Newsmax Inc. 10-K

ITEM 9A. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate to allow timely decisions regarding required disclosure. Our management, with the participation of our CEO and CFO, evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15(d)-15(e) of the Exchange Act, as of December 31, 2024. Based on such evaluation, our CEO and CFO have concluded that as of December 31, 2024, our disclosure controls and procedures were not effective due to material weaknesses in our internal control over financial reporting described below. Internal Control over Financial Reporting Our management identified material weaknesses in our internal control over financial reporting as of December 31, 2024. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. We identified the following material weaknesses in our internal control over financing reporting: • Lack of adequate policies and procedures to support the operation of the Company’s business processes and internal control framework, including monitoring activities. In addition, the Company has not documented risk assessment procedures to set suitable objectives, identify relevant business risks, assess fraud risk, and develop associated responses to those risks. This includes designing appropriate business process controls in each of the following business cycles: revenue (including evaluation of new and modified contracts for proper accounting), period-end reporting, procure to pay, asset management, treasury, and income tax. • Evidence is not maintained to support the review and approval of the complete population of journal entries including maintaining appropriate segregation of duties. • Evidence is not maintained to support that certain controls were appropriately designed and implemented to ensure timely reporting of complete and accurate financial information. Specifically, the Company lacked evidence over review of subledgers and account reconciliations to ensure timely detection of material misstatements in financial statement balances and the related footnote disclosures in each of the following business cycles: revenue, period-end reporting, procure to pay, asset management, and treasury. 54 • Management did not fully design, implement and monitor general information technology controls in the areas related to privileged access, provisioning, terminations, user access review, vulnerability assessment and backup recovery controls and segregation of duties for systems supporting substantially all of the Company’s internal control processes. These ineffective information technology controls contributed to (i) improper segregation of duties among certain business process controls and (ii) ineffective data validation of spreadsheets and system-generated reports. We are committed to remediating the material weaknesses described above and continuing remediation efforts during 2025. We intend to initiate and implement several remediation measures including, but not limited to, hiring additional accounting staff with the requisite background and knowledge, engaging third parties to assist in complying with the accounting and financial reporting requirements related to significant and complex transactions as well as adding personnel to assist Newsmax Inc. with formalizing its business process, accounting policies and internal control documentation, strengthening supervisory reviews by our management team, and evaluating the effectiveness of our internal controls. While our efforts are ongoing, we plan to take additional steps to remediate the material weaknesses, improve our financial reporting systems, and implement new policies, procedures, and controls. However, we cannot be certain that our efforts will successfully remediate our material weaknesses. Newsmax Inc.’s future compliance with Section 404 of the Sarbanes-Oxley Act may require that it incur substantial accounting expenses and expend significant management efforts. Newsmax Inc. may not be able to complete its evaluation, testing and any required remediation in a timely fashion. During the evaluation and testing process, if Newsmax Inc. identifies one or more material weaknesses in its internal control over financial reporting, it may be unable to assert that its internal control over financial reporting is effective. Any failure to maintain internal control over financial reporting could severely inhibit Newsmax Inc.’s ability to accurately report our financial condition, results of operations or cash flows. If Newsmax Inc. is unable to conclude that its internal control over financial reporting is effective, it could lose investor confidence in the accuracy and completeness of its financial reports, the value of the Shares could decline, and it could be subject to sanctions or investigations by regulatory authorities. Failure to remediate any material weakness in Newsmax Inc.’s internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict Newsmax Inc.’s future access to the capital markets. Management’s Annual Report on Internal Control Over Financial Reporting This Annual Report on Form 10-K does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of our independent registered public accounting due to a transition period established by the rules of the SEC for newly public companies. In addition, because we are an “emerging growth company” under the JOBS Act, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting for so long as we are an emerging growth company. Changes in Internal Control Over Financial Reporting There were no changes in our internal control over financial reporting (as defined in Rules 13a‑15(f) and 15d‑15(f) under the Exchange Act) during the year ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting ITEM 9B. OTHER INFORMATION During the fiscal quarter ended December 31, 2024 , none of our directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The following table presents information with respect to our executive officers and directors as of the date hereof: 55 Name Age Position at Newsmax Inc. Position at Newsmax Media Officers: Christopher Ruddy 60 Chief Executive Officer Chief Executive Officer Darryle Burnham 60 Chief Financial Officer Chief Financial Officer Andrew Brown 55 N/A Chief Operating Officer Directors: Christopher Ruddy 60 Director Chief Executive Officer and Director Nancy G. Brinker 77 Director N/A Christopher N. Cox 45 Director N/A R. Alexander Acosta 56 Director N/A The business background and certain other information about our directors and executive officers is set forth below. Christopher Ruddy is the Chief Executive Officer and is a member of the board of directors of Newsmax Inc. and Newsmax Media. Mr. Ruddy founded Newsmax Media in 1998. Prior to founding Newsmax, Mr. Ruddy worked as a journalist at the New York Post and Pittsburgh Tribune-Review. Mr. Ruddy was recognized in Multichannel News’ “News Titans”: Top 10 People to Know in TV News in 2017, and by Newsweek as one of America’s top 20 most influential news media personalities. Mr. Ruddy served as a member of the Knight Foundation’s Commission on Trust, Media and American Democracy and previously as a member of Dr. Henry Kissinger’s Counsel for the Center for Strategic and International Studies. Mr. Ruddy holds a bachelor of arts summa cum laude from St. John’s University and a master’s degree in public policy from the London School of Economics. Mr. Ruddy has also been a Media Fellow at the Hoover Institution at Stanford University. Mr. Ruddy’s experience and proven success in news media, well qualifies him to serve as a member of our board of directors and our Chief Executive Officer and adds significant strategic and business expertise. Darryle Burnham is the Chief Financial Officer of Newsmax Inc. and of Newsmax Media. Mr. Burnham has been with Newsmax Media since 2008. Prior to joining Newsmax Media, Mr. Burnham was Director of Finance and Operations at CopperCom Inc., Corporate Treasurer for Sleepmaster LLC (dba Serta Mattress) and Finance Manager of Procurement for Scientific Atlanta, Inc. (acquired by Cisco Systems in 2005). Mr. Burnham holds a bachelor of science degree from Florida Atlantic University and studied computer information systems at Lynn University. Andrew Brown is the Chief Operating Officer of Newsmax Media. Mr. Brown joined Newsmax Media in 2012 as director of operations for Humanix Publishing. In October 2014, Mr. Brown was promoted to Chief Operations Officer at Newsmax Media. Mr. Brown is responsible for the day-to-day operations and oversees the operational infrastructure, IT and facilities. Prior to Newsmax, Mr. Brown was the production director at Scribe Inc., overseeing all aspects of workflow and technology. He also served as a software product manager at Managing Editor Inc., responsible for newspaper and magazine software, and was an editor at The Commercial Dispatch. Mr. Brown earned a bachelor of science degree from Mississippi State University. Non-Employee Directors Nancy Goodman Brinker has served as a director of the Company since April 2024. Ms. Brinker is the founder of The Promise Fund and Susan G. Komen for the Cure. Ms. Brinker was also United States Ambassador to Hungary from 2001 to 2003 and Chief of Protocol of the United States from 2007 to the end of the George W. Bush administration. In 2011, she was appointed a Goodwill Ambassador for Cancer Control by the World Health Organization. For her work on breast cancer research, Time magazine named Ms. Brinker to its 2008 list of the 100 most influential people in the world. Ms. Brinker was awarded the Presidential Medal of Freedom by Barack Obama in August 2009. Ms. Brinker is a lifetime member of the Council on Foreign Relations and has received numerous accolades for her global work, including the prestigious Mary Woodard Lasker Award for Public Service, the Champions of Excellence Award presented by the Centers for Disease Control, the Porter Prize presented by the University of Pittsburgh Graduate School of Public Health, the Forbes Trailblazer Award, Ladies Home Journal’s “100 Most Important Women of the 20 th Century”, and the Anti-Defamation League Americanism Award. In 2015, Ms. Brinker was inducted to the National Women’s Hall of Fame and in 2016 she received the Order of Lincoln Award – Illinois’ highest honor for professional achievement and public service. We believe that Ms. Brinker’s extensive experience and record of achievement in public service provide her with the qualification to serve as a director. 56 Christopher Nixon Cox has served as a director of the Company since April 2024. Mr. Cox is an American lawyer based in New York. He is the only child of Tricia Nixon Cox and Edward F. Cox, and grandson of President Richard Nixon and First Lady Pat Nixon. Mr. Cox also serves as the Chief Executive Officer of Lightswitch Capital, a private equity fund investing in biotech companies. He has been involved in private equity transactions for over two decades. Mr. Cox also serves as the chairman of the board of directors for High-Trend International Group (NASDAQ: HTCO) and as lead independent board member of Alto Neuroscience (NYSE: ANRO). Previously, Mr. Cox was a corporate associate at the law firm of Weil, Gotshal & Manges, where he worked in the Private Equity Group, and recently, Mr. Cox was Vice Chairman of BrightSphere Investment Group. Mr. Cox graduated from Princeton University with an A.B. in Politics and received his J.D. from NYU School of Law. We believe that Mr. Cox’s experience in business, law and corporate transactions provide him with the qualification to serve as a director. Rene Alexander Acosta has served as a director of the Company since March 2025. Mr. Acosta served as the 27 th Secretary of the Department of Labor from April 2017 to July 2019 following his appointment by President Trump. Mr. Acosta also serves as a strategic consultant and the sole member of Acosta Group, LLC and sits on the board of the private non-profit corporations Job Creators Network, Salient Publications, Inc. and State Leadership Foundation. Previously, Mr. Acosta was the Chairman of the Board of U.S. Century Bank from January 2014 to April 2017, the Dean of the Florida International University School of Law from July 2009 to April 2017, and a United States Attorney for the Southern District of Florida from June 2005 to June 2009. Mr. Acosta graduated from Harvard College with a B.A. and received his J.D. from Harvard Law School. We believe that Mr. Acosta’s extensive experience in government, law and finance provide him with the qualification to serve as a director. Arrangements Between Officers and Directors Except as set forth herein, to our knowledge, there is no arrangement or understanding between any of our officers or directors and any other person pursuant to which the officer or director was selected to serve as an officer or director. Family Relationships There are no family relationships between any of our directors, director nominees or executive officers. Involvement in Certain Legal Proceedings None of our directors, director nominees or officers has, in the past ten years, filed bankruptcy, been convicted in a criminal proceeding or named in a pending criminal proceeding, been the subject of any order, judgment, or decree of any court permanently or temporarily enjoining him or her from any securities activities, or any other disclosable event required by Item 401(f) of Regulation S-K. Director Independence Our board of directors has determined that Rene Alexander Acosta is considered an “independent director” under the NYSE listing rules, which is defined generally as a person other than an executive officer or employee of the Company who does not have a relationship that, in the option of the board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our independent directors will have regularly scheduled meetings at which only independent directors are present. Because we are a “controlled company” under NYSE rules, we are not required to have a majority independent board of directors. However, we are required to have an audit committee composed of a minimum of three independent directors. Pursuant to NYSE’s phase-in rules, we were permitted to have one independent member on our audit committee on the date of our listing on NYSE. We will have at least two independent members on our audit committee within 90 days of the qualification of our post-effective amendment to our offering statement on Form 1-A (March 26, 2025), and we will have three independent members of our audit committee within one year of the qualification of our post-effective amendment to our offering statement on Form 1-A. Our Board of Directors Our board of directors consists of four members. At least one additional member will be appointed to our board of directors within 90 days of the qualification of our post-effective amendment to our offering statement on Form 1-A, and two members will have been appointed to our board of directors within one year of the qualification of our post-effective amendment to our offering statement on Form 1-A, for a total of six members. Our board of directors is generally 57 responsible for the oversight of corporate risk in its review and deliberations relating to our activities. Risk is inherent in every business. As is the case in virtually all businesses, we face a number of risks, including operational, economic, financial, legal, regulatory, and competitive risks. Our management is responsible for the day-to-day management of the risks we face. Our board of directors, as a whole and through its committees, has responsibility for the oversight of risk management. In its oversight role, our board of directors’ involvement in our business strategy and strategic plans plays a key role in its oversight of risk management, its assessment of management’s risk appetite, and its determination of the appropriate level of enterprise risk. Our board of directors receives updates at least quarterly from senior management and periodically from outside advisors regarding the various risks we face, including operational, economic, financial, legal, regulatory, and competitive risks. Our board of directors also risks relating to various developments such as acquisitions, debt and equity offerings, and new service offerings. Board Committees Our board of directors has an audit committee. The audit committee has a written charter, which is available on our corporate website, Newsmax.com . Audit Committee Mr. Acosta is currently the sole member and chair of our audit committee. We will have at least two independent members on our audit committee within 90 days of the qualification of our post-effective amendment to our offering statement on Form 1-A, and we will have three independent members of our audit committee within one year of the qualification of our post-effective amendment to our offering statement on Form 1-A. Our board of directors has affirmatively determined that Mr. Acosta meets the definition of “independent director” under the NYSE rules, and that he meets the independence standards under Rule 10A-3. Each member of our audit committee meets the financial literacy requirements of the NYSE rules. In addition, our board of directors has determined that Mr. Acosta will qualify as an “audit committee financial expert,” as such term is defined in Item 407(d)(5) of Regulation S-K, The audit committee responsibilities include: ● overseeing the compensation and work of and performance by our independent registered public accounting firm and any other registered public accounting firm performing audit, review or attestation services for us; ● engaging, retaining and terminating our independent registered public accounting firm and determining the terms thereof; ● assessing the qualifications, performance and independence of the independent registered public accounting firm; ● evaluating whether the provision of permitted non-audit services is compatible with maintaining the auditor’s independence; ● reviewing and discussing the audit results, including any comments and recommendations of the independent registered public accounting firm and the responses of management to such recommendations; ● reviewing and discussing the annual and quarterly financial statements with management and the independent registered public accounting firm; ● producing a committee report for inclusion in applicable Commission filings; ● reviewing the adequacy and effectiveness of internal controls and procedures; ● establishing procedures regarding the receipt, retention and treatment of complaints received regarding the accounting, internal accounting controls, or auditing matters and conducting or authorizing investigations into any matters within the scope of the responsibility of the audit committee; 58 ● reviewing transactions with related persons for potential conflict of interest situations and ● Reviewing and assessing annually the audit committee’s performance and the adequacy of its charter. Code of Ethics We have adopted a written code of business conduct and ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer and principal accounting officer or controller, or persons performing similar functions. The full text of our code of business conduct and ethics is posted on our corporate website. We intend to disclose future amendments to certain provisions of our code of business conduct and ethics, or waivers of these provisions, on our corporate website or in filings under the Exchange Act. Indemnification of Directors and Officers Article VII of Newsmax Inc.’s Amended and Restated Articles of Incorporation provides that Newsmax Inc. shall, to the fullest extent legally permissible under the provisions of the FBCA, as the same may be amended and supplemented, indemnify any person who was or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civi1, criminal, administrative, or investigative (other than an action by or in the right of Newsmax Inc.) by reason of the fact that the person is or was a director or officer of Newsmax Inc., against expenses (including attorney’s fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by him or her in connection with any action, suit, or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of Newsmax Inc., and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. Pursuant