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Item 9A. Controls and Procedures

2023-03-29 compared with 2022-06-13 · 1323 added, 2310 removed, 190 unchanged (95% of the section changed)

CONTROLS AND PROCEDURES

of Disclosure Controls and Procedures

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

disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of December 31, 2021.

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

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 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.

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

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

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

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

in 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,

2021 our ICFR were not effective at the reasonable assurance level:

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

to limited personnel.

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

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

are reflected and properly recorded;

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

due to limited personnel.

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

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

information is accurate and free from misstatements.

Control Remediation Efforts.

Management expects to remediate the material weaknesses identified above as follows:

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

Securities, and Exchange Commission

compliance requirements.

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

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

Management will further expand the accounting and finance

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

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

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

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

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

segment and revenue stream.

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

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

are made on a timely basis.

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

is accurate and free from misstatements.

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

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

of deferred taxation and accounting for income taxes.

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

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

Annual Report on Form 10-K does not include an attestation report of the Company’s registered independent public accounting firm

on management’s assessment regarding ICFR due to the exemption from such requirements established by rules of the SEC for smaller

reporting companies.

in Internal Control Over Financial Reporting

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.

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of December 31, 2022.

Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that as of the period ended December 31, 2022, due to the existence of the material weaknesses in the Company’s internal control over financial reporting described below, the Company’s disclosure controls and procedures were not effective.

Management's Annual Report on Internal Control over Financial Reporting

Our senior management is responsible for establishing and maintaining adequate internal control over financial reporting.

Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers, or persons performing similar functions, and effected by our Board, senior management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S.

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

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

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

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

Based upon this assessment, because of the effect of the material

weaknesses described below, management has concluded that the Company’s internal control over financial reporting was not effective as of December 31, 2022.

As set forth below, management will take steps to remediate the material weaknesses identified below.

Notwithstanding the material weaknesses described below, we have performed additional analyses and other procedures to enable management to conclude that our consolidated financial statements included in this Form 10-K fairly present, in all material respects, our financial condition and results of operations as of and for the year ended December 31, 2022.

Material Weaknesses

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

As of December 31, 2022, management identified the material weakness described below:

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

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

The Company has initiated a remediation plan to enhance controls relating to the accounting of its debt arrangements that includes the following:

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

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

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

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

Management had previously identified the following material weaknesses, which caused management to conclude that as of December 31, 2021 our internal controls over financial reporting were not effective at the reasonable assurance level:

• Insufficient segregation of duties, oversight of work performed and lack of compensating controls in our finance and accounting functions due to limited personnel;

• The Company’s systems that impact financial information and disclosures have ineffective information technology controls;

• Inadequate controls surrounding revenue recognition, to ensure that all material transactions and developments impacting the financial statements are reflected and properly recorded;

• Management evaluation of 1) the disclosure controls and procedures and 2) internal control over financial reporting was not sufficiently comprehensive due to limited personnel;

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

• Inadequate controls surrounding information provided to third party valuation reports in connection with acquisitions to ensure that the financial information is accurate and free from misstatements.

The Company has implemented a remediation plan to remediate the material weaknesses identified during the year ended December 31, 2021 as follows:

• We have hired a new Chief Financial Officer with extensive knowledge of implementing procedures to remediate material weaknesses in companies.

• We have expanded our finance department through the hiring of a certified public accountant with previous experience as an auditor and knowledge of SEC filings and technical issues.

We believe this will strengthen our finance department as we work towards segregation of duties, strong internal controls and provide guidance to enhance our current staff.

Management will further expand the accounting and finance function by hiring additional staff to ensure segregation of duties is enforced.

• We no longer rely on a third party consultant to prepare our SEC filings, and this is now being done internally.

• We have engaged a third party company to assist the Company with SOX compliance.

• As of our filing date, we are in the process of completing our information technology general controls ("ITGC") risk assessment and moving forward to document and implement controls over the revenue process.

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

This Annual Report on Form 10-K does not include an attestation report of the Company’s registered independent public accounting firm on management’s assessment regarding internal controls over financial reporting due to the exemption from such requirements established by rules of the SEC for smaller reporting companies.

Changes in Internal Control over Financial Reporting

Other than the matters set forth above, there were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the quarter ended December 31, 2022 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

OTHER INFORMATION

Disclosure Regarding Foreign Jurisdictions the Prevent Inspections

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Officers and Directors

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.

During December 2021, he has stepped down as

CEO and transitioned Mr.

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

2005 to 2009 Mr.

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

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

From October 2002 to May 2005 Mr.

Speyer had been a

private investor.

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

from October 2000 through

June 2002, whereby Mr.

Speyer became chief executive officer of ICAD, Inc.

NASDAQ) which was a combination of ISSI and Howtek,

(HOWT:NASDAQ).

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

NASDAQ) from 1998 to 1999.

Galileo Corporation changed its name to NetOptix (OPTX:

NASDAQ) and was merged with Corning Corporation (GLW:

NYSE) in a stock purchase

From 1996 to 1998 Mr.

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

Prior to joining Galileo Corporation, Mr.

Speyer founded Leisegang Medical, Inc.

and served as its president and chief executive

officer from 1986 to 1996.

Leisegang Medical, Inc.

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

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.

Cabanas, age 49 served as the Vice President-Finance

for ACAMS, L.L.C.

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

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

expansion and product development.

From February 2017 until August 2019 Mr.

Cabanas served as Senior Vice President, Chief Financial

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

ENT) where he oversaw the global finance and accounting functions

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

From 2001 until 2016 Mr.

Cabanas served

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

Cabanas received a BS in Public

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

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

our Chief Executive Officer – Bright Mountain, LLC.

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

and proprietary ad serving technology.

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

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

Previously, Mr.

Speyer was our Director of

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

Speyer graduated from Florida State University

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

Speyer is the son of Mr.

Kip Speyer, our CEO, President

and Chairman.

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

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

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

Winshman has served as Chief Marketing Officer of

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

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

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

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

legal and regulatory matters.

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

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

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

and foreign regulatory authorities – in compliance with restrictive data protection and privacy regimes around the world.

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

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

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

and the SEC Historical Society.

Parizek holds a JD from Northwestern

University School of Law and a BA from Harvard College.

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

Lichtman is an attorney practicing law since

1980, licensed in Illinois and Florida.

He is a partner of Berger Singerman LLP since 2001.

Lichtman has been honored as a two-time

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

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

He has also been recognized by Chambers

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

Lichtman’s professional experience as

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

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

For more than 20 years he has served on multiple

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

International Holdings.

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

degree in Business from the University of Dayton.

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

Each director is elected

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

and qualified.

If any director resigns, dies or is otherwise unable to serve out his or her term, or if the board increases the number

of directors, the board may fill any vacancy by a vote of a majority of the directors then in office, although less than a quorum exists.

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

Vacancies occurring by reason of the

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

Tibbits joined the Board of Directors in February 2021.

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

and mergers & acquisitions.

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

Previously, Ms.

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

holds an M.B.A.

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

from the University of

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

of the Tectonic Theater Project.

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

with any director or executive officer of the Company.

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

common stock or rights to acquire common stock.

structure, independence of directors and risk oversight

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

Lichtman, Schulman, Parizek, and Tibbits are considered independent

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

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

We face a number of risks,

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

Management is responsible

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

of risk management.

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

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

To do this, the chairman of the board meets

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

Senior management attends the board meetings and is available

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

The chairman of the board and independent

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

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

of our board of directors

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

In August 2016, our board

of directors established a standing Corporate Governance and Nominating Committee.

Each committee has a written charter.

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

All committee members are required to be independent directors.

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

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:

integrity of our financial statements;

compliance with legal and regulatory requirements;

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 eight times during 2021.

Compensation Committee assists the board in:

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

is acting as the CEO;

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

and recommending to the board regarding compensation to be provided to our employees and directors;

administering

our stock compensation plans.

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

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

aligned with the interests of our 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 met

two times in 2021.

Governance and Nominating Committee

Corporate Governance and Nominating Committee:

the board in selecting nominees for election to the Board;

the composition of the board;

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

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

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

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

with appropriate corporate governance policies and procedures.

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

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

The Corporate Governance and Nominating Committee 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.

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

Governance and Nominating Committee for appropriate consideration.

It is the policy of the Corporate Governance and Nominating Committee

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

The Corporate

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

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

In order to avoid the unnecessary use of the

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

in accordance with the procedures set forth below.

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

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

Mountain at our main office:

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

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

to Regulation 14A under the Exchange Act;

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

as a director if elected;

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

of our common stock owned by such person;

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

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

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

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

the identity of such person.

of Ethics and Conduct

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

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

opportunities;

disclosure reporting;

confidentiality;

of company assets;

with applicable laws.

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

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

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

Under the terms of the 2019

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

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

In November 2019, our board of directors changed the compensation

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

Our non-independent directors are not compensated for

their services.

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

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

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

board of directors for 2021.

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

which we may have paid:

Tibbits joined the board in February 2021.

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

with Section 16(a) of the Exchange Act

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

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

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

on Forms 3, 4 and 5 respectively.

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

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

Based on our review of the copies of

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

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

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

to one disposition by gift.

The delinquent Form 4 has subsequently been filed.

The information required by Item 10 of Part III of Form 10-K will be set forth in our definitive proxy statement for our 2023 Annual Meeting of Shareholders, to be filed with the SEC within 120 days of December 31, 2022, and is incorporated herein by reference.

EXECUTIVE COMPENSATION

following table summarizes all compensation recorded by us in the past two years for:

principal executive officer or other individual serving in a similar capacity;

two most highly compensated executive officers other than our principal executive officer who were serving as executive officers

at December 31, 2021;

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

an executive officer at December 31, 2021.

Compensation Table

and principal position

Awards ($) (1)

equity incentive plan compensation ($)

Non-qualified

deferred compensation earnings ($)

other compensation ($)

Kip Speyer, Chairman of the Board (2)

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.

Kip Speyer excludes $8,113 and $63,136 in interest and dividend payments for 2021 and 2020,

respectively.

Effective December 1, 2021, Mr.

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

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

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

of December 31, 2020, Mr.

Bergman is no longer an officer of the Company.

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

Drinkwater joined the Company on December 1, 2021

agreement with our named executive and other executive officers

have entered into an Executive Employment Agreement with W.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

agreement with Mr.

Speyer will terminate upon his death or disability.

In the event of a termination upon his death, we are obligated

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

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

salary for a period of one year.

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

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

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

or voluntarily by Mr.

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

In the event we terminate

the agreement without cause, we are obligated to give him one years’ notice of our intent to terminate and, at the end of the one-year

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

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

to our company fails to assume our obligations under Mr.

Speyer’s employment agreement.

In that event, he will be entitled to the

same compensation as if we terminated the agreement without cause.

The employment agreement contains customary non-compete and confidentiality

We have also agreed to indemnify Mr.

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

and amended and restated by-laws.

Effective December 1, 2021, Mr.

Kip Speyer has transitioned Chief Executive Officer role into Chairman

of the Board.

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.

His compensation is determined by the compensation committee, based

upon industry norms.

Todd Speyer is Mr.

Kip Speyer’s son.

Todd Speyer’s compensation may be changed from time to

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

are not a party to an employment agreement with Mr.

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

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

of directors.

Emily Smith has an employment agreement which was assigned to Bright Mountain per the acquisition of CL Media Holdings, LLC (d/b/a/ Wild

Sky Media) which occurred during June 2020.

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

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.

equity awards at fiscal year-end

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

for each named executive officer outstanding as of December 31, 2021, together with unexercised stock options, stock that has not vested

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

of Securities

Unexercisable

Incentive Plan

Exercise Price

Expiration Date

of Stock That

Not Vested (#)

Value of Shares

Units of Stock That

Incentive Plan

Shares, Units

Other Rights that

Incentive Plan

Shares, Units

Other Rights That

The information required by Item 11 of Part III of Form 10-K will be set forth in our definitive proxy statement for our 2023 Annual Meeting of Shareholders, to be filed with the SEC within 120 days of December 31, 2022, and is incorporated herein by reference.

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

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;

of our directors;

of our named executive officers;

named executive officers and directors as a group.

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

The percentages

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

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

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

Except as otherwise indicated,

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

the extent that power may be shared with a spouse.

Name of Beneficial Owner

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 200,000 shares of our common stock issuable upon the conversion

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

number of shares of common stock beneficially owned by Mr.

Speyer includes 75,000 shares underlying vested stock options.

number of shares beneficially owned by Mr.

Lichtman includes 136,599 shares underlying vested stock options.

number of shares beneficially owned by Mr.

Handwerker includes:

shares held jointly with his wife:

shares held individually.

number of shares beneficially owned by Mr.

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

Under the terms

of the warrants, Mr.

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

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

our common stock following such exercise.

This limitation may be increased to 9.99% at Mr.

Handwerker’s option upon 61 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 stockholders as well

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

Plan category

securities to be

issued upon exercise of

outstanding options, warrants

and rights (a)

Weighted average

exercise price

of outstanding options,

warrants and rights

Number of securities remaining

available for future issuance

under equity compensation

plans (excluding

reflected in column (a))

Plans approved by our stockholders:

2011 Stock Option Plan

2013 Stock Option Plan

2015 Stock Option Plan

2019 Stock Option Plan

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.

The information required by Item 12 of Part III of Form 10-K will be set forth in our definitive proxy statement for our 2023 Annual Meeting of Shareholders, to be filed with the SEC within 120 days of December 31, 2022, and is incorporated herein by reference.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

party transactions

stock purchases

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

of our Series F Convertible Preferred Stock described below of $0 and $55,000, to Mr.

Speyer, respectively.

Exchange Agreement

time-to-time Mr.

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

On November 7, 2019

we entered into a Note Exchange Agreement with Mr.

Speyer pursuant to which we exchanged:

principal amount and accrued but unpaid interest due Mr.

Speyer under 12% Convertible Promissory Notes maturing between September

26, 2021 and April 10, 2022 for 2,177,233 shares of our newly created Series F-1 Convertible Preferred Stock in full satisfaction

of those notes:

principal amount and accrued but unpaid interest due Mr.

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

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

principal amount and accrued but unpaid interest due Mr.

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

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

November 2019, we issued and sold Mr.

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

These notes, which are convertible at the option of the holder at any time at a conversion price of $0.40 per share, will automatically

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

We used the proceeds from these notes for working

Lichtman, Schulman, Parizek and Tibbits are considered “independent” within the meaning of Section 802 of the NYSE American

Company Guide.

The information required by Item 13 of Part III of Form 10-K will be set forth in our definitive proxy statement for our 2023 Annual Meeting of Shareholders, to be filed with the SEC within 120 days of December 31, 2022, and is incorporated herein by reference.

PRINCIPAL ACCOUNTING FEES AND SERVICES

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

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

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

with engagements for those fiscal years.

This category also includes advice on audit and accounting matters that arose during, or as

a result of, the audit or the review of interim financial statements.

Audit-Related

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

with the Securities and Exchange Commission and other accounting consulting.

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

compliance and tax advice.

The services for the fees disclosed under this category include tax return preparation and technical tax advice.

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

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

Other fees are subject to pre-approval by the Audit Committee.

The audit and tax fees paid to the auditors with respect to 2021 and 2020

were pre-approved by the Audit Committee.

EXHIBITS AND FINANCIAL STATEMENTS SCHEDULES

Financial Statements

financial statements and notes are listed in the Index to Consolidated Financial Statements on page F-1 of this Annual Report

on Form 10-K.

Financial Statement Schedules

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

All financial statement schedules are omitted because they are not applicable or the required information is included in the

Consolidated Financial Statements or notes thereto listed in the Index to Consolidated Financial Statements , starting on page

F-1 of this Annual Report on Form 10-K.

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

The information required by Item 14 of Part III of Form 10-K will be set forth in our definitive proxy statement for our 2023 Annual Meeting of Shareholders, to be filed with the SEC within 120 days of December 31, 2022, and is incorporated herein by reference.

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1) Financial Statements

The financial statements and notes are listed in the Index to Consolidated Financial Statements on page F-1 of this Annual Report on Form 10-K and are included in Part II, Item 8 of this Annual Report on Form 10-K.

(a)(2) Financial Statement Schedules

All financial statement schedules are omitted because they are not applicable or the required information is included in the Consolidated Financial Statements or notes thereto listed in the Index to Consolidated Financial Statements , starting on page F-1 of this Annual Report on Form 10-K.

(a)(3) Exhibits

The following exhibits listed in the Exhibit Index below are filed as part of, and incorporated by reference into, this Annual Report on Form 10-K.

EXHIBIT INDEX

Incorporated by Reference Filed or

Exhibit Description Form Date Filed Number Herewith

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

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

and the shareholders of Slutzky & Winshman, Ltd.

8-K 8/1/19 2.1

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

BMTMZ, and News Distribution Network, Inc.

8-K 11/21/19 2.1

3.1 Amended and Restated Articles of Incorporation

10 1/31/13 3.3

3.2 Articles of Amendment to the Amended and Restated Articles of Incorporation

8-K 7/9/13 3.3

3.3 Articles of Amendment to the Amended and Restated Articles of Incorporation

8-K 11/16/13 3.4

3.4 Articles of Amendment to the Amended and Restated Articles of Incorporation

8-K 12/30/13 3.4

3.5 Articles of Amendment to the Amended and Restated Articles of Incorporation

10-K 3/31/14 3.5

3.6 Articles of Amendment to the Amended and Restated Articles of Incorporation

8-K 7/28/14 3.6

3.7 Articles of Amendment to the Amended and Restated Articles of Incorporation

10-K/A 4/1/15 3.5

3.8 Articles of Amendment to the Amended and Restated Articles of Incorporation

8-K 12/4/15 3.7

3.9 Articles Amendment to the Amended and Restated Articles of Incorporation

8-K 11/13/18 3.10

3.10 Amended and Restated Bylaws

10 1/31/13 3.2

4.1 Form of unit warrant 2018 private placement

10-K 4/2/18 4.1

4.2 Form of placement agent warrant 2018 private placement

10-K 4/2/18 4.2

4.3 Specimen common stock certificate

10-K 5/14/20 4.3

4.4 Form of unit warrant 2019 private placement

8-K 1/14/19 4.1

4.5 Form of placement agent warrant 2019 private placement

8-K 1/14/19 4.2

4.6 Description of Securities

10.1 2011 Stock Option Plan

10 1/31/13 10.1

10.2 2013 Stock Option Plan

10-Q 11/13/13 10.18

10.3 2015 Stock Option Plan

8-K 5/27/15 10.36

10.4 2019 Stock Option Plan

10-K 12/23/21 10.4

10.5 2022 Stock Option Plan

Letter agreement dated September 19, 2017 with Vinay Belani

8-K 4/20/22 10.3

10.6 Letter A greement dated September 19, 2017 with Vinay Belani

8-K 9/25/17 10.2

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

8-K 10/4/18 10.45

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

8-K 10/4/18 10.46

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

10-Q 11/20/18 10.2

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

8-K 1/14/19 10.1

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

10-Q 11/12/14 10.26

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

10-Q 8/11/15 10.37

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

10-Q 11/20/18 10.1

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

Kip Speyer and Bright Mountain Media, Inc.

