and certain of its subsidiaries entered into a Third amendment to the Amended and Restated Senior Secured

Credit Agreement between itself and Centre Lane Partners (“the Third Amendment”).

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 $ 500,000 , in the aggregate.

loan shall be repaid by February 28, 2022.

In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”)

totaling $ 250,000 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 2.0 million common shares to Centre Lane Partners as part of this transaction.

August 31, 2021, the Company and certain of its subsidiaries entered into a Fourth amendment to the Amended and Restated Senior Secured

Credit Agreement between itself and Centre Lane Partners (“the Fourth Amendment”).

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 approximately $ 1,100,000 , in the aggregate.

This term loan shall be repaid by February 28, 2022.

In addition, and as part of the transaction, there is an Exit Fee (“the Exit

Fee”) totaling $ 550,000 which will be added and capitalized to the principal amount of the original loan and the original loan

There was no issuance of common shares as part of this amendment.

October 8, 2021, the Company and certain of its subsidiaries entered into a Fifth amendment to the Amended and Restated Senior Secured

Credit Agreement between itself and Centre Lane Partners (“the Fifth Amendment”).

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 $ 725,000 , in the aggregate.

loan shall be repaid by February 28, 2022.

In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”)

totaling $ 800,000 which will be added and capitalized to the principal amount of the original loan and the original loan terms apply.

There was no issuance of common shares as part of this amendment.

November 5, 2021, the Company and certain of its subsidiaries entered into a Sixth amendment to the Amended and Restated Senior Secured

Credit Agreement between itself and Centre Lane Partners (“the Sixth Amendment”).

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 $ 800,000 ,

in the aggregate.

This term loan shall be repaid by February 28, 2022.

In addition, and as part of the transaction, there is an Exit

Fee (“the Exit Fee”) totaling $ 800,000

which will be added and capitalized to the principal

amount of the original loan and the original loan terms apply.

This amendment required the Company to issue 7,500,000

shares of the Company’s common stock to

Centre Lane Partners prior to November 30, 2021.

December 23, 2021, the Company and certain of its subsidiaries entered into a Seventh amendment to the Amended and Restated Senior Secured

Credit Agreement between itself and Centre Lane Partners (“the Seventh Amendment”).

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 $ 500,000 ,

in the aggregate.

This term loan shall be repaid by February 28, 2022.

In addition, and as part of the transaction, there is an Exit

Fee (“the Exit Fee”) totaling $ 500,000

which will be added and capitalized to the principal

amount of the original loan and the original loan terms apply.

There was no issuance of common shares as part of this amendment.

Note 18 for amendments to the Amended and Restated Senior Secured Credit Agreement subsequent to December 31, 2021.

accumulated gross debt discount as of December 31, 2021 totaled $ 8,200,476

and will be amortized into the consolidated statement

of operations and included in the interest expense – related party over the remaining life of the loan or until the next debt modification

or extinguishment is determined.

Interest expense for note payable to related party for the year ended December 31, 2021 and 2020 was

respectively.

total related party debt owed to Centre Lane Partners was $ 26,334,064 and $ 16,451,905 as of December 31, 2021 and 2020.

The debt owed

to Centre Lane Partners is reported net of their unamortized debt discount of $ 3,853,822 and $ 0 as of December 31, 2021 and 2020.

further clarification, please see Note 9, Notes Payable.

the year ended December 31, 2021 and 2020, we paid cash dividends on the outstanding shares of the Company’s Series E and F Preferred

Stock of $ 5,000 and $ 60,022 , respectively held by affiliates of the Company.

unsecured and interest free Closing Notes of $ 750,000 related to the Oceanside acquisition were recorded ratably as compensation expense

into the consolidated 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 First Closing Note and thereby defaulted on its obligation and the Second

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 third quarter of 2020 which was $ 250,000

of compensation expense and $ 50,672 of interest expense-related party.

For the year ended December 31, 2021, $ 135,000 of interest expense-related

party was recorded.

17 – INCOME TAXES

Company is subject to federal and various state income taxes in the U.S.

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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,

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.

Notable provisions of the CAA included changes to the Paycheck Protection Program including

legislation concluding that expenses used to obtain loan forgiveness are tax deductible.

Company evaluated the various aspects of the Act and determined that it was eligible for the Paycheck Protection Program (PPP Loan).

Two PPP Loans were received in 2020, one for $ 1,706,735

and one for $ 464,800 .

These were forgiven during 2021 and the CODI from these loans were deemed excludable from taxable income and therefore deducted as a

permanent book tax difference.

The Company took two additional PPP Loans out during 2021 for $ 841,540

and $ 295,600 .

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,

(As Restated)

Of these, the $ 841,540

loan has been forgiven in March 2022,

and its corresponding CODI will be excluded from taxable income in 2022.

If the $ 295,600

loan is forgiven in subsequent years,

the CODI will be excludable from taxable income, consistent with the treatment in the current year.

Company’s loss before income taxes consists of the following:

SCHEDULE OF LOSS BEFORE INCOME TAXES

Year ended December 31,

United States

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( 20,165,836 )

Total loss before provision for income

Total loss before provision for income taxes

$ ( 12,000,237 )

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provision for income taxes consists of the following:

ended December 31,

(As Restated)

SCHEDULE OF PROVISION FOR INCOME TAXES

Year ended December 31,

$ ( 192,561 )

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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

SCHEDULE OF INCOME TAX RATE RECONCILIATION

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

$ ( 2,520,050 )

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State tax benefit, net of federal income tax benefit

( 1,436,416 )

PPP loan forgiveness

Other adjustments

Effect of foreign taxes

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Total tax provision (benefit)

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

State tax benefit, net of federal income tax benefit

Change in valuation allowance

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)

goodwill and intangible impairments recorded during the year ended December 31, 2020, are non-deductible for tax purposes.

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

in the 2020 effective tax rate.

tax effect of significant components of the Company’s deferred tax assets and liabilities at December 31, 2021 and 2020, are as

SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

Year ended December 31,

Deferred tax assets:

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Total gross deferred tax assets

Deferred tax asset valuation

Deferred tax asset valuation allowance

( 14,937,665 )

( 11,579,703 )

Total net deferred tax assets

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federal net operating loss carryforwards of $ 50.2 million that expire at various dates from

2030 through 2037, and include $29.2 million that have an unlimited carryforward period.

2030 through 2038 , and includes $ 39.9 million that have an unlimited carryforward period.

As of December 31, 2021, 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.

and local net operating loss carryforwards of $ 54.4 million that expire at various dates from 2030 through 2041 , and includes $ 14.0 million

that have an unlimited carryforward period.

As of December 31, 2021, the Company had foreign net operating loss carryforwards of $ 4.2

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

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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.”

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

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fully offset by the deferred tax liability and a 100% 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.

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 Company continues to maintain a full valuation against its net deferred tax assets.

For the years that ended December 31, 2021 and

December 31, 2020, the change in the valuation allowance was an increase of approximately $ 3.4 million and an increase of approximately

$ 10.7 million, respectively.

2020, the Company completed the acquisitions of Wild Sky.

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.

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.

The net 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

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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.

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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.

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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.

The Company’s tax years are still open under statute from 2018 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

2 unchanged sentences

18 – 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