to Newsmax Inc.’s Articles of Incorporation, such indemnification or advancement of expenses provided by, or granted pursuant to, Section 607.0850 of the FBCA, shall not be deemed exclusive of any other rights to which an indemnified party may be entitled under any bylaw, agreement or resolution adopted by Newsmax Inc.’s board of directors. Article IX of Newsmax Inc.’s Amended and Restated Bylaws provides that to the fullest extent permitted under the law of the State of Florida, Newsmax Inc. shall have the power to indemnify, and shall indemnify, any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of Newsmax Inc.) by reason of the fact that the person is or was serving at the request of Newsmax Inc. as a director, officer, employee or agent of Newsmax Inc., against expenses (including attorneys’ fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit, or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of Newsmax Inc., and, with respect to any criminal action or proceeding, had no reasonable cause to believe the person’s conduct was unlawful. Insider Trading Policies We have adopted an insider trading policy governing the purchase, sale, and/or any other disposition of the Company’s securities and material non-public information that is reasonably designed to promote compliance with insider trading laws, rules, regulations, and applicable NYSE standards. Our insider trading policy applies to the Company’s directors, officers, employees of the Company and its subsidiaries, and any other persons, such as consultants, contractors, temporary staff, family members, and controlled entities who have access to material nonpublic information or are designated by the Company as subject to such policy. A copy of the Company’s insider trading policy is filed as Exhibit 19.1 to this Annual Report on Form 10-K. ITEM 11. EXECUTIVE COMPENSATION The following section describes our compensation program for 2024 and the compensation of our Chief Executive Officer and other two most highly compensated executive officers (each, a “Named Executive Officer” or “NEO”) during 2024. For 2024, the following individuals were our Named Executive Officers: ● Christopher Ruddy, Chief Executive Officer ● Darryle Burnham, Chief Financial Officer ● Andrew Brown, Chief Operating Officer 59 Detailed information on the compensation for our NEOs is presented in the following tables and accompanying narrative. Summary Compensation Table The following table presents the compensation awarded to, earned by or paid to each of our NEOs for the year ended December 31, 2024. Name and Principal Position Year Salary ($) Bonus ($) Stock awards ($) Option Awards ($) (3) Non-Equity Incentive Plan Compensation ($) Non-Qualified Deferred Compensation Earnings All Other Compensation ($) (2) Total ($) (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) Christopher Ruddy Chief Executive Officer (1) 2024 $ $ 373,077 $ $ 275,000 $ $ 0 $ $ 0 $ $ 0 $ 0 $ 265,462 $ 913,539 Darryle Burnham Chief Financial Officer 2024 $ $ 357,000 $ $ 0 $ $ 0 $ $ 100,000 $ $ 0 $ 0 $ 32,453 $ 489,453 Andrew Brown Chief Operating Officer 2024 $ $ 175,396 $ $ 0 $ $ 0 $ $ 25,000 $ $ 0 $ 0 $ 8,707 $ 209,103 (1) All amounts listed in this table for Mr. Ruddy include a portion of compensation and expense reimbursement paid to Crown Reserve LLC, an entity wholly owned by Mr. Ruddy. (2) Amounts reported represent the aggregate grant date fair value of equity awards granted to the named executive officers, computed in accordance with the Financial Accounting Standards Board’s, or FASB’s, Accounting Standards Codification, or ASC, Topic 718. Additional information regarding the assumptions made in calculating the grant date for the value of the equity awards reported in this column will be provided in the notes to the consolidated financial statements to be included in our Annual Report on Form 10-K for the year ended December 31, 2024. (3) For 2024, all other compensation for each NEO includes the following: Name Car and Auto Insurance Payment ($) Tax Gross Up ($) Apartment Reimbursement Personal Liability Insurance Premium $ Life Insurance Payments 401(k) Match Total ($) Christopher Ruddy (1) $ 27,298 $ 48,790 $ 124,771 $ 799 $ 46,746 $ 17,058 $ 265,462 Darryle Burnham (2) $ 13,018 $ 2,449 $ 0 $ 0 $ 0 $ 16,986 $ 32,453 Andrew Brown (3) $ 0 $ 0 $ 0 $ 0 $ 0 $ 8,707 $ 8,707 (1) We pay directly Mr. Ruddy’s car lease payments and auto insurance, provide matching contributions under the terms of our 401(k) plan and pay a portion of various life insurance and other personal liability insurance premiums. In addition, prior to August 1, 2024 we reimbursed Mr. Ruddy for the costs of his apartment in New York City, which was used by Mr. Ruddy when he worked out of our New York City office. Starting on August 1, 2024, we leased our own apartment in New York City as a corporate apartment, the use of which we provide to Mr. Ruddy when he is working out of our New York City office. (2) We reimburse Mr. Burnham’s car lease payments (and provide a tax gross up to cover certain taxes due by Mr. Burnham as a result of such reimbursement) and provide matching contributions under the terms of our 401(k) plan. (3) We provide Mr. Brown matching contributions under the terms of our 401(k) plan. Outstanding Equity Awards at Fiscal Year-End The following table provides information regarding awards held by each of our Named Executive Officers that were outstanding as of December 31, 2024 and reflects the Forward Stock Split. There were no other equity awards held by our NEOs as of December 31, 2024. 60 Option Awards Stock Awards Name Number of securities underlying unexercised options (#) exercisable (1) Number of securities underlying unexercised options (#) unexercisable Equity incentive plan awards: Number of securities underlying unexercised earned options (#) Option exercise price ($) Option expiration date Number of shares or units of stock that have not vested (#) Market value of shares or units of stock that have not vested ($) Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#) Equity incentive plan awards; Market or payout value of unearned shares, units or other rights that have not vested ($) (a) (b) (c) (d) (e) (f) (g) (h) (i) (j) Darryle Burnham 22,190 0   0 30,539.29 6/8/2031 0 0 0 0 18,605 0 0 36,308.56 6/29/2033 0 0 0 0 Andrew Brown 5,548 0 0 30,539.29 6/8/2031 0 0 0 0 4,668 0 0 36,308.56 6/29/2033 0 0 0 0 (1) All option awards were fully vested on December 31, 2024. Employment Agreements We have entered into the following employment agreements with our Named Executive Officers: Christopher Ruddy In June 2024, we entered into an Amended and Restated Employment Agreement with Mr. Ruddy, pursuant to which Mr. Ruddy serves as our President and Chief Executive Officer. Mr. Ruddy’s employment agreement provides for a base salary of $400,000 and provides that he will be eligible for annual merit-based increases of such salary or cost-of-living increases at the discretion of our board of directors (the “Board”). The Board shall also determine any bonus opportunities or other compensation to be provided to Mr. Ruddy. Mr. Ruddy is eligible to participate in our benefit plans, including but not limited to, group hospitalization, health, life, disability, travel or accident insurance, equity incentive plan, retirement income or pension plan, 401(k) plan or other present or future group employee benefit plan or program for which executives are or will become eligible. Mr. Ruddy is entitled to accumulate twenty-seven (27) days of PTO per year (provided, that if at the end of each calendar year, Mr. Ruddy has more than ten (10) PTO days accrued and unused, then the Company shall pay him the value of such excess PTO days in cash during the first payroll run of the new calendar year), and is also entitled to receive (i) reimbursement for insurance expenses associated with personal liability, personal liability umbrella and life insurances in which an affiliate of Mr. Ruddy (or his trust) is the beneficiary; (ii) reimbursement for car expenses (including, but not limited to lease and insurance payment); and (iii) a housing allowance for all expenses in connection with an apartment located in New York, NY to be used at his sole discretion, including for travel to our offices in New York, NY (and a tax gross-up to cover any taxes resulting from such expenses and such tax gross-up). Pursuant to Mr. Ruddy’s employment agreement, in the event that his employment is terminated by the Company without cause, or if he resigns for “good reason,” he will be entitled to (i) severance compensation in an amount equal to 24 months of his then-current base salary; (ii) any bonuses earned, but not yet paid for any completed full fiscal year or calendar quarter immediately preceding the termination date; (iii) continuation of health benefits for a period of 24 months and (iv) payout of his accrued vacation. In the event that Mr. Ruddy’s employment is terminated by reason of his death or disability, the Company shall pay him (or his estate, as applicable) a payout for his accrued vacation. Darryle Burnham In June 2024, we entered into an Amended and Restated Employment Agreement with Mr. Burnham, pursuant to which Mr. Burnham serves as our Chief Financial Officer. Mr. Burnham’s employment agreement provides for a base salary of $357,000 and provides that he will be eligible for annual merit-based increases of such salary or cost-of-living 61 increases at the discretion of the Company. The Chief Executive Officer of the Company shall also determine any bonus opportunities or other compensation to be provided to Mr. Burnham. Mr. Burnham is eligible to participate in our benefit plans, including but not limited to, group hospitalization, health, life, disability, travel or accident insurance, equity incentive plan, retirement income or pension plan, 401(k) plan or other present or future group employee benefit plan or program for which executives are or will become eligible. Mr. Burnham is entitled to accumulate twenty-seven (27) days of PTO per year (provided, that if at the end of each calendar year, Mr. Burnham has more than ten (10) PTO days accrued and unused, then the Company shall pay him the value of such excess PTO days in cash during the first payroll run of the new calendar year), and is also entitled to receive reimbursement for lease payments for a vehicle approved by the Company. Pursuant to Mr. Burnham’s employment agreement, in the event that his employment is terminated by the Company without cause, or if he resigns for “good reason,” he will be entitled to (i) severance compensation in an amount equal to 24 months of his then-current base salary; (ii) any bonuses earned, but not yet paid for any completed full fiscal year or calendar quarter immediately preceding the termination date; (iii) continuation of health benefits for a period of 24 months and (iv) payout of his accrued vacation. In the event that Mr. Burnham’s employment is terminated by reason of his death or disability, the Company shall pay him (or his estate, as applicable) a payout for his accrued vacation. Andrew Brown Mr. Brown is not employed by us pursuant to any employment agreement. In the event that Mr. Brown’s employment is terminated by reason for any reason, we are not obligated to pay any amounts to him as severance compensation or benefits. Annual Incentives Our compensation program for Named Executive Officers and other executive officers includes eligibility for annual cash bonuses. The annual bonuses are discretionary and are paid, if at all, based on our performance and the applicable executive’s performance. Generally, the Board determines bonuses for Mr. Ruddy and Mr. Ruddy, as the CEO, determines the amount of bonuses for our other NEOs. With respect to 2024, our Board in view of our performance last year, awarded Mr. Ruddy a discretionary bonus in the amount set forth in the Summary Compensation Table above, and Mr. Ruddy determined that that no discretionary bonuses shall be paid to our other NEOs with respect to 2024. Long-Term Incentives Equity-based awards are a variable element of compensation that allows us to reward our NEOs for their sustained contributions to the Company. Equity awards reward performance and continued employment by a NEO, with associated benefits to the Company of attracting and retaining employees. We believe that equity-based compensation, including but not limited to stock options and restricted stock, will provide NEOs with a strong link to long-term corporate performance and the creation of shareholder value. On May 22, 2024, the Board approved the Company’s assumption of the Newsmax Media, Inc. Equity Incentive Plan (the “Plan”) and certain stock option awards granted thereunder. Under the Plan, 240 shares of the Company’s Class B Common Stock are available for grant. The Company may grant incentive stock options (or “ISOs”), non-statutory stock options or restricted stock to participants under the Plan. The Plan will terminate upon the expiration of a 10 year term, and awards issued thereunder shall expire as provided in the award agreement with respect thereto. Other Benefits We offer standard health, dental, life and disability insurance benefits, as well as a 401(k) plan with a company match, to our NEOs, on the same terms and conditions as provided to all eligible employees. We do not offer a deferred compensation plan or pension plan. Director Compensation 62 The following Director Compensation Table sets forth the compensation of our non-employee directors for the fiscal year ending December 31, 2024. Name Fees earned or paid in cash ($) (1) Stock awards ($) Option awards ($) (2) Non-equity incentive plan compensation ($) Nonqualified deferred compensation earnings ($) All other compensation ($) Total ($) (a) (b) (c) (d) (e) (f) (g) (h) Shaun Doherty (3) $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Christopher Cox $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Nancy Brinker $ 0 $ 0 $ 25,000 $ 0 $ 0 $ 0 $ 25,000 (1) We did not pay any cash fees to our non-employee directors in 2024. (2) On January 1, 2024, we granted a stock option award with respect to 0.69 shares (4,668 shares reflecting the Forward Stock Split) of the Company’s Class B Common Stock to Ms. Brinker, which vests in full on January 1, 2025. The amount shown above reflects the aggregate grant date fair value of such award computed in accordance with FASB’s ASC Topic 718. Other than this stock option award to Ms. Brinker, our non-employee directors hold no other equity incentive awards. Additional information regarding the assumptions made in calculating the grant date for the value of the equity awards reported in this column will be provided in the notes to the consolidated financial statements to be included in our Annual Report on Form 10-K for the year ended December 31, 2024. (3) Mr. Doherty resigned from the Board effective January 30, 2024. Narrative to Director Compensation Table Following our initial public offering, on March 28, 2025, we adopted a Director Compensation Policy, which is summarized as follows: Each non-employee director shall be entitled to receive an annual cash retainer in the amount of $75,000, which shall be payable in equal quarterly installments. Each non-employee director who serves as a Chairperson of the Board shall receive an additional cash retainer in the amount of $10,000, which shall be payable in equal quarterly installments. The payment of such amounts with respect to the first quarter of 2025 shall be prorated from the date of adoption of our Director Compensation Policy and paid concurrently with the applicable payment amounts for the second quarter of 2025. For each Board committee upon which a non-employee director serves, such non-employee director shall receive an annual cash retainer in the amount of $7,500, which shall be payable in equal quarterly installments. For each Board committee upon which a non-employee director serves as a member and a Chairperson, such non-employee director shall receive an additional cash retainer in the amount of $2,500, which shall be payable in equal quarterly installments. The payment of such amounts with respect to the first quarter of 2025 shall be prorated from the date of adoption of our Director Compensation Policy and paid concurrently with the applicable payment amounts for the second quarter of 2025. In addition, each non-employee director shall be entitled to receive an annual equity award, which shall be granted (A) with respect to calendar year 2025, on the date of adoption of the Director Compensation Policy, and (B) with respect to any other calendar year, on the date of the Company’s annual shareholder meeting for such year. Subject to the non-employee director’s continued service, such equity awards sh all vest upon the one-year anniversary of the date of grant. The number of shares of Class B Common Stock subject to such awards shall be determined by dividing $175,000 by the Fair Market Value (as such term is defined in the Company’s 2025 Plan (as defined below) or its successor plan) of the Company’s Class B Common Stock on the date of grant of such award. Subject to the Company’s expense reimbursement policy, each non-employee director shall be reimbursed for reasonable travel and other business expenses in connection with attending meetings of the Board or its committees, as applicable; provided, that any expenses in excess of $2,500 is subject to prior approval by the Company’s Chief Executive Officer. Prior to the adoption of our Director Compensation Policy, our non-employee directors were paid such amounts for their services as was determined by the Board from time to time. In addition. each director or member of a committee of the Board was eligible to be reimbursed for expenses, if any, of attendance at each meeting of the Board or committee thereof, as applicable. 