8-K 3/31/20 10.1

10.15 Letter Agreement dated February 8, 2023 by and between W.

Kip Speyer and Bright Mountain Media, Inc.

8-K 2/10/23 10.1

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

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

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

and the shareholders of Slutzky & Winshman, Ltd.

8-K 1/6/21 10.1

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

and Spartan Capital Securities, LLC

8-K 8/7/19 10.2

10.18 Promissory Note dated August 15, 2019 due to Joey Winshman

8-K 8/16/19 10.1

10.19 Promissory Note dated August 15, 2019 to Nadav Slutzky

8-K 8/16/19 10.2

10.20 Promissory Note dated August 15, 2019 to Eli Desatnik

8-K 8/16/19 10.3

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

and Joey Winshman

8-K 8/16/19 10.8

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

and Nadav Slutzky

8-K 8/16/19 10.9

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

8-K 6/8/20 10.1

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

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

BMTMZ, and News Distribution Network, Inc.

8-K 6/8/20 10

10.25 Form of Warrant for November 2019 Private Placement

8-K 2/4/20 10.2

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

8-K 4/30/21 10.1

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

8-K 6/2/21 10.1

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

8-K 8/18/21 10.1

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

8-K 9/7/21 10.1

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

8-K 10/8/21 10.1

10.31 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

8-K 11/5/21 10.1

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

8-K 12/29/21 10.1

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

8-K 1/20/22 10.1

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

8-K 2/17/22 10.1

10.35 Annex A to the Credit Agreement dated February 11, 2022

8-K 2/17/22 10.2

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

8-K 3/16/22 10.1

10.37 Annex A to the Credit Agreement dated March 11, 2022

8-K 3/16/22 10.2

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

8-K 3/31/22 10.1

10.39 Annex A to the Credit Agreement dated March 25, 2022

8-K 3/31/22 10.2

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

8-K 4/20/22 10.1

10.41 Annex A to the Credit Agreement dated April 15, 2022

8-K 4/20/22 10.2

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

8-K 5/16/22 10.1

10.43 Annex A to the Credit Agreement dated May 10, 2022

8-K 5/16/22 10.2

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

8-K 6/16/22 10.1

10.45 Annex A to the Credit Agreement dated June 10, 2022

8-K 6/16/22 10.2

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

8-K 7/13/22 10.1

10.47 Annex A to the Credit Agreement dated July 8, 2022

8-K 7/13/22 10.2

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

8-K 2/16/23 10.1

10.49 Annex A to the Credit Agreement dated February 10, 2023

8-K 2/16/23 10.2

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

dated September 22, 2021

Code Conduct and Ethics

8-K 9/28/21 10.1

21.1 List of subsidiaries

of WithumSmith+Brown, PC

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

Rule 13a-14(a)/15d-14(a) Certification of principal financial and accounting officer

Section 1350 Certification of Chief Executive Officer and principal financial and accounting officer

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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

on its behalf by the undersigned, thereunto duly authorized.

MOUNTAIN MEDIA, INC.

June 10, 2022

23.1 Consent of WithumSmith+Brown, PC

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

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

32.1* Certification of the Principal Executive Officer and the P rincipal F inancial O fficer pursuant to Section 1350

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

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* Furnished herewith.

This certification is deemed not filed for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BRIGHT MOUNTAIN MEDIA, INC.

March 28, 2023

/s/ Matthew Drinkwater

Matthew Drinkwater

and Principal Executive Officer

June 10, 2022

Financial and Accounting Officer

to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the

registrant and in the capacities and on the dates indicated.

June 10, 2022

of the Board of Directors

June 10, 2022

Chief Executive Officer and Director

(Principal Executive Officer)

March 28, 2023

/s/ Miriam Martinez

Miriam Martinez

Chief Financial Officer

(Principal Financial and Accounting Officer)

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

March 28, 2023

Chairman of the Board of Directors

March 28, 2023

/s/ Matthew Drinkwater

Matthew Drinkwater

and Principal Executive Officer

June 10, 2022

Director and Chief Executive Officer

March 28, 2023

/s/ Harry Schulman

Harry Schulman

June 10, 2022

Joey Winshman

June 10, 2022

Bright Mountain, LLC., Director

June 10, 2022

March 28, 2023

/s/ Pamela Parizek

Pamela Parizek

June 10, 2022

March 28, 2023

/s/ Gretchen Tibbits

Gretchen Tibbits

MOUNTAIN MEDIA, INC.

AND SUBSIDIARIES

TO CONSOLIDATED FINANCIAL STATEMENTS

TO FINANCIAL STATEMENTS

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

March 28, 2023

/s/ Todd Speyer

BRIGHT MOUNTAIN MEDIA, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

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

Consolidated balance sheets at December 31, 2022 and 2021

Consolidated statements of operations and comprehensive loss for the years ended December 31, 2022 and 2021

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

Consolidated statements of changes in stockholders’ deficit for the years ended December 31, 2022 and 2021

Consolidated statements of cash flows for the years ended December 31, 2022 and 2021

Notes to consolidated financial statements

of Independent Registered Public Accounting Firm

the Board of Directors and Shareholders of

Mountain Media, Inc.

on the Financial Statements

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

(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, 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.

As discussed in Note

1 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise

substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters are also described

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of

Bright Mountain Media, Inc.

Opinion on the Financial Statements

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

(the "Company") as of December 31, 2022 and 2021, the related consolidated statements of operations and comprehensive loss, changes in stockholders’ deficit and cash flows for each of the years ended December 31, 2022 and 2021, and the related notes (collectively referred to as the "financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2022 and 2021, and the consolidated results of their operations and their cash flows for each of the years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.

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

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

As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern.

Management's plans in regard to these matters are also described in Note 2.

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

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.

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

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

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

As part of our audits

we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion

on the effectiveness of the Company’s internal control over financial reporting.

Emphasis of the Matter – Restatement of Interim Financial Statements

As disclosed in Note 21 of the consolidated financial statements, the unaudited interim financial statements as of and for the periods ended June 30, 2022 and September 30, 2022 have been restated to correct an understatement of interest expense and interest payable.

This matter is described in more detail in Note 21 of the consolidated financial statements.

Basis for Opinion

These financial statements are the responsibility of the Company's management.

Our responsibility is to express an opinion on the Company's financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

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

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

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

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

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

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error

or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding

the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant

estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits

provide a reasonable basis for our opinion.

WithumSmith+Brown, PC

have served as the Company’s auditor since 2021.

Brunswick, New Jersey

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

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

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

Critical Audit Matter Description

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

The Company recognizes revenue primarily from delivering digital advertisements on its owned and operated publishing websites, as well as advertising on partner websites, mobile apps and digital streaming services such as CTV (Connected Television) Channels in its customer agreements.

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

(i) identify the contract with customer (ii) identify the performance obligation in the contract;

(iii) determine the transaction price;

(iv) allocate the

transaction price to the performance obligations in the contract;

and (v) recognize revenue when the Company satisfies a performance obligation.

How the Critical Audit Matter Was Addressed in the Audit

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

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

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

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

◦ We obtained an understanding of the performance obligations associated with the Company’s revenue contracts, such as number of ads displayed, consumer clicks on the ads, or consumer actions that were required by the contract.

◦ We tested the transaction price within the contract, which was represented by the amount of impressions that must be delivered by the Company.

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

◦ We tested the amount of impressions delivered by the Company to the customer from the independent ad server data to test the properness of recognized revenue with the terms of the contract.

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

Valuation of goodwill - Refer to Notes 2 and 7 to the consolidated financial statements

Critical Audit Matter Description

As reflected in the Company’s consolidated financial statements at December 31, 2022 the Company’s goodwill was approximately $19.6 million.

As disclosed in Note 1 to the consolidated financial statements, the Company tests goodwill for impairment at the reporting unit level on an annual basis and on an interim basis if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value, which are determined through a qualitative assessment.

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

If the qualitative assessment does not conclude that it is more likely than not that the estimated fair value of the reporting unit is greater than the carrying value, the Company performs a quantitative analysis.

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

A discounted cash flow analysis requires the Company to make various assumptions, including assumptions about future cash flows, growth rates and discount rates.

The assumptions about future cash flows and growth rates are based on the Company’s long-term projections.

Assumptions used in the Company’s impairment testing are consistent with the Company’s internal forecasts and operating plans.

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

If the fair value of the reporting unit exceeds its carrying amount, there is no impairment.

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

How the Critical Audit Matter Was Addressed in the Audit

We read and evaluated the impairment analysis summary report, prepared by the Company's external valuation specialists that assessed the fair value of the Company's goodwill as of December 31, 2022.

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

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

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

We evaluated these assumptions for their reasonableness considering (i) historical performance;

(ii) industry and economic forecast and (iii) whether the assumptions were consistent with evidence obtained in other areas of the audit.

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

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

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

• We independently performed a calculation of the fair value to evaluate whether the external valuation specialist’s conclusion was reasonable and consistent with our conclusion.

Accounting for debt modifications - Refer to Note 9 to the consolidated financial statements

Critical Audit Matter Description

During the year ended December 31, 2022, the Company entered into various amendments to the credit facility for additional loans used for working capital.

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

The Company is required to perform an analysis of the change in each amendment to determine whether the change is a modification or an extinguishment of debt.

Under a modification, no gain or loss is recorded, and a new effective interest rate is established based on the carrying value of the debt and revised cash flow.

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

How the Critical Audit Matter Was Addressed in the Audit

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

There were a total of 15 amendments that were executed.

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

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

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

• We agreed data from the authorized amendments to the analysis performed by the external valuation specialist.

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

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

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

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

/s/ WithumSmith+Brown, PC

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

East Brunswick, New Jersey

March 28, 2023

PCAOB ID Number 100

MOUNTAIN MEDIA, INC.

AND SUBSIDIARIES

BALANCE SHEETS

BRIGHT MOUNTAIN MEDIA, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

Current Assets

Cash and cash equivalents $ 316 $ 781

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

Note receivable, net

Accounts receivable, net 3,585 3,550

Prepaid expenses and other current assets 600 926

1 unchanged sentence

Property and equipment, net 40 65

Website acquisition assets, net

Intangible assets, net 4,510 6,069

Prepaid services/consulting agreements – long term

Right-of-use asset

LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY

Goodwill 19,645 19,645

Operating lease right-of-use asset 367 —

Other assets 137 528

Total Assets $ 29,200 $ 31,564

LIABILITIES AND STOCKHOLDERS’ (DEFICIT)

Current Liabilities

Accounts payable

Accrued expenses

Accrued interest to related party

Premium finance loan payable

Deferred revenues

Long term debt, current portion

Long term debt to related parties, current portion, net

Other current liabilities

Operating lease liability, current portion

Accounts payable and accrued expenses $ 10,317 $ 10,967

Other liabilities 1,838 1,598

Interest payable – 10 % Convertible Promissory Notes– related party

Interest payable – Centre Lane Senior Secured Credit Facility – related party — 617

Deferred revenue 737 1,162

PPP Loan and other loans — 1,387

Note payable – 10 % Convertible Promissory Notes, net of discount, related party

Note payable – Centre Lane Senior Secured Credit Facility – related party (current portion) 4,860 7,316

Total Current Liabilities 17,851 23,070

Long term debt to related parties, net

Long term debt

Note payable – Centre Lane Senior Secured Credit Facility – net of discount, related party 25,101 15,164

Note payable – 10 % Convertible Promissory Notes, net of discount, related party

Operating lease liability 319 —

Total Liabilities 43,271 38,288

Commitments and Contingencies

Stockholders’ (deficit) equity

Stockholders’ Deficit

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;

Series A-1, 2,000,000 shares designated, no shares issued or outstanding at December 31, 2022 and December 31, 2021

Series B-1, 6,000,000 shares designated, no shares issued or outstanding at December 31, 2022 and December 31, 2021

Series E, 2,500,000 shares designated, 0 and 125,000 shares issued and outstanding at December 31, 2022 and December 31, 2021;

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

Series F, 4,344,017 shares designated, no shares issued or outstanding at December 31, 2022 and December 31, 2021

Common stock, par value $ 0.01 , 324,000,000 shares authorized, 150,444,636 and 149,810,383 issued and 149,619,461 and 148,985,208 outstanding at December 31, 2022 and December 31, 2021, respectively

Treasury stock, at cost;

825,175 shares at December 31, 2021 and 2020

825,175 shares at December 31, 2022 and December 31, 2021, respectively

( 220 ) ( 220 )

Additional paid-in-capital 98,797 98,129

Accumulated deficit ( 114,269 ) ( 106,144 )

( 106,144,065 )

( 93,932,080 )

Accumulated other comprehensive income (loss)

Total stockholders’ (deficit) equity

( 6,723,140 )

Total liabilities and stockholders’ (deficit) equity

accompanying notes to consolidated financial statements.

MOUNTAIN MEDIA, INC.

AND SUBSIDIARIES

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the Years Ended

Accumulated other comprehensive income 117 12

Total stockholders’ deficit ( 14,071 ) ( 6,724 )

Total liabilities and stockholders’ deficit $ 29,200 $ 31,564

See accompanying notes to consolidated financial statements.

BRIGHT MOUNTAIN MEDIA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share data)

For the Years Ended December 31,

Revenue $ 19,580 $ 12,925

Cost of revenue 10,493 6,350

Operating expenses:

Selling, general and administrative expenses

Impairment expense – Goodwill

Impairment expense – Intangible assets

Gross margin 9,087 6,575

General and administrative expenses 14,249 18,482

Total operating expenses 14,249 18,482

Loss from operations ( 5,162 ) ( 11,907 )

( 11,906,951 )

( 72,925,286 )

Other income (expense)

Interest income

Financing income (expense)

Gain on forgiveness of PPP loan 1,137 2,172

Other (expense) income

Interest expense

Interest expense – related party

( 1,944,794 )

Total other expense

Net loss before tax

( 12,000,237 )

( 73,281,936 )

Income tax benefit

( 12,000,237 )

( 72,714,422 )

Other income 163 2

Interest expense - Centre Lane Senior Secured Credit Facility- related party ( 4,227 ) ( 2,163 )

Interest expense - Convertible Promissory notes - related party ( 22 ) ( 22 )

Other interest expense ( 14 ) ( 82 )

Total financing income (expense) ( 2,963 ) ( 93 )

Net loss before income tax ( 8,125 ) ( 12,000 )

Income tax provision (benefit) — —

Net loss ( 8,125 ) ( 12,000 )

Common stock deemed dividend — ( 212 )

Preferred stock dividends ( 5 ) ( 242 )

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

Deemed dividends

Total Preferred stock dividends

Net loss attributable to common stockholders

( 5 ) ( 454 )

( 73,077,882 )

Other comprehensive income (loss)

Net loss attributable to common stockholders $ ( 8,130 ) $ ( 12,454 )

Foreign currency translation 105 35

Comprehensive loss $ ( 8,025 ) $ ( 12,419 )

$ ( 12,418,762 )

$ ( 73,100,547 )

Basic and diluted net loss per share

Weighted average shares outstanding – basic and diluted

accompanying notes to consolidated financial statements.

MOUNTAIN MEDIA, INC.

Net loss per common share:

Basic and diluted $ ( 0.05 ) $ ( 0.10 )

Weighted average shares outstanding

Basic and diluted 149,191,057 128,163,616

See accompanying notes to consolidated financial statements.

BRIGHT MOUNTAIN MEDIA, INC.

AND SUBSIDIARIES

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

Ended December 31, 2021 and 2020

Additional Paid-in

Accumulated Other

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT)

(in thousands, except share and per share data)

Years Ended December 31, 2022 and 2021

Preferred Stock Common Stock Treasury Stock Additional

Capital Accumulated

Deficit Accumulated

Comprehensive

Loss (Income) Total

Stockholders’

Shares Amount Shares Amount Shares Amount

Balance, December 31, 2020 8,044,017 $ 80 118,162,150 $ 1,182 ( 825,175 ) $ ( 220 ) $ 96,427 $ ( 93,932 ) $ ( 23 ) $ 3,514

$ ( 21,217,658 )

( 72,714,422 )

Net loss — — — — — — — ( 12,000 ) — ( 12,000 )

Series A-1, E and F preferred stock dividend — — — — — — ( 242 ) — — ( 242 )

Issuance of common stock:

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

cash, net of costs

Common stock issued for services rendered — — 176,250 2 — — — — — 2

Exercise of stock options — — 100,000 1 — — 13 — — 14

Restricted Share Awards

WSM acquisition (Note 4)

For services rendered

For cashless exercise of warrants

Acquisition of treasury stock, at cost

Share-based compensation

Exercise of warrants — — 25,000 — — — 10 — — 10

Centre Lane Partners debt financing — — 12,650,000 127 — — 1,002 — — 1,129

Conversion of preferred to common shares ( 7,919,017 ) ( 79 ) 7,919,017 79 — — — — — —

Common stock deemed dividend — — 10,398,700 104 — — 108 ( 212 ) — —

Common stock issued for Oceanside acquisition — — 379,266 4 — — 603 — — 607

Stock based compensation — — — — — — 207 — — 207

Adjustment from foreign currency translation, net — — — — — — — — 35 35

Balance, December 31, 2021 125,000 $ 1 149,810,383 $ 1,498 ( 825,175 ) $ ( 220 ) $ 98,129 $ ( 106,144 ) $ 12 $ ( 6,724 )

$ ( 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

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

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

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

Exercise of stock options — — 100,000 1 — — — — — 1

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

Stock based compensation — — — — — — 144 — — 144

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

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

Common stock issued for services rendered — — 235,000 2 — — 36 — — 38

Adjustment from foreign currency translation, net — — — — — — — — 105 105

1 unchanged sentence

— $ — 150,444,636 $ 1,504 ( 825,175 ) $ ( 220 ) $ 98,797 $ ( 114,269 ) $ 117 $ ( 14,071 )

$ ( 106,144,065 )

$ ( 6,723,140 )

$ ( 219,837 )

$ ( 106,144,065 )

$ ( 6,723,140 )

accompanying notes to consolidated financial statements.