63 2025 Omnibus Equity Incentive Plan On March 28, 2025, the Board adopted our 2025 Omnibus Equity Incentive Plan (the “2025 Plan”) and it was approved by our shareholders on March 24, 2025 (the “Effective Date”). Under the 2025 Plan, 6,500,000 shares of Class B Common Stock are initially available for grant. Our administrator may grant incentive stock options (“ISOs”), non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards to participants to acquire shares of common stock under the 2025 Plan. It is anticipated that the Plan will be administered by the Board. Rationale for the 2025 Plan Grants of options, stock appreciation rights, restricted shares of common stock, restricted stock units and other stock-based awards to our employees, directors and independent contractors are an important part of our long-term incentive compensation program, which we use in order to strengthen the commitment of such individuals to us, motivate them to faithfully and diligently perform their responsibilities and attract and retain competent and dedicated individuals whose efforts are expected to result in our long-term growth and profitability. The number of shares available for grant under the 2025 Plan is designed to enable the Company to properly incentivize its employees and management teams over a number of years on a going-forward basis. Shares Available; Certain Limitations The maximum number of shares of common stock reserved and available for issuance under the 2025 Plan is 6,500,000 shares of common stock, provided that such number of shares shall increase annually on January 1 of each year beginning with January 1, 2026 and ending with the last January 1 during the initial ten-year term of the Plan, by a number of shares of common stock equal to the lesser of (A) five percent (5%) of the shares of common stock outstanding (on an as-converted basis, which shall include shares of common stock issuable upon the exercise or conversion of all outstanding securities or rights convertible into or exercisable for shares of common stock, including without limitation, preferred stock, warrants and employee options to purchase any shares of common stock) on the final day of the immediately preceding calendar year and (B) such lesser number of shares of common stock as determined by the Board; provided further that shares of common stock issued under the 2025 Plan with respect to an Exempt Award will not count against the share limit. Under the 2025 Plan, an “Exempt Award” is (i) an award granted in the assumption of, or in substitution for, outstanding awards previously granted by another business entity acquired by us or any of our subsidiaries or with which we or any of our subsidiaries merges, (ii) an “employment inducement” award as described in the applicable stock exchange listing manual or rules; or (iii) an award that a participant purchases at fair market value. No more than 6,500,000 shares of Class B Common Stock shall be issued pursuant to the exercise of ISOs, provided that such number of shares shall increase annually on January 1 of each year beginning with January 1, 2026 and ending with the last January 1 during the initial ten-year term of the Plan by a number of shares of common stock equal to the lesser of (A) five percent (5%) of the shares of common stock outstanding (on an as-converted basis, which shall include shares of common stock issuable upon the exercise or conversion of all outstanding securities or rights convertible into or exercisable for shares of common stock, including without limitation, preferred stock, warrants and employee options to purchase any shares of common stock) on the final day of the immediately preceding calendar year, (B) 6,500,000 shares of common stock, and (C) such lesser number of shares of common stock as determined by the Board. New shares reserved for issuance under the 2025 Plan may be authorized but unissued shares of common stock or shares of common stock that will have been or may be reacquired by us in the open market, in private transactions or otherwise. If any shares of common stock subject to an award are forfeited, cancelled, exchanged or surrendered or if an award terminates or expires without a distribution of shares to the participant, the shares of common stock with respect to such award will, to the extent of any such forfeiture, cancellation, exchange, surrender, termination or expiration, again be available for awards under the Plan except that (i) any shares of common stock reacquired by us on the open market or otherwise using cash proceeds from the exercise of options, and (ii) any shares of common stock surrendered or withheld as payment of either the exercise price of an award and/or withholding taxes in respect of an award will not again be available for awards under the Plan. If an award is denominated in shares of common stock, but settled in cash, the number of shares of common stock previously subject to the award will again be available for grants under the 2025 Plan. If an award can only be settled in cash, it will not be counted against the total number of shares of common stock available for 64 grant under the 2025 Plan. However, upon the exercise of any award granted in tandem with any other awards, such related awards will be cancelled as to the number of shares as to which the award is exercised and such number of shares of common stock will no longer be available for grant under the 2025 Plan. As exhibited by our responsible use of equity over the past several years and good corporate governance practices associated with equity and executive compensation practices in general, the stock reserved under the 2025 Plan will provide us with the platform needed for our continued growth, while managing program costs and share utilization levels within acceptable industry standards. Description of 2025 Plan The following is a summary of the material features of the 2025 Plan. This summary is qualified in its entirety by the full text of the 2025 Plan, a copy of which is attached to this Annual Report on Form 10-K as Exhibit 10.12. Types of Awards . The 2025 Plan provides for the issuance of incentive stock options, non-statutory stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units (“RSUs”), and other stock-based awards. Items described above in the Section called “Shares Available” are incorporated herein by reference. Administration . The 2025 Plan will be administered by the Board, or if the Board does not administer the 2025 Plan, a committee or subcommittee of the Board that complies with the applicable requirements of Section 16 of the Exchange Act and any other applicable legal or stock exchange listing requirements (each of our board of directors or such committee or subcommittee, the “plan administrator”). The plan administrator may interpret the 2025 Plan and may prescribe, amend and rescind rules and make all other determinations necessary or desirable for the administration of the 2025 Plan. The 2025 Plan permits the plan administrator to select the eligible recipients who will receive awards, to determine the terms and conditions of those awards, including but not limited to the exercise price or other purchase price of an award, the number of shares of common stock or cash or other property subject to an award, the term of an award and the vesting schedule applicable to an award, and to amend the terms and conditions of outstanding awards. Restricted Stock and Restricted Stock Units . Restricted stock and RSUs may be granted under the 2025 Plan. The plan administrator will determine the purchase price, vesting schedule and performance goals, if any, and any other conditions that apply to a grant of restricted stock and RSUs. If the restrictions, performance goals or other conditions determined by the plan administrator are not satisfied, the restricted stock and RSUs will be forfeited. Subject to the provisions of the 2025 Plan and the applicable award agreement, the plan administrator has the sole discretion to provide for the lapse of restrictions in installments. Unless the applicable award agreement provides otherwise, participants with restricted stock will generally have all of the rights of a shareholder; provided that dividends will only be paid if and when the underlying restricted stock vests. RSUs will not be entitled to dividends prior to vesting, but may be entitled to receive dividend equivalents if the award agreement provides for them. The rights of participants granted restricted stock or RSUs upon the termination of employment or service to us will be set forth in the award agreement. Options . Incentive stock options and non-statutory stock options may be granted under the 2025 Plan. An “incentive stock option” means an option intended to qualify for tax treatment applicable to incentive stock options under Section 422 of the Internal Revenue Code. A “non-statutory stock option” is an option that is not subject to statutory requirements and limitations required for certain tax advantages that are allowed under specific provisions of the Internal Revenue Code. A non-statutory stock option under the 2025 Plan is referred to for federal income tax purposes as a “non-qualified” stock option. Each option granted under the Plan will be designated as a non-qualified stock option or an incentive stock option. At the discretion of the administrator, incentive stock options may be granted only to our employees, employees of our “parent corporation” (as such term is defined in Section 424(e) of the Code) or employees of our subsidiaries. The exercise period of an option may not exceed ten years from the date of grant and the exercise price may not be less than 100% of the fair market value of a share of common stock on the date the option is granted (110% of fair market value in the case of incentive stock options granted to ten percent shareholders). The exercise price for shares of common stock subject to an option may be paid in cash, or as determined by the administrator in its sole discretion, (i) through any cashless exercise procedure approved by the administrator (including the withholding of shares of common stock otherwise issuable upon exercise), (ii) by tendering unrestricted shares of common stock owned by the participant, (iii) with any other form of consideration approved by the administrator and permitted by applicable law or (iv) by any combination of these 65 methods. The option holder will have no rights to dividends or distributions or other rights of a shareholder with respect to the shares of common stock subject to an option until the option holder has given written notice of exercise and paid the exercise price and applicable withholding taxes. In the event of a participant's termination of employment or service, the participant may exercise his or her option (to the extent vested as of such date of termination) for such period of time as specified in his or her option agreement. Stock Appreciation Rights . SARs may be granted either alone (a “Free-Standing Right”) or in conjunction with all or part of any option granted under the 2025 Plan (a “Related Right”). A Free-Standing Right will entitle its holder to receive, at the time of exercise, an amount per share up to the excess of the fair market value (at the date of exercise) of a share of common stock over the base price of the Free-Standing Right (which shall be no less than 100% of the fair market value of the related shares of common stock on the date of grant) multiplied by the number of shares in respect of which the SAR is being exercised. A Related Right will entitle its holder to receive, at the time of exercise of the SAR and surrender of the applicable portion of the related option, an amount per share up to the excess of the fair market value (at the date of exercise) of a share of common stock over the exercise price of the related option multiplied by the number of shares in respect of which the SAR is being exercised. The exercise period of a Free-Standing Right may not exceed ten years from the date of grant. The exercise period of a Related Right will also expire upon the expiration of its related option. The holder of a SAR will have no rights to dividends or any other rights of a shareholder with respect to the shares of common stock subject to the SAR until the holder has given written notice of exercise and paid the exercise price and applicable withholding taxes. In the event of an participant's termination of employment or service, the holder of a SAR may exercise his or her SAR (to the extent vested as of such date of termination) for such period of time as specified in his or her SAR agreement. Other Stock-Based Awards . The administrator may grant other stock-based awards under the 2025 Plan, valued in whole or in part by reference to, or otherwise based on, shares of common stock. The administrator will determine the terms and conditions of these awards, including the number of shares of common stock to be granted pursuant to each award, the manner in which the award will be settled, and the conditions to the vesting and payment of the award (including the achievement of performance goals). The rights of participants granted other stock-based awards upon the termination of employment or service to us will be set forth in the applicable award agreement. In the event that a bonus is granted in the form of shares of common stock, the shares of common stock constituting such bonus shall, as determined by the administrator, be evidenced in uncertificated form or by a book entry record or a certificate issued in the name of the participant to whom such grant was made and delivered to such participant as soon as practicable after the date on which such bonus is payable. Any dividend or dividend equivalent award issued hereunder shall be subject to the same restrictions, conditions and risks of forfeiture as apply to the underlying award. Equitable Adjustment and Treatment of Outstanding Awards Upon a Change in Control Equitable Adjustments . In the event of a merger, consolidation, reclassification, recapitalization, spin-off, spin-out, repurchase, reorganization, special or extraordinary dividend or other extraordinary distribution (whether in the form of common stock, cash or other property), combination, exchange of shares, or other change in corporate structure affecting our common stock, an equitable substitution or proportionate adjustment shall be made in (i) the aggregate number and kind of securities reserved for issuance under the 2025 Plan; (ii) the kind and number of securities subject to, and the exercise price of, any outstanding options and SARs granted under the 2025 Plan; (iii) the kind, number and purchase price of shares of common stock, or the amount of cash or amount or type of property, subject to outstanding restricted stock, RSUs and other stock-based awards granted under the 2025 Plan; and (iv) the terms and conditions of any outstanding awards (including any applicable performance targets). Equitable substitutions or adjustments other than those listed above may also be made as determined by the plan administrator. In addition, the plan administrator may, subject in all events to the requirements of Section 409A of the Internal Revenue Code, terminate all outstanding awards for the payment of cash or in-kind consideration having an aggregate fair market value equal to the excess of the fair market value of the shares of common stock, cash or other property covered by such awards over the aggregate exercise price, if any, of such awards, but if the exercise price of any outstanding award is equal to or greater than the fair market value of the shares of common stock, cash or other property covered by such award, the plan administrator may cancel the award without the payment of any consideration to the participant. With respect to awards subject to foreign laws, adjustments will be made in compliance with applicable requirements. Except to the extent determined by the plan administrator, adjustments to ISOs will be made only to the extent not constituting a “modification” within the meaning of Section 424(h)(3) of the Code. Change in Control . The 2025 Plan provides that, unless otherwise determined by the plan administrator and evidenced in an award agreement, if a “change in control” (as defined below) occurs and a participant is employed by us or 66 any of our affiliates immediately prior to the consummation of the change in control, then the plan administrator, in its sole and absolute discretion, may (i) provide that any unvested or unexercisable portion of an award carrying a right to exercise will become fully vested and exercisable; and (ii) cause the restrictions, deferral limitations, payment conditions and forfeiture conditions applicable to any award granted under the 2025 Plan to lapse, and the awards will be deemed fully vested and any performance conditions imposed with respect to such awards will be deemed to be fully achieved at target performance levels. If the administrator determines in its discretion to accelerate the vesting of options and SARs in connection with a change in control, the administrator shall also have discretion in connection with such action to provide that all outstanding and unexercised options and SARs shall expire upon the consummation of such change in control. For purposes of the 2025 Plan, a “change in control” means, in summary, the occurrence of any of the following events: (i) a person or entity becomes the beneficial owner of more than 50% of our voting power; (ii) an unapproved change in the majority membership of our board of directors; (iii) a merger or consolidation of us or any of our subsidiaries, other than (A) a merger or consolidation that results in our voting securities continuing to represent 50% or more of the combined voting power of the surviving entity or its parent and our board of directors immediately prior to the merger or consolidation continuing to represent at least a majority of the board of directors of the surviving entity or its parent or (B) a merger or consolidation effected to implement a recapitalization in which no person is or becomes the beneficial owner of our voting securities representing more than 50% of our combined voting power; or (iv) shareholder approval of a plan of our complete liquidation or dissolution or the consummation of an agreement for the sale or disposition of substantially all of our assets, other than (A) a sale or disposition to an entity, more than 50% of the combined voting power of which is owned by our shareholders in substantially the same proportions as their ownership of us immediately prior to such sale; or (B) a sale or disposition to an entity controlled by our board of directors. However, a change in control will not be deemed to have occurred as a result of any transaction or series of integrated transactions following which our shareholders, immediately prior thereto, hold immediately afterward the same proportionate equity interests in the entity that owns all or substantially all of our assets. Tax Withholding Each participant will be required to make arrangements satisfactory to the plan administrator regarding payment of up to the maximum statutory tax rates in the participant’s applicable jurisdiction with respect to any award granted under the 2025 Plan, as determined by us. We have the right, to the extent permitted by applicable law, to deduct any such taxes from any payment of any kind otherwise due to the participant. With the approval of the plan administrator, the participant may satisfy the foregoing requirement by either electing to have us withhold from delivery of shares of common stock, cash or other property, as applicable, or by delivering already owned unrestricted shares of common stock, in each case, having a value not exceeding the applicable taxes to be withheld and applied to the tax obligations. We may also use any other method of obtaining the necessary payment or proceeds, as permitted by applicable law, to satisfy our withholding obligation with respect to any award. Amendment and Termination of the 2025 Plan The 2025 Plan provides our board of directors with authority to amend, alter or terminate the 2025 Plan, but no such action may impair the rights of any participant with respect to outstanding awards without the participant’s consent. The plan administrator may amend an award, prospectively or retroactively, but no such amendment may materially impair the rights of any participant without the participant’s consent. Shareholder approval of any such action will be obtained if required to comply with applicable law. The 2025 Plan will terminate on the tenth anniversary of the Effective Date (although awards granted before that time will remain outstanding in accordance with their terms). Clawback If we are required to prepare an accounting restatement of our financial statements due to our material noncompliance (whether one occurrence or a series of occurrences of noncompliance) with any financial reporting requirement under the securities laws, then the administrator may require any Section 10D-1(d) of the Exchange Act “executive officer” to repay or forfeit to us that part of the cash or equity incentive compensation received by that Section 10D-1(d) executive officer during the preceding three (3) completed fiscal years that the administrator determines was in excess of the amount that such Section 10D-1(d) executive officer would have received had such cash or equity incentive compensation been calculated based on the restated amounts reported in the restated financial statement. The administrator may take into account any factors it deems reasonable in determining whether to seek recoupment of previously paid cash or equity incentive compensation and how much of such compensation to recoup from each Section 10D-1(d) executive officer (which shall be made irrespective of any fault, misconduct or responsibility of each Section 10D-1(d) executive officer). The amount and form of the incentive compensation to be recouped shall be determined by the administrator in its sole and absolute discretion, and calculated on a pre-tax basis. 67 US Federal Income Tax Consequences The following is a summary of certain United States federal income tax consequences of awards under the 2025 Plan. It does not purport to be a complete description of all applicable rules, and those rules (including those summarized here) are subject to change. Non-Qualified Stock Options. A participant who has been granted a non-qualified stock option will not recognize taxable income upon the grant of a non-qualified stock option. Rather, at the time of exercise of such non-qualified stock option, the participant will recognize ordinary income for income tax purposes in an amount equal to the excess of the fair market value of the shares of common stock purchased over the exercise price. We generally will be entitled to a tax deduction at such time and in the same amount that the participant recognizes ordinary income. If shares of common stock acquired upon exercise of a non-qualified stock option are later sold or exchanged, then the difference between the amount received upon such sale or exchange and the fair market value of such shares on the date of such exercise will generally be taxable as long-term or short-term capital gain or loss (if the shares are a capital asset of the participant) depending upon the length of time such shares were held by the participant. Incentive Stock Options. In general, no taxable income is realized by a participant upon the grant of an ISO. If shares of common stock are purchased by a participant, or option shares, pursuant to the exercise of an ISO granted under the 2025 Plan and the participant does not dispose of the option shares within the two-year period after the date of grant or within one year after the receipt of such option shares by the participant, such disposition a disqualifying disposition, then, generally (1) the participant will not realize ordinary income upon exercise and (2) upon sale of such option shares, any amount realized in excess of the exercise price paid for the option shares will be taxed to such participant as capital gain (or loss). The amount by which the fair market value of the common stock on the exercise date of an ISO exceeds the purchase price generally will constitute an item which increases the participant’s “alternative minimum taxable income.” If option shares acquired upon the exercise of an ISO are disposed of in a disqualifying disposition, the participant generally would include in ordinary income in the year of disposition an amount equal to the excess of the fair market value of the option shares at the time of exercise (or, if less, the amount realized on the disposition of the option shares), over the exercise price paid for the option shares. Subject to certain exceptions, an option generally will not be treated as an ISO if it is exercised more than three months following termination of employment. If an ISO is exercised at a time when it no longer qualifies as an ISO, such option will be treated as a nonqualified stock option as discussed above. In general, we will receive an income tax deduction at the same time and in the same amount as the participant recognizes ordinary income. Stock Appreciation Rights. A participant who is granted an SAR generally will not recognize ordinary income upon receipt of the SAR. Rather, at the time of exercise of such SAR, the participant will recognize ordinary income for income tax purposes in an amount equal to the value of any cash received and the fair market value on the date of exercise of any shares of common stock received. We generally will be entitled to a tax deduction at such time and in the same amount, if any, that the participant recognizes as ordinary income. The participant’s tax basis in any shares of common stock received upon exercise of an SAR will be the fair market value of the shares of common stock on the date of exercise, and if the shares are later sold or exchanged, then the difference between the amount received upon such sale or exchange and the fair market value of such shares on the date of exercise will generally be taxable as long-term or short-term capital gain or loss (if the shares are a capital asset of the participant) depending upon the length of time such shares were held by the participant. Restricted Stock. A participant generally will not be taxed upon the grant of restricted stock, but rather will recognize ordinary income in an amount equal to the fair market value of the shares of common stock at the earlier of the time the shares become transferable or are no longer subject to a substantial risk of forfeiture (within the meaning of the Code). We generally will be entitled to a deduction at the time when, and in the amount that, the participant recognizes ordinary income on account of the lapse of the restrictions. A participant’s tax basis in the shares of common stock will equal their fair market value at the time the restrictions lapse, and the participant’s holding period for capital gains purposes will begin at that time. Any cash dividends paid on the shares of common stock before the restrictions lapse will be taxable to the participant as additional compensation and not as dividend income, unless the individual has made an election under Section 83(b) of the Code. Under Section 83(b) of the Code, a participant may elect to recognize ordinary income at the time the restricted shares are awarded in an amount equal to their fair market value at that time, notwithstanding the fact that such stock is subject to restrictions or transfer and a substantial risk of forfeiture. If such an election is made, no additional taxable income will be recognized by such participant at the time the restrictions lapse, the participant will have a tax basis in the shares of common stock equal to their fair market value on the date of their award, and the participant’s holding period for capital gains purposes will begin at that time. We generally will be entitled to a tax deduction at the time when, and to the extent that, ordinary income is recognized by such participant. Restricted Stock Units. In general, the grant of RSUs will not result in income for the participant or in a tax deduction for us. Upon the settlement of such an award in cash or shares of common stock, the participant will recognize 68 ordinary income equal to the aggregate value of the payment received, and we generally will be entitled to a tax deduction at the same time and in the same amount. Other Awards. With respect to other stock-based awards, generally when the participant receives payment in respect of the award, the amount of cash and/or the fair market value of any shares of common stock or other property received will be ordinary income to the participant, and we generally will be entitled to a tax deduction at the same time and in the same amount. New Plan Benefits Future grants under the 2025 Plan will be made at the discretion of the plan administrator and, accordingly, are not yet determinable. In addition, benefits under the 2025 Plan will depend on a number of factors, including the fair market value of our common stock on future dates and the exercise decisions made by participants. Consequently, at this time, it is not possible to determine the future benefits that might be received by participants receiving discretionary grants under the 2025 Plan. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The following table sets forth certain information regarding the beneficial ownership of our Common Stock as of March 28, 2025 by: ● each of our named executive officers; ● each of our directors and director nominees; ● all of our current and proposed directors and named executive officers as a group; and ● each stockholder known by us to own beneficially more than 5% of our Common Stock. Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the securities. Shares of Common Stock that may be acquired by an individual or group within 60 days of March 28, 2025, pursuant to the exercise of options or warrants or conversion of preferred stock or convertible debt, are deemed to be outstanding for the purpose of computing the percentage ownership of such individual or group, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other person shown in the table. Percentage of ownership is based on 128,188,655 shares of Common Stock issued and outstanding, consisting of 39,239,297 shares of Class A Common Stock and 88,949,358 shares of Class B Common Stock issued and outstanding as of March 28, 2025. Except as indicated in footnotes to this table, we believe that the stockholders named in this table have sole voting and investment power with respect to all shares of Common Stock shown to be beneficially owned by them, based on information provided to us by such stockholders. Unless otherwise indicated, the address for each director and executive officer listed is: c/o Newsmax Inc., 750 Park of Commerce Drive, Suite 100, Boca Raton, Florida 33487. Shares of Common Stock Beneficially Owned Class A Class B Name of Beneficial Owner Shares % Shares % Directors and Executive Officer: Christopher Ruddy, Director and Chief Executive Officer (1) 39,239,297 100 39,239,297 30.6 % Darryle Burnham, Chief Financial Officer - * 40,795 (2) * Nancy G. Brinker, Director - * 54,597 (3) * R. Alexander Acosta, Director - * - * Andrew Brown, Chief Operating Officer - * 10,216 (4) * Directors and Executive Officers as a group (5 persons) 5% or Greater Stockholders: 39,239,297 100 105,608 * Christopher Ruddy Revocable Trust dated October 12, 2007 (1) 39,239,297 100 - * Conyers Investments LLC (5) - *- 23,045,352 25.9 % Naples Investment HoldCo, LLC (6)(7) - *- 19,737,553 22.2 % * Indicates beneficial ownership of less than 1%. 69 (1) The 39,239,297 shares of Class A Common Stock beneficially owned by Christopher Ruddy are held by the Christopher Ruddy Revocable Trust dated October 12, 2007 (the “Trust”). Mr. Ruddy is the trustee of the Trust and is deemed to beneficially own the shares of Class A Common Stock owned by the Trust and has sole voting and dispositive powers over its shares. The business address of the Trust is 750 Park of Commerce Drive, Suite 100, Boca Raton, Florida 33487. (2) Consists of 40,795 shares of Class B Common Stock issuable upon the exercise of options. (3) Consists of 54,597 shares of Class B Common Stock issuable upon the exercise of options. (4) Consists of 10,216 shares of Class B Common Stock issuable upon the exercise of options. (5) Conyers Investments LLC is a Connecticut limited liability company. Thomas Peterffy, as the manager of Conyers Investments LLC, may be deemed to beneficially own the shares of Class B Common Stock owned by Conyers Investments LLC and has voting and dispositive powers over its shares. Conyers Investments LLC’s business address is 777 S. Flagler Drive, #1001 East, West Palm Beach, Florida 33401. (6) Naples Investment Holdco LLC (“Holdco”) is a Delaware limited liability company. Heritage Investments Limited Partnership (“Heritage Investments LP”) is the sole member of Holdco. Heritage GP Limited (“Heritage GP”) is the general partner of Heritage Investments LP. Heritage Investment Holdings Limited (“Holdings Limited”) serves as the sole director of Heritage GP. GTCS Directors Limited (“GTCS Directors”) serves as the sole director of Holdings Limited and Heritage Holdings Bare Trust (“Heritage Trust”) is the sole member of Holdings Limited. GTCS Nominees Limited (“GTCS Nominee”) serves as trustee of the Heritage Trust and Sheikh Sultan bin Jassim Al-Thani is the sole beneficiary of the Heritage Trust. Each of Heritage Investments LP, Heritage GP, Holdings Limited, GTCS Directors, Heritage Trust, GTCS Nominee and Sheikh Sultan bin Jassim Al-Thani may be deemed to beneficially own the shares owned directly by Holdco. The principal business address of each of the persons and entities named in this footnote is 13a St George Street, London, United Kingdom, W1S 2FQ. (7) Naples Investment Holdco LLC granted to the Trust a proxy pursuant to which the Trust may vote all of the shares of the Series A-3 Preferred Stock on matters submitted to stockholder vote, subject to certain exceptions, including, but not limited to, the right to appoint one director to the Company’s board of directors. The proxy terminates upon an initial public offering of Newsmax Inc.. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE We have not been a party during our year ended December 31, 2024 to any transactions in which the amount involved in the transaction exceeds the lesser of $120,000 or 1% of the average of our total assets at year-end for the last two completed fiscal years, and in which any of our directors, executive officers or, to our knowledge, beneficial owners of more than 5% of our capital stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than equity and other compensation, termination, change in control and other arrangements, which are described elsewhere in this Annual Report. Policies and Procedures for Related Party Transactions Our audit committee charter requires that our audit committee review and approve in advance any related party transaction. This covers, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act, any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we were or are to be a participant, where the amount involved exceeds $120,000 and a related person had or will have a direct or indirect material interest, including, without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness and employment by us of a related person. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The following table sets forth the aggregate fees billed by BDO USA, P.C. as described below: 2024 2023 Audit Fees $ 1,210,000 $ 520,000 Audit Related Fees — — Tax Fees — — All Other Fees — — Total $ 1,210,000 $ 520,000 70 Audit Fees: Audit fees consist of fees billed for professional services performed by BDO USA, P.C. for the audit of our annual consolidated financial statements, the review of interim consolidated financial statements, and related services that are normally provided in connection with registration statements. Audit-Related Fees: Audit related fees consist of fees billed by an independent registered public accounting firm for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements. There were no such fees incurred by the Company in the fiscal years ended December 31, 2024 and 2023. Tax Fees: Tax fees consist of fees for professional services, including tax compliance performed by BDO USA, P.C. There were no such fees incurred by the Company in the fiscal years ended December 31, 2024 and 2023. All Other Fees: There were no such fees incurred by the Company in the fiscal years ended December 31, 2024 and 2023. Pre-Approval Policies and Procedures In accordance with Sarbanes-Oxley, our audit committee charter requires the audit committee to pre-approve all audit and permitted non-audit services provided by our independent registered public accounting firm, including the review and approval in advance of our independent registered public accounting firm’s annual engagement letter and the proposed fees contained therein. The audit committee has the ability to delegate the authority to pre-approve non-audit services to one or more designated members of the audit committee. If such authority is delegated, such delegated members of the audit committee must report to the full audit committee at the next audit committee meeting all items pre-approved by such delegated members. PART IV ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES. (a) Documents filed as part of this Annual Report on Form 10-K 1.Consolidated Financial Statements: See accompanying Index to Consolidated Financial Statements. 2. Consolidated Financial Statement Schedules: Financial statement schedules are omitted either due to the absence of conditions under which they are required or because the information required is included in the notes to the Company’s Consolidated Financial Statements. (b) Exhibit Index Exhibit No. Description 3.1 Amended and Restated Articles of Incorporation (Incorporated by reference to Exhibit 2.8 to the Company's Offering Statement on Form 1-A filed on March 6, 2025). 3.2 Amended and Restated Bylaws (Incorporated by reference to Exhibit 2.9 to the Company's Offering Statement on Form 1-A filed on March 6, 2025). 4.1 Form of Placement Agent Warrant (Incorporated by reference to Exhibit 3.1 to the Company's Offering Statement on Form 1-A filed on March 6, 2025). 10.1+ Offer Letter by and between Newsmax Media, Inc. and Andrew Brown dated August 13, 2012 (Incorporated by reference to Exhibit 6.4 to the Company's Offering Statement on Form 1-A filed on March 6, 2025). 10.2 Master Note by and between Newsmax Media, Inc. and The Northern Trust Company dated October 8, 2023 (Incorporated by reference to Exhibit 6.1 to the Company's Offering Statement on Form 1-A filed on March 6, 2025). 10.3 Assignment and Assumption Agreement by and between Newsmax Media, Inc. and Newsmax Inc. dated April 29, 2024 (Incorporated by reference to Exhibit 4.7 to the Company's Offering Statement on Form 1-A filed on March 6, 2025). 71 10.4 Assignment and Assumption Agreement by and between Newsmax Media, Inc. and Newsmax Inc. dated April 29, 2024 (Incorporated by reference to Exhibit 4.8 to the Company's Offering Statement on Form 1-A filed on March 6, 2025). 10.5+ Amended and Restated Employment Agreement by and between Newsmax Media, Inc. and Christopher Ruddy dated June 3, 2024 (Incorporated by reference to Exhibit 6.2 to the Company's Offering Statement on Form 1-A filed on March 6, 2025). 10.6+ Amended and Restated Employment Agreement by and between Newsmax Media, Inc. and Darryle Burnham dated June 3, 2024 (Incorporated by reference to Exhibit 6.3 to the Company's Offering Statement on Form 1-A filed on March 6, 2025). 10.7 Form of Subscription Agreement for purchase of Class B Common Stock (Incorporated by reference to Exhibit 4.11 to the Company's Offering Statement on Form 1-A filed on March 6, 2025). 10.8 Form of Subscription Agreement (DealMaker) for purchase of Class B Common Stock (Incorporated by reference to Exhibit 4.13 to the Company's Offering Statement on Form 1-A filed on March 6, 2025). 10.9+ Form of Equity Incentive Plan (Incorporated by reference to Exhibit 6.6 to the Company's Offering Statement on Form 1-A filed on March 6, 2025). 10.1 Form of Indemnification Agreement with Executive Officers and Directors of the Company (Incorporated by reference to Exhibit 6.7 to the Company's Offering Statement on Form 1-A filed on March 6, 2025). 10.11+ Form of Stock Option Agreement (Incorporated by reference to Exhibit 6.8 to the Company's Offering Statement on Form 1-A filed on March 6, 2025). 10.12+ 2025 Omnibus Equity Incentive Plan (Incorporated by reference to Exhibit 6.9 to the Company's Offering Statement on Form 1-A filed on March 6, 2025). 10.13+ Stock Option Agreement (2025 Omnibus Equity Incentive Plan) (Incorporated by reference to Exhibit 6.10 to the Company's Offering Statement on Form 1-A filed on March 6, 2025). 19.1* Insider Trading Policy . 21.1* Subsidiaries of the R egistrant . 24.1* Power of Attorney (included on the signature page hereto). 31.1* Certification of Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1** Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97.1 Clawback Policy (Incorporated by reference to Exhibit 99.1 to the Company's Offering Statement on Form 1-A filed on March 6, 2025). 99.1 * W ritten Consent of the Shareholders of Newsmax Inc. dated March 24, 2025 (Recapitalization, Appointment of Directors) 99.2 * W ritten Consent of the S hareholders of Newsmax Inc. dated March 24, 2025 (2025 Om nibus Equity Incentive Plan) 101.INS* Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document). 101.SCH* Inline XBRL Taxonomy Extension Schema Document. 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document. 101.LAB* Inline XBRL Taxonomy Extension Labels Linkbase Document. 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document. 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document. 