MOUNTAIN MEDIA, INC.

AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS

See accompanying notes to consolidated financial statements.

BRIGHT MOUNTAIN MEDIA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended December 31,

Cash flows from operating activities:

$ ( 12,000,237 )

( 72,714,422 )

Net loss $ ( 8,125 ) $ ( 12,000 )

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

Non-cash interest expense

Goodwill impairment

Intangible impairment

Stock issued for services rendered

Stock option vesting expense

Effects of foreign currency translation 105 35

Depreciation 38 48

Interest paid-in kind on Centre Lane Credit Facility 3,104 1,660

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

Amortization of debt discount 1,199 578

Amortization of intangibles 1,558 1,591

Stock based compensation 144 207

Common stock and warrants issued for services 38 12

Compensation expense for stock issuances

Stock compensation for Oceanside shares 89 281

Change in deferred taxes

Write off doubtful accounts — ( 240 )

Gain on forgiveness of PPP loan ( 1,137 ) ( 2,172 )

( 2,171,535 )

Provision for bad debt 84 74

2 unchanged sentences

Prepaid expenses and other current assets 695 426

Prepaid services / consulting agreements

ROU asset and lease liability

Accounts payable

( 1,195,875 )

Accrued expenses

( 2,331,213 )

Accrued interest — related party

Operating lease right-of-use asset ( 382 ) —

Operating lease liability 357 —

Accounts payable and accrued expenses ( 593 ) 51

Other liabilities 698 —

Interest payable – Centre Lane Senior Secured Credit Facility, related party ( 465 ) ( 358 )

Interest payable – 10% Convertible Promissory note, related party 8 8

Deferred revenues ( 426 ) 816

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 ( 3,115 ) ( 5,933 )

( 5,927,418 )

( 6,507,821 )

Cash flows from investing activities:

Cash paid for property and equipment, net

Cash acquired in acquisition of subsidiaries

Cash paid for property and equipment ( 14 ) —

Net cash (used in) provided by investing activities ( 14 ) —

Cash flows from financing activities:

Proceeds from issuance of common stock, net of commissions

Dividend payments

Proceeds from debt financing

Preference dividend payments ( 5 ) ( 5 )

Proceeds from Centre Lane Senior Secured Credit Facility, related party 3,050 5,125

Repayment of principal on Centre Lane Senior Secured Credit Facility, related party — ( 150 )

Repayments of debt ( 250 ) ( 135 )

Principal payments received (funded) for notes receivable 21 ( 8 )

Proceeds from exercise of options

Proceeds from issuance of (payments of) premium finance loan payable

Proceeds from stock option exercises 1 14

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

Proceeds from PPP loan — 1,137

Net cash provided by financing activities 2,664 5,978

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

Net increase (decrease) in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents ( 465 ) 45

Cash and cash equivalents at beginning of year 781 736

Cash and cash equivalents at end of year $ 316 $ 781

accompanying notes to consolidated financial statements.

MOUNTAIN MEDIA, INC.

AND SUBSIDIARIES

STATEMENTS OF CASH FLOWS (CONTINUED)

Supplemental disclosure of cash flow information:

Cash paid for interest $ 153 $ —

Interest paid-in-kind on Centre Lane Credit Facility $ 3,104 $ 1,660

Supplemental disclosure of non-cash investing and financing activities

Recognition of right-of-use asset and operating lease liability $ 382 $ —

Conversion of Preferred shares to Common shares $ 1 $ 212

Issuance of debt in accordance with legal settlement

Settlement of Daily Engage liability

Issuance of common stock to Centre Lane for debt issuance

Non-cash acquisition of WSM net assets

Non-cash acquisition of WSM net liabilities

Non-cash intangible assets of WSM

Common stock issued for acquisitions

Issuance of common stock for services

Issuance of debt in accordance with legal settlement (Encoding)

accompanying notes to consolidated financial statements.

MOUNTAIN MEDIA, INC.

AND SUBSIDIARIES

to the Consolidated Financial Statements

1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Organization,

Nature of Operations and Liquidity

Mountain Media, Inc.

(the “Company” or “Bright Mountain” or “We”) is a Florida corporation formed

on May 20, 2010.

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

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

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

In August 2019, Bright Mountain Israel Acquisition, an Israeli

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

(“S&W”) which then changed its

name to Oceanside Media LLC (“Oceanside”).

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

television (CTV) publishing formats.

We define “end-to-end” as our process for taking ad buying from beginning to end, delivering

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

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

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

our ad exchange network.

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

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

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

streaming video content.

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

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

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

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

into targeted consumer categories valued by advertisers.

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

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

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

of America (“U.S.”).

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

a wholly-owned subsidiary of the Company.

Wild Sky is the home to parenting and lifestyle brands.

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.

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

public and private sources.

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

The accompanying

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

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

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

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

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

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

pandemic has caused disruptions in the services we provide.

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

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

During 2021, we continued

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

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

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

It appears the pandemic will continue into 2022,

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

2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of Consolidation and Basis of Presentation

consolidated financial statements include the accounts of the Company and all of its wholly-owned subsidiaries.

All significant intercompany

balances and transactions have been eliminated in consolidation.

The accompanying consolidated financial statements have been prepared

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

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

following five steps:

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

Debt issued in accordance with legal settlement $ — $ 79

Common stock issued to Centre Lane for debt issuance $ — $ 1,003

Warrants issued to settle liability $ 216 $ —

See accompanying notes to consolidated financial statements.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – DESCRIPTION OF BUSINESS

Organization and Nature of Operations

Bright Mountain Media, Inc.

(the “Company” or “Bright Mountain” or “we”), is a holding Company which focuses on digital publishing and advertising technology.

The Company is engaged in content creation and advertising technology development that helps customers connect with, and market to, targeted audiences in high quality environments using a variety of digital ad formats.

Digital Publishing

Our digital publishing division focuses on developing content that attracts an audience and monetizes that audience through advertising.

The current portfolio of owned and operated websites is focused on moms, parenting, families, and more broadly, women.

The portfolio consists of popular websites including Mom.com, Cafemom.com, LittleThings.com, and MamasLatinas.com.

This demographic is highly sought after by brands and their advertising agencies.

We use internal and external technologies to constantly improve the effectiveness and efficiency of the content we create.

Our publishing division monetizes its audiences through both direct and programmatic advertising sales.

Advertising Technology

Our advertising technology division focuses on delivering targeted ads to audiences on owned and operated sites as well as third party publishers in a cost-effective manner through the deployment of proprietary technologies.

By developing our own proprietary technology stack, we are able to pass along efficiencies to both the demand and supply side of the ecosystem.

Our goal is to enable and support a streamlined, end-to-end advertising model that addresses both demand (buy side) and publisher supply (sell side) programmatic sales and delivery of digital advertisements using an array of audience targeting tools and advertising formats (display, audio, video, CTV, in-app).

Programmatic advertising relies on artificial intelligence powered software programs that leverage data and proprietary algorithms to match the optimal selection of an ad with a bid price offered by advertisers.

The Company generates revenue through sales of advertising services which generate revenue from advertisements placed on the Company’s owned and managed sites, as well as from advertisements placed on partner websites, for which the Company earns a share of the revenue.

Additionally, we also generate advertising services revenue from facilitating the real-time buying and selling of advertisements at scale between networks of buyers known as DSPs and sellers known as SSPs.

Application to OTC

On July 1, 2022, the Company filed an application with the Over-The-Counter (“OTC”) Markets Group Inc.

for a review of its candidature to be upgraded to the OTCQB exchange from the OTC Expert Market as the Company is now current with its SEC filing obligations.

The application was approved on August 19, 2022 and as of August 19, 2022, the Company's Common Stock is quoted for trading on the OTCQB Market under the symbol "BMTM," and continues to be quoted on this exchange at December 31, 2022.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

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

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

Going Concern and Liquidity

Historically, the Company has incurred losses, which has resulted in an accumulated deficit of approximately $ 114.3 million as of December 31, 2022.

Cash flows used in operating activities were $ 3.1 million and $ 5.9 million for the years ended December 31, 2022 and 2021, respectively.

As of December 31, 2022, the Company had a working capital deficit of approximately $ 13.3 million inclusive of $ 316,000 in cash and cash equivalents.

The Company’s ability to continue as a going concern is dependent on its ability to meet its liquidity needs through a combination of factors.

The Company is currently exploring all strategic alternatives, including restructuring or refinancing its debts, seeking additional debt, such as borrowings under the Centre Lane Senior Secured Credit Facility or equity capital.

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

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

The ultimate success of these plans is not guaranteed.

In considering our forecast for the next twelve months, the current cash and working capital, as of the filing of this Annual Report on Form 10-K, the Company’s available cash will not be sufficient to fund its anticipated level of operations.

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

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

Subsequent Event

On February 28, 2023, the Company reduced its headcount from 57 employees to 52 employees.

No executive officer was included in this reduction.

See Note 22, "Subsequent Events", to the accompanying consolidated financial statements for further information.

Cash and Cash Equivalents

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

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

and other foreign countries in which the Company operates.

As of December 31, 2022, the Company's interest and noninterest bearing accounts were within the federally insured limits of $ 250,000 .

As of December 31, 2021, the Company exceeded the federally insured limit of $ 250,000 for interest and noninterest bearing accounts.

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

The Company had cash balances with a single financial institution in excess of the FDIC insured limits by amounts of $ 0 and $ 93,000 as of December 31, 2022 and December 31, 2021, respectively.

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

At December 31, 2022, and 2021, the Company had $ 316,000 and $ 781,000 , respectively, in cash and cash equivalents.

Subsequent Event

On March 10, 2023, the FDIC took over Silicon Valley Bank ("SVB"), which is one of the Company's banking institution.

See Note 22, "Subsequent Events", to the accompanying consolidated financial statements for further information.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable represent receivables from customers in the ordinary course of business and are recorded in accordance with FASB Accounting Standards Codification No.

310, Receivables, (ASC 310) .

Receivables are recorded at the invoice amount on the date revenue is recognized and are presented net of the allowance for doubtful accounts in the accompanying consolidated balance sheets.

Receivables are subjected to adjustments from traffic settlements that are deducted from open invoices.

Our receivables are not interest bearing and not collateralized.

The allowance for doubtful accounts is based on our assessment of the collectability of customer accounts.

We regularly review our receivables that remain outstanding past their applicable payment terms and establish an allowance for potential write-offs by considering factors such as historical experience, credit quality, age of the accounts receivable balances, and current and forecasted economic conditions that may affect a customer’s ability to pay.

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

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

Property and Equipment, net

Property and equipment are recorded at cost, less accumulated depreciation in accordance with FASB Accounting Standards Codification No.

360, Property, Plant and Equipment, (ASC 360) .

Depreciation is computed using the straight-line method based on the estimated useful lives of the related assets.

Leasehold improvements are amortized over the lesser of the lease term or the useful life of the improvements.

We account for Goodwill under FASB Accounting Standards Codification No.

350, Goodwill and Other, (ASC 350).

Goodwill represents the cost in excess of the fair value of the net assets acquired in a business combination.

The Company categorizes Goodwill into two reporting units:

“Owned & Operated” and “Ad Network”.

Goodwill is tested for impairment at the reporting unit level on an annual basis and on an interim basis if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value, which are determined through a qualitative assessment.

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

If our qualitative assessment does not conclude that it is more likely than not that the estimated fair value of the reporting unit is greater than the carrying value, we perform a quantitative analysis.

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

A discounted cash flow analysis requires us to make various assumptions, including assumptions about future cash flows, growth rates and discount rates.

The assumptions about future cash flows and growth rates are based on our long-term projections.

Assumptions used in our impairment testing are consistent with our internal forecasts and operating plans.

Our discount rate is based on our debt structure, adjusted for current market conditions.

If the fair value of the reporting unit exceeds its carrying amount, there is no impairment.

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

We performed our annual goodwill impairment test as of December 31, 2022, and 2021, and we determined there were no events or circumstances which indicated that the carrying value of a reporting unit exceeded the fair value.

Intangible Assets

We account for intangibles under FASB Accounting Standards Codification No.

350, Goodwill and Other, (ASC 350).

Intangible assets acquired in a business combination or an asset acquisition are recorded at fair value on the date of acquisition and amortized over their estimated useful lives.

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

The Company’s trade name and customer relationships are amortized on a straight-line basis over a useful life of five years .

IP/technology is amortized on a straight-line basis over a useful life of ten years .

Non-compete agreements are amortized on a straight-line basis over the length of each agreement, typically between 3 years- five years .

The Company reviews for impairment indicators of finite-lived intangibles and other long-lived assets as described below in “Amortization and Impairment of Long-Lived Assets.”

Amortization and Impairment of Long-Lived Assets

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

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

If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset.

For long-lived assets held for sale, assets are written down to fair value, less cost to sell.

Fair value is determined based on discounted cash flows, appraised values or management’s estimates, depending upon the nature of the assets.

There were no impairment losses related to long-lived assets in any of the periods presented.

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

842, Leases, (ASC 842) .

Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liability on our consolidated balance sheets.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

Lease ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date.

As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments.

We do not include options to extend or terminate the lease term unless it is reasonably certain that we will exercise any such options.

We recognize rent expense under our operating leases on a straight-line basis.

Variable lease costs such as operating costs and property taxes are expensed as incurred.

Revenue Recognition

The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification No.

606, Revenue from Contracts with Customers, (ASC 606) .

The Company recognizes revenue at a point-in-time when control 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.

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

(i) identify the contract(s) with a customer;

(ii) identify the performance obligations in the contract;

determine the transaction price;

(iii) determine the transaction price;

(iv) allocate the transaction price to the performance obligations in the contract;

and (v) recognize

revenue when (or as) the Company satisfies a performance obligation.

The Company only applies the five-step model to contracts when it

is probable that Company will collect the consideration it is entitled to in exchange for the advertising services it transfers to the

At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the advertising

services promised within each contract and determines those that are performance obligations and assesses whether each promised advertising

service is distinct.

The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance

obligation based on relative fair values, when (or as) the performance obligation is satisfied.

Company recognizes revenue from its own advertising platform, ad network partners and websites (“Ad Network”) through its

publishing advertiser impressions and pay-for-click services, the Company’s owned and operated sites, our ad network, or platforms.

Invalid traffic on the Ad Network may impact the amount collected and adjusted by our Ad Network.

Company has one revenue stream generated directly from publishing advertisements, whether on the Company’s owned and operated sites,

our ad network, or platforms.

The revenue is earned when the users click on the published website advertisements.

Specific revenue recognition

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.

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

The Company subsequently settles these transactions

with publishers at which time adjustments for invalid traffic may impact the amount collected.

are no significant initial costs incurred to obtain contracts with customers, and no contract assets or contract liabilities recorded

in our consolidated financial statements.

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

Company determines if an arrangement is a lease at inception.

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.

We believe that the estimates, judgments, and assumptions upon which we rely are reasonable based upon information available to us at

the time that these estimates, judgments, and assumptions are made.

These estimates, judgments, and assumptions can affect the reported

amounts of assets and liabilities as of the date of our consolidated financial statements as well as reported amounts of revenue and

expenses during the periods presented.

Our consolidated financial statements would be affected to the extent there are material differences

between these estimates and actual results.

In many cases, the accounting treatment of a particular transaction is specifically dictated

by GAAP and does not require management’s judgment in its application.

There are also areas in which management’s judgment

in selecting any available alternative would not produce a materially different result.

estimates included in the accompanying consolidated financial statements include revenue recognition, the fair value of acquired assets

for purchase price allocation in business combinations, valuation of goodwill and intangible assets, estimates of amortization period

for intangible assets, estimates of depreciation period for fixed assets, the valuation of equity-based transactions, and the valuation

allowance on deferred tax assets.

and Cash Equivalents

Company considers all highly liquid investments with an original maturity, or remaining maturity when acquired, of three months or less

to be cash equivalents.

Cash and cash equivalents are all maintained in bank accounts in the U.S.

and other foreign countries in which

the Company operates.

Cash maintained in bank accounts outside of the U.S.

is not significant.

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.

banks, which at times, may exceed federally insured limits.

has not incurred any losses on these accounts.

In addition, the Company maintains various bank accounts in Thailand, which are not insured.

During the years ended December 31, 2021 and 2020, we have not incurred material losses on these uninsured accounts.

The Company minimizes

the concentration of credit risk associated with its cash by maintaining its cash with high quality federally insured financial institutions.

The Company performs ongoing evaluations of its trade accounts receivable customers and generally does not require collateral.

Value of Financial Instruments and Fair Value Measurements

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

date, is as follows:

inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities;

other than quoted prices that are observable, either directly or indirectly.

These include quoted prices for similar assets or liabilities

in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active;

inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect

those that a market participant would use.

Company measures its financial assets and liabilities in accordance with GAAP.

For certain of our financial instruments, including cash,

accounts payable, accrued expenses, and the short-term portion of long-term debt, the carrying amounts approximate fair value due to

their short maturities.

and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

Our assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the placement

of assets and liabilities being measured within the fair value hierarchy.

(See Note 13).

receivable represent receivables from customers in the ordinary course of business.

These are recorded at invoices amount on the date

revenue is recognized.

Receivables are recorded net of the allowance for doubtful accounts in the accompanying consolidated balance sheets.