72 104* Cover Page Interactive Data File - the cover page of the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2024 is formatted in Inline XBRL. * F iled herewith. ** This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (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 of 1933, as amended, or the Exchange Act. + Indicates a management contract or compensatory plan. ¥ Certain exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Company agrees to furnish supplementally a copy of all omitted exhibits and schedules to the Securities and Exchange Commission upon its request. ITEM 16. FORM 10-K SUMMARY None. 73 SIGNATURES Pursu ant to the requirements of Section 13 and 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized on this 31st day of March, 2025. NEWSMAX INC. /s/ Christopher Ruddy Christopher Ruddy, Chief Executive Officer and Director Each person whose signature appears below constitutes and appoints Christopher Ruddy and Darryle Burnham , acting alone or together with the other attorney-in-fact, as his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for such person and in his or her name, place and stead, in any and all capacities, to sign any or all further amendments, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ Christopher Ruddy Chief Executive Officer and Director March 31, 2025 Christopher Ruddy (Principal Executive Officer) /s/ Darryle Burnham Chief Financial Officer March 31, 2025 Darryle Burnham (Principal Financial and Accounting Officer) /s/ Nancy G. Brinker, Director March 31, 2025 Nancy G. Brinker, /s/ Christopher N. Cox Director March 31, 2025 Christopher N. Cox /s/ R. Alexander Acosta Director March 31, 2025 R. Alexander Acosta 74 Newsmax Inc. Index to Audited Financial Statements for the Years Ended December 31, 2024 and 2023 Page Report of Independent Registered Public Accounting Fir m (BDO USA, P.C., Miami, FL, Auditor Firm ID: 243) F- 2 Consolidated Balance Sheets F- 3 Consolidated Statements of Operations and Comprehensive (Loss) Income F- 4 Consolidated Statements of Convertible and Redeemable Preferred Stock and Stockholders’ Deficit F-7 Consolidated Statements of Cash Flows F-8 Notes to Consolidated Financial Statements F-10 Report of Independent Registered Public Accounting Firm Shareholders and Board of Directors Newsmax Inc. Boca Raton, Florida Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Newsmax Inc. (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive (loss) income, convertible and redeemable preferred stock and stockholders’ deficit, and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated 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 consolidated 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. Our audits included performing procedures to assess the risks of material misstatement of the consolidated 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 consolidated 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 consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Emphasis of Matter – Ongoing Litigation As described in Note 12 to the consolidated financial statements, the Company is a defendant in a lawsuit filed during 2021 by Dominion Voting Systems, Inc. and certain of its affiliates (collectively, “Dominion”) of which the trial is set for April 28, 2025. An unfavorable outcome in this lawsuit may have material adverse effects on the Company’s continuing operations, cash flows and liquidity, and financial position. Our opinion is not modified with respect to this matter. /s/ BDO USA, P.C. We have served as the Company’s auditor since 2022. Miami, Florida March 31, 2025 F-2 NEWSMAX INC. CONSOLIDATED BALANCE SHEETS December 31, 2024 December 31, 2023 ASSETS Current assets: Cash and cash equivalents $ 24,052,887 $ 6,037,211 Investments 58,310,955 1,221,585 Accounts receivable, net 28,265,721 21,971,756 Inventories, net 1,792,697 3,834,706 Prepaid distribution 179,624 722,651 Prepaid expenses and other current assets 5,688,910 1,628,508 Total current assets 118,290,794 35,416,417 Property and equipment, net 6,225,617 8,029,457 Right of use asset, operating lease 7,191,606 10,565,899 Other asset 13,755,420 16,812,180 Security deposits 609,426 785,878 Total assets $ 146,072,863 $ 71,609,831 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities Accounts payable 14,670,846 $ 19,606,959 Accrued expenses 9,882,720 2,419,837 Accrued payroll 2,220,872 1,453,444 Accrued distribution 1,068,366 1,898,593 Deferred revenue 13,652,699 14,850,053 Lease liability, operating lease 3,894,102 3,670,598 Lease liability, finance lease 199,237 169,055 Line of credit - 500,000 Settlement liability 29,099,265 7,279,412 Warrant liability 6,499,821 - Derivative liability 41,459,418 - Total current liabilities 122,647,346 51,847,951 Long-term liabilities: Deferred revenue, net of current portion 2,835,218 3,122,044 Lease liability, operating lease, net of current portion 4,049,256 7,880,413 Lease liability finance lease, net of current portion 129,930 185,393 Settlement liability, net of current portion 25,477,941 32,158,126 Total liabilities 155,139,691 95,193,927 Commitments and contingencies (Note 11) Convertible and redeemable preferred stock, $0.001 par value; 11,034 shares authorized; and 5,575 and 5,575 shares issued and outstanding as of December 31, 2024 and December 31, 2023 128,576,901 126,018,101 Stockholders’ deficit Convertible and redeemable preferred stock, $0.001 par value; 60,000 shares authorized; and 27,612 and 0 shares issued and outstanding as of December 31, 2024 and December 31, 2023 86,742,045 - Common stock, $0.001 par value; 20,000 Class A shares authorized; 68,127,538 Class A shares issued and outstanding at December 31, 2024 and 2023, respectively; 60,000 Class B shares authorized; 0 Class B shares issued and outstanding at December 31, 2024 and 2023, respectively. (1) 10 10 Treasury stock, 27,061,584 shares at cost, respectively (14,622,222) (14,622,222) Additional paid-in capital 18,056,702 18,056,702 Accumulated other comprehensive (loss) (52,849) - Accumulated deficit (227,767,415) (153,036,687) Total stockholders’ deficit (137,643,729) (149,602,197) Total liabilities, convertible and redeemable preferred stock and stockholders’ deficit $ 146,072,863 $ 71,609,831 (1) On March 28, 2025, the Company announced a 6,765.396 for 1 stock split, effective March 31, 2025. This stock split is reflected retroactively in all periods periods presented for the common shares issued and outstanding. See Note 1. Nature of Business . The accompanying notes are an integral part of these consolidated financial statements. F-3 NEWSMAX INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME Years Ended December 31, 2024 2023 Revenues: Service revenue $ 165,006,126 $ 128,839,681 Product revenue 6,010,329 6,436,346 Total revenues 171,016,455 135,276,027 Cost of services 81,716,314 74,488,412 Cost of products sold 5,252,014 4,967,584 Gross profit 84,048,127 55,820,031 General and administrative expenses: Personnel costs 31,617,930 26,460,464 Advertising costs 16,872,315 16,981,894 Professional fees 6,714,104 5,087,614 Rent and utilities 5,978,377 5,935,762 Depreciation 3,115,635 3,164,254 Asset impairment — 23,928,359 Other corporate matters 76,940,693 7,626,122 Other 12,617,313 11,730,832 Total general and administrative expenses 153,856,367 100,915,301 Loss from operations (69,808,240) (45,095,270) Other (expense) income, net Interest and dividend income 580,502 143,760 Interest expense (91,540) (39,461) Unrealized (loss) gain on marketable securities (290,081) 46,318 Other, net (2,562,569) 3,186,037 Total other (expense) income, net (2,363,688) 3,336,654 Net loss before income taxes (72,171,928) (41,758,616) Income tax expense — 18,550 Net loss $ (72,171,928) $ (41,777,166) Other comprehensive income (loss): Unrealized (loss) gain on available for sale debt investments, net of income tax (52,849) 93,680 Comprehensive loss $ (72,224,777) $ (41,683,486) Weighted average common stock outstanding, basic and diluted 41,065,954 41,065,954 Net loss per share attributable to common stockholders, basic and diluted (1) (1.95) (1.16) F-4 (1) On March 28, 2025, the Company announced a 6,765.396 for 1 stock split, effective March 31, 2025. This stock split is reflected retroactively in all periods periods presented for the common shares issued and outstanding. Note 1. Nature of Business . The accompanying notes are an integral part of these consolidated financial statements. F-5 NEWSMAX INC. CONSOLIDATED STATEMENTS OF CONVERTIBLE AND REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT FOR THE YEARS ENDED DECEMBER 31, 2024 and 2023 Convertible and Redeemable Series A Preferred Stock Class A and Class B Common Stock (1) Convertible and Redeemable Series B Preferred Stock Treasury Stock (1) Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Deficit Shares Amount Shares Amount Shares Amount Shares Amount Balance, December 31, 2022 5,575 $ 123,466,294 41,065,954 $ 10 - $ - 27,061,584 $ (14,622,222) $ 18,056,702 $ (93,680) $ (108,707,714) $ (105,366,904) Other comprehensive loss - - - - - - - - - 93,680 - 93,680 Dividends accretion - 2,551,807 - - - - - - - - (2,551,807) (2,551,807) Net loss - - - - - - - - - - (41,777,166) (41,777,166) Balance, December 31, 2023 5,575 126,018,101 41,065,954 10 - - 27,061,584 (14,622,222) 18,056,702 - (153,036,687) (149,602,197) . Sale of preferred stock 27,612 85,003,159 85,003,159 Issuance of equity-classified warrants 1,738,886 1,738,886 Other comprehensive loss - - - - - - - - - (52,849) - (52,849) Dividends accretion - 2,558,800 - - - - - (2,558,800) (2,558,800) Net loss - - - - - - - - (72,171,928) (72,171,928) Balance, December 31, 2024 5,575 $ 128,576,901 41,065,954 $ 10 $ 27,612 $ 86,742,045 27,061,584 $ (14,622,222) $ 18,056,702 $ (52,849) $ (227,767,415) $ (137,643,729) (1) On March 28, 2025, the Company announced a 6,765.396 for 1 stock split, effective March 31, 2025. This stock split is reflected retroactively in all periods periods presented for the par value and the common shares issued and outstanding. See Note 1. Nature of Business . The accompanying notes are an integral part of these consolidated financial statements. F-6 NEWSMAX INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended December 31, 2024 2023 Cash flows from operating activities: Net loss $ (72,171,928) $ (41,777,166) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 6,172,395 3,673,715 Asset impairment - 23,928,359 Warrant liability 6,499,821 Derivative liability 2,380,393 Bad debts 259,269 2,554,615 Unrealized loss (gain) on marketable securities 290,081 (46,318) Non-cash lease expense 3,453,550 3,289,699 Changes in operating assets and liabilities: (Increase) decrease in assets: Accounts receivable (6,553,234) (5,789,539) Inventory 2,042,009 (873) Prepaid distribution 543,027 4,347,012 Prepaid expenses (4,060,402) 1,757,481 Other asset - (41,250,000) Security deposits 176,452 5,000 Increase (decrease) in liabilities: Accounts payable (5,087,528) 4,495,074 Accrued expenses 7,400,084 1,159,179 Lease liabilities (3,686,910) (3,442,868) Settlement liability 15,139,668 39,437,538 Deferred revenue (1,484,180) 3,827,588 Net cash used in operating activities (48,687,432) (3,831,504) Cash flows from investing activities: Purchase of investments (57,432,300) - Sale of investments - 6,312,221 Purchase of property and equipment (996,291) (916,994) Net cash (used in) provided by investing activities (58,428,592) 5,395,227 Cash flows from financing activities: Proceeds from issuance of convertible preferred stock 125,821,070 - Payment of line of credit (500,000) - Proceeds from line of credit - 500,000 Principal payment under finance lease obligation (189,370) (72,557) Net cash provided by financing activities 125,131,700 427,443 Net change in cash 18,015,676 1,991,166 Cash and cash equivalents – beginning 6,037,211 4,046,045 Cash and cash equivalents – ending $ 24,052,887 $ 6,037,211 Supplemental disclosures of cash flow information: Operating lease assets obtained in exchange for operating lease liabilities $ 38,955 $ 132,978 Interest paid $ 42,300 $ 24,964 Non-cash transactions: Property and equipment acquired through accounts payable: $ 151,415 $ 73,531 Non-cash financing activities: Issuance of warrants resulting in recognition of warrant liabilities $ 6,373,757 $ - Issuance of warrants in connection with the issuance of convertible stock $ 1,738,886 $ - The accompanying notes are an integral part of these consolidated financial statements. F-7 NOTE 1. NATURE OF BUSINESS Nature of Business Newsmax Inc. began as Newsmax Media, Inc., a Nevada Corporation, which was incorporated on July 15, 1998, and registered on August 20, 1998, as a foreign corporation in the State of Florida. During 2014, Newsmax Media, Inc. changed its state of domicile from Nevada to Delaware. In connection with the change, the NMX Holdings, LLC entity was dissolved. On April 14, 2024, Newsmax Media, Inc. consummated a corporate reorganization. Newsmax Inc. (the "Company") was formed as a new holding company that owns all of the outstanding shares of the operating company, Newsmax Media, Inc. The stockholders of Newsmax Media, Inc. exchanged their shares of capital stock in Newsmax Media, Inc. for the same class and number of shares in Newsmax Inc. Subsequently, Newsmax Media, Inc. changed its state of domicile from Delaware to Florida. As a result of this reorganization, Newsmax Inc. became the direct holding company and the sole shareholder of Newsmax Media, Inc. Newsmax Media, Inc.’s ownership of its subsidiaries was not affected or changed as a result of this reorganization. The Company is a multi-platform media company that provides original news and lifestyle content using a mixed-revenue model that derives income from its linear cable television and over-the-top (“OTT”) news channels, websites, proprietary database, publishing products and e-commerce products. The Company uses original news and editorial content to draw large numbers of readers to its media outlets in order to sell advertising, print and online information products. The Company’s business operations are conducted through two operating segments, Broadcast and Digital. Private Placement In June 2024, the Company issued a Private Placement Memorandum ("PPM") to potential investors, aiming to raise capital through the sale of its Series B Preferred Stock in a Private Placement. The initial offering was for up to 30,000 shares of Series B Preferred Stock at $5,000 per share for a base offering amount of $150,000,000, with the option to expand up to 45,000 shares of Series B Preferred Stock for an offering amount of $225,000,000. The PPM was distributed to accredited investors as defined under Regulation D of the Securities Act of 1933. In connection with the PPM, the Company agreed to issue a three-year warrant to Digital Offering, LLC, as placement agent for the Private Placement, exercisable for 900 shares of Series B Preferred Stock with an exercise price per share of $5,000 upon the closing of the PPM. As of December 31, 2024, the Company had raised approximately $138,000,000. The offering was closed on February 27, 2025 and raised a total of $225,000,000. Stock Split On March 28, 2025, a previously announced forward stock split of the Company's issued and outstanding shares of common stock at a ratio of 6,765.396-for-1 took effect. In accordance with ASC 260-10-55-12, the Company has adjusted the number of issued and outstanding common shares, par value, and the computations of basic and diluted earnings per share retroactively for all periods presented in the financial statements and related notes. Broadcast The broadcast segment of the Company’s business produces and licenses news, business news and lifestyle content for distribution primarily through multichannel video programming distributors (“MVPDs”) including cable television systems, direct broadcast satellite operators and telecommunication companies, primarily in the United States. The Company creates and broadcasts content and distributes such content using a hybrid distribution strategy of linear cable, free OTT channels and free ad-supported streaming television services (“FAST”) channels. The broadcast segment generates revenues from (1) linear TV channels, primarily through advertising sales, (2) OTT and FAST channels, primarily through revenue derived from third-party advertising in connection with services accessed through websites, apps and digital media players, (3) affiliate revenue earned through MDVPs broadcasting the Company’s content to their paid subscribers, and (4) subscription revenue earned via the Company’s new Newsmax+ subscription program which users can sign up to receive the Company’s content directly. Digital The digital segment generates revenues through (1) online advertising, including online display, email advertising, other online placements and print advertisements, (2) subscriptions, including our collection of specialized health and financial F-8 newsletters, Newsmax Magazine and four online membership programs, and (3) e-commerce, primarily through our subsidiaries that sell nutraceuticals and nonfiction books on political, financial and health-related topics. The Company also distributes content through its websites and social media accounts, apps, email and newsletters. The Company’s websites and apps provide live and/or on-demand streaming of network-related programming to allow video subscribers of the Company’s participating distribution partners to view Company content via the Internet. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include the accounts of Newsmax Inc. and its wholly owned subsidiaries Newsmax Media Inc, Medix Health, LLC (“Medix”), Crown Atlantic Insurance, LLC (“Crown”), Newsmax Broadcasting, LLC (“Broadcasting”), Humanix Publishing, LLC (“Humanix”), ROI Media Strategies (“ROI”) and Newsmax Radio LLC (“Radio”). All intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions made by management are used for, but not limited to, the allowance for credit losses, carrying value of other assets, and realizability of deferred income taxes. Reclassifications Certain prior period comparative amounts have been reclassified to conform to the current period presentation. The Company reclassified certain litigation expenses, and related fees, for specific proceedings that the Company has determined are infrequent and unusual in terms of their magnitude, from Professional Fees to Other Corporate Matters within general and administrative expenses in the Consolidated Statements of Operations and Comprehensive (Loss) Income for the year ended December 31, 2023, to conform to current year presentation. Such reclassifications did not affect total general and administrative expenses, loss from operations or net loss. Cash and Cash Equivalents The Company considers all investments, which includes money market funds, short-term treasuries and certificate of deposits, purchased with original maturities of three (3) months or less to be cash and cash equivalents. From time to time, the cash balance in the Company's bank accounts may exceed amounts covered by the insurance provided by the U.S. Federal Deposit Insurance Corporation ("FDIC"). The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents." Investments Marketable Securities The Company accounts for its marketable securities in accordance with ASC Topic 321, Investments - Equity Securities. ASC Topic 321 requires companies to measure equity investments at fair value, with changes in fair value recognized in net income (loss). The Company’s investments in marketable securities consist of equity securities with readily determinable fair values. The cost of securities sold is based on the specific identification method, and interest and dividends on securities are included in non-operating income (expense). The fair market value of marketable equity securities is determined based on quoted market prices in active markets. See Note 3 - Fair Value Measurements, for additional information regarding the valuation of marketable equity securities. As of December 31, 2024 and 2023, zero and $313,285, respectively, of the Company’s marketable securities are held in a brokerage firm owned by a shareholder of the Company. F-9 Available-for-Sale Debt Instruments The Company classifies investments in fixed income securities as available-for-sale debt investments. The Company’s available-for-sale debt investments primarily consist of certificates of deposits and treasury securities. These available-for-sale debt investments are held in the custody of a major financial institution. A specific identification method is used to determine the cost basis of available-for-sale debt investments sold. These investments are recorded in the consolidated balance sheets at fair value. Unrealized gains and losses on these investments are included within