The Company provides allowances for doubtful accounts for estimated losses resulting from the inability of its customers to repay their

If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability

to repay, additional allowances may be required.

The Company provides for potential uncollectible accounts receivable based on specific

customer identification and historical collection experience adjusted for existing market conditions.

If market conditions decline, actual

collection experience may not meet expectations and may result in decreased cash flows and increased bad debt expense.

The Company is

also subject to adjustments from traffic settlements that are deducted from open invoices.

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

Once collection efforts by the Company and its collection agency are exhausted, the determination for charging off uncollectible

receivables is made.

and Equipment

and equipment are recorded at cost, less accumulated depreciation.

Depreciation is computed using the straight-line method based on the

estimated useful lives of the related assets.

Leasehold improvements are amortized over the lesser of the lease term or the useful life

of the improvements.

Development Costs

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

(v) recognize revenue when (or as) the Company satisfies a performance obligation.

The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the services it provides to the customer.

At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the services promised within each

contract and determines those that are performance obligations and assesses whether each promised service is distinct.

The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation based on relative fair values, when (or as) the performance obligation is satisfied.

Advertising revenue is generated by audiences seeing or clicking on digital advertisements utilizing several advertiser partners.

Revenue is recognized net of adjustments based on the number of advertisements delivered and are billed monthly or generated via custom content production and extensions on our social media platforms.

There is no significant initial cost incurred to obtain contracts with customers, and no contract assets or contract liability recorded in our consolidated financial statements other than those classified as deferred revenue.

Deferred Revenue

The Company records deferred revenue when cash payments are received in advance of performance obligations.

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

Cost of Revenue

Cost of revenue includes payment to third parties for services performed to drive revenue, including revenue share paid for ad exchange on third party’s site, advertising fees, fees paid for content creation, influencers, writers and sales commissions.

Website Development Costs

The Company accounts for its website development costs in accordance with FASB Accounting Standards Codification No.

350, Website Development Costs (ASC 350) .

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

Upgrades or enhancements that

add functionality are capitalized while other costs during the operating stage are expensed as incurred.

The Company amortizes the capitalized

website development costs over an estimated life of five years.

of December 31, 2021 and 2020, all website development costs have been expensed.

While it is likely that we will have significant amortization

expense as we continue to acquire websites, we believe that intangible assets represent costs incurred by the acquired website to build

value prior to acquisition and the related amortization and impairment charges of assets, if applicable, are not ongoing costs of doing

Net and Intangible Assets, Net

and Intangible assets result primarily from acquisitions.

The Company categorizes Goodwill into two reporting units:

Operated” and “Ad Network”.

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

Upon the acquisition, the purchase price is first allocated to identifiable assets and liabilities, including the trade name

and other intangibles, with any remaining purchase price recorded as goodwill.

is not amortized, rather, an impairment test is conducted on an annual basis, or more frequently if indicators of impairment are present,

which are determined through a qualitative assessment.

A qualitative assessment includes consideration of the economic, industry and

market conditions in addition to the overall financial performance of the Company and these assets.

If our qualitative assessment does

not conclude that it is more likely than not that the estimated fair value of the reporting unit is greater than the carrying value,

we perform a quantitative analysis.

In a quantitative test, the fair value of a reporting unit is determined based on a discounted cash

flow analysis and further analyzed using other methods of valuation.

A discounted cash flow analysis requires us to make various assumptions,

including assumptions about future cash flows, growth rates and discount rates.

The assumptions about future cash flows and growth rates

are based on our long-term projections.

Assumptions used in our impairment testing are consistent with our internal forecasts and operating

Our discount rate is based on our debt structure, adjusted for current market conditions.

If the fair value of the reporting unit

exceeds its carrying amount, there is no impairment.

If not, we compare the fair value with its carrying amount.

To the extent the carrying

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

The Company’s annual

assessment date is December 31.

Company’s trade name and customer relationships are amortized on a straight-line basis over a useful life of 5 years.

IP/technology

is amortized on a straight-line basis over a useful life of 10 years.

Non-compete agreements are amortized on a straight-line basis over

the length of each agreement, typically between 3-5 years.

The Company reviews for impairment indicators of finite-lived intangibles

and other long-lived assets as described below in “Amortization and Impairment of Long-Lived Assets.”

and Impairment of Long-Lived Assets

Company evaluates long-lived assets, including amortizable intangible assets, for impairment whenever events or changes in circumstances

indicate that the carrying amount of an asset may not be recoverable.

Upon such an occurrence, recoverability of assets to be held and

used is measured by comparing the carrying amount of an asset to forecasted undiscounted future net cash flows expected to be generated

by the asset.

If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized for the

amount by which the carrying amount of the asset exceeds the fair value of the asset.

For long-lived assets held for sale, assets are

written down to fair value, less cost to sell.

Fair value is determined based on discounted cash flows, appraised values or management’s

estimates, depending upon the nature of the assets.

Company accounts for share-based compensation related to instruments issued to employees and non-employees under GAAP, which requires

the measurement and recognition compensation costs for all equity-based payment awards based on estimated fair values.

The value of the

portion of an employee award that is ultimately expected to vest is recognized as an expense over the requisite service periods using

the straight-line attribution method.

The Company estimates the fair value of stock options by using the Black-Scholes option-pricing

Share-based compensation expense is included in selling, general and administrative expenses on the accompanying consolidated

statement of operations.

We have elected to account for forfeitures as they occur.

and Marketing

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

consolidated 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 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.

Under this method, deferred income taxes are determined based on the

differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements which

will result in taxable or deductible amounts in future years and are measured using the currently enacted tax rates and laws in the period

those differences are expected to reverse.

A valuation allowance is provided to reduce net deferred tax assets to the amount that, based

on available evidence, is more likely than not to be realized.

Company follows the provisions of ASC 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.

Upgrades or enhancements that add functionality are capitalized while other costs during the operating stage are expensed as incurred.

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

As of December 31, 2022 and 2021, all website development costs have been expensed.

While it is likely that we will have significant amortization expense as we continue to acquire websites, we believe that intangible assets represent costs incurred by the acquired website to build value prior to acquisition and the related amortization and impairment charges of assets, if applicable, are not ongoing costs of doing business.

Advertising and Marketing

Advertising and marketing expenses are recognized as incurred and are included in general and administrative expenses on the accompanying consolidated statements of operations and comprehensive loss.

For the years ended December 31, 2022 and 2021, advertising and marketing expense was $ 46,000 and $ 58,000 , respectively.

Stock Based Compensation

We account for stock based compensation in accordance with FASB Accounting Standards Codification No.

718, Compensation - Stock Compensation (ASC 718) .

ASC 718 addresses accounting for share-based awards, including stock options, restricted stock, performance shares and warrant.

Stock-based compensation for stock options to employees and non-employees is based upon the fair value of the award on the date of grant.

We record forfeitures as they occur.

The compensation cost is recognized over the requisite service period, which is generally the vesting period, and is included in general and administrative expenses in the consolidated statements of operations.

The Company estimates the fair value of stock options using the Black-Scholes valuation model.

The expected life represents the term the options granted are expected to be outstanding.

The expected volatility is determined using the

historical volatility of similar publicly traded companies.

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

Treasury rate in effect at the time of grant.

Treasury Stock

The Company accounts for its treasury stock as set forth in FASB Accounting Standards Codification No.

505, Treasury Stock (ASC 505-30) .

Under ASC 505-30 the total amount paid to acquire the stock is recorded and no gain or loss is recognized at the time of purchase.

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

At December 31, 2022 and 2021, the Company owned 825,175 shares of treasury stock.

Loss Per Share

The Company computes net loss per share in accordance with FASB Accounting Standards Codification No.

260, Earnings Per Share (ASC 260) .

Under the provisions of ASC 260, basic net loss per share is computed by dividing the net loss available to common shareholders by the weighted average common shares outstanding during the period.

Diluted net loss per share adjusts basic net loss per share for the effect of stock options, warrants, convertible notes and restricted stock awards only in periods, or for such awards in which the effect is dilutive.

ASC 260 also requires the Company to present basic and diluted loss per share information separately for each class of equity instruments that participates in any income distribution with primary equity instruments.

Deferred Debt Costs

Deferred debt costs include costs incurred in connection with acquiring and maintaining debt arrangements.

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

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

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

Under this method, deferred income taxes are determined based on the differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements which will result in taxable or deductible amounts in future years and are measured using the currently enacted tax rates and laws in the period those differences are expected to reverse.

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

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

740, Income Taxes (ASC 740).

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained.

In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any.

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

Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more

than 50 percent likely of being realized upon settlement with the applicable taxing authority.

The portion of the benefits associated

with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax

benefits in the accompanying consolidated balance sheets along with any associated interest and penalties that would be payable to the

taxing authorities upon examination.

Interest and penalties associated with unrecognized tax expenses are recognized as tax expenses

in the Statement of Operations.

Concentrations

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” 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

both dividends declared or accumulated and participation rights in undistributed earnings as if all such earnings had been distributed

during the period.

The Company has convertible preferred stock which have a right to participate in dividends;

these are deemed to be

participating securities.

During periods of loss, there is no allocation required under the two-class method since the participating

securities do not have a contractual obligation to fund the losses of the Company.

applicable, basic earnings (loss) per share is calculated by dividing net income (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

common shares outstanding during the period.

Diluted earnings (loss) per share is calculated in a similar manner after consideration

of the potential dilutive effect of common stock equivalents on the average number of common shares outstanding during the period.

stock equivalents include warrants and stock options.

Common stock equivalents are calculated based upon the treasury stock method using

an average market price of common shares during the period.

Dilution is not considered when a net loss is reported.

Common stock equivalents

that have an antidilutive effect are excluded from the computation of diluted earnings per share.

Company currently operates in one reporting segment.

The services segment is focused on producing advertising revenue generated by users

“clicking” on website advertisements utilizing several ad network partners, and direct advertisers and subscription revenue

generated by the sale of access to career postings on one of our websites, 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), “ 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”)

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

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

The Company is currently evaluating the impact this guidance will have

on the consolidated financial statements.

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

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

– Goodwill and other (Topic 350):

Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority.

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

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

Segment Reporting

Consistent with FASB Accounting Standards Codification No.

280, Segment Reporting (ASC "280"), our Chief Financial Officer reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance.

There are no segment managers who are held accountable by the Chief Financial Officer,

or anyone else, for operations, operating results and planning for levels or components below the consolidated unit level.

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

Use of Estimates

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

We believe that the estimates, judgments, and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments, and assumptions are made.

These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of our condensed consolidated financial statements as well as reported amounts of revenue and expenses during the periods presented.

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

In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application.

There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result.

Significant estimates included in the accompanying consolidated financial statements include, valuation of goodwill and intangible assets, estimates of amortization period for intangible assets, estimates of depreciation period for property and equipment, the valuation of equity-based transactions, valuation of the Center Lane Senior Secured Facility carrying value regarding debt modification or extinguishment, and the valuation allowance on deferred tax assets.

Foreign Currency

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

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

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

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

Concentrations of Credit Risk

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

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

Such deposits may be in excess of federally insured limits.

In addition, the Company maintains various bank accounts in Thailand and Israel, which are not insured.

To date, we have not experienced any losses on our cash and cash equivalents.

We perform periodic evaluations of the relative credit standing of the financial institutions.

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

We maintain an allowance for doubtful accounts receivable based upon the expected collectability of accounts receivable balances.

The follow table provides information about customer and vendor concentration that exceeds 10% of revenue, accounts receivable and accounts payable for the years ended December 31, 2022 and 2021:

Revenue Concentration

Customers exceeding 10% of revenue 1 1

% of overall revenue

Customer 1 37.7 % 8.6 %

Total % of revenue 37.7 % 8.6 %

Accounts Receivable Concentration

Customers exceeding 10% of receivable 1 2

% of accounts receivable

Customer 1 43.5 % 13.1 %

Customer 2 — % 12.0 %

Total % of accounts receivable 43.5 % 25.1 %

Accounts Payable Concentration

Vendors exceeding 10% of payable 2 1

% of accounts payable

Customer 1 11.0 % 11.2 %

Customer 2 10.8 % — %

Total % of accounts payable 21.8 % 11.2 %

Off-balance Sheet Arrangements

There are no off-balance sheet arrangements as of December 31, 2022 and December 31, 2021.

Reclassification

During the year ended December 31, 2022, reclassification of certain accounts has been made to previously reported amounts to conform to their treatment to the current period.

Specifically, the Company identified a reclassification of commissions from general and administrative expenses to cost of revenue on the consolidated statements of operations and comprehensive loss, reclassification between note receivable to prepaid expense and other current assets, website acquisition assets to intangible asset, as well as a reclassification between property and equipment and accumulated depreciation, accrued expenses to other liabilities on the consolidated balance sheets.

These reclassifications had no impact on the previously reported net loss for year ended December 31, 2021.

Effective Accounting Pronouncements

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

2017-04 (amended by ASU 2019-10), Intangibles – Goodwill and other (Topic 350):

Simplifying the Test for Goodwill Impairment.

” Which simplifies the test for goodwill

impairment by removing the second step of the test.

There is a one-step qualitative test and does not amend the optional qualitative

assessment of goodwill impairment.

The new standard is effective January 1, 2023 and is not expected to have a material impact on the

Company’s consolidated financial statements.

August 2020, the FASB issued ASU 2020-06, “ Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives

and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) ”.

The ASU simplifies the accounting for certain

financial instruments with characteristics of liabilities and equity.

The FASB reduced the number of accounting models for convertible

debt and convertible preferred stock instruments and made certain disclosure amendments to improve the information provided to users.

which simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test.

The current guidance requires companies to calculate the implied fair value of goodwill in Step 2 by calculating the fair value of all assets (including any unrecognized intangible assets) and liabilities of the reporting unit and subtracting it from the fair value of the reporting unit previously calculated in Step 1.

The amendments in this update modify the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value.

This update is effective beginning after December 15, 2021.

We adopted this standard on January 1, 2022.

The adoption of this standard did not have a material impact on our condensed consolidated financial statements for the year ended December 31, 2022.

In December 2019, the FASB issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes.

The ASU enhances and simplifies various aspects of the income tax accounting guidance in ASC 740, including requirements related to the following:

(1) hybrid tax regimes;

(2) tax basis step-up in goodwill obtained in a transaction that is not a business combination;

(3) separate financial statements of entities not subject to tax;

(4) intra-period tax allocation exception to the incremental approach;

(5) ownership changes in investments;

(6) interim-period accounting for enacted changes in tax law;

and (7) year-to-date loss limitation in interim-period tax accounting.

The amendments in ASU 2019-12 are effective for public business entities for fiscal years beginning after December 15, 2020, including interim periods therein.

This update is effective beginning after December 15, 2021.

We adopted this standard on January 1, 2022.

The adoption of this standard did not have a material impact on our consolidated financial statements for the year ended December 31, 2022.

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

2020-01, Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 .

The amendments in this update clarify certain interactions between the guidance to account for certain equity securities.

This update is effective beginning after December 15, 2021.

We adopted this standard on January 1, 2022.

The adoption of this standard did not have a material impact on our consolidated financial statements for the year ended December 31, 2022.

Recent Accounting Pronouncements Not Yet Adopted

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

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

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

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

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

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

The Company does not anticipate adopting this guidance will have a material impact on its consolidated financial statements.

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

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

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

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

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

The Company is currently

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

March 2020, the FASB issued ASU No.

2020-04, “ Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate

Reform on Financial Reporting ” which provides optional expedient and exceptions for applying generally accepted accounting

principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met.

In response to the concerns about structural risks of interbank offered rates (“IBORs”) and, particularly, the risk of cessation

of the LIBOR, regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative

reference rates that are more observable or transaction based and less susceptible to manipulation.

This accounting standards update

provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates

that are expected to be discontinued.

This new guidance may be adopted by the Company no later than December 1, 2022, with early adoption

The potential adoption of this guidance is not expected to have a material impact on the consolidated financial statements.

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”).

The Company issued 2,500,000 shares of restricted common stock to Centre Lane and Centre Lane issued a first

lien senior secured credit facility of $ 16,451,905 .

Per the credit facility with Center Lane, our loan payments begin December 1, 2021.

There is no prepayment penalty associated with this credit facility.

Certain future capital raises do require partial or full prepayments

of the credit facility.

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.

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

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

Cash & cash equivalents

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

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

2021-08, Business Combinations (Topic 805):

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

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

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

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

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

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

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

The Company does not anticipate adopting this guidance will have a material impact on its consolidated financial statements.

NOTE 3 – ACCOUNTS RECEIVABLE

Accounts receivable, net consisted of the following:

($ in thousands) 2022 2021

Accounts receivable $ 3,447 $ 4,048

Unbilled receivables ( A )

allowance for doubtful accounts ( 586 ) ( 498 )

Accounts receivable, net $ 3,585 $ 3,550

Prepaid expense

Fixed assets, net

Intangible assets acquired:

Tradename – Trademarks

IP/Technology

Customer relationships

Liabilities assumed

Accounts payable

Accrued expenses

Other current liabilities

Long term loan payable – PPP

( 1,706,735 )

Deferred tax liability

Net assets acquired

Total purchase price

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

SCHEDULE OF TOTAL CONSIDERATION TRANSACTION

Shares issued

Total consideration

4 – PREPAID EXPENSES AND OTHER CURRENT ASSETS

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

OF PREPAID EXPENSES AND OTHER CURRENT ASSETS

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

Bad debt expense was $ 84,000 , and $ 74,000 for the years ended December 31, 2022, and 2021, respectively.

NOTE 4 – PREPAID EXPENSE AND OTHER ASSETS

Prepaid expenses and other assets consisted of the following:

($ in thousands) 2022 2021

Prepaid insurance $ 1 $ 427

Prepaid consulting service agreements – Spartan (1)

Prepaid expenses – other

Deposits 137 243

Other 314 119

Total prepaid expense and other assets $ 737 $ 1,454

Non-current other assets – Spartan (1)

( 137 ) ( 528 )

Prepaid expenses and other current assets $ 600 $ 926

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

OF PROPERTY AND EQUIPMENT

(1) Spartan 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 commencing October 2018 for the provision of such services.

During the years ended December 31, 2018 to December 31, 2020, a series of payments were made under the terms of this agreement, resulting in amounts being capitalized and amortized over the remaining life of the agreement.

These amounts will be fully amortized by September 30, 2023.

Approximately $ 285,000 included in non-current for 2021 relates to Spartan.

NOTE 5 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

(Years) December 31,

($ in thousands) 2022 2021

Furniture and fixtures 3 - 5

Leasehold improvements

Computer equipment 3 340 176

Total property and equipment

accumulated depreciation ( 349 ) ( 150 )

Total property and equipment, net

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

Property and equipment, net $ 40 $ 65

Depreciation expense was $ 38,000 , and $ 48,000 for the years ending December 31, 2022, and 2021, respectively and is included in general and administrative expenses on the consolidated statements of operations and comprehensive loss.

NOTE 6 – INTANGIBLE ASSETS, NET

Website acquisitions, net consisted of the following:

($ in thousands) 2022 2021

Website acquisition assets $ 1,124 $ 1,124

2 unchanged sentences

Website acquisition assets, net $ 2 $ 4

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 and comprehensive loss.

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

OF INTANGIBLE ASSETS

Customer relationships

Other intangible assets, net consisted of the following:

December 31, 2022 December 31, 2021

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

Trade name 5 $ 2,759 $ ( 1,617 ) $ 1,142 $ 2,759 $ ( 1,141 ) $ 1,618

IP/Technology 10 1,983 ( 899 ) 1,084 1,983 ( 753 ) 1,230

Customer relationships 5 6,680 ( 4,419 ) 2,261 6,680 ( 3,494 ) 3,186

Non-compete agreements 3 - 5

Total intangible assets

accumulated amortization

402 ( 381 ) 21 402 ( 371 ) 31

( 4,170,454 )

accumulated impairment loss

( 16,486,929 )

Intangible assets, net

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

of impairment noted by management, including decreased revenues.

primarily resulting from the COVID-19 global pandemic when many companies

in various industries were forced to restructure their advertising budgets and spending.

The fair value of the respective assets was

determined based on the projected future cash flows associated with the respective assets.

These fair values were compared with the carrying

values of the respective assets to determine if an impairment of the respective assets was warranted.

It was determined that the carrying

values of the finite lived intangible assets associated with Oceanside did not exceed the respective fair values of the assets, therefore

no revaluation associated with these assets has been recognized.

It was determined that the finite lived intangible assets associated

with MediaHouse were deemed impaired based on an analysis of the carrying values and fair values of the assets.

In September 2020, the

Company recorded an impairment expense of $ 16,486,929 within intangible assets impairment expense on the consolidated statement of operations.

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

OF CHANGES GOODWILL

Owned & Operated

January 1, 2020 goodwill

Additions (a)

Deletions (b)

Impairment loss

( 42,031,510 )

( 42,279,087 )

December 31, 2020 goodwill

December 31, 2021 goodwill

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

Refer to Note 3.

Company had an adjustment to Goodwill related to purchase accounting related to the acquisition of MediaHouse for ($ 182,203 ) related

to a working capital adjustment.

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

Impairment is deemed to

occur when the carrying value of the Goodwill associated with the reporting unit exceeds the implied value of the Goodwill associated

with the reporting unit.

The year 2020 has been marked by the COVID-19 Global pandemic when many companies in various industries were

forced to restructure their advertising budgets and spending.

This is evidenced by the reduced revenues from our customers in comparison

with the 2019 year.

The fair value of the respective reporting units was determined based on both the Income Approach (Discount Cash

Flows) and the Market Multiples Approach.

In September 2020, 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:

OF ACCRUED EXPENSES

Year ended December 31,

Accrued interest

Accrued salaries and benefits

Accrued dividends

Accrued traffic settlement (1)

Accrued legal settlement (2)

Accrued legal fees

Accrued other professional fees

Share issuance liability (4)

Accrued warrant penalty (3)

Other accrued expenses

Total accrued expenses

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.

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.

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 3 for further information on the Company’s acquisitions.

debt to related parties

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.

A beneficial conversion feature exists on the date the convertible notes were issued

whereby the fair value of the underlying common stock to which the notes are convertible into is in excess of the face value of the note

of $ 70,000 .

principal balance of these notes payable was $ 80,000 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.

At December 31, 2021 and 2020, the total

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

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

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.

The Wild Sky PPP Loan has a two -year term and bears interest at a rate of 1.0 % per annum.

Monthly principal

and interest payments are deferred for six months after the date of disbursement.

The Wild Sky PPP Loan may be prepaid at any time prior

to maturity with no prepayment penalties.

The Wild Sky PPP Loan contains customary events of default provisions.

Under the terms of the

CARES Act, PPP Loan recipients can apply for and be granted forgiveness for all or a portion of loans granted under the PPP.

22, 2021, the Company applied for the promissory note to be forgiven by the SBA in whole or in part and on March 29, 2021, the Company

obtained the forgiveness of the Wild Sky PPP Loan in whole.

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.

The note bears interest at a

rate of 6.0 % per annum.

Per the credit facility with the seller, our loan payments begin December 1, 2021.

There is no prepayment penalty

associated with this credit facility.

Certain future capital raises do require partial or full prepayments of the credit facility.

membership interest purchase included a requirement that the opinion of the financial statements as of and for the year ended December

31, 2020 not include a “going concern opinion”;

the Company has defaulted on this requirement but on April 26, 2021, the

Company obtained a waiver from the lender waiving this requirement.

December 31, 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

Company generally finances its annual insurance premiums through the use of short-term notes, payable in 10 equal monthly installments .

Coverages financed include Directors and Officers and Errors and Omissions with premiums financed in 2021 and 2020 of $ 406,522 and $ 380,397 ,

respectively.

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 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,

and they are recorded at fair value only when impairment is recognized.

These assets include property, plant and equipment, goodwill

and intangible assets, net.

Refer to Note 6 and Note 7 for discussion on impairment of intangible assets and goodwill, respectively.

The Company does not have any non-financial liabilities measured and recorded at fair value on a non-recurring basis.

Disclosures about Fair Value of Financial Instruments

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

OF CONSOLIDATED FINANCIAL INSTRUMENT

Level in Fair

Total $ 11,824 $ ( 7,316 ) $ 4,508 $ 11,824 $ ( 5,759 ) $ 6,065

Website $ 2 $ 4

Other intangibles 4,508 6,065

Total intangible, net $ 4,510 $ 6,069

Amortization expense for the years ended December 31, 2022, and 2021 was approximately $ 1.6 million, and $ 1.6 million, respectively, related to both the website acquisition costs and the intangible assets and is included in general and administrative expense in the statements of operations and comprehensive loss.

As of December 31, 2022, expected remaining amortization expense of intangible assets and website acquisition by fiscal year is as follows:

($ in thousands) Amount

Thereafter 497

Total $ 4,510

NOTE 7 – GOODWILL

The following table represents the allocation of Goodwill as of December 31, 2022 and 2021:

($ in thousands) Owned & Operated Ad Network Total

December 31, 2021 $ 9,725 $ 9,920 $ 19,645

Additions – – –

December 31, 2022 $ 9,725 $ 9,920 $ 19,645

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

Additions during 2020 (1)

Balance at December 31, 2020

Reclassification (2)

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

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

At December 31, 2022 and 2021, an assessment was performed using a qualitative assessment which includes consideration of the economic, industry and market conditions in addition to the overall financial performance of the Company and these assets.

Our qualitative assessment did not conclude that it is more likely than not that the estimated fair value of the reporting unit is greater than the carrying value, and we performed a quantitative analysis.

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

A discounted cash flow analysis requires us to make various assumptions, including

assumptions about future cash flows, growth rates and discount rates.

The assumptions about future cash flows and growth rates are based on our long-term projections.

Assumptions used in our impairment testing are consistent with our internal forecasts and operating plans.

Our discount rate is based on our debt structure, adjusted for current market conditions.

If the fair value of the reporting unit exceeds its carrying amount, there is no impairment.

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

NOTE 8 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following:

($ in thousands) 2022 2021

Accounts payable $ 8,585 $ 8,460

Accrued wages, commissions and bonus 380 1,459

Publisher cost 559 —

Professional fees 677 775

Other 116 273

Total accounts payable and accrued expenses $ 10,317 $ 10,967

NOTE 9 – CENTRE LANE SENIOR SECURED CREDIT FACILITY

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

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

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

Centre Lane Partners subsequently loaned the Company an additional $ 8.2 million to provide liquidity to fund operations beginning in April 26, 2021 (as amended, the “Centre Lane Senior Secured Credit Facility”).

This Centre Lane Senior Secured Credit Facility has been determined to qualify as a related party transaction as shares were issued to Centre Lane Partners as part of the transaction resulting in Centre Lane Partners owning 10 % of the Company's Common Stock as of December 31, 2022.

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

The note issued under the Centre Lane Senior Secured Credit Facility initially bore interest at a rate of 6.0 % per annum and is scheduled to mature on June 30, 2025, with payments of 2.5 % of outstanding principal beginning on June 30, 2023.

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

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

These draws are known as the "last in first out loans", totaling $ 2.8 million inclusive of exit fees at December 31, 2022, due and payable on June 30, 2023.

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

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

Optional Prepayment

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

Repayment of Loans

The Company is required to repay in cash to Centre Lane Partners (i) commencing with the fiscal quarter ending on June 30, 2023, in consecutive quarterly installments to be paid on the last day of each fiscal quarter of the Company, an amount equal to 2.5 % of the outstanding aggregate principal amount of the loans (after giving effect to capitalized PIK

Interest) and (ii) on the maturity date all outstanding obligations (including, without limitation, all accrued and unpaid principal and interest on the principal amounts of the Loans (including any accrued but uncapitalized PIK Interest)) of the loan parties that are due and payable on such date.

During the years ended December 31, 2022, and 2021, the Company paid approximately $ 153,000 and $ 0 , respectively, toward outstanding interest payable.

During the years ended December 31, 2022, and 2021, the Company paid approximately $ 0 and $ 150,000 , respectively, toward outstanding principal.

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

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

For the year ended December 31, 2022, the accumulated administrative fee was $ 105,000 and is included in outstanding principal.

The below table summarizes the loan balances and accrued interest for the year ended December 31, 2022 and 2021:

($ in thousands) 2022 2021

Note payable – Centre Lane Senior Secured Credit Facility, related party (current portion) $ 4,860 $ 7,316

Note payable – Centre Lane Senior Secured Credit Facility – net of discount, related party 25,101 15,164

Net principal at December 31, 2022 and 2021 29,961 22,480

debt discount 3,148 3,854

Outstanding principal at December 31, 2022 and 2021 $ 33,109 $ 26,334

The below table summarizes the movement in the outstanding principal from inception through December 31, 2022:

($ in thousands) 2022 2021

Opening balance $ 26,334 $ 16,416

Draws 3,050 5,125

Exit and other fees 621 3,283

Interest capitalized 3,104 1,660

33,109 26,484

Payment — ( 150 )

Outstanding principal $ 33,109 $ 26,334

Amendments to Centre Lane Senior Secured Credit Facility

Commencing April 2021, the Company and certain of its subsidiaries entered into various amendments to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners.

The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent.

The Credit Agreement was amended to provide for additional loans used for working capital.

In addition, and as part of the transaction, there are Exit Fees (“the Exit Fees”), which will be added and capitalized to the principal amount of the original loan.

As of December 31, 2022, there were fifteen amendments to the Centre Lane Senior Secured Credit Facility.

Consistent with FASB ASC Topic 470 Debt , (“ASC 470”), the Company is required to perform an analysis of the change in each amendment to determine whether the change is a modification or an extinguishment of debt.

Under a modification, no gain or loss is recorded, and a new effective interest rate is established based on the carrying value of the debt and revised cash flow.

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

A gain or loss is recorded for the difference between the net carrying value or the original debt and the fair value of the new debt.

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

A debt is considered extinguished if the present value of the new cash flows under the term of the new debt is at least 10 % different from the present value of the remaining cash flows under the terms of the old debt.

The below table summarizes the amendments that were executed by the Company since the inception of the facility to December 31, 2022, (in thousands), except for share data:

Number Date Draw $'000 Repayment Date Interest Rate (PIK) Interest Rate (Cash) Agency Fee Exit Fee (B) Common Stock Issued Accounting Impact

1 4/26/2021 $ — 6/30/2025 10 % — % $ — $ — 150,000 Extinguishment (A)

2 5/26/2021 1,500 6/30/2025 10 % — % — 750 3,000,000 Modification

3 8/12/2021 500 6/30/2025 10 % — % — 250 2,000,000 Modification

4 8/31/2021 1,100 6/30/2025 10 % — % — 550 — Modification

5 10/8/2021 725 6/30/2025 10 % — % — 363 — Extinguishment

6 11/5/2021 800 6/30/2025 10 % — % — 800 7,500,000 Modification

7 12/23/2021 500 6/30/2025 10 % — % 70 500 — Modification

$ 5,125 $ 70 $ 3,213 12,650,000

Acquisition debt, Wild Sky, related party

Related party debt (4)

Related party debt (5)

Related party debt discount and amortization (6)

8 1/26/2022 350 6/30/2025 10 % — % — 350 — Modification

9 2/11/2022 250 6/30/2023 4 % 8 % — 13 — Modification

10 3/11/2022 300 6/30/2023 4 % 8 % — 15 — Modification

11 3/25/2022 500 6/30/2023 4 % 8 % — 25 — Modification

12 4/15/2022 450 6/30/2023 4 % 8 % — 23 — Modification

13 5/10/2022 500 6/30/2023 4 % 8 % 35 25 — Modification

14 6/10/2022 350 6/30/2023 4 % 8 % — 18 — Modification

15 7/8/2022 350 6/30/2023 4 % 8 % — 18 — Modification

$ 3,050 $ 35 $ 487 —

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 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 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

Total $ 8,175 $ 105 $ 3,700 12,650,000

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

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

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

Draws advanced by amendments 2 through 8 totaling $ 5.5 million and exit fees totaling $ 3.6 million, were due for full repayment on February 28, 2022;

prior to this date, the loan agreement allowed the Company to waive accrual of interest on these amounts.

There was no repayment of these amounts, and as a result, on March 11, 2022, amendment 10 was executed, changing the repayment date of the outstanding principal and commencing interest accrual on the exit fees.

All amounts advanced for Amendments 9 through 15 are due on June 30, 2023 along with accrued and unpaid interest.

The outstanding amount at December 31, 2022 is $ 2.8 million, inclusive of interest paid in kind.

Commencing June 30, 2023, the Company is required to pay 2.5 % of the original principal plus draws advanced by amendments 2 through 8 along with accrued and unpaid interest.

The outstanding amount at December 31, 2022 is $ 30.3 million, inclusive of interest paid in kind

As of December 31, 2022, and 2021, the carrying value of the Centre Lane Senior Secured Credit Facility was $ 30.0 million and $ 22.5 million, respectively, net of unamortized debt discount of $ 3.1 million and $ 3.9 million, respectively.

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

During the years ended December 31, 2022 and 2021, the Company recorded amortization of debt discount of $ 1.2 million and $ 563,000 , respectively on the Centre Lane Senior Secured Credit Facility.

Interest expense for the year ended December 31, 2022, and 2021 consisted of the following:

($ in thousands)

Interest expense $ 3,042 $ 1,600

Amortization 1,185 563

Total interest expense $ 4,227 $ 2,163

The minimum annual principal payments of notes payable at December 31, 2022 were:

($ in thousands)

Total $ 33,109

NOTE 10 – OCEANSIDE SHARE EXCHANGE LOAN

On 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 July 31, 2019, and the Company acquired all of the outstanding shares of Oceanside.

Pursuant to the terms of the Oceanside Merger Agreement, the Company issued 12,513,227 shares valued at $ 20.0 million 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 Note(s)”).

At the time of the acquisition and under FASB ASC Topic 805, Business Combinations (“ASC 805”), these Closing Notes were recorded ratably as compensation expense into the statement of operations and comprehensive loss over the 24-month term and the Company recorded an accrued payable over the same period.

As of 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, the Company recorded a total charge of $ 301,000 during the third quarter of 2020, comprised of $ 250,000 in compensation expense and $ 51,000 in interest expense.

The Company also established a reserve for the $ 750,000 Closing Note principal balance which is included in litigation reserves.

On September 6, 2022, the Company’s Board of Directors approved a settlement with the Oceanside Shareholders providing for payment of $ 650,000 payable over a 50-month period commencing January 2023.

The Company recognized a gain of approximately $ 286,000 which includes $ 100,000 for the reduction in the settlement amount and $ 186,000 representing interest that was previously accrued as of December 30, 2021.

The amount is included in litigation settlement in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2022.

NOTE 11 – 10% CONVERTIBLE PROMISSORY NOTES

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

The Convertible Notes are unsecured and mature five years from

issuance and are convertible at the option of the holder into shares of common stock at any time prior to maturity at a conversion price of $ 0.40 per share.

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

The principal balance of these Convertible Notes payable was $ 80,000 at December 31, 2022 and 2021.

The total Convertible Notes payable was $ 68,000 and $ 54,000 , net of discount of $ 12,000 and $ 26,000 , at December 31, 2022 and 2021, respectively.

Interest expense for the Convertible Notes was $ 22,000 inclusive of interest of $ 8,000 and discount amortization was $ 14,000 for the years ended December 31, 2022, and 2021, respectively.

The outstanding principal and interest is due and payable November 2023.

NOTE 12 – PAYCHECK PROTECTION PROGRAM

The Paycheck Protection Program (“PPP”) was established by the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, administered by the Small Business Administration (“SBA”).

During 2020 to 2021, the Company and one of its subsidiaries.

Wild Sky Media, entered into agreements to borrow funds under the PPP.

Under the terms of the CARES Act, PPP loan recipients could apply for and be granted forgiveness for all, or a portion of loans granted under the PPP.

Bright Mountain PPP Loan

On April 24, 2020, the Company entered into a promissory note of $ 465,000 with Regions Bank (the “Bright Mountain PPP Loan”) which had a two-year term and bore interest at a rate of 1.0 % per annum.