other comprehensive income (loss), net of tax. The Company classifies investments as current based on the nature of the investments and their availability for use in current operations. The Company regularly reviews investment securities for impairment. For debt securities, any impairment relating to credit losses is recorded through an allowance for credit losses. A change in the allowance for credit losses is recorded into earnings in the period of the change. Revenue Recognition In accordance with Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers,” the Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the Company expects to be entitled in exchange for those goods are services. The Company records taxes collected from customers and remitted to governmental authorities on a net basis. Service Revenue Service revenue is primarily derived from the Company’s original news and lifestyle content, using a mixed-revenue multi-platform model that derives income from digital, linear and over-the-top (“OTT”) news channels, websites, proprietary database, publishing and video subscription services. The Company uses original news, syndicated services and editorial content to draw consumers to its media outlets in order to sell advertising, license fees and video, print and online information services. The Company earns revenue through contractual allocations of fees based on impressions received or subscriber counts. The Company’s service revenue is comprised of the following for the years ended December 31, 2024 2023 Advertising revenue $ 109,128,471 $ 107,322,024 Subscription revenue 26,907,098 18,080,467 Affiliate fee revenue 26,661,701 2,410,039 Other 2,308,856 1,027,151 Total $ 165,006,126 $ 128,839,681 Advertising Revenue Advertising revenue is derived from the sale of advertising on the Company’s cable television, email database, in the Company’s magazine and related publications, or on the Company’s website. Revenue related to the sale of advertising in the broadcast segment is recognized at the time of broadcast. Revenue related to the Company's digital segment is recognized when display or other digital advertisements record impressions on the various digital media. Revenue related the Company's magazine and related publications is recognized when the ad is displayed in the printed document. Each advertisement insertion order is determined to be a distinct performance obligation that is satisfied at the point in time when such advertisements are published/aired. The Company records revenue from contracts that are entered into between the Company and its customers, primarily advertising agencies and direct advertisers, at the amount charged for the services. Advertising contracts, which are generally short-term, are billed monthly for the services provided during the month, with payments due shortly thereafter. Cash payments received prior to services rendered result in deferred revenue, which is then recognized as revenue when the advertising time or space is actually provided. The Company enters into agreements with over-the-top distribution platforms to distribute the Company’s news channel. Pursuant to the Company’s distribution agreements, advertising revenues are earned based on an allocation of the fee determined by the number of impressions received. These contracts represent a single performance obligation recognized over time under the series guidance. Revenue is recognized upon delivery of the content over the course of an over-the-top F-10 distribution agreement term based on time elapsed, as this best depicts the simultaneous consumption and delivery of the services. The Company bills OTT customers monthly over the life of the contract. The Company has an unconditional right to receive payment of the amount billed generally within 30 days from the invoice date. The invoiced amount to be received is recorded in accounts receivable on the balance sheets. Subscription Revenue The Company sells magazines to consumers through subscriptions. Each subscription is determined to be a distinct performance obligation that is satisfied over the term of the subscription, normally one (1) to five (5) years. Subscriptions received in advance of the publication are recorded as deferred revenue and recognized as income on a straight line basis over the term, as this best represents the transfer of control of the services to the consumer. During 2023, the Company launched Newsmax+ which is a subscription service that provides the Company’s content directly to consumers either on a monthly or annual basis. Monthly subscriptions are recognized as income in the month it was earned. Annual subscriptions are recorded as deferred revenue and recognized as income over the term of the contract each month. The Company’s deferred subscription revenue balances are shown below along with the corresponding revenue recognized from the prior period: 2024 2023 Deferred subscription revenue, current portion $ 13,356,032 $ 14,558,386 Deferred subscription revenue, net of current portion 2,835,218 3,122,044 Total deferred subscription revenue $ 16,191,250 $ 17,680,430 Revenue recognized in the period from: Amounts included in deferred subscription revenue at the beginning of the period $ 14,558,386 $ 10,927,489 Affiliate Fee Revenue The Company generates affiliate fee revenue from agreements with MVPDs for cable networks. Affiliate fee revenue is recognized over time as we continuously make the programming available to the customer over the term of the agreement using the output method. For contracts with affiliate fees based on the number of the affiliate’s subscribers, revenues are recognized based on the contractual rate multiplied by the estimated number of subscribers each period. Consideration payable to a customer is treated as a cost of sale when distinct. If a distinct service is not received, such costs are recorded as a reduction to revenues. Affiliate contracts are generally multi-year contracts billed monthly with payments due shortly thereafter. Other Other primarily includes revenue generated from the Company’s content licensing agreements. Revenue from content licensing agreements is recognized when the content is made available under the content licensing agreements. Deferred revenue related to licensing agreements amounts to $291,667 and $291,667 as of December 31, 2024 and 2023 respectively. Product Revenue Product sales are derived from the sales of books, audio and video, dietary supplements, and other items advertised on the Company’s website. Supplement, books, media and other product sales are recognized at the point in time control transfers to the customer, which is when the product is shipped. Allowances are considered for estimated returns and refunds at the point in time when revenue is recognized. As of December 31, 2024 and 2023, the refund liability was $424,278 and $701,025, respectively and is classified as a reduction in accounts receivable. Product revenue is comprised of the following for the years ended December 31: 2024 2023 Supplement sales $ 4,810,294 $ 5,799,859 Books, media and other product sales 1,646,924 2,657,571 F-11 Product returns and allowances (446,889) (2,021,084) Total $ 6,010,329 $ 6,436,346 Practical Expedient As a practical expedient, the Company recognizes any incremental costs of obtaining contracts as expense when the amortization period is considered to be a year or less. As a practical expedient, the Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. Shipping and Handling Costs Amounts billed to third-party customers for shipping and handling are included as a component of revenue. Shipping and handling costs incurred are included as a component of cost of products sold. Shipping and handling charges recorded as revenue amounted to $327,085 and $360,084 for the years ended December 31, 2024 and 2023, respectively. Cost of Services Cost of services consists primarily of compensation-related expenses and costs incurred for the publishing of editorial, promotional, and news content across all platforms, as well as amounts due to third party websites and platforms to fulfil customers’ advertising campaigns. Web hosting and advertising serving platform costs are also included in cost of services. Cost of Products Sold Cost of product sold consists primarily of cost of inventory sold, fulfillment costs and compensation. General and Administrative expenses General and administrative expense consists of compensation-related expenses for corporate employees. Also, it consists of expense for advertising, facilities, professional services fees, insurance costs, and other general overhead costs. Accounts Receivable and Allowance for Credit Losses Accounts receivable is presented net of an allowance for credit losses of $2,308,612 and $3,607,933 at December 31, 2024 and 2023, respectively. The Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses and doubtful accounts. The Company’s allowance for credit losses is estimated based on historical loss rates, current conditions, reasonable economic forecasts that affect collectability, and known credit issues with specific customers. December 31, 2024 2023 Beginning Balance $ 3,607,933 $ 1,042,468 Provision (100,584) 2,608,156 Accounts written off (1,198,737) (42,691) Total $ 2,308,612 $ 3,607,933 Inventory Inventory consists of promotional items, books and supplements and is stated at the lower of cost (first-in, first-out basis) or net realizable value. The Company also reduces the carrying value of inventories for items identified as excess, obsolete, or slow-moving based on customer demand and other economic factors. Impairment of Long-Lived Assets The Company continually evaluates factors, events and circumstances that include, but are not limited to, historical and projected operating performance of the Company, specific industry trends and general economic conditions to assess whether the remaining estimated useful lives of long-lived assets may warrant revision or that the remaining balance of long-lived assets may not be recoverable. When such factors, events or circumstances indicate that long-lived assets should F-12 be evaluated for possible impairment, the Company uses an estimate of undiscounted cash flows over the remaining lives of the long-lived assets in measuring their recoverability. The Company measures asset impairment loss as the amount by which the carrying amount exceeds the fair market value of the asset. Leases At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present. Operating lease liabilities are recorded based on the present value of lease payments over the expected lease term, discounted using the Company's incremental borrowing rate, and adjusted for lease incentives. The interest rate implicit in lease contracts is typically not readily determinable and the Company currently does not have any outstanding borrowings. As such, the Company estimates its incremental borrowing rate based on the rate it would incur to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Options to extend or terminate a lease are included in the calculation of the lease term to the extent that the option is reasonably certain of exercise. The Company elected the package of practical expedients which permits the Company to not reassess under the new standard the prior conclusions about lease identification, lease classification, or initial direct costs The Company has made a policy election to exclude short-term leases, those with an original term of less than twelve months, from recognition and measurement under ASC 842. As such, the Company has not recognized an ROU asset or lease liability for these leases. The Company’s operating lease portfolio primarily includes real estate and office equipment. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. The Company computes depreciation using the straight-line method over the estimated economic useful lives of the assets. Leasehold improvements are depreciated over the shorter of their estimated economic useful lives or the remaining term of the lease. Other Assets During 2023, the Company capitalized a separate payment obligation of $41.3 million associated with a commercial counterparty to resolve various claims. The Company accounted for the payment as a reduction to the transaction price in accordance with the guidance in ASC 606-10-32-25 and 32-26 and is amortizing the asset as a contra-revenue item. In connection with the signing of this agreement, the Company identified indicators that the carrying value of these upfront costs were not fully recoverable based on estimated cash flows related to the customer relationship. As a result, the Company’s broadcast segment recognized impairment of the upfront cost during 2024 and 2023 of zero and $23.9 million , respectably, in the accompanying consolidated statements of operations and comprehensive (loss) income. Amortization of the capitalized costs of the asset is recorded on a straight-line basis over the life of the agreement which ends June 30, 2029 as contra revenue in the accompanying consolidated statements of operations and comprehensive (loss) income. Amortization expense amounted to $3,056,760 and $509,460 during the years ended December 31, 2024 and 2023, respectively. The Company evaluates these other assets for impairment each reporting period based upon its estimate of recoverability of the assets. Recoverability of the assets is based upon estimated cash flows including reductions for direct and allocable costs attributable to the underlying business arrangement. Fair Value Measurements The Company carries certain assets and/or liabilities at fair value in the consolidated balance sheets. The Company applies accounting guidance that defines fair value as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. Fair value measurements under the accounting guidance are classified based on the following fair value hierarchy: Level 1: Quoted market prices in active markets for identical assets or liabilities. Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data. We use inputs such as actual trade data, benchmark yields, and other similar data, which are obtained from quoted market F-13 prices, independent pricing vendors, or other sources, to determine the ultimate fair value of assets or liabilities. Level 3: Unobservable inputs that are not corroborated by market data. The fair value of a financial instrument is the amount for which the instrument could be exchanged in a current transaction between willing parties. The level in the fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest-level input that is significant to the fair value measurement in its entirety. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, accrued payroll and accrued distribution approximate fair value due to their short-term nature and observable inputs. Income Taxes Income taxes are provided for the tax effects of transactions reported in the consolidated financial statements and consist of taxes currently due plus deferred taxes related primarily to operating losses carried forward as well as differences between the financial reporting and tax reporting bases of assets and liabilities. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which also are recognized for operating losses that are available to offset future federal income taxes. The Company files income tax returns in the U.S. federal jurisdiction, and various state jurisdictions. The recording of a deferred tax asset assumes the realization of such asset in the future. Otherwise, a valuation allowance is recorded to reduce the asset to its estimated net realizable value. If management determines that the Company may not be able to realize all or part of a deferred tax asset in the future, a valuation allowance for the deferred tax asset is charged to income tax expense in the period the determination is made. Management considers all positive and negative evidence including attribute carrybacks, reversing taxable temporary differences, future pretax income, and ongoing prudent and feasible tax planning strategies in assessing the estimated net realizable value of tax assets and the corresponding need for any related valuation allowances. ASC 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. At December 31, 2024 and 2023, a full valuation allowance was required. In accordance with the provisions of ASC 740, a two-step approach is utilized to recognize and measure uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon tax authority examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon the ultimate settlement. At December 31, 2024 and 2023, the Company has no liabilities for uncertain tax positions. The Company continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. The open tax years subject to U.S. federal tax examinations with respect to the Company’s operations are 2019, 2021, 2022 and 2023. Advertising Costs Amounts incurred for advertising costs with third parties are expensed as incurred. Total advertising costs expensed for the years ended December 31, 2024 and 2023 were $16,872,315 and $16,981,894, respectively. Mezzanine Equity The Company has issued Series A convertible redeemable preferred stock instruments that the Company has determined are financial instruments with both equity and debt characteristics and are classified as mezzanine equity in the consolidated financial statements. The Company reassesses whether the instrument is currently redeemable or probable to become redeemable in the future as of each reporting date, in which, if the instrument meets either criteria, the Company will recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the instrument to equal the redemption value at the end of each reporting period. To assess classification, the Company reviews all features of the instruments, including mandatory redemption features and conversion features that may be substantive. All financial instruments that are classified as mezzanine equity are evaluated for embedded derivative features by evaluating each feature against the nature of the host instrument (e.g., more equity-like or debt-like). The Company has evaluated the Series A convertible redeemable preferred stock and determined that its nature is that of an equity host and no embedded derivatives exist related to the Series A convertible redeemable preferred stock that would require bifurcation on our consolidated balance sheets. Embedded Derivatives F-14 Embedded derivatives that are required to be bifurcated from the underlying host instrument are accounted for and valued as a separate financial instrument. These embedded derivatives are bifurcated, accounted for at their estimated fair value, which is based on certain estimates and assumptions, and presented separately on the consolidated statements of financial position. Changes in fair value of the embedded derivatives related to the Series B convertible redeemable preferred stock are recognized as a non-cash component of other expense on our consolidated statements of operations and comprehensive (loss) income. The fair value for embedded derivatives are measured on a recurring basis using Level 3 inputs. Warrants The Company evaluates warrants under ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity. The Company assesses whether the warrant is a freestanding financial instruments and whether it meets the criteria to be classified in stockholders’ equity, or classified as a liability under ASC 480, Distinguishing Liabilities from Equity. Warrant liabilities are categorized within Level 3 of the fair value hierarchy and are remeasured at each financial reporting date with any changes in fair value being recognized as non-cash gains or losses in change in fair value of warrant liabilities in the consolidated statements of operations and comprehensive (loss) income. Net Loss Per Share Basic and diluted loss per share is computed as net loss available to common stockholders divided by the weighted average number of shares outstanding for the period. For the years ended December 31, 2024 and 2023, all dilutive securities have been excluded as their inclusion would have had an antidilutive effect on loss per share. Potentially dilutive common shares include warrants, convertible preferred stock, and stock options. CARES Act Under the provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) signed into law on March 27, 2020 and the subsequent extension of the CARES Act, businesses were eligible for various credits to provide financial relief such as the Employee Retention Credit (ERC), Economic Impact Payments (EIPs), Paid Sick and Family Leave Credits and Employment Tax Deferral credits. In 2023, the Company filed and collected $3,803,683 in tax credits under the CARES Act 2023 which is recorded within other, net on the consolidated statements of operations and comprehensive (loss) income. Recently Adopted Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this ASU require public entities to disclose significant segment expenses and other segment items and to provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. The guidance is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments in this ASU should be applied retrospectively to all periods presented. The adoption of this standard for the year ended December 31, 2024 did not have a material impact on the Company's consolidated financial results, but resulted in enhanced disclosures as included in Note 9. Segment Information. Recent Accounting Pronouncements Not Yet Adopted In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”) to enhance transparency and decision usefulness of income tax disclosures. ASU 2023-09 requires greater standardization and disaggregation of categories within an entity’s tax rate reconciliation disclosure, as well as disclosure of income taxes paid by jurisdiction, among other requirements. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with early adoption permitted. ASU 2023-09 is effective on a prospective basis, with retrospective application permitted. The Company is currently evaluating the effects of this ASU on its income tax disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires additional disclosures of the nature of expenses included in the income statement. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The amendments in this update are effective for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027 on a prospective basis, with early F-15 adoption permitted. The Company is currently evaluating the provisions of the amendments and the impact on its disclosures. NOTE 3. FAIR VALUE MEASUREMENTS The Company accounts for its investments at fair value and classifies these assets within the fair value hierarchy (Level 1, Level 2, or Level 3). Assets and liabilities subject to fair value measurements are as follows: As of December 31, 2024 Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents U.S. Treasury securities $ — $ 4,959,350 $ - $ 4,959,350 Money market $ 12,615,549 $ 12,615,549 Certificates of deposit $ — $ 2,250,628 $ - $ 2,250,628 Total cash and cash equivalents $ 12,615,549 $ 7,209,978 $ — $ 19,825,527 Investments Equity securities $ 7,553,725 $ - $ - $ 7,553,725 U.S. Treasury securities $ 9,923,100 $ 36,580,580 $ - $ 46,503,680 Certificates of deposit $ — $ 4,253,550 $ - $ 4,253,550 Total investments $ 17,476,825 $ 40,834,130 $ — $ 58,310,955 Total assets $ 30,092,374 $ 48,044,108 $ — $ 78,136,482 Liabilities Warrant liability $ — $ - $ 6,499,821 $ 6,499,821 Derivative liability $ — $ - $ 41,459,418 $ 41,459,418 Total liabilities $ — $ — $ 47,959,239 $ 47,959,239 As of December 31, 2023 Level 1 Level 2 Level 3 Total Assets Equity securities $ 1,221,585 $ - $ - $ 1,221,585 Fixed income investments - - - - Total assets $ 1,221,585 $ - $ - $ 1,221,585 The Company’s Level 2 investments are valued using third-party pricing sources. The pricing services utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. U.S. treasury notes and bills are considered Level 2 investments when they were issued before the most recent issue and were still outstanding at measurement day (off-the-run). There were no transfers in or out of Level 3 investments for the year ended December 31, 2024. F-16 The valuation methodologies and significant unobservable inputs for Level 3 investments were as follows: As of December 31, 2024 Fair Value Valuation Methodology Significant Unobservable Inputs Range Weighted Average Warrant liability $6,499,821 Modified Black Scholes Expected volatility 65% 65% Risk-free interest rate 4.17% - 4.28% 4.18% Expected term 2.5 - 4.8 years 2.7 years Derivative liability $41,459,418 Scenario-based discounted cash flow Timing of conversion 0.18 - 4.42 years 0.70 years Discount rate 20% 20% Changes in Level 3 liabilities measured at fair value on a recurring basis for the year ended December 31, 2024 were as follows (in thousands): Year Ended December 31, 2024 Warrant Liability Derivative Liability Opening Balance $ — $ — Total losses for the period Included in earnings (or changes in net assets) 126,064 2,380,799 Purchases, issues, sales, and settlements Issuances 6,373,757 39,078,619 Closing Balance $ 6,499,821 $ 41,459,418 NOTE 4. PROPERTY AND EQUIPMENT Major classes of property and equipment at December 31 are as follows: Estimated Useful Lives 2024 2023 Furniture and fixtures 7 years $ 2,022,586 $ 1,979,368 Computer, office and production equipment 3-8 years 12,145,337 10,968,569 Leasehold improvements Lesser of Useful Life or Term of Lease 10,178,386 10,178,386 Fixed assets not yet placed in service N/A — 14,417 24,346,310 23,140,740 Less: Accumulated depreciation (18,120,692) (15,111,283) $ 6,225,617 $ 8,029,457 Depreciation of property and equipment amounted to $3,115,635 and $3,164,254 for the years ended December 31, 2024 and 2023, respectively. Included in property and equipment are finance lease assets of $429,133 and $391,524 as of December 31, 2024 and 2023, respectively. F-17 NOTE 5. INVESTMENTS Investments on the consolidated balance sheets consisted of the following at December 31: December 31, 2024 2023 Equity securities $ 7,553,725 $ 1,221,585 Available-for-sale securities $ 50,757,230 $ — Total investments $ 58,310,955 $ 1,221,585 Available-for-Sale Securities The Company did not have available-for-sale securities at December 31, 2023. The major classes of the Company's available-for-sale investment securities and their respective fair values at December 31, 2024, were as follows: Amortized Cost Gross Unrealized gain Gross Unrealized Loss Fair Value Certificate of deposit $ 4,250,000 $ 3,550 $ — $ 4,253,550 U.S. Treasury securities $ 46,560,079 $ — $ (56,399) $ 46,503,680 Total $ 50,810,079 $ 3,550 $ (56,399) $ 50,757,230 The maturity distribution based on the contractual terms of the Company's available-for-sale investment securities at December 31, 2024 was as follows: Amortized Cost Fair Value Due within 1 year $ 15,787,881 $ 15,813,685 Due after 1 year through 5 years $ 35,022,198 $ 34,943,545 Total $ 50,810,079 $ 50,757,230 NOTE 6. LEASES The Company determines if an arrangement is a lease at inception. Operating lease assets and liabilities are included in the Company’s consolidated balance sheets within the right of use asset, net, and operating lease liability, current portion and net of current portion. Finance lease assets are included in Property and equipment, net and Finance lease liability, current portion and net of current portion. The Company generally uses the base, non-cancelable, lease term when determining the lease assets and liabilities. Below is a summary of the weighted-average discount rate and weighted-average remaining lease term for the Company’s leases: Other supplemental information: 2024 2023 Operating leases: Weighted average of remaining lease term 2 3 Weighted average discount rate 4.33 % 4.33 % Finance leases: Weighted average of remaining lease term 2 2 Weighted average discount rate 10.96 % 12.09 % Operating lease expense is recognized on a straight-line basis over the lease term within operating expenses in the Company’s consolidated statements of operations and comprehensive (loss) income. Finance lease expense is recognized over the lease term within interest expense and amortization in the Company’s consolidated statements of operations and comprehensive (loss) income. The Company’s total operating and finance lease expense all relate to lease costs and amounted to $5,080,185 and $5,071,357 for the years ended December 31, 2024 and December 31, 2023, respectively. F-18 Future minimum lease payments at December 31, 2024 were as follows: Operating Finance Total 2025 $ 4,126,953 $ 224,233 $ 4,351,187 2026 3,202,568 130,605 3,333,172 2027 607,210 4,999 612,209 2028 290,152 - 290,152 2029 71,802 - 71,802 Thereafter - - - Total lease payments $ 8,298,685 $ 359,837 $ 8,658,522 Less: imputed interest (355,327) (30,670) (385,997) Present value of lease liability $ 7,943,358 $ 329,167 $ 8,272,525 NOTE 7. LINE OF CREDIT The Company has a $9,000,000 bank line of credit. The line bears interest at the greater of (i) one percent (1.000%) or (ii) the Prime Rate minus seventy five hundredths percent (-0.750%). The line of credit expired in October 2024 which the Company did not renew as of December 31, 2024. At December 31, 2023 the Company’s line of credit fair value approximates carrying value due to the variable market-based interest rate. NOTE 8. INCOME TAXES The components of income tax expense related to its operations are as follows at December 31: 2024 2023 Current income tax: Federal $ - $ - State - 18,550 Deferred income tax: Federal - - State - - Total income tax expense $ - $ 18,550 The Company’s effective income tax rate differs from the statutory federal income tax rate of 21%, for the years ending December 31, as follows: 2024 2023 U.S. federal income tax rate 21.00 % 21.00 % State and local taxes 6.85 5.77 Rate changes 0.10 (0.22) Permanent adjustments (0.97) (0.34) Deferred adjustments (0.06) 0.48 Return to provision (0.15) - Valuation allowance (26.76) (26.73) Effective tax rate — % (0.04) % F-19 The components of deferred income tax assets and liabilities that have been presented in the Company’s consolidated financial statements are as follows at December 31: 2024 2023 Deferred tax assets: Inventory $ 211,426 $ 319,369 Charitable contribution carryover 95,182 77,138 Net operating loss carryover 41,404,850 28,779,924 Lease liabilities 2,215,587 3,186,883 Accrued vacation 216,330 205,073 Capital loss carryforward - 34,337 Intangible assets 201,044 32,451 Accrued expenses 1,486,385 439,487 Retention credit 43,490 43,490 Returns and allowances 1,219,183 1,151,442 Settlement liability 15,445,497 10,880,678 Deferred revenue 139,669 - Total deferred tax assets $ 62,678,643 $ 45,150,272 Deferred tax liabilities: Unrealized gain (loss) on marketable securities $ 12,887 $ (82,045) Right of use assets (2,034,573) (2,915,094) Property and equipment (723,793) (1,013,409) Other asset (3,891,538) (4,638,422) Other - (1,966) Total deferred tax liabilities (6,637,017) (8,650,936) Valuation allowance (56,041,630) (36,499,336) Net deferred tax assets $ - $ - At December 31, 2024 and 2023, the Company had $156,650,801 and $111,909,394 respectively, in federal net operating loss (“NOL”) carryforwards which $20,800,517 will expire from 2031 to 2037 and $135,850,284 will carry foward indefinitely and $156,078,701 and $103,707,626 respectively, in state net operating loss (“NOL”) carryforwards, which expire starting in the year 2031. In 2006, the Company had a more than 50% ownership change and, therefore, is subject to Internal Revenue Code (“IRC”) Section 382 NOL limitation. IRC Section 382 limits the Company’s utilization of its NOL to an annual amount after a more than 50% ownership change. The Company anticipates that all NOLs subject to the IRC Section 382 limitations will be available to be utilized in future years. The valuation allowance increased by $19,542,294 for the year ended December 31, 2024. This change was primarily driven by increases in net operating loss carryovers, settlement liabilities, and other assets. The valuation allowance increased by $11,136,567 for the year ended December 31, 2023. This change was primarily driven by increases in net operating loss carryovers, settlement liabilities, and other assets. ASC 740 requires a valuation allowance to reduce the deferred tax assets reported if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. At December 31, 2024 and 2023, a full valuation allowance was required. NOTE 9. SEGMENT INFORMATION The Company has two operating segments: (1) Broadcasting and (2) Digital, which also qualify as reportable segments. In accordance with ASC 280, “Segment Reporting,” the operating segments reflect how the chief operating decision maker, which the Company defines as the chief executive officer, assesses the performance of each operating segment and F-20 determines the appropriate allocations of resources to each segment. We continually review our operating segment classifications to align with operational changes in our business and may make changes as necessary. The Company evaluates performance based upon several factors, of which the primary financial measure is Segment Adjusted EBITDA. Due to the integrated nature of these operating segments, estimates and judgements are made in allocating certain assets, revenues and expenses. Segment Adjusted EBITDA is defined as revenues less cost of revenues and general and administrative expenses and does not include depreciation, interest, net, asset impairment, unrealized gain (loss) on marketable securities, other corporate matters, other, net and income tax expense. Other corporate matters represent certain litigation expenses, and related fees, for specific proceedings that the Company has determined are infrequent and unusual in terms of their magnitude. Management believes that Segment Adjusted EBITDA is an appropriate measure for evaluating the operating performance of the Company’s business segments because it is the primary measure used by the Company’s chief operating decision maker to evaluate the performance of and allocate resources to the Company’s business. We do not present asset information for our segments as this information is not used to allocate resources. The following tables set forth the Company’s Revenues and Segment Adjusted EBITDA for fiscal 2024 and 2023: 2024 2023 Revenues Broadcasting $ 130,708,405 $ 92,680,683 Digital 40,308,050 42,595,344 Total revenues $ 171,016,456 $ 135,276,027 Segment expenses and operating performance Broadcasting Cost of sales 65,956,021 57,552,788 Adjusted general and administrative expenses 45,026,281 42,850,677 Broadcasting adjusted EBITDA 19,726,104 (7,722,782) Digital Cost of sales 21,012,307 21,903,208 Adjusted general and administrative expenses 28,773,758 23,345,889 Digital adjusted EBITDA (9,478,015) (2,653,753) Total reportable adjusted EBITDA 10,248,088 (10,376,535) Corporate and unallocated Depreciation (3,115,635) (3,164,254) Interest, net 488,962 104,299 Asset impairment - (23,928,359) Unrealized gain (loss) on marketable securities (290,081) 46,318 Other corporate matters (76,940,693) (7,626,122) Other, net (2,562,569) 3,186,037 Loss before income tax expense (72,171,928) (41,758,616) Income tax expense - 18,550 Net loss $ (72,171,928) $ (41,777,166) Revenues by Segment by Component 2024 2023 Broadcast Advertising $ 89,379,946 $ 88,343,596 Subscription 12,358,641 901,215 Affiliate fee 26,661,701 2,410,039 F-21 Other 2,308,117 1,025,833 Total Broadcast revenues 130,708,405 92,680,683 Digital Advertising 19,748,525 18,978,428 Subscription 14,548,457 17,179,252 Product sales 6,010,329 6,436,346 Other 739 1,318 Total Digital revenues 40,308,050 42,595,344 Total revenues $ 171,016,455 $ 135,276,027 NOTE 10. CONCENTRATIONS OF CREDIT RISKS Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash, short-term investments available-for-sale and accounts receivable. Management believes the financial risks associated with these financial instruments are minimal. The Company places its cash, and its short-term investments with high credit quality financial institutions. The Company maintains its cash in bank deposit accounts that, at times, may exceed federally insured limits. The Company has not experienced any losses due to this policy. The Company's short-term investments are generally deemed to be low risk; however, the longer the duration of a security, the more susceptible it is to changes in market interest rates and bond yields. As the balance of the Company's short-term investments has grown, the market risk related to those investments has grown as well. Concentrations of credit risk with respect to accounts receivable are limited because a large number of geographically diverse customers make up the Company’s customer base, thus spreading the trade credit risk. The Company controls credit risk through credit approvals, credit limits and monitoring procedures. The Company performs credit evaluations of its commercial customers but generally does not require collateral to support accounts receivable. No single customer accounted for over 10% of the Company’s consolidated net revenues during either of the years ended December 31, 2024 or 2023. No single customer accounted for over 10% of the Company’s consolidated accounts receivable as of December 31, 2024 or 2023. NOTE 11. COMMITMENTS AND CONTINGENCIES The Company has commitments under certain firm contractual arrangements (“firm commitments”) to make future payments. These firm commitments secure the future rights to various assets and services to be used in the normal course of operations. The following table summarizes the Company’s material firm commitments for contracts that run through 2027 as of December 31, 2024: Payments Due by Period Total 2025 2026 2027 Distribution agreements $ 11,002,508 $ 11,002,508 $ - $ - Other commitments 12,031,250 7,234,167 3,282,500 1,514,583 Total commitments and contractual obligations $ 23,033,758 $ 18,236,675 $ 3,282,500 $ 1,514,583 Distribution Agreements The Company has entered into several Affiliation/Distribution Agreements with the MVPDs. These agreements typically have a five-year term beginning as early as December 2014 and ending as late as May 2025. The Company is required to make payments under such agreements which have payment terms that are generally over a three-to-four-year period and as such will shift between accrued distribution fees or prepaid distribution fees. Other Commitments The Company has entered into several other contractual commitments over the next three years ending in December 2027 primarily related to talent costs and other service agreements. F-22 NOTE 12. LEGAL Legal Matters From time to time, the Company may be involved in various claims, lawsuits, and disputes with third parties, actions involving allegations of discrimination or breach of contract incidental to the ordinary operations of the business. In the opinion of management, the amount of ultimate liability with respect to these actions will not have a material adverse impact on the Company’s consolidated financial position or results of consolidated operations or consolidated cash flows. The Company accrues for loss contingencies that are probable and reasonably estimable. The Company generally does not accrue for legal costs expected to be incurred with a loss contingency until those services are provided. Defamation and Disparagement Claims From time to time, the Company is subject to lawsuits alleging defamation or disparagement. These include lawsuits filed by Smartmatic USA Corp. and certain of its affiliates (collectively, “Smartmatic”) and Dominion Voting Systems, Inc. and certain of its affiliates (collectively, “Dominion”) filed during 2021. The Smartmatic complaint sought an unspecified amount of damages while the Dominion complaint is seeking $1.6 billion in damages. On September 26, 2024, the Company entered into a settlement agreement with Smartmatic pursuant to which the parties agreed to resolve the lawsuits among them. The Company agreed to pay a settlement of approximately $40 million payable over time and granted a five year warrant to purchase 2,000 shares of Series B preferred stock at an exercise price of $5,000 per share. Refer to Note 15. Equity for details of the warrant. The settlement expense, inclusive of the warrant, is included in other corporate matters in the Consolidated Statements of Operations and Comprehensive (Loss) Income for the year ended December 31, 2024. The $40 million payable over time is recorded within settlement liability on the Consolidated Balance Sheet. As of December 31, 2024 the outstanding balance of the settlement is $20 million. The Company continues to believe the Dominion and other pending lawsuits are without merit and intends to defend against them vigorously. Discovery in the Dominion case, including depositions and expert discovery, remains ongoing, and summary judgement and other key motions will follow. At this time, a trial in the Dominion lawsuit is not expected to commence until April 28, 2025. The Company is unable to predict the final outcome of this matter and cannot reasonably estimate the amount of liability, if any. To date, the Company has not reserved any amounts for pending or future claims. There can be no assurance that the ultimate resolution of this pending matter will not have a material adverse effect on the Company's business, financial condition, results of operations or cash flows. In 2023, the Company entered into a settlement agreement with a commercial counterparty for $41.3 million. As of December 31, 2024, and pursuant to the payment schedule associated with this settlement agreement, the Company has a total of approximately $34.6 million remaining to be paid over time. The fair value of the settlement agreement as of December 31, 2024 and 2023 was $27.7 million and $30.2 million, respectively, which assumes a discount rate of 9.75% and making quarterly payments for 66 and 54 months, respectively. The fair value measurement is disclosed for information purposes and is not reflected in the carrying amount on the consolidated balance sheet. The table below represents the estimated timing of payments over the term of the agreements. As of December 31, 2024 Payments Due by Period Total 2025 2026 2027 2028 2029 Settlement agreements $ 54,577,206 $ 29,099,265 $ 7,279,412 $ 7,279,412 $ 7,279,412 $ 3,639,706 NOTE 13. EMPLOYEE BENEFIT PLANS The Company maintains a 401(k) Salary Savings Plan (the “Plan”) covering those employees who meet eligibility requirements set forth in the Plan. The matching contribution is at the discretion of the Company’s Board of Directors. The Company’s policy is to match 100% of the first 1% of employee contributions and 50% on the next 2 to 6% of employee contributions. Total expense for the Plan for the years ended December 31, 2024 and 2023 amounted to $1,240,644 and $892,005, respectively. NOTE 14. CONVERTIBLE AND REDEEMABLE PREFERRED STOCK F-23 Convertible and Redeemable Preferred Stock Convertible and Redeemable Preferred Stock as of December 31, 2024 and 2023 (41,034 total shares authorized and all classes are $0.001 par value per share) is as follows. The conversion prices and conversion ratios presented in this footnote have not been adjusted for the stock split disclosed in Note 1. Nature of Business and Note 17. Subsequent Events : Series Shares Authorized Shares Issued and Outstanding Per Unit Issue Price December 31, 2024 Conversion Price Liquidation Preference Carrying Amount Series A 3,965 611 $ 22,500 $ 22,500 $ 13,747,500 $ 14,726,570 Series A (with redemption rights) 35 35 $ 22,500 $ 22,500 787,500 1,296,850 Series A-1 2,445 1,222 $ 20,451 $ 20,451 25,000,000 32,147,260 Series A-2 3,176 2,647 $ 18,891 $ 18,891 50,000,000 50,000,000 Series A-3 1,413 1,060 $ 23,619 $ 23,619 25,036,140 30,406,221 Series B 30,000 27,612 $ 5,000 $ 50,741 $ 138,060,000 $ 86,742,045 41,034 33,187 252,631,140 215,318,946 The Company’s Series A convertible preferred stock is classified as mezzanine equity and Series B convertible preferred stock is classified as permanent equity in our consolidated financial statements. Voting Rights Each holder of Preferred A Shares has full voting rights and powers equal to the voting rights and powers of the holders of common stock on an as converted basis. The holders of Series A-1, A-2 and A-3 preferred stock also have the right to designate members to the Company’s board of directors, demand registration rights and limited approval rights. The holders of shares of Series B Preferred Stock do not have voting rights. Dividends The holders of the preferred stock are entitled to receive dividends at an annual dividend rate per share of 5% of the per-share-price. Dividends on Series A, A-1 and A-2 are payable only upon a liquidity event or if dividends are declared on common stock. Additionally, A-1 and A-2 are payable upon the conversion of Series A-1 or A-2 into common shares. Dividends on Series A-3 are only payable when and if declared on common stock, Series A-1 or Series A-2 preferred stock. The shares of Series B Preferred Stock accrue an annual dividend rate of 7% on the price per share. Series B dividends accrue daily and are payable when and if declared by the board of directors. The Preferred A Shares have preference over dividends payable with respect to common stock. Series A-3 has a dividend preference over Series A-1 and Series A-2. Series B has a preference over Series A, Series A-1, Series A-2, and Series A-3 No cash or other dividend or distribution may be declared or paid on the common stock unless a dividend or other distribution is also declared and paid on the preferred stock. As of December 31, 2024 and 2023, the Company has not recognized an accrual for unpaid dividends on preferred stock which amount to $33,729,540 and $25,723,781, respectively. Included in these amounts are dividends that have been accreted to the preferred stock being measured at its maximum redemption value which is explained below. Liquidation Rights In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company, each holder of preferred stock is entitled to receive, prior and in preference to any distributions to the common stockholders, an amount equal to the greater of (i) the liquidation preference price per share plus any accrued but unpaid dividends payable and (ii) the per share amount of all cash, securities, and other property to be distributed in respect of the Class A or Class B common stock such holder would have been entitled to received had it converted such preferred stock immediately prior to the date fixed for the liquidity event. F-24 In the event of a sale of the Company, the holders of Series A-1, A-2, and A-3 preferred stock shall have the right to elect not to receive the cash payment and instead continue to hold the Series A-1, A-2, or A-3 preferred stock following the consummation of the sale of the company transaction. In the event of a public sale of the Company, defined as any sale of capital stock to the public pursuant to an offering registered under the securities act of 1933, the holders of shares of preferred Series A-1, A-2, and A-3 stock shall be entitled, before any distribution or payment is made upon any Junior Stock, to be paid an amount equal to the greater of (i) the liquidation preference price per share plus any accrued but unpaid dividends payable and (ii) the per share amount of all cash, securities, and other property to be distributed in respect of the Class A or Class B common stock such holder would have been entitled to received had it converted such preferred stock immediately prior to the date fixed for the liquidity event. For the Series A preferred stock, the Company has the right to convert the preferred shares into shares of common A stock upon a liquidation event. Upon a Liquidity Event, after the holders of the Series B Stock shall have been paid in full their full preferential amount to which they are entitled, the remaining assets of the Company legally available for distribution shall be distributed among the holders of the junior stock then outstanding, pursuant to the terms of the Certificate of Incorporation, the Series A Certificate of Designation, the Series A-1 Certificate of Designation and the Series A-2 Certificate of Designation. Pursuant to those agreements, after the holders of Series A, Series A-1 and Series A-2 have been paid in full their full preferential amount, the remaining assets of the Company shall be distributed ratably among the holders of the junior stock then outstanding. “Junior stock” – shall mean the Common Stock and any other class or series of capital stock (including the Series A-1 Stock and the Series A-2 Stock) that ranks junior to the Series A-3 Stock (a) as to the payment of dividends, if any, or (b) as to the distribution of assets on any liquidation, dissolution or winding up of the Corporation, or both. Conversion Rights Preferred Series A, Series A-1, Series A-2, and Series A-3 shares have conversion rights to convert into common stock at a rate of one share of common stock for one share of convertible preferred stock. The conversion ratio is subject to customary anti-dilution protection and is unadjusted for the stock split referred to in Note 17. Subsequent Events for details around the stock split. For the Series A preferred stock, the Company has the right to convert the preferred shares into shares of common A stock upon a liquidation event. For the Series A-1, A-2, and A-3 preferred stock, each share of preferred stock is automatically converted into common A stock at the earlier of an Initial Public Offering, a liquidation event, or the election by written consent of the holders of a majority of each respective series of shares. Preferred Series B shares have conversion rights to convert into Class B common stock at a rate equal to the quotient of (i) the Liquidation Preference of such share of Series B Stock being converted plus any accrued but unpaid dividends, divided by (ii) the Conversion Price as of the time of the conversion. The Liquidation Preference shall initially mean $5,000 per share of Series B Preferred Stock. The Conversion Price shall mean $50,740.47 per share of Series B Preferred Stock; provided, that the Conversion Price for purposes of converting the Series B Stock upon (i) an IPO shall equal 75% of the price per share or deemed price per share sold to the public in such IPO or (ii) the consummation of a Qualified Financing shall be 75% of the price per share sold by the Company in such Qualified Financing Redemption Rights Certain holders of Series A preferred stock have certain redemption rights or put rights, including the right to require the Company to repurchase all or any portion of the preferred stock on any date commencing on and immediately following January 25, 2023, and upon certain change of control events at 100% of the liquidation preference thereof plus all accrued but unpaid dividends. The holders of Series A-1 preferred stock have certain redemption rights or put rights, including the right to require the Company to repurchase all or any portion of the preferred stock on any date commencing on and immediately following April 16, 2026, and ending on April 16, 2028 at 100% of the liquidation preference thereof plus all accrued but unpaid dividends. The holders of Series A-3 preferred stock have certain redemption rights or put rights, including the right to require the Company to repurchase all or any portion of the preferred stock on any date commencing on and immediately following July 16, 2027, and ending on July 16, 2029 at 100% of the liquidation preference thereof plus all accrued but unpaid dividends. F-25 The Company measures the preferred stock where redemption is probable at its maximum redemption value plus dividends not currently declared or paid but which will be payable upon redemption. On December 31, 2024 the Company remeasured the preferred stock following the accretion method, which resulted in the preferred stock being measured at its maximum redemption value of $128,576,901 and accretion of $12,814,190, included in Accumulated Deficit on the consolidated balance sheets as of December 31, 2024. Similarly, on December 31, 2023, the preferred stock was remeasured, resulting in a maximum redemption value of $126,018,101 and accretion of $10,255,392, also included in Accumulated Deficit on the consolidated balance sheets as of December 31, 2023. The Series B preferred stock includes certain redemption rights that are solely in the control of the Company, including redemption upon sale or liquidation of the Company, and an in-substance redemption feature associated with the conversion terms of the Series B preferred stock upon IPO. The stock is recorded in permanent equity on the consolidated balance sheets as of December 31, 2024. The redemption features are bifurcated as an embedded derivative and are accounted for as a derivative liability on the consolidated balance sheets. The fair value of the embedded derivative is estimated using a scenario-based discounted cash flow method. The valuation methodology includes assumptions and judgments regarding discount rates and timing of conversion, which are primarily level 3 assumptions. The embedded derivative is measured at fair value on a recurring basis and any changes in fair value in a subsequent period will be recorded to other income (expense). As of December 31, 2024, the embedded derivative had a net fair value of $41.5 million and the Company recognized a loss of $2.4 million in fair value adjustments in other, net on the consolidated statements of operations and comprehensive (loss) income related to the change in net fair value . Refer to Note 17. Subsequent Events for details on the subsequent conversion of all Series A Preferred Stock to Class A Common Stock and Series B Preferred Stock to Class B Common Stock NOTE 15. EQUITY Common Stock A – As of December 31, 2024 and 2023, the Company was authorized to issue 20,000 shares of common stock (pre-stock split), with a par value of $0.001 per share. See Note 17 Subsequent Events. Common Stock B - As of December 31, 2024 and 2023, the Company was authorized to issue 60,000 shares of common stock (pre-stock split), with a par value of $0.001 per share. No shares have been issued as of December 31, 2024. See Note 17 Subsequent Events. Settlement Warrant - On September 26, 2024, the Company granted a five year warrant to purchase 2,000 shares of Series B preferred stock at an exercise price of $5,000 per share in connection with a settlement agreement with Smartmatic. Refer to Note 12. Legal for details of the settlement. The exercise price and the number of shares of the warrants are subject to adjustment for standard anti-dilution provisions and for subsequent Series B preferred issuance at a price lower than the then exercise price of the warrants. Exercise of the warrant would result in the Company recognizing a $10 million increase in gross proceeds. The settlement warrant did not meet the conditions to be classified in equity, and therefore the Company assessed and confirmed it met the definition of a liability under ASC 815 and ASC 480 and is recognized on the balance sheet at fair value. The fair value of the warrant liability as of December 31, 2024 is $6,499,822 and the Company recognized a loss of $126,065 in fair value adjustments in other, net on the consolidated statements of operations and comprehensive (loss) income . Agent Warrant - The Company agreed to issue a three-year warrant to the placement agent associated with the Private Placement of shares of the Company's Series B convertible preferred Stock. The number of shares under the warrant is equal to 2% of the total shares raised under the private placement with an exercise price of $5,000 per share. The warrant holder has the option to elect net share settlement. The effective date of the warrant is the date of the final close of the private placement offering. The Company evaluated the warrant under ASC 718, Compensation - Stock Compensation and determined that the award was non-employee share-based compensation that does not meet the criteria for liability classification. As a result, the warrant was classified in equity in the Company's consolidated balance sheets. NOTE 16. LOSS PER SHARE The following table illustrates the reconciliation of the basic and diluted loss per share computations. The outstanding shares reflect the stock split described in Note 17. Subsequent Events : Year Ended December 31, 2024 2023 Basic and diluted loss per share: F-26 Numerator: Net loss $ (72,171,928) (41,777,166) Cumulative dividends on preferred stock 8,005,759 5,790,807 Net loss attributable to common stockholders $ (80,177,687) $ (47,567,973) Denominator: Weighted average common stock outstanding, basic and diluted 41,065,954 41,065,954 Per share: Net loss per share attributable to common stockholders, basic and diluted $ (1.95) $ (1.16) The following outstanding potentially dilutive shares were excluded from the computation of diluted net loss per share attributable to common stock for the periods presented because the impact of including them would have been anti-dilutive. The outstanding shares related to stock options reflect the stock split described in Note 17. Subsequent Events . Year Ended December 31, 2024 2023 Warrants 1,701,493 — Stock options 759,348 189,431 Preferred shares 56,125,083 37,717,083 Total 58,585,924 37,906,514 NOTE 17. SUBSEQUENT EVENTS On February 27, 2025, the Company completed the sale of the remaining Series B Preferred Stock from the PPM raising approximately $87,000,000 during the period January 1, 2025 through February 27, 2025. On March 24, 2025, a majority in interest of the shareholders of the Company approved by written consent (1) the amending and restating of the Company's articles of incorporation, the recapitalization of the Company's capital stock and the appointment of directors and (2) the Company's 2025 Omnibus Equity Incentive Plan. Copies of the written consents of the shareholders are filed as Exhibits 99.1 and 99.2, respectively, to this Annual Report on Form 10-K. On March 28, 2025, the Company completed its initial public offering on the NYSE and is authorized to issue 50,000,000 shares of Class A Common Stock; 940,000,000 shares of Class B Common Stock; and 10,000,000 shares of Preferred Stock. The par value of all shares is $0.001 . The offering resulted in total proceeds of $75,000,000. In connection with the offering, Series A, A-1, A-2 and A-3 Preferred Stock were converted to Class A Common Stock at $10.00 per share and all of the Company's Series B Preferred Stock was converted to Class B Common Stock at $10.00 per share following the recapitalization discussed below. Concurrently with the closing of the offering, the Company amended and restated its Articles of Incorporation (the "Amended and Restated Articles of Incorporation") to reclassify its authorized share capital to implement a dual class of securities. As a result, each share of the Company's existing Class A Common Stock of Newsmax Inc. that was issued and outstanding immediately prior to the effectiveness of the Amended and Restated Articles of Incorporation, and not held by the Company's CEO, was recapitalized, reclassified, and reconstituted into one fully paid and non-assessable share of Class B Common Stock of Newsmax Inc. Each share held by the Company's CEO immediately before the recapitalization, was recapitalized, reclassified, and reconstituted into one fully paid and non-assessable share of Class A Common Stock of Newsmax, Inc. Following the recapitalization, Class A Common Stock has ten votes per share and Class B Common Stock has one vote per share. Immediately following the recapitalization, the Company completed a 6,765.396:1 stock split of its Series A and Series B Common Stock. On March 28, 2025, the Board adopted our 2025 Omnibus Equity Incentive Plan (the “2025 Plan”) and it was approved by our shareholders on March 24, 2025 (the “Effective Date”). Under the 2025 Plan, 6,500,000 shares of Class B Common Stock are initially available for grant. Our administrator may grant incentive stock options (“ISOs”), non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards to participants to acquire shares of common stock under the 2025 Plan. It is anticipated that the Plan will be administered by the Board.On March 28, 2025, the Company granted stock options to employees and certain service providers to purchase an aggregate of 3,382,000 shares of common stock at an exercise price of $10.00 per share, which was the fair market value on the grant date. These options vest over 90 days and expire 9.5 years from the grant date. F-27