On January 28, 2021, the Company applied for the promissory note 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 and recorded a non-cash gain of $ 465,000 on the Bright Mountain PPP Loan forgiveness during the year ended December 31, 2021.

Second Bright Mountain PPP Loan

On February 17, 2021, the Company entered into a promissory note of $ 296,000 with Regions Bank (the “Second Bright Mountain PPP Loan”) which had a two-year term and bore interest at a rate of 1.0 % per annum.

This was the second tranche available under the PPP and was forgiven as of June 15, 2022, and the Company recorded a non-cash gain of $ 296,000 on the Second Bright Mountain PPP Loan forgiveness during the year ended December 31, 2022.

Wild Sky PPP Loan

Effective June 1, 2020, the Company acquired Wild Sky and assumed the $ 1.7 million promissory note (the “Wild Sky PPP Loan”) with Holcomb Bank received under the PPP.

On January 22, 2021, the Company applied for the promissory note to be forgiven by the SBA in whole or in part and on March 29, 2021, the Company obtained the forgiveness of the Wild Sky PPP Loan in whole and recorded a non-cash gain of $ 1.7 million on the Wild Sky PPP Loan forgiveness during the year ended December 31, 2021.

Second Wild Sky PPP Loan

On March 23, 2021, Wild Sky entered into a promissory note of $ 842,000 with Holcomb Bank (the “Second Wild Sky PPP Loan”) which had a two-year term and bore interest at a rate of 1.0 % per annum.

This was the second tranche available under the PPP and was forgiven as of March 23, 2022, and the Company recorded a non-cash gain of $ 842,000 on the Second Wild Sky PPP Loan forgiveness during the year ended December 31, 2022.

Total non-cash gain recorded by the Company for the PPP was $ 1.1 million and $ 2.2 million for the years ended December 31, 2022, and 2021, respectively.

NOTE 13 – FAIR VALUE MEASUREMENTS

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date.

In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).

The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Valuation is based on unadjusted quoted prices in active markets for identical assets and liabilities that are accessible at the reporting date.

Because valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.

Valuation is determined from pricing inputs that are other than quoted prices in active markets that are either directly or indirectly observable as of the reporting date.

Observable inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and interest rates and yield curves that are observable at commonly quoted intervals.

Valuation is based on inputs that are both significant to the fair value measurement and unobservable.

Level 3 inputs includes situations where there is little, if any, market activity for the financial instrument.

The inputs into the determination of fair value generally require significant management judgment or estimation.

Fair Value Considerations

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

The Company believes that the carrying value of its current financial instruments approximates their fair value due to the short-term nature of these instruments.

The carrying value of the Centre Lane Senior Secured Credit Facility and the 10 % Convertible Promissory Note approximates the fair value due to their nature and level of risk.

NOTE 14 – REVENUE RECOGNITION

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

Year Ended December 31,

Digital publishing $ 8,032 $ 2,887

Advertising technology 11,548 10,038

Total revenue $ 19,580 $ 12,925

Geographic Information

Revenue by geographical region consist of the following (in thousands):

Year Ended December 31,

United States $ 18,400 $ 11,662

Israel 1,180 1,263

Total revenue $ 19,580 $ 12,925

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

Total United States revenue was approximately 94 %, and 90 % of total revenue for the years ended December 31, 2022, and 2021, respectively.

As of December 31, 2022, and 2021, approximately 100 % of our long-lived assets were attributable to operations in the United States.

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

Deferred Revenue

The movement in deferred revenue during the year ended December 31, 2022 and 2021, comprised the following (in thousands):

December 31, 2022 December 31, 2021

Deferred revenue at start of the year $ 1,162 $ 347

Amounts invoiced during the year 588 1,060

revenue recognized during the year ( 1,013 ) ( 245 )

Deferred revenue at end of the year $ 737 $ 1,162

NOTE 15 – COMMITMENTS AND CONTINGENCIES

Lease Agreements

The Company accounts for its operating lease under FASB ASC Topic 842, Leases (“ASC 842”), which requires lessees to recognize on the balance sheet at lease commencement, the lease assets and the related lease liabilities for the rights and obligations created by operating and finance leases with lease terms of more than 12 months.

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

On June 14, 2022, the Company signed a second lease addendum (“Second Addendum”) to the lease with a lease term for five years beginning upon completion of improvements to the office space by the landlord, which was completed on September 12, 2022.

The annual base rent is $ 100,000 , with a provision for a 3 % increase on each anniversary of the rent commencement date.

The Company has the option to renew the lease for one additional five-year term.

At December 31, 2022, the operating lease asset was $ 367,000 and is included under assets on the consolidated balance sheets.

At December 31, 2022, the operating lease liability was $ 357,000 and is included under liabilities on the consolidated balance sheets.

Over the lease term, the Company is required to amortize the operating lease asset and record interest expense on the lease liability created at lease commencement.

Operating lease expense was approximately $ 33,000 for the year ended December 31, 2022.

Rent expense prior to commencement of the lease was $ 110,000 , net of landlord incentives of $ 95,000 for the year ended December 31, 2022.

Rent expense for the year ended December 31, 2021 was $ 203,000 .

The Company’s non-lease components are primarily related to property maintenance and other operating services, which varies based on future outcomes and is recognized in rent expense when incurred and not included in the measurement of the lease liability.

As of December 31, 2022 and 2021, the right-of-use asset and lease liability for the operating lease are summarized as follows (in thousands):

Operating lease right-of-use asset $ 367 $ —

2 unchanged sentences

Total operating lease liabilities $ 357 $ —

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 years ended December 31, 2021 and 2020.

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

and $ 377,704 ,

respectively.

time-to-time, the Company may be involved in litigation or be subject to claims arising out of our operations or content appearing on

our websites in the normal course of business.

Although the results of litigation and claims cannot be predicted with certainty, the

Company currently believes that the final outcome of these ordinary course matters will not have a material adverse effect on our business.

Under the covenants of the Placement Agent Agreement and as disclosed in the Placement Offering Memorandum, the Company was

obligated to make a filing with a stock exchange to list the Company’s shares.

The Company was to make such filing by a listing

deadline and have stock exchange approval by a listing approval deadline.

In the event the Company was unable to meet to deadlines, the

investors in the Offering would be entitled to one additional share of common stock for each share purchased in the Offering provided,

however, that such deadlines and obligations of the Company to issue additional shares would be extended for so long as the Company was

able to demonstrate to the reasonable satisfaction of the Placement Agent, which consent shall not be reasonably withheld that it had

acted in good-faith in attempting to list such securities which included responding to comments from such exchange.

The Company believes

it has acted in good-faith and has no obligation.

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

connection with the matter.

For more information, see Note 18 Subsequent events.

2020, Synacor, Inc commenced an action against MediaHouse, LLC, Inform, Inc.

and the Company, alleging approximately $ 230,000 was owed

based on invoices provided in 2019 in respect to that certain Content Provider & Advertising Agreement with MediaHouse.

has filed an answer and defenses and intends to defend the alleged claims.

This is recorded as an accrued liability as of December 31,

For more information, see Note 18 Subsequent events.

former employee of the Company filed a suit against the Company MediaHouse, Inc., and Gregory A.

Peters, a former Executive, (the “Defendants”)

alleging two counts of defamation.

Any potential losses associated with this matter cannot be estimated at this time.

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.

In 2020, the Company and

Encoding agreed to settle the overdue receivable through the issuance of 175,000 warrants to purchase Company stock with a $ 1.00 exercise

This 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

resources and other factors.

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

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”).

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

preference and date of automatic conversion into shares of our common stock.

The Series F-1 pays dividends at the rate of 12 % per annum

and automatically converts into shares of our common stock on April 10, 2022.

The Series F-2 pays dividends at the rate of 6 % per annum

and automatically converts into shares of our common on July 27, 2022.

The Series F-3 pays dividends at the rate of 10 % per annum and

automatically converts into shares of our common stock on August 30, 2022.

Additional terms of the designations, rights and preferences

of the Series F-1, Series F-2 and Series F-3 include:

shares have no voting rights, except as may be provided under Florida law;

shares pay cash dividends subject to the provisions of Florida law at the dividend rates set forth above, payable monthly in arrears;

shares are convertible at any time at the option of the holder into shares of our common stock on a 1:1 basis.

The conversion ratio

is proportionally adjusted in the event of stock splits, recapitalization or similar corporate events.

Any shares not previously

converted will automatically convert into shares of our common stock on the dates set forth above;

shares rank junior to our 10% Series A Convertible Preferred Stock and our 10% Series E Convertible Preferred Stock;

the event of a liquidation or winding up of the Company, the shares have a liquidation preference of $ 0.50 per share for the Series

F-1, $ 0.50 per share for the Series F-2 and $ 0.40 per share for the Series F-3;

shares are not redeemable by the Company.

December 31, 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

automatically convert into shares of common stock five years from the date of issuance or upon a change in control.

Both the voluntary

and automatic conversion formulas are subject to proportional adjustment in the event of stock splits, stock dividends and similar corporate

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.

Pagoulatos, George Rezitis, and Angelo Triantafillou

whereby they relinquished their Bright Mountain common stock shares and the Company will pay a final settlement of $ 385,000 within 12

months from the date the shares are delivered to the Company, which were received by the legal agent in December 2020.

As of December

31, 2020, the parties have provided the Company with the total 825,175 shares.

The shares will be held as Treasury Stock by the Company

and will be resold at later dates.

Issued for cash

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

a private placement exempt from registration under the Securities Act in reliance on exemptions provided by Section 4(a)(2) and Rule

506(b) of Regulation D resulting in gross proceeds to the Company of $ 5,199,350 .

Each unit, which was sold at a purchase price of $ 0.50 ,

consisted of one share of common stock and one five -year warrant to purchase one share of common stock at an exercise price of $ 0.75

Spartan Capital Securities, LLC (“Spartan Capital”) served as placement agent for the Company in this offering.

As compensation for its services, Spartan Capital withheld $ 1,621,653 of certain fees.

These include direct offering commissions of $ 1,179,653

which are included as an adjustment to Additional Paid-in-Capital, $ 165,000 of finders fees related to Oceanside acquisition and other

fees totaling $ 277,000 , of which $ 250,000 is included in prepaid and other current assets, and the remaining $ 27,000 were recorded as

In addition, the Company issued Spartan Capital Placement Agents Warrants to purchase an aggregate of 1,039,870 shares of our

common stock at an exercise price of $ 1.00 per share.

issued for services

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

on the fair value of the date of grant, which range from $ 1.49 to $ 1.90 a share for an aggregate value of $ 4,332,623 .

2020, Spartan Capital notified Bright Mountain of a cashless exercise of 1,852,003 warrants which had previously been awarded as compensation

for facilitating private placement offerings.

A total of 1,464,691 shares were issued as follows:

1,295,806 shares at $ 4.00 and 168,885

shares at $ 4.37 , for an aggregate value of $ 5,921,251 .

2020, two Spartan Capital employees, who had previously been assigned warrants according to Spartan Capital’s internal incentive

compensation program, notified Bright Mountain of a cashless exercise 175,000 warrants.

A total of 146,563 shares were issued at a $ 4.00

share price, for an aggregate value of $ 586,252

2020, a former employee exercised 50,000 stock options for $ 6,950 .

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

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.

The Company has reserved for issuance an aggregate of 900,000 shares of common stock under the 2011

The maximum aggregate number of shares of Company stock that shall be subject to Grants made under the Plan to any individual during

any calendar year shall be 180,000 shares.

On April 1, 2013, the Company’s board of directors and majority stockholder adopted

the 2013 Stock Option Plan (the “2013 Plan”), to be effective on April 1, 2013.

The Company has reserved for issuance an

aggregate of 900,000 shares of common stock under the 2013 Plan.

May 22, 2015, the Company’s board of directors and majority stockholder adopted the 2015 Stock Option Plan (the “2015 Plan”),

to be effective on May 22, 2015.

The Company has reserved for issuance an aggregate of 1,000,000 shares of common stock under the 2015

November 7, 2019, the Company’s board of directors and majority stockholder adopted the 2019 Stock Option Plan (the “2019

Plan”), to be effective on November 7, 2019.

The Company has reserved for issuance an aggregate of 5,000,000 shares of common stock

under the 2019 Plan.

of December 31, 2021, 697,000 shares, 567,000 shares, 859,000 shares and 4,761,773 shares were remaining for future issuance under the

2011 Plan, 2013 Plan, 2015 Plan and 2019 Plan, respectively.

purpose of the 2011 Plan, 2013 Plan, 2015 Plan, and 2019 Plan (together, the “Plans”) are to provide an incentive to attract

and retain directors, officers, consultants, advisors and employees whose services are considered valuable, to encourage a sense of proprietorship

and to stimulate an active interest of such persons into our development and financial success.

Under the 2015 Plan, the Company is authorized

to issue incentive stock options intended to qualify under Section 422 of the Code, non-qualified stock options, stock appreciation rights,

performance shares, restricted stock and long-term incentive awards.

The Company’s board of directors will administer the 2011

Plan until such time as such authority has been delegated to a committee of the board of directors.

The material terms of each option

granted pursuant to the 2011 Plan by the Company shall contain the following terms:

(i) that the purchase price of each share purchasable

under an incentive option shall be determined by the Committee at the time of grant, (ii) the term of each option shall be fixed by the

Committee, but no option shall be exercisable more than 10 years after the date such option is granted and (iii) in the absence of any

option vesting periods designated by the Committee at the time of grant, options shall vest and become exercisable in terms and conditions,

consistent with the Plan, as may be determined by the Committee and specified in the Grant Instrument.

compensation is recognized as an expense on a straight-line basis over the requisite service period, which is generally the vesting period.

Employee stock options granted under the plan generally vest ratably over a four-year period and expire on the tenth anniversary of their

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

one year after the date of grant.

Company estimates the fair value of share-based compensation utilizing the Black-Scholes option pricing model, which is dependent upon

several variables such as the expected option term, expected volatility of our stock price over the expected option term, expected risk-free

interest rate over the expected option term, expected dividend yield rate over the expected option term, and an estimate of expected

forfeiture rates.

following table summarizes the assumptions the Company utilized to record compensation expense for stock options granted during the years

ended December 31, 2021 and 2020:

SCHEDULE OF ASSUMPTIONS USED IN VALUING STOCK OPTIONS

Weighted average remaining lease terms (in years) 4.75 —

Weighted average discount rate 14.39 % —

Current portion of operating lease liability of $ 38,000 is included in other liabilities on the balance sheets at December 31, 2022.

In accordance with applicable accounting guidance, the Company establishes an accrued liability for litigation and regulatory matters when those matters present loss contingencies that are both probable and estimable.

In such cases, there may be exposure to loss in excess of any amounts accrued.

When a loss contingency is not both probable and estimable, the Company does not establish an accrued liability.

As a litigation or regulatory matter develops, the Company, in conjunction with any outside counsel handling the matter, evaluates on an ongoing basis whether such matter presents a loss contingency that is probable and estimable.

If, at the time of evaluation, the loss contingency related to a litigation or regulatory matter is not both probable and estimable, the matter will continue to be monitored for further developments that would make such loss contingency both probable and estimable.

When a loss contingency related to a litigation or regulatory matter is deemed to be both probable and estimable, the Company will establish an accrued liability with respect to such loss contingency and record a corresponding amount of litigation-related expense.

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

Synacor Litigation

In 2020, Synacor, Inc.

(“Synacor”) commenced an action against MediaHouse, LLC, Inform, Inc.

and the Company, alleging approximately $ 230,000 was owed based on invoices issued in 2019 in respect to that certain Content Provider & Advertising Agreement with MediaHouse.

During January 2022, the Company entered into a settlement agreement related to the legal proceedings with Synacor totaling $ 184,000 .

The agreement obligates the Company to pay $ 12,000 per month beginning January 24, 2022, for 12 consecutive months and then a final one-time payment in the amount of $ 40,000 which was paid on or before January 24, 2023.

The Company previously reserved approximately $ 245,000 towards this litigation, and following the settlement, the Company recognized an adjustment of $ 61,000 included in litigation settlement on the consolidated statements of operations for the year ended December 31, 2022.

At December 31, 2022, the Company paid $ 144,000 in connection with the Synacor settlement agreement, leaving an outstanding balance of $ 40,000 .

This amount is included in other liabilities on the consolidated balance sheet at December 31, 2022.

MediaHouse Defamation

A former employee of the Company filed a suit against the Company, MediaHouse, LLC, and Gregory A.

Peters, a former Executive, (the “Defendants”) alleging two counts of defamation.

On August 2, 2022, the parties engaged in mediation, which resulted in a settlement of the lawsuit on August 4, 2022.

The Company agreed to pay $ 62,500 over a 12-month period, with the first payment commencing on September 8, 2022,

and final payment due on August 1, 2023.

Approximately $ 42,000 was outstanding at December 31, 2022.

This amount is included in other liabilities on the consolidated balance sheet at December 31, 2022.

Slutzky & Winshman – Default on Obligations

Bright 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 Bright Mountain 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.

On September 6, 2022, the Company’s Board of Directors approved a settlement of $ 650,000 payable over a 50-month period commencing January 2023.

The amount is included in other liabilities on the consolidated balances sheets.

See Note 10, "Oceanside Share Exchange Loan" to the accompanying consolidated financial statements for further information.

Other Litigation

Other litigation is defined as smaller claims or litigation that are neither individually nor collectively material.

It does not include lawsuits that relate to collections.

The Company is party to various other legal proceedings that arise in the ordinary course of business, separate from normal course accounts receivable collections matters.

Due to the inherent difficulty of predicting the outcome of these litigations and other legal proceedings, the Company cannot predict the eventual outcome of these matters, and it is reasonably possible that some of them could be resolved unfavorably to the Company.

As a result, it is possible that the Company’s results of operations or cash flows in a particular fiscal period could be materially affected by an unfavorable resolution of pending litigation or contingencies.

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

NOTE 16 – STOCK BASED COMPENSATION

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

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

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

The Stock Option Plan is the successor to the Company’s prior stock option plans (2011, 2013, 2015, and 2019 Plans) and accordingly no new grants will be made under the prior plans from and after the date of adoption of the Stock Option Plan.

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

As of December 31, 2022, 15,982,340 shares were remaining under the Stock Option Plan for the future issuance.

As of December 31, 2022, options to purchase 6,517,660 shares of common stock were outstanding under the Stock Option Plan at a weighted average exercise price of $ 0.33 per share.

Compensation expense recorded in connection with the Stock Option Plan was $ 144,000 , and $ 207,000 for the years ended December 31, 2022, and 2021, respectively.

These amounts have been recognized as a component of general and administrative expenses in the accompanying condensed consolidated financial statements.

The following table presents the activity of the Company’s outstanding stock options of common stock for the year ended December 31, 2022:

Options Weighted

Price Weighted

(in years) Aggregate

Balance Outstanding, December 31, 2021 1,415,227 $ 0.62 6.2 $ —

Granted 5,612,433 0.04 9.3 —

Exercised ( 100,000 ) — — —

Forfeited ( 338,000 ) — — —

Expired ( 72,000 ) — — —

Balance Outstanding, December 31, 2022 6,517,660 $ 0.33 7.8 —

Exercisable at December 31, 2022 796,796 $ 0.67 4.5 $ —

Unvested at December 31, 2022

100,000 common stock options were exercised during the years ended December 31, 2022 and 2021, respectively, with an intrinsic value of $ 44,000 and $ 295,000 , respectively.

Summarized information with respect to options outstanding under the stock option plans at December 31, 2022, is as follows:

Options Outstanding Options Exercisable

Exercise Price Number

Outstanding Weighted Average

Exercise Price Remaining

Life (In Years) Number

Exercisable Weighted Average

Exercise Price

5,062,433 $ 0.01 9.4 137,500 $ 0.01

767,000 0.18 9.8 — —

54,000 0.28 0.5 54,000 0.28

501,000 0.69 2.5 501,000 0.69

133,227 1.64 6.9 104,296 1.64

6,517,660 $ 0.12 8.8 796,796 $ 0.67

As of December 31, 2022, there were total unrecognized compensation costs related to non-vested share-based compensation arrangements of $ 154,000 to be recognized over a weighted-average period of 1.95 years.

The Company estimates the fair value of share-based compensation utilizing the Black-Scholes option pricing model, which is dependent upon several variables such as the expected option term, expected volatility of our stock price over the expected option term, expected risk-free interest rate over the expected option term, expected dividend yield rate over the expected option term, and an estimate of expected forfeiture rates.

The following table provides the weighted average assumptions used in determining the fair value of the stock-based awards for the year ended December 31, 2022 and 2021:

December 31, 2022 December 31, 2021

Expected Term (years) 6.25 6.25

1 unchanged sentence

Risk -free interest rate 2.73 % - 2.93 %

0.31 – 0.51 %

Dividend yield — —

Expected forfeiture rate — —

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.

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

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

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

Treasury yields

with terms equivalent to the expected term of the related option at the time of the grant.

yield is based on historical trends.

While the Company believes these estimates are reasonable, the compensation expense recorded would

increase if the expected life was increased, a higher expected volatility was used, or if the expected dividend yield increased.

Company has elected to account for forfeitures as they occur.

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, 2021 is presented below:

SCHEDULE OF STOCK OPTION ACTIVITY

Balance Outstanding, December 31, 2020

Balance Outstanding, December 31, 2021

Exercisable at December 31, 2021

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

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.

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, the Company assumed the existing S&W Option plan (“Israel Sub Plan”).

The Israel Sub Plan was cancelled the and the 26 individuals who were participants in the plan had their options under the Israel Sub

Plan converted into options to purchase stock of the Company, with their original vesting period.

The grant date was determined to be

the acquisition date and the stock price on the acquisition date of $ 1.60 was determined to be the grant price.

As of the acquisition

date, there were a total of 546,773 shares that will be issued between acquisition date and March 31, 2023 .

December 31, 2021, we had 35,823,316 common stock warrants outstanding to purchase shares of our common stock with an exercise price

ranging between $ 0.65 and $ 1.00 per share.

A summary of the Company’s warrants outstanding as of December 31, 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

share-based awards, including common stock options, convertible preferred stock and warrants.

Because both periods reported a net loss,

dilution is not considered and basic loss per share equals diluted loss per share.

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

SCHEDULE OF LOSS PER SHARE

Common stock equivalent from:

Stock options

Convertible preferred stock

Convertibles notes payable

a dilutive perspective, existing cashless warrants, when converted, will result in a lower number of common shares.

16 – RELATED PARTY TRANSACTIONS

discussed in Note 11, notes payable to the CEO amounted to $ 53,729 and $ 39,728 as of December 31, 2021 and 2020 respectively, and are

reported net of their unamortized debt discount of $ 26,271 and $ 40,272 as of December 31, 2021 and 2020, respectively.

See Note 11 further

discussion on these notes payable.

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

as well as income taxes in various foreign jurisdictions.

regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations.

March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES”) was signed into law and it amended some

of the tax provisions introduced by the Tax Cuts and JOBS Act previously enacted on December 22, 2017.

Specifically, the CARES Act temporarily

relaxed the business interest limitation for tax years 2019 and 2020, and temporarily eliminated the 80% taxable income limitation for

net operating loss deductions and provided a five-year carryback for net operating losses generated in tax years 2018, 2019, and 2020.

On December 27, 2020, the Consolidated Appropriations Act (“CAA”) was signed into law and largely extended and expanded many

of the provisions introduced by the CARES Act, and also included extensions for expiring tax deductions, credits, and incentives that

were scheduled to expire on December 31, 2020.

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 .

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

Treasury yields with terms equivalent to the expected term of the related option at the time of the grant.

Dividend yield is based on historical trends.

While the Company believes these estimates are reasonable, the compensation expense recorded would increase if the expected life was increased, a higher expected volatility was used, or if the expected dividend yield increased.

The Company has elected to account for forfeitures as they occur.

Restricted Stock Awards (RSAs)

During the years ended December 31, 2022, and 2021, the Company granted 235,000 and 176,250 in RSAs to its independent directors and recognized compensation expense of approximately $ 2,400 and $ 1,800 , respectively.

Shares Held in Escrow

As part of the Company’s acquisition of Oceanside, the Company assumed the existing S&W Option plan (“Israel Sub Plan”).

The Israel Sub Plan was cancelled and 26 individuals who were participants in the plan had their options under the Israel Sub Plan convert into options to purchase stock of the Company, with their original vesting period.

The grant date was determined to be the acquisition date and the stock price on the acquisition date of $ 1.60 was determined to be the grant price.

As of the acquisition date, there were a total of 546,773 shares that will be issued between acquisition date and March 31, 2023.

During the year ended December 31, 2022, and 2021, shares of 174,253 and 379,266 were issued under the Israel Sub Plan.

During the year ended December 31, 2022, and 2021, the Company recognized stock based compensation expense of $ 89,000 and $ 281,000 , respectively, in connection with the Oceanside employee share issuances.

These are included in general and administrative expenses on the consolidated statements of operation and comprehensive loss.

NOTE 17 – STOCKHOLDER'S DEFICIT

Preferred Stock

The Company has authorized 20,000,000 shares of preferred stock with a par value of $ 0.01 (the “Preferred Stock”), issuable in such series and with such designations, rights and preferences as the board of directors may determine.

The Company’s board of directors has 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”), 10% Series E Convertible Preferred Stock (“Series E Stock”) and 10% Series F Convertible Preferred Stock (“Series F Stock”) .

The designations, rights and preferences of the Series F-1, Series F-2 and Series F-3 are identical, other than the dividend rate, liquidation preference and date of automatic conversion into shares of our common stock.

The Series F-1 pays dividends at the rate of 12 % per annum and automatically converted into shares of our common stock on April 10, 2022.

The Series F-2 pays dividends at the rate of 6 % per annum and automatically converted into shares of our common on July 27, 2022.

The Series F-3 pays dividends at the rate of 10 % per annum and automatically converted into shares of our common stock on August 30, 2022.

The Series E pays dividends at the rate of 10 % per annum and automatically converted into shares of our common stock on November 21, 2022.

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

• the shares have no voting rights, except as may be provided under Florida law;

• the shares pay cash dividends subject to the provisions of Florida law at the dividend rates set forth above, payable monthly in arrears;

• the shares are convertible at any time at the option of the holder into shares of our common stock on a 1:1 basis.

The conversion ratio is proportionally adjusted in the event of stock splits, recapitalization or similar corporate events.

Any shares not previously converted will automatically convert into shares of our common stock on the dates set forth above;

• the shares rank junior to our 10% Series A Convertible Preferred Stock and our 10% Series E Convertible Preferred Stock;

• in the event of a liquidation or winding up of the Company, the shares have a liquidation preference of $ 0.50 per share for the Series F-1, $ 0.50 per share for the Series F-2 and $ 0.40 per share for the Series F-3;

• the shares are not redeemable by the Company.

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

(i) shares do not have voting rights, except as may be permitted under Florida law,

(ii) are convertible into shares of our common stock at the holder’s option on a one for one basis,

(iii) are entitled to a liquidation preference equal to a return of the capital invested, and

(iv) each share will automatically convert into shares of common stock five years from the date of issuance or upon a change in control.

Both the voluntary and automatic conversion formulas are subject to proportional adjustment in the event of stock splits, stock dividends and similar corporate events.

On August 31, 2021, W.

Kip Speyer, the Company’s CEO, at that time, gave notice that all his held preferred stock was converted in accordance with the original terms.

Accordingly, 7,919,017 shares of the Company’s common stock were issued to Mr.

The Company recognized the conversion of the preferred stock on August 31, 2021 and provided all rights as a common shareholder with regard to said shares to Mr.

Speyer, including all voting rights.

The Company confirms that there was no inducement to convert the shares and that the correct shares were issued in accordance with the original conversion terms.

Approximately $ 691,000 in outstanding dividend related to this preferred stock is included in other liabilities on the consolidated balance sheet at December 31, 2022.

At December 31, 2022 and 2021, 0 and 125,000 shares of Series E Stock were issued and outstanding, respectively.

There are no shares of Series A-1 Stock, Series B Stock, Series B-1 Stock, Series C Stock, Series D or Series F Stock issued and outstanding.

The Series E stock automatically converted into shares of our common stock on November 21, 2022, and 1,250 shares were transferred to common stock to satisfy this transaction.

Dividends for Series A Convertible Preferred Stock were $ 0 and $ 40,000 during the years ended December 31, 2022 and 2021, respectively.

Dividends for Series E Convertible Preferred Stock were $ 5,000 and $ 68,000 , for the years ended December 31, 2022 and 2021, respectively.

Dividend for Series F Convertible Preferred Stock were $ 0 and $ 134,000 during the years ended December 31, 2022 and 2021, respectively.

At December 31, 2022 and 2021, accrued unpaid preference dividend was $ 691,000 and $ 692,000 , respectively, amounts for 2021 included $ 242,000 due within that year.

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

Kip Speyer and is included under other liabilities in the consolidated balance sheet as at December 31, 2022.

Shares of Common Stock under the Stock Option Plan

On April 14, 2022, the Board and the Compensation Committee of the Board adopted and approved the 2022 Stock Option Plan.

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

As of December 31, 2022, 15,982,340 shares were remaining under the 2022 Plan for the future issuance.

Issue of Common Stock

During the year ended December 31, 2022, the Company issued 634,253 shares of our common stock for the following concepts (in thousands, except share data):

Shares (#) Value $'000

Conversion of Preferred Stocks 125,000 1

Services rendered 235,000 38

Options exercised by employees 100,000 1

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

Total 634,253 $ 319

During the year ended December 31, 2021, the Company issued 31,648,233 shares of our common stock for the following concepts (in thousands, except share data):

Shares (#) Value $'000

Shares issued to Centre Lane related to debt financing 12,650,000 $ 1,129

Services rendered 176,250 2

Options exercised by employees 100,000 14

Warrants exercised 25,000 10

Stock issued for deemed dividend 10,398,700 —

Conversion of Preferred Stocks 7,919,017 79

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

Total 31,648,233 $ 1,841

Stocks Issued for Deemed Dividend

On 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.

This issuance was determined to be a deemed dividend.

Treasury Stocks

During the year ended December 2020, the Company executed a settlement agreement with three shareholders who relinquished their Bright Mountain common stock shares.

A total of 825,175 shares were acquired with a value of $ 220,000 .

The shares are being held as Treasury Stock by the Company.

At December 31, 2022 and 2021, we had 35,998,316 and 35,823,316 common stock warrants outstanding to purchase shares of our common stock, respectively, with an exercise price ranging between $ 0.65 and $ 1.00 per share.

A summary of the Company’s warrants outstanding as of December 31, 2022 is presented below:

Warrants Exercise Price Number

Outstanding Gross cash proceeds

if exercised $'000

$ 1.00 4,992,308 $ 4,992

1 unchanged sentence

$ 0.75 15,456,008 11,592

Total loss before provision for income taxes

35,998,316 $ 26,692

During the year ended December 31, 2022, a total of 175,000 warrants were issued in settlement of liability of $ 216,000 .

A summary of the Company’s warrants outstanding as of December 31, 2021, is presented below:

Warrants Exercise Price Number

Outstanding Gross cash proceeds

if exercised $'000

$ 1.00 4,817,308 $ 4,817

provision for income taxes consists of the following:

SCHEDULE OF PROVISION FOR INCOME TAXES

Year ended December 31,

0.65 15,550,000 10,108

Discontinued Operations

reconciliation of the federal statutory income tax rate to the effective tax rate is as follows:

SCHEDULE OF INCOME TAX RATE RECONCILIATION

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

$ 0.75 15,456,008 11,592

35,823,316 $ 26,517

During the year ended December 31, 2021, a total of 25,000 warrants were exercised at $ 0.40 per share.

NOTE 18 – LOSS PER SHARE

As of December 31, 2022, and 2021, there were 150,444,636 and 149,810,383 shares of common stock issued, respectively, and 149,619,461 and 148,985,208 shares of common stock outstanding, respectively.

Outstanding shares as of December 31, 2022, and 2021, have been adjusted to reflect 825,175 treasury shares.

Basic net loss per share is computed by dividing the net earnings attributable to common shareholders by the weighted average number of common shares outstanding during the period.

Diluted loss per share is computed by dividing net income attributable to common shareholders by the weighted average number of common shares outstanding, increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued.

Conversion or exercise of the potential common shares is not reflected in diluted earnings per share unless the effect is dilutive.

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

The following tables reconcile actual basic and diluted earnings per share for the years ended December 31, 2022, and 2021 (in thousands except shares and per share data).

Loss per share:

Net loss $ ( 8,125 ) $ ( 12,000 )

Preferred stock dividends ( 5 ) ( 242 )

Common stock deemed dividend — ( 212 )

Net loss available to common stockholders $ ( 8,130 ) $ ( 12,454 )

Weighted-average common shares outstanding

Basic and diluted 149,191,057 128,163,616

Net loss per common share

Basic and diluted $ ( 0.05 ) $ ( 0.10 )

The anti-dilutive securities excluded from the weighted-average shares used to calculate the diluted net loss per common share for the years ended December 31, 2022, and 2021 were as follows:

Common stock equivalent from:

Shares unvested and subject to exercise of stock options 6,517,660 1,415,227

Shares subject to warrants stock conversion 35,998,316 35,823,316

Shares subject to convertible preferred stock conversion — 125,000

Shares subject to convertible notes stock conversion 200,000 200,000

NOTE 19 – RELATED PARTY TRANSACTIONS

Centre Lane Partners

Centre Lane Partners Master Credit Fund II, L.P.

(“Centre Lane Partners”), who sold the Wild Sky business to the Company in June 2020 has partnered and assisted the Company from a liquidity perspective during 2021 and through the year ended December 31, 2022.

This relationship has been determined to qualify as a related party.

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

Through December 31, 2022, the Company has entered into 15 amendments to the Amended and Restated Senior Secured Credit agreement between itself and Centre Lane Partners.

See Note 9 - Centre Lane Senior Secured Credit Facility for more information.

The total related party debt owed to Centre Lane Partners was $ 33.1 million and $ 26.3 million as of December 31, 2022 and 2021, respectively.

See Note 9, Centre Lane Senior Secured Credit Facility for details on this facility.

Convertible Promissory Note

As discussed in Note 11, 10 % Convertible Promissory Note, the note payable to the Chairman of the Board amounted to $ 80,000 as of December 31, 2022, and 2021, respectively, See Note 11, 10 % Convertible Promissory Note for further discussion on these notes payable.

Preferred Stocks

During the years ended December 31, 2022 and 2021, the Company paid cash dividends on the outstanding shares of the Company’s Series E and F Preferred Stock of $ 5,000 and $ 5,000 , respectively, held by affiliates of the Company.

At December 31, 2022 and 2021, accrued unpaid preference dividend was $ 691,000 and $ 692,000 , respectively, amounts for 2021 included $ 242,000 due with that year.

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

Oceanside Acquisition

The 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 and comprehensive loss 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 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 $ 301,000 recorded during the third quarter of 2020 which was $ 250,000 of compensation expense and $ 51,000 of interest expense.

The Company established a reserve for the $ 750,000 which was included in litigation reserves.

On September 6, 2022, the Company’s Board of Directors approved a settlement of $ 650,000 payable over a 50- month period commencing January 2023.

The Company recognize a gain of approximately $ 286,000 which includes $ 100,000 for the reduction in the settlement and $ 186,000 representing interest that was previously accrued up to December 30, 2021, the amount is included in litigation settlement in the consolidated statement of operations and comprehensive loss.

For details on the Oceanside Acquisition, see Note 10, "Oceanside Shares Exchange", to the consolidated financial statements.

NOTE 20 – INCOME TAXES

The Company is subject to federal and various state income taxes in the United States as well as income taxes in various foreign jurisdictions.

Tax regulations within each jurisdiction are subject to the interpretation of the related tax laws and regulations.

On December 27, 2020, the Consolidations Appropriations Act, 2021 (“CAA” or the “Act”) was signed into law and included government appropriations and additional economic stimulus.

Notable provisions of the CAA included changes to the PPP including legislation concluding that expenses used to obtain loan forgiveness are tax deductible.

The Company evaluated the various aspects of the Act and determined that it was eligible for the PPP.

During the year ended December 31, 2021, the Company obtained two PPP loans for $ 842,000 and $ 296,000 .

These loans were forgiven in 2022.

The Cancellation of Debt Income ("CODI") from these loans were deemed excludable from taxable income and therefore deducted as a permanent book tax difference during the year ended December 31, 2022.

During the year ended December 30, 2020, the Company obtained two PPP loans of $ 1.7 million and $ 465,000 .

These were forgiven during the year ended December 31, 2021, the CODI from these loans were deemed excludable from taxable income and therefore deducted as a permanent book tax difference.

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

Year Ended December 31,

United States $ (7,596) $ ( 11,002 )

Foreign ( 529 ) ( 998 )

Total loss before provision for income taxes $ (8,125) $ ( 12,000 )

A reconciliation of the federal statutory income tax rate to the effective tax rate is as follows:

Amount Rate Amount Rate

Federal tax expense (benefit) at the statutory rate from operations $ ( 1,706 ) 21.00 % $ ( 2,520 ) 21.00 %

State tax benefit, net of federal income tax benefit ( 872 ) 10.73 % ( 754 ) 6.29 %

( 1,436,416 )

PPP loan forgiveness ( 62 ) 0.76 % ( 456 ) 3.80 %

6 unchanged sentences

Total tax provision (benefit) $ — — % $ — — %

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,

The tax effect of significant components of the Company’s deferred tax assets and liabilities at December 31, 2022, and 2021, are as follows:

Deferred tax assets:

Net operating loss carryforward $ 16,552 $ 14,269

Other 1,028 676

Total gross deferred tax assets 17,580 14,945

Deferred tax asset valuation allowance ( 17,570 ) ( 14,938 )

( 14,937,665 )

( 11,579,703 )

Total net deferred tax assets $ 10 $ 7

Property and equipment ( 10 ) ( 7 )

Intangible assets

Net deferred tax liability $ — $ —

of December 31, 2021, the Company had U.S.

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

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 $ 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

may result in the expiration of net operating loss carryforwards before their utilization.

The Company has not completed a study to assess

whether an “ownership change” as defined in Section 382 has occurred or whether there have been multiple ownership changes

since the Company’s inception.

Future changes in the Company’s stock ownership, which may be outside of the Company’s

control, may trigger an “ownership change.” In addition, future equity offerings or acquisitions that have equity as a component

of the purchase price could result in an “ownership change.”

assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all

of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of

future taxable income during the periods in which those temporary differences become deductible.

Management considers the scheduled reversal

of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

Because of the historical

earnings history of the Company and its foreign subsidiaries, the net deferred tax assets less deferred tax liabilities for 2021 were

fully offset by the deferred tax liability and a 100% valuation allowance on the remaining balance.

Based on all available evidence,

management determined that 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

of its historical valuation allowance in the amount by the same amount as the Wild Sky Media net deferred tax liability.

of the valuation allowance was recorded as a benefit in the tax provision for the year ending December 31, 2020.

calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations

for both federal taxes and the many states in which it operates or does business in.

A tax benefit from an uncertain tax position may

be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related

appeals or litigation, on the basis of the technical merits.

Company records tax positions as liabilities and adjusts these liabilities when its judgement changes as a result of the evaluation of

new information not previously available.

Because of the complexity of some of these uncertainties, the ultimate resolution may result

in a payment that is materially different from the Company’s current estimate of the recognized tax benefit liabilities.

differences will be reflected as increases or decreases to income tax expense in the period in which new information is available.

of December 31, 2021 and 2020, the Company has not recorded any liabilities for uncertain tax positions in its consolidated financial

Company records interest and penalties related to unrecognized tax benefits in the provision for income taxes.

As of December 31, 2021

and 2020, no accrued interest or penalties are recorded on the balance sheet, and the Company has not recorded any related expenses.

Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates.

In the normal course of business,

the Company is subject to examinations by federal, foreign, and state and local jurisdictions, where applicable.

There are currently

no pending tax examinations.

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

which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service and state and local tax authorities

to the extent utilized in a future period.

18 – SUBSEQUENT EVENTS

January 26, 2022 and June 10, 2022, the Company and certain of its subsidiaries entered into seven amendments to

the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners Master Credit Fund II, L.P.

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 $ 2.7

million, in the aggregate.

This term loan

matures on June

In addition, and as part of the transaction,

there is an Exit Fee (“the Exit Fee”) totaling $ 468

thousand which will be added

and capitalized to the principal amount of the original loan and the original loan terms apply.

January 2022, the Company entered into a settlement agreement related to the legal proceeding with Synacor referenced in Note 11.

agreement obligates the Company to pay $ 12,000 per month beginning January 24, 2022 for 12 consecutive months and then a final one-time

payment in the amount of $ 40,000 to be paid on or before January 24, 2023.

Notwithstanding, the Company has an early settlement option

to pay-off the obligation with a discount if it pays $ 160,000 to Synacor on or before September 1, 2022, which amount shall be inclusive

of the monthly installments previously mentioned prior to the date when early settlement payment is transmitted to Synacor.

January 14, 2022, the Board of Directors nominated and elected Mr.

Matthew Drinkwater, the Company’s Chief Executive Officer to

the Board of Directors of the Company.

February 2022, the Russian Federation and Belarus commenced military action with the country of Ukraine.

As a result of this action,

various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus.

the impact of this action and related sanctions on the world economy are not determinable as of the date of these financial statements.

The specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of

the date of these financial statements.

April 14, 2022, the Board of Directors of the Company and the Compensation Committee of the Board adopted and approved the 2022 Bright

Mountain Media Stock Option Plan (the “Stock Option Plan”).

The Stock Option Plan will be presented for stockholder approval

at the Company’s 2022 Annual Meeting of Stockholders.

The Stock Option Plan provides for the grants of awards to eligible employees,

directors and consultants in the form of stock options.

The Stock Option Plan is the successor to the Company’s prior stock

option plans and accordingly no new grants will be made under the prior plans from and after the date hereof.

The Stock Option Plan is

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

As of December 31, 2022, the Company had U.S.

federal net operating loss carryforwards of $ 57.0 million that expire at various dates from 2030 through 2038, and includes $ 46.7 million that have an unlimited carryforward period.

As of December 31, 2022, the Company had state and local net operating loss carryforwards of $ 74.2 million that expire at various dates from 2030 through 2041, and includes $ 19.1 million that have an unlimited carryforward period.

As of December 31, 2022, the Company had foreign net operating loss carryforwards of $ 4.8 million primarily in Israel that have an unlimited carryforward period.

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

federal limitation due to the “change in ownership provisions” under Section 382 of the Internal Revenue Code and other similar limitations in various state jurisdictions.

Such limitations may result in the expiration of net operating loss carryforwards before their utilization.

The Company has not completed a study to assess whether an “ownership change” as defined in Section 382 has occurred or whether there have been multiple ownership changes since the Company’s inception.

Future changes in the Company’s stock ownership, which may be outside of the Company’s control, may trigger an “ownership change.” In addition, future equity offerings or acquisitions that have equity as a component of the purchase price could result in an “ownership change.”

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent

upon the generation of future taxable income during the periods in which those temporary differences become deductible.

Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment.

Because of the historical earnings history of the Company and its foreign subsidiaries, the net deferred tax assets less deferred tax liabilities for 2022 were fully offset by the deferred tax liability and a 100% valuation allowance on the remaining balance.

Based on all available evidence, management determined that it is more likely than not that the Company's net deferred tax assets will not be realized.

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

For the years ended December 31, 2022, and 2021, the change in the valuation allowance was an increase of approximately $ 2.6 million and an increase of approximately $ 3.4 million, respectively.

The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations for both federal taxes and the many states in which it operates or does business in.

A tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation, on the basis of the technical merits.

The Company records tax positions as liabilities and adjusts these liabilities when its judgement changes as a result of the evaluation of new information not previously available.

Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company’s current estimate of the recognized tax benefit liabilities.

These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available.

As of December 31, 2022, and 2021, the Company has not recorded any liabilities for uncertain tax positions in its consolidated financial statements.

The Company records interest and penalties related to unrecognized tax benefits in the provision for income taxes.

As of December 31, 2022 and 2021, no accrued interest or penalties are recorded on the balance sheet, and the Company has not recorded any related expenses.

The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates.

In the normal course of business, the Company is subject to examinations by federal, foreign, and state and local jurisdictions, where applicable.

There are currently no pending tax examinations.

The Company’s tax years currently open under statute from 2018 to the present in the U.S.

and from 2019 to present in the Company’s foreign operations.

To the extent the Company has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the Internal Revenue Service and state and local tax authorities to the extent utilized in a future period.

NOTE 21 – RESTATEMENT OF PREVIOUSLY ISSUED UNAUDITED FINANCIAL STATEMENTS

On March 6, 2023, the Board, upon the recommendation of the Audit Committee of the Company’s Board (the “Audit Committee”), determined that the Company’s previously issued unaudited consolidated financial statements as of and for each of the periods ended June 30, 2022 and September 30, 2022 (collectively, the “Prior Quarters Unaudited Financial Statements”) should no longer be relied upon due to material errors contained in those financial statements primarily relating to the understatement of interest payable and interest expense (the “Restatement Items”).

In October 2022, under the direction of the Company’s recently appointed Chief Financial Officer, a detailed analysis was performed of the Amended and Restated Senior Secured Credit Agreement, dated June 5, 2020, among the Company, the lenders party thereto and Centre Lane Partners Master Credit Fund II, L.P.

(“Centre Lane”), as amended.

During the course of this analysis, errors were identified in connection with the accounting related to Amendments No.

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

As a result of such errors, the management of the Company, the Audit Committee and the Board of Directors have determined that it is appropriate to restate the Prior Period Financial Statements to correct the accounting of the Restatement Items.

From December 30, 2021 to January 26, 2022, draws advanced by Amendments 2 through 8 of the Centre Lane Senior Secured Credit Facility totaling $ 5.5 million, and exit fees totaling $ 3.6 million, were due for full repayment on February 28, 2022.

On March 11, 2022, there was a further amendment (Amendment 10) to the Centre Lane Senior Secured Credit Facility, which changed the repayment date of the outstanding principal and capitalized these exit fees with a new repayment date.

The Company did not commence accruing interest on these amounts.

Consistent with FASB ASC No.

250, Accounting Changes and Error Corrections, (ASC 250), we are restating these amounts.

The table below reflects the impact of the correction of the understatement of the interest payable on the consolidated balance sheet as at June 30, 2022, in thousands:

June 30, 2022

As Previously Filed Restatement Adjustment As Restated

Total Assets $ 30,701 $ — $ 30,701

Current Liabilities

Interest payable – Centre Lane Senior Secured Credit Facility – related party 1,702 270 1,972

Other current liabilities 15,796 — 15,796

Total current Liabilities 17,498 270 17,768

Long term liabilities 22,878 — 22,878

Total Liabilities 40,376 270 40,646

Shareholders’ deficit

Accumulated deficit ( 109,448 ) ( 270 ) ( 109,718 )

Other 99,773 — 99,773

Total shareholders’ deficit ( 9,675 ) ( 270 ) ( 9,945 )

Total liabilities and shareholders’ deficit $ 30,701 $ — $ 30,701

The table below reflects the impact of the correction of the understatement of the interest expense on the consolidated statement of operations and comprehensive loss for the three and six months ended June 30, 2022, in thousands, except for shares and per share data:

Three Months Ended June 30, 2022 Six Months Ended June 30, 2022

As Previously Filed Restatement Adjustment As Restated As Previously Filed Restatement Adjustment As Restated

Gross margin $ 2,817 $ — $ 2,817 $ 4,586 $ — $ 4,586

General and administrative expenses 3,443 — 3,443 7,331 — 7,331

Loss from operations ( 626 ) — ( 626 ) ( 2,745 ) — ( 2,745 )

Financing income (expense)

Interest expense - Centre Lane Senior Secured Credit Facility- related party ( 885 ) ( 270 ) ( 1,155 ) ( 1,724 ) ( 270 ) ( 1,994 )

Other 323 — 323 1,164 — 1,164

Total financing income (expense) ( 562 ) ( 270 ) ( 832 ) ( 560 ) ( 270 ) ( 830 )

Net loss before income tax ( 1,188 ) ( 270 ) ( 1,458 ) (3,305) ( 270 ) ( 3,575 )

Income tax provision (benefit) — — — — — —

Net loss $ ( 1,188 ) $ ( 270 ) $ ( 1,458 ) $ (3,305) $ ( 270 ) $ ( 3,575 )

Net loss attributable to common shareholders $ ( 1,189 ) ( 270 ) ( 1,459 ) $ ( 3,307 ) $ ( 270 ) $ ( 3,577 )

Comprehensive loss $ ( 1,172 ) $ ( 270 ) $ ( 1,442 ) $ ( 3,290 ) $ ( 270 ) $ ( 3,560 )

Basic and diluted net loss per share $ ( 0.01 ) $ — $ ( 0.01 ) $ ( 0.02 ) $ — $ ( 0.02 )

Weighted average shares outstanding

Basic and diluted 149,159,461 — 149,159,461 149,130,579 — 149,130,579

The table below reflects the impact of the correction of the understatement of the interest payable on the consolidated balance sheet as at September 30, 2022, in thousands:

September 30, 2022

As Previously Filed Restatement Adjustment As Restated

Total Assets $ 30,284 $ — $ 30,284

Current Liabilities

Interest payable – Centre Lane Senior Secured Credit Facility – related party 1,855 582 2,437

Other current liabilities 16,551 — 16,551

Total current Liabilities 18,406 582 18,988

Long term liabilities 23,979 — 23,979

Total Liabilities 42,385 582 42,967

Shareholders’ deficit

Accumulated deficit ( 111,948 ) ( 582 ) ( 112,530 )

Other 99,847 — 99,847

Total shareholders’ deficit ( 12,101 ) ( 582 ) ( 12,683 )

Total liabilities and shareholders’ deficit $ 30,284 $ — $ 30,284

The table below reflects the impact of the correction of the understatement of the interest expense on the consolidated statement of operations and comprehensive loss for the three and nine months ended September 30, 2022, in thousands, except for shares and per share data:

Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022

As Previously Filed Restatement Adjustment As Restated As Previously Filed Restatement Adjustment As Restated

Gross margin $ 2,146 $ — $ 2,146 $ 6,694 $ — $ 6,694

General and administrative expenses 3,323 — 3323 10,616 — 10,616

Loss from operations ( 1,177 ) — ( 1,177 ) ( 3,922 ) — ( 3,922 )

Financing income (expense)

Interest expense - Centre Lane Senior Secured Credit Facility- related party ( 744 ) ( 312 ) ( 1,056 ) ( 2,468 ) ( 582 ) ( 3,050 )

Other 3 — 3 1,168 — 1,168

Total financing income (expense) ( 741 ) ( 312 ) ( 1,053 ) ( 1,300 ) ( 582 ) ( 1,882 )

Net loss before income tax ( 1,918 ) ( 312 ) ( 2,230 ) ( 5,222 ) ( 582 ) ( 5,804 )

Income tax provision (benefit) — — — — — —

Net loss $ ( 1,918 ) $ ( 312 ) $ ( 2,230 ) $ ( 5,222 ) $ ( 582 ) $ ( 5,804 )

Net loss attributable to common shareholders ( 1,919 ) ( 312 ) ( 2,231 ) ( 5,225 ) $ ( 582 ) $ ( 5,807 )

Comprehensive loss ( 1,882 ) $ ( 312 ) $ ( 2,194 ) ( 5,171 ) $ ( 582 ) $ ( 5,753 )

Basic and diluted net loss per share $ 0.01 $ — $ 0.01 $ 0.04 $ — $ 0.04

Weighted average shares outstanding

Basic and diluted 149,159,461 — 149,159,461 149,140,312 — 149,140,312

NOTE 22 – SUBSEQUENT EVENTS

Centre Lane Senior Secure Credit Facility Amendment

On February 10, 2023, the Company and its subsidiaries CL Media Holdings LLC, Bright Mountain Media, Inc., Bright Mountain LLC, MediaHouse, Inc.

entered into the Sixteenth Amendment to Amended and Restated Senior Secured Credit Agreement (the “Agreement”).

The Company and its subsidiaries are parties to a credit agreement between itself, the lenders party thereto and Centre Lane Partners Master Credit Fund II, L.P.

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 term loan amount of $ 1.5 million.

This term loan matures on June 30, 2023.

As of February 10, 2023, the accumulated term loan principal is $ 32.6 million, inclusive of fees and interest paid in kind capitalized.

Reduction in Work Force

On February 28, 2023, the Company reduced its headcount from 57 employees to 52 employees.

There were no executive officers included in this reduction.

As a result, the Company will recognize a onetime severance cost of approximately $ 122,000 during the first quarter of 2023.

The reduction in force will result in annual savings of approximately $ 343,000 or 7 % of gross salary.

Non-Reliance on Previously Issued Financial Statements

On March 6, 2023, the Board of Directors, upon the recommendation of the Audit Committee, determined that the Company’s previously issued unaudited consolidated financial statements as of and for each of the interim quarterly periods ended June 30, 2022 and September 30, 2022 (collectively, the “Prior Period Financial Statements”), should no

longer be relied upon due to material errors contained in those financials statements primarily relating to the understatement of interest payable and interest expense (the “Restatement Items”).

The Company is restating its financial statements as of and for each of the periods ended June 30, 2022 and September 30, 2022 in this Annual Report on Form 10-K for the year ended December 31, 2022.

See Note 21, "Restatement of Previously Issued Unaudited Financial Statements", to the consolidated financial statements for details of the restatement.

Collapse of Silicon Valley Bank

On March 10, 2023, the FDIC took over Silicon Valley Bank ("SVB"), which is one of the Company's banking institution.

At December 31, 2022 approximately $ 152,000 , including a corporate credit card deposit of $ 50,000 , was held by the bank, this was subsequently reduced to $ 51,000 as of our filing date, consisting mainly of the corporate credit card deposit.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures