10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


	☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF

1934 For the quarterly period ended March 31, 2025


	☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number 000-54887

Bright Mountain Media, Inc.

(Exact Name of Registrant as Specified in its Charter)


Florida		27-2977890
State or Other Jurisdiction of		I.R.S. Employer
Incorporation or Organization		Identification No.

6400 Congress Avenue, Suite 2050, Boca Raton, FL		33487
Address of Principal Executive Offices		Zip Code

561-998-2440

Registrant’s Telephone Number, Including Area Code

Not applicable

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	None	None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of May 8, 2025 there were 175,965,052 shares of the registrant's common stock outstanding.

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BRIGHT MOUNTAIN MEDIA, INC.

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		Page No.
	PART I - FINANCIAL INFORMATION

Item 1.	Unaudited Consolidated Financial Statements:
	Consolidated Balance Sheets as of March 31, 2025 (unaudited) and December 31, 2024	5
	Unaudited Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2025 and 2024	6
	Unaudited Consolidated Statements of Changes in Stockholders’ Deficit for the three months ended March 31, 2025 and 2024	7
	Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	42
Item 4.	Controls and Procedures	42

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3.	Default Upon Senior Securities	44
Item 4.	Mine Safety Disclosures	44
Item 5.	Other Information	44
Item 6.	Exhibits	45

	Signatures	46

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

This report includes forward-looking statements that relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “likely,” “aim,” “will,” “would,” “could,” and similar expressions or phrases identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and future events and financial trends that we believe may affect our financial condition, results of operation, business strategy and financial needs. Forward-looking statements include, but are not limited to, statements about:

•

our dependence upon sales of equity securities and borrowings under our credit facility to fund operating capital;

•

our ability to refinance, extend or repay our substantial indebtedness owed to Centre Lane;

•

our ability to detect advertising fraud;

•

the continued appeal of internet advertising;

•

our ability to manage and expand our relationships with publishers;

•

our dependence on revenues from a limited number of customers;

•

the impact of seasonal fluctuations on our revenues;

•

our ability to revise and improve the business plan of our legacy businesses to meet the needs of a broader range of customers;

•

acquisitions of new businesses and our ability to integrate those businesses into our operations;

•

online security breaches;

•

failure to effectively promote our brand and attract advertisers;

•

our ability to predict the impact of future pandemics or outbreaks of disease;

•

our ability to protect our content;

•

our ability to protect our intellectual property rights;

•

the success of our technology development efforts;

•

our ability to obtain or maintain key website addresses;

•

the rejection of digital advertising by consumers, through opt-in, opt-out or ad-blocking technologies or other means;

•

restrictions on the use of third-party cookies, mobile device identifiers or other tracking technologies;

•

our dependence on certain third-party service providers;

•

liability related to content which appears on our websites;

•

cybersecurity risk associated with cyber attack or data breach;

•

dependence on executive officers and certain key employees and consultants;

•

our ability to hire qualified personnel;

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•

regulatory risks and compliance with privacy laws;

•

risks associated with potential litigation;

•

limitations from our secured indebtedness;

•

substantial doubts about our ability to continue as a going concern;

•

ongoing material weaknesses in our disclosure controls and internal control over financial reporting;

•

the limited public market for our common stock;

•

additional competition resulting from our business expansion strategy;

•

possible problems with our network infrastructure;

•

adverse impacts to our working capital as a result of the amount of cash dividends and outstanding interest we owe and/or pay affiliates;

•

dilution to existing shareholders upon the exercise of outstanding options and warrants;

•

provisions of our charter and Florida law which may have anti-takeover effects;

•

concentration of our stock ownership and control; and

•

our ability to issue additional shares of preferred stock in the future.

Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements and readers should carefully review this report, our Annual Report on Form 10-K for the year ended December 31, 2024 and our other filings with the U.S. Securities and Exchange Commission in their entirety. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. These forward-looking statements speak only as of the date of this report, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business.

OTHER PERTINENT INFORMATION

Unless specifically set forth to the contrary, when used in this report the terms “Bright Mountain,” the “Company,” “we,” “us," “our” and similar terms refer to Bright Mountain Media, Inc., a Florida corporation, and its subsidiaries. In addition, when used in this report, “first quarter of 2025” refers to the three months ended March 31, 2025, “first quarter of 2024” refers to the three months ended March 31, 2024, and “2024” refers to the year ended December 31, 2024. The information on, or that can be accessed through, our website at www.brightmountainmedia.com is not incorporated by reference in, or considered part of, this Quarterly Report on Form 10-Q.

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PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

BRIGHT MOUNTAIN MEDIA, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share figures)


	March 31, 2025			December 31, 2024
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	2,181		$	2,546
Restricted cash		1,861			1,861
Accounts receivable, net		14,260			15,033
Prepaid expenses and other current assets		1,318			859
Total current assets		19,620			20,299
Property and equipment, net		66			69
Intangible assets, net		12,921			13,406
Goodwill		7,785			7,785
Operating lease right-of-use assets		235			253
Other long-term assets		158			158
Total assets	$	40,785		$	41,970

Liabilities and Stockholders' Deficit

Current liabilities:
Accounts payable and accrued expenses	$	18,682		$	22,667
Other current liabilities		3,902			4,401
Interest payable - Centre Lane senior secured credit facility - related party		141			21
Deferred revenue		6,378			2,883
Note payable - Centre Lane senior secured credit facility - related party (current)		5,341			3,808
Total current liabilities		34,444			33,780
Other long-term liabilities		130			169
Note payable - Centre Lane senior secured credit facility - related party (long-term)		72,411			71,043
Finance lease liabilities		14			20
Operating lease liabilities		163			185
Total liabilities		107,162			105,197

Stockholders' deficit:
Convertible preferred stock, par value $0.01, 20,000,000 shares authorized, no shares issued or outstanding at March 31, 2025 and December 31, 2024, respectively		-			-
Common stock, par value $0.01, 324,000,000 shares authorized, 177,515,227 and 177,464,827 issued, and 175,965,052 and 176,114,652 outstanding at March 31, 2025 and December 31, 2024, respectively		1,776			1,775
Treasury stock at cost, 1,550,175 and 1,350,175 shares at March 31, 2025 and December 31, 2024, respectively		(220	)		(220	)
Additional paid-in capital		101,836			101,798
Accumulated deficit		(170,088	)		(166,857	)
Accumulated other comprehensive income		319			277
Total stockholders' deficit	$	(66,377	)	$	(63,227	)
Total liabilities and stockholders' deficit	$	40,785		$	41,970

* Derived from audited consolidated financial statements.

See accompanying notes to unaudited consolidated financial statements.

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BRIGHT MOUNTAIN MEDIA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)

(in thousands, except share and per share figures)


	Three Months Ended

	March 31, 2025			March 31, 2024

Revenue	$	14,190		$	12,448
Cost of revenue		9,918			9,311
Gross margin		4,272			3,137
General and administrative expenses		4,524			5,244
Loss from operations		(252	)		(2,107	)

Financing and other expense:
Other income		47			345
Interest expense - 10% convertible promissory notes - related party		-			(2	)
Interest expense - Centre Lane senior secured credit facility - related party		(3,020	)		(2,991	)
Other interest expense		(6	)		(11	)
Total financing and other expense, net		(2,979	)		(2,659	)

Net loss before income tax		(3,231	)		(4,766	)
Income tax provision		-			-
Net loss	$	(3,231	)	$	(4,766	)

Foreign currency translation		42			34
Comprehensive loss	$	(3,189	)	$	(4,732	)

Net loss per common share:
Basic	$	(0.02	)	$	(0.03	)
Diluted	$	(0.02	)	$	(0.03	)

Weighted-average shares outstanding:
Basic		175,974,990			171,231,775
Diluted		175,974,990			171,231,775

See accompanying notes to unaudited consolidated financial statements.

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BRIGHT MOUNTAIN MEDIA, INC

CONSOLIDATED STATEMENTS OF CHANGE IN STOCKHOLDERS’ DEFICIT

(unaudited)

(in thousands, except share figures)


	Common Stock				Treasury Stock						Additional Paid-in		Accumulated			Accumulated Other Comprehensive		Total Stockholders'
	Shares		Amount		Shares			Amount			Capital		Deficit			Income		Deficit


Balance at December 31, 2023 *		172,103,134	$	1,721		(825,175	)	$	(220	)	$	101,405	$	(149,833	)	$	262	$	(46,665	)

Net loss		-		-		-			-			-		(4,766	)		-		(4,766	)
Common stock issued for services rendered		279,452		3		-			-			13		-			-		16
Treasury stock		-		-		(525,000	)		-			-		-			-		-
Stock-based compensation		-		-		-			-			65		-			-		65
Adjustment from foreign currency translation, net		-		-		-			-			-		-			34		34

Balance at March 31, 2024		172,382,586	$	1,724		(1,350,175	)	$	(220	)	$	101,483	$	(154,599	)	$	296	$	(51,316	)


Balance at December 31, 2024 *		177,464,827	$	1,775		(1,350,175	)	$	(220	)	$	101,798	$	(166,857	)	$	277	$	(63,227	)

Net loss		-		-		-			-			-		(3,231	)		-		(3,231	)
Common stock issued for options exercised		50,400		1		-			-			1		-			-		2
Treasury stock		-		-		(200,000	)		-			-		-			-		-
Stock-based compensation		-		-		-			-			37		-			-		37
Adjustment from foreign currency translation, net		-		-		-			-			-		-			42		42

Balance at March 31, 2025		177,515,227	$	1,776		(1,550,175	)	$	(220	)	$	101,836	$	(170,088	)	$	319	$	(66,377	)

*Derived from audited consolidated financial statements.

See accompanying notes to unaudited consolidated financial statements.

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BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)


	For the Three Months Ended
	March 31, 2025			March 31, 2024

Cash flows from operating activities:
Net loss	$	(3,231	)	$	(4,766	)
Adjustments to reconcile net loss to net cash (used in) provided by operations:
Depreciation expense		13			40
Interest paid-in-kind on Centre Lane senior secured credit facility - related party		2,269			2,238
Amortization of operating lease right-of-use assets		18			16
Amortization of debt discount		633			615
Amortization of intangible assets		485			481
Stock-based compensation		37			65
Common stock issued for services rendered		-			16
Provision for (recovery of) credit losses		11			(37	)
Changes in operating assets and liabilities:
Accounts receivable		762			2,243
Prepaid expenses and other assets		(459	)		(123	)
Operating lease liabilities		(18	)		(15	)
Accounts payable and accrued expenses		(3,942	)		(1,662	)
Other liabilities		(543	)		(30	)
Interest payable - Centre Lane senior secured credit facility - related party		120			138
Interest payable - 10% convertible promissory notes - related party		-			2
Deferred revenue		3,495			1,699
Net cash (used in) provided by operating activities		(350	)		920

Cash flows from investing activities:
Purchase of property and equipment		(10	)		(2	)
Net cash used in investing activities		(10	)		(2	)

Cash flows from financing activities:
Proceeds from stock option exercises		1			-
Principal payments on finance lease liabilities		(5	)		(4	)
Net cash used in financing activities		(4	)		(4	)
Effect of foreign exchange rates on cash		(1	)		6
Net (decrease) increase in cash, cash equivalents, and restricted cash		(365	)		920
Cash, cash equivalents, and restricted cash at the beginning of the period		4,407			4,001
Cash, cash equivalents, and restricted cash at the end of the period	$	4,042		$	4,921

Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets:
Cash and cash equivalents	$	2,181		$	4,921
Restricted cash		1,861			-
Total cash, cash equivalents, and restricted cash	$	4,042		$	4,921

Supplemental disclosure of cash flow information:
Interest paid-in-kind on Centre Lane senior secured credit facility - related party		2,269			2,238

See accompanying notes to unaudited consolidated financial statements.

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BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(Unaudited)

NOTE 1 – DESCRIPTION OF BUSINESS AND DEVELOPMENTS

Organization and Nature of Operations

Bright Mountain Media, Inc. (together with its wholly-owned subsidiaries, the “Company,” “Bright Mountain” or “we”) is an end-to-end digital media and advertising services company that efficiently connects brands with targeted consumer demographics. We focus on digital publishing, advertising technology, consumer insights, creative services, and media services.

Digital Publishing

Our digital publishing division focuses on developing content that attracts an audience and monetizes that audience through advertising. The current portfolio of owned and operated websites is focused on moms, parenting, families, and more broadly, women. The portfolio consists of popular websites including Mom.com, Cafemom.com, LittleThings.com, and MamasLatinas.com. This demographic is highly sought after by brands and their advertising agencies. We use internal and external technologies to constantly improve the effectiveness and efficiency of the content we create. Our publishing division monetizes its audiences through both direct and programmatic advertising sales.

Advertising Technology

Our advertising technology division focuses on delivering targeted ads to audiences on owned and operated sites as well as third-party publishers in a cost-effective manner through the deployment of proprietary technologies. By developing our own proprietary technology stack, we are able to pass along efficiencies to both the demand and supply side of the ecosystem. Our goal is to enable and support a streamlined, end-to-end advertising model that addresses both demand (buy side) and publisher supply (sell side) programmatic sales and delivery of digital advertisements using an array of audience targeting tools and advertising formats (display, audio, video, CTV, in-app). Programmatic advertising relies on software programs that leverage data and proprietary algorithms to match the optimal selection of an ad with a bid price offered by advertisers.

Consumer Insights

Our consumer insights division focuses on providing primary and secondary research and competitive intelligence to address customers' strategic issues. We provide cutting-edge and dynamic research, offering clients a comprehensive perspective on their consumers. This insight extends to strategic guidance on the optimal timing and channels to effectively connect with target audiences. Our cutting-edge approach combines advanced data analytics, artificial intelligence, and comprehensive market research, to uncover actionable insights that drive informed decision-making.

Creative Services

Our creative services division transforms data into award-winning campaigns. We are uniquely able to leverage insights teams with highly strategic media planning and buying teams to ensure brands not only position their advertising precisely, but also yield impactful business results. Our goal is to combine data-driven decisions with creativity fueled by a deep understanding of modern culture.

Media Services

Our media services division focuses on advertisers and agencies by providing access to premium inventory, leveraging data to optimize programmatic campaigns. Our aim is to empower clients to access the most sought-after advertising spaces across diverse platforms tailored to their specific needs and preferences. Our data-driven approach aims to ensure that ad placements are not only well-targeted, but also continuously optimized for maximum efficiency and return on investment ("ROI"). Our commitment to combining premium inventory access with data-driven programmatic campaign optimization makes us a valuable partner in the success of our clients' advertising and marketing endeavors.

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BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(Unaudited)

The Company generates revenue through:

•

the selling of advertisements placed on our owned and managed sites and on partner websites where we earn a share of the revenue;

•

fees for facilitating the seamless, real-time exchange of advertisements on a large scale, bridging networks of buyers (referred to as "DSPs") and networks of sellers (referred to as "SSPs");

•

serving advertisers through providing access to premium resources and leveraging data to optimize programmatic campaigns, where revenue is derived from the planning and execution of creative and media marketing campaigns;

•

providing primary and secondary research, competitive intelligence, and expert insights to address customers' strategic issues, where revenue is primarily derived from providing a single integrated service for such research; and

•

provision of creative and media services to advertisers.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

The unaudited consolidated financial statements include the accounts of the Company and all of its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited consolidated financial statements for the three months ended March 31, 2025 and 2024, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in accordance with rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all the information and disclosures required by GAAP for complete consolidated financial statements. In the opinion of management, such unaudited consolidated financial statements include all adjustments (consisting of normal recurring accruals) necessary for the fair presentation of the consolidated financial position and the consolidated results of operations. The consolidated results of operations for periods presented are not necessarily indicative of the results to be expected for the full year or any future periods. The consolidated balance sheet information as of December 31, 2024, was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. The interim consolidated financial statements should be read in conjunction with that report.

Going Concern and Liquidity

Historically, the Company has incurred losses, which have resulted in an accumulated deficit of approximately $170.1 million as of March 31, 2025. Cash flows (used in) provided by operating activities were $(350,000) and $920,000 for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, the Company had approximately a $14.8 million working capital deficit, inclusive of $2.2 million in cash and cash equivalents and $1.9 million in restricted cash.

The Company’s ability to continue as a going concern is dependent upon its ability to meet its liquidity needs through a combination of factors. The Company is currently exploring several strategic alternatives, including restructuring or refinancing its debt, or seeking additional debt, including borrowing under the Centre Lane Senior Secured Credit Facility, or raising equity capital. The ability to access the capital markets depends, in part, upon the volume and market price of the Company's stock, which cannot be assured. Other measures include reducing or delaying certain business activities, and reducing general and administrative expenses, including a reduction in headcount. The ultimate success of these plans is not guaranteed.

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

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BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(Unaudited)

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less, when acquired, to be cash equivalents. The Company maintains its cash with various commercial banks in the United States, and other foreign countries in which the Company operates.

As of March 31, 2025 and December 31, 2024, the Company exceeded the federally insured limit of $250,000 for interest and non-interest-bearing accounts. The Company held a cash balance with a single financial institution in excess of the Federal Deposit Insurance Corporation ("FDIC") insured limit in the amount of $1.9 million as of March 31, 2025, and $2.3 million as of December 31, 2024.

As of March 31, 2025 and December 31, 2024, the Company did not exceed the insurance limit of $29,000 for its international bank accounts.

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

At March 31, 2025, and December 31, 2024, the Company had $2.2 million and $2.5 million, respectively, in cash and cash equivalents.

Restricted Cash

The Company considers cash to be restricted when withdrawal or general use is legally restricted. The Company reports restricted cash as a separate line item in the consolidated balance sheets. At March 31, 2025 and December 31, 2024, the Company had $1.9 million in restricted cash for both periods, which is designated specifically for settlement of a legal judgment. See Note 16, Commitments and Contingencies, to the unaudited consolidated financial statements.

Off-balance Sheet Arrangements

There were no off-balance sheet arrangements as of March 31, 2025 and December 31, 2024.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments, and assumptions are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of our consolidated financial statements as well as reported amounts of revenue and expenses during the periods presented. Our consolidated financial statements would be affected to the extent there are material differences between these estimates and actual results.

Significant estimates included in the accompanying consolidated financial statements include, valuation of goodwill and intangible assets, allowance for current expected credit losses, percentage of completion for revenue recognition, estimates of amortization period for intangible assets, estimates of depreciation period for property and equipment, discount rates used in the valuation of right-of-use assets and lease liabilities, litigation reserves, the valuation of equity-based transactions, valuation of the Center Lane Senior Secured Facility carrying value regarding debt modification or extinguishment, and the valuation allowance on deferred tax assets. While these estimates are based on our best knowledge of current events and actions that may affect us in the future, actual results may differ materially from these estimates.

Foreign Currency

We translate the consolidated financial statements of our foreign subsidiaries, which have a functional currency in the respective country’s local currency, to U.S. dollars using month-end exchange rates for assets and liabilities and actual exchange rates for revenue, cost and expenses on the date of the transaction. Translation gains and losses as a result of consolidation are included in accumulated other comprehensive income. Transaction gains and losses are included within general and administrative expenses on the consolidated statements of operations and comprehensive loss.

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BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(Unaudited)

Concentrations of Credit Risk

Financial instruments that potentially subject us to concentration of credit risk consist principally of cash, cash equivalents, restricted cash, and accounts receivable. We place our cash, cash equivalents, and restricted cash with high credit-quality financial institutions. Such deposits may be in excess of federally insured limits. In addition, the Company maintains various bank accounts in Thailand and Israel, with some level of insurance. We perform periodic evaluations of the relative credit standing of financial institutions. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company's financial condition, results of operations, and cash flows.

We perform credit evaluations of our customers’ financial condition and require no collateral from our customers. We maintain an allowance for current expected credit losses based upon the expected collectability of accounts receivable balances.

The following tables provide information about concentrations that exceed 10% of revenue and accounts receivable for the period:


	Three Months Ended
	March 31, 2025			March 31, 2024
Revenue Concentration
Customers exceeding 10% of revenue		1			1
Percentage of revenue:
Customer 1		15.4	%		14.9	%
Total percentage of revenue		15.4	%		14.9	%


	March 31, 2025			December 31, 2024
Accounts Receivable Concentration
Customers exceeding 10% of accounts receivable		2			3
Percentage of accounts receivable:
Customer 1		22.4	%		13.5	%
Customer 2	*				11.1	%
Customer 3	*				10.4	%
Customer 4		10.2	%	*
Total percentage of accounts receivable		32.6	%		35.0	%

* Represents a customer accounts receivable balance less than the 10% threshold.

Effective Accounting Pronouncements Adopted

In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40). This ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. The FASB reduced the number of accounting models for convertible debt and convertible preferred stock instruments and made certain disclosure amendments to improve the information provided to users. The new standard was effective January 1, 2024 (early adoption was permitted, but not earlier than January 1, 2021). This standard did not have an impact on our consolidated financial statements for the period ended March 31, 2025.

For 2024 annual reporting, we adopted ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This new standard requires an enhanced disclosure of significant segment expenses on an annual and interim basis, effective for fiscal years beginning after December 15, 2024. The adoption of ASU 2023-07 did not have a significant impact on our consolidated financial statements for the period ended March 31, 2025.

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BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(Unaudited)

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. The adoption of ASU 2023-09 did not have a significant impact on our consolidated financial statements for the period ended March 31, 2025.

Accounting Pronouncements Not Yet Adopted

In November 2024, and as amended in January 2025, the FASB issued ASU No. 2024-03, Income Statement Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The new guidance requires disaggregated information about certain income statement expense line items on an annual and interim basis. This guidance will be effective for annual periods beginning in the year ending December 31, 2027 and for interim periods thereafter. The new standard permits early adoption and can be applied prospectively or retrospectively. We are evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.

NOTE 3 – ACCOUNTS RECEIVABLE

Accounts receivable, net consisted of the following:


	March 31, 2025			December 31, 2024
(in thousands)
Accounts receivable	$	10,653		$	12,460
Unbilled receivables (1)		3,740			2,698
		14,393			15,158
Less: allowance for current expected credit losses		(133	)		(125	)
Accounts receivable, net	$	14,260		$	15,033

(1) - Unbilled receivables represent amounts for services rendered at the end of the period pending generation of invoice to the customer.

Accounts receivable, net at January 1, 2024 was $14.7 million.

Expected credit losses (recoveries) were approximately $11,000 and $(37,000) for the three months ended March 31, 2025 and 2024, respectively. These amounts are included in general and administrative expenses in the consolidated statements of operations and comprehensive loss.

NOTE 4 – PREPAID EXPENSES AND OTHER ASSETS

Prepaid expenses and other assets consisted of the following:


	March 31, 2025			December 31, 2024
(in thousands)
Prepaid insurance (1)	$	228		$	358
Prepaid software		116			93
Deposits		158			158
Subscriptions		174			213
Other current assets (2)		800			195
Total prepaid costs and other assets		1,476			1,017
Less: other long-term assets		(158	)		(158	)
Prepaid expenses and other current assets	$	1,318		$	859

(1) - Includes approximately $187,000 and $291,000 which is being paid over a period of time and is included in accounts payable at March 31, 2025 and December 31, 2024, respectively.

(2) - Includes approximately $726,000 and $121,000 which is being paid over a period of time and is included in accounts payable at March 31, 2025 and December 31, 2024, respectively.

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BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(Unaudited)

NOTE 5 – PROPERTY AND EQUIPMENT, NET

Property and equipment, net, consisted of the following:


	Useful Life	March 31, 2025			December 31, 2024
(in thousands)
Furniture and fixtures	3 - 5	$	-		$	-
Computer equipment	3		86			76
Computer software	5		206			206
			292			282
Less: accumulated depreciation			(226	)		(213	)
Property and equipment, net		$	66		$	69

Depreciation and amortization expense for the three months ended March 31, 2025 and 2024, was $13,000 and $40,000, respectively. The amounts are included in general and administrative expenses in the consolidated statements of operations and comprehensive loss.

NOTE 6 – INTANGIBLE ASSETS, NET

Website acquisitions, net, consisted of the following:


	March 31, 2025			December 31, 2024
(in thousands)
Website acquisition assets	$	1,125		$	1,125
Add: website development costs		96			96
		1,221			1,221
Less: accumulated amortization		(1,131	)		(1,127	)
Website acquisition assets, net	$	90		$	94

Other intangible assets, net, consisted of the following:


		March 31, 2025							December 31, 2024
	Useful Life	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
(in thousands)
Trade name	2 - 10	$	8,381	$	(3,952	)	$	4,429	$	8,381	$	(3,795	)	$	4,586
IP/technology	10		5,821		(2,674	)		3,147		5,821		(2,575	)		3,246
Customer relationships	5 - 10		13,380		(8,125	)		5,255		13,380		(7,900	)		5,480
Non-compete agreements	3 - 5		402		(402	)		-		402		(402	)		-
Other intangible assets, net		$	27,984	$	(15,153	)	$	12,831	$	27,984	$	(14,672	)	$	13,312


	March 31, 2025		December 31, 2024
(in thousands)
Website	$	90	$	94
Other intangible assets		12,831		13,312
Intangible assets, net	$	12,921	$	13,406

Amortization expense for the three months ended March 31, 2025 and 2024 was approximately $485,000 and $481,000 respectively.

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BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(Unaudited)

As of March 31, 2025, expected remaining amortization expense of intangible assets and website acquisition by fiscal year is as follows:


Remainder of 2025	$	1,379
2026		1,788
2027		1,788
2028		1,788
2029		1,785
Thereafter		4,393
Total expected amortization expense	$	12,921

NOTE 7 – GOODWILL

The following table represents the allocation of goodwill as of March 31, 2025, and December 31, 2024:


	Owned & Operated		Ad Network		Insights		Total
(in thousands)
December 31, 2024	$	2,865	$	4,013	$	907	$	7,785
Additions		-		-		-		-
Impairment		-		-		-		-
March 31, 2025	$	2,865	$	4,013	$	907	$	7,785

We allocate goodwill to reporting units based on the expected benefit and synergies with our current reporting units. The Company categorizes goodwill into three reporting units: "Owned & Operated", "Ad Network", and "Insights".

Goodwill is tested for impairment at least annually and if triggering events are noted prior to the annual assessment. Impairment is deemed to occur when the carrying value of the goodwill associated with the reporting unit exceeds the implied value of the goodwill associated with the reporting unit.

During the year ended December 31, 2024, an impairment assessment was performed on goodwill for the Ad Network, Owned & Operated and Insights reporting units. The assessment used a qualitative assessment, including consideration of the economic, industry and market conditions in addition to the overall financial performance of the Company and these assets. Our qualitative assessment concluded that it was more likely than not that the estimated fair value of the Ad Network, Owned & Operated and Insights reporting units exceeds their carrying amounts. Since the assets are considered recoverable, no impairment charge was recognized for the year ended December 31, 2024.

There was no triggering event or impairment for the three months ended March 31, 2025.

NOTE 8 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following:


	March 31, 2025		December 31, 2024
(in thousands)
Accounts payable (1)	$	12,733	$	14,428
Accrued wages, commissions, and bonus		256		527
Publisher cost		1,934		2,811
Professional fees		874		1,138
Subcontractor		2,483		3,438
Other		402		325
Total accounts payable and accrued expenses	$	18,682	$	22,667

(1) - Accounts payable includes $5.2 million at both March 31, 2025 and December 31, 2024, for Slutzky & Winshman Ltd. and Mediahouse Inc., whose operations were terminated during the year ended December 31, 2023.

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BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(Unaudited)

NOTE 9 – OTHER CURRENT LIABILITIES

Other current liabilities consisted of the following:


	March 31, 2025			December 31, 2024
(in thousands)
Current portion of long-term lease	$	106		$	101
Dividend payable		691			691
Project advance expense (1)		990			1,546
Litigation reserves		2,237			2,224
Other current liabilities		8			8
Total other liabilities		4,032			4,570
Less: other long-term liabilities		(130	)		(169	)
Other current liabilities	$	3,902		$	4,401

(1) - Represents amounts advanced by customers to cover third-party expenses specifically related to their project. These expenses are offset against the advance and are not part of the Company's statement of operations and comprehensive loss.

NOTE 10 – CENTRE LANE SENIOR SECURED CREDIT FACILITY

Effective June 1, 2020, the Company entered into a membership interest purchase agreement to acquire 100% of Wild Sky Media, which is now a subsidiary of the Company (the “Purchase Agreement”). To finance the acquisition, the Company obtained a first lien senior loan in the amount of $16.5 million, comprised of $15.0 million of initial indebtedness, repayment of Wild Sky's existing accounts receivable factoring facility of approximately $900,000, and approximately $500,000 of expenses, from, and entered into a secured credit facility with Centre Lane Partners Master Credit Fund II, L.P. (“Centre Lane Partners”).

Additional Draws

As of March 31, 2025, Centre Lane Partners had loaned the Company an additional $39.9 million through Amendments One through Eight (the “Second Out Loans”), Amendments Nine through Sixteen and Nineteen (the “First Out Loans”), and Amendments Seventeen, Twenty-One, and Twenty-Two (the “Third Out Loans”) to provide liquidity to fund operations. The Centre Lane Senior Secured Credit Facility has been determined to qualify as a related party transaction as shares were issued to Centre Lane Partners as part of the transaction. A related party is a party that can exercise significant influence over the Company in making financial and/or operating decisions.

On December 26, 2024, the Company and its subsidiaries entered into the Twenty-First Amendment to the Credit Agreement with Centre Lane Partners for the purpose of securing a bond to stay execution of a judgment in the amount of approximately $1.7 million that was entered against the Company as a result of certain disclosed litigation (the “Ladenburg litigation”), as the Company intends to appeal the judgment. The Company borrowed an additional $1.9 million from the Lenders, which funds were used to secure the bond. Amounts drawn pursuant to the Twenty-First Amendment, including all accrued but unpaid principal and interest thereon, will mature and become payable in December 2026. Interest to be paid in cash accrues at a rate of 0% per annum, and interest to be paid in kind accrues at a rate of 15% per annum. For further information on this judgment, see Note 16, Commitments and Contingencies, to the consolidated financial statements.

In connection with the Twenty-First Amendment, and as consideration therefore, the Company agreed to issue a number of shares of the common stock of the Company, par value $0.01 per share, equal to 2.5% of the fully diluted pro forma ownership of the Company, or 5,001,991 shares of the common stock, to an affiliate of the Lenders. As of March 31, 2025, BV Agency, LLC, and Centre Lane Partners own approximately 15.0% and 8.6% of the Company’s outstanding common stock, respectively.

Optional Prepayment

The Company may, at any time, voluntarily prepay, in whole or in part (with a minimum prepayment of $250,000) the outstanding principal of the loans, plus any accrued but unpaid interest on the aggregate principal amount of the loans being prepaid. There is no prepayment penalty associated with the Centre Lane Senior Secured Credit Facility. However, partial or full prepayments of the Centre Lane Senior Secured Credit Facility is required in the event of certain future capital raises.

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BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(Unaudited)

Repayment of Loans

Effective March 31, 2025, the Company, the Lenders, and Centre Lane Partners entered into the Twenty-Second Amendment to the Credit Agreement, pursuant to which the following adjustments were made to the outstanding loans as follows:

•

Extending the maturity date of the First Out Loans (which no longer include the Seventeenth Amendment Term Loans and the Twenty-First Amendment Term Loans), Second Out Loans (formerly defined as the "Last Out Loans"), and Third Out Loans (comprised of the Seventeenth Amendment Term Loans and the Twenty-First Amendment Term Loans) from April 20, 2026 to December 20, 2026;

•

Changing the Second Out Loans PIK rate to the Term Secured Overnight Financing Rate ("SOFR") plus 3% and the Second Out Loans cash interest rate to 2%. At March 31, 2025, the SOFR floor was 5.00% per annum, thus the overall PIK rate on these facilities was 8.00%;

•

Changing the First Out Loans cash interest rate to the Term SOFR plus 2%. The overall PIK rate on these facilities was 7.00% at March 31, 2025;

•

Changing the Third Out Loans PIK rate to 15%;

•

Adjusting the amortization of the Second Out Loans such that quarterly installments of 1% of the aggregate principal amount (after giving effect to capitalized PIK interest) are paid for each quarter in 2025, and quarterly installments of 2% of the aggregate principal amount (after giving effect to capitalized PIK interest) are paid thereafter until maturity; and

•

Adjusting the amortization of the First Out Loans such that an installment of $700,000 is paid on March 31, 2025, and quarterly installments of $575,000 are paid thereafter until maturity.

For the three months ended March 31, 2025 and 2024, the Company did not make a payment toward the principal loan balance. During the three months ended March 31, 2025 and 2024, the Company did not make a payment toward the outstanding interest payable. Because Amendment Twenty-Two was closed on March 31, 2025, principal and interest payments, which had been due in the first quarter, became due and were paid in the first week of April.

The below table summarizes the loan balances at March 31, 2025, and December 31, 2024:


	March 31, 2025		December 31, 2024
(in thousands)
Note payable - Centre Lane senior secured credit facility - related party (current)	$	5,341	$	3,808
Note payable - Centre Lane senior secured credit facility - related party (net of discount)		72,411		71,043
Net principal		77,752		74,851
Add: debt discount		3,339		3,971
Outstanding principal	$	81,091	$	78,822

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BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(Unaudited)

The below table summarizes the movement in the outstanding principal during the three months ended March 31, 2025:


	March 31, 2025		December 31, 2024
(in thousands)
Opening balance	$	78,822	$	70,228
Add:
Draws		-		1,861
Exit and other fees		-		505
Interest capitalized		2,269		9,353
		81,091		81,947
Less
Payments		-		(3,125	)
Outstanding principal	$	81,091	$	78,822

Fees

Under the terms of the Centre Lane Senior Secured Credit Facility, the Company is required to pay Centre Lane Partners a non-refundable annual administration fee equal to $35,000 for agency services. The Centre Lane Senior Secured Credit Facility provides that this fee shall be, in all respects, fully earned, due and PIK by the Company on the effective date of the Centre Lane Senior Secured Credit Facility, and on each anniversary of the effective date during the term of the agreement by adding and capitalizing the full amount of such fee to the outstanding principal balance of the loans. The accumulated administrative fee since inception of the facility is $175,000 and is included in outstanding principal. There was no administrative fee charged during the three months ended March 31, 2025 and 2024.

Amendments to Centre Lane Senior Secured Credit Facility

Commencing April 2021, the Company and certain subsidiaries entered into various amendments to the Amended and Restated Senior Secured Credit Facility. The Credit Agreement was amended a number of times to provide for additional loans used for working capital and acquisitions. In addition, as part of the transaction, there are exit fees (the "Exit Fees"), which are added and capitalized to the principal amount of the original loan. As of March 31, 2025, there were twenty-two amendments to the Credit Agreement.

Consistent with FASB Accounting Standards Codification ("ASC") Topic 470, Debt (“ASC 470”), the Company is required to perform an analysis of the change in each amendment to determine whether the change is a modification or an extinguishment of debt. Under a modification, no gain or loss is recorded, and a new effective interest rate is established based on the carrying value of the debt and revised cash flow. If the debt is extinguished, the old debt is derecognized and the new debt is recorded at fair value, which becomes the new carrying value. A gain or loss is recorded for the difference between the net carrying value of the original debt and the fair value of the new debt. Additionally, in the event the transaction is with a related party, this gain or loss should be recognized against additional paid-in capital. Interest expense is recorded based on the effective interest rate of the new debt. A debt is considered extinguished if the present value of the new cash flows under the term of the new debt is at least 10% different from the present value of the remaining cash flows under the terms of the old debt.

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BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(Unaudited)

The below table summarizes the amendments that were executed by the Company from the inception of the facility to March 31, 2025 (in thousands, except for share data):


Amendment No.		Date	Draw		Repayment Date	Interest Rate Paid-in-Kind	c	Interest Rate Cash	d	Agency Fee		Exit Fee		a	Common Stock Issued		Accounting Impact
(in thousands, except share data)
1		4/26/2021	$	-	12/20/2026	8.00%		2.00%		$	-	$	-			150,000	Extinguishment	b
2		5/26/2021		1,500	12/20/2026	8.00%		2.00%			-		750			3,000,000	Modification	e
3		8/12/2021		500	12/20/2026	8.00%		2.00%			-		250			2,000,000	Modification	e
4		8/31/2021		1,100	12/20/2026	8.00%		2.00%			-		550			-	Modification	e
5		10/8/2021		725	12/20/2026	8.00%		2.00%			-		363			-	Extinguishment	e
6		11/5/2021		800	12/20/2026	8.00%		2.00%			-		800			7,500,000	Modification	e
7		12/23/2021		500	12/20/2026	8.00%		2.00%			70		500			-	Modification	e
				5,125							70		3,213			12,650,000

8		1/26/2022		350	12/20/2026	8.00%		2.00%			-		350			-	Modification	e
9		2/11/2022		250	12/20/2026	0.00%		7.00%			-		13			-	Modification	f
10		3/11/2022		300	12/20/2026	0.00%		7.00%			-		15			-	Modification	f
11		3/25/2022		500	12/20/2026	0.00%		7.00%			-		25			-	Modification	f
12		4/15/2022		450	12/20/2026	0.00%		7.00%			-		23			-	Modification	f
13		5/10/2022		500	12/20/2026	0.00%		7.00%			35		25			-	Modification	f
14		6/10/2022		350	12/20/2026	0.00%		7.00%			-		18			-	Modification	f
15		7/8/2022		350	12/20/2026	0.00%		7.00%			-		18			-	Modification	f
				3,050							35		487			-

16		2/10/2023		1,500	12/20/2026	0.00%		7.00%			-		75			-	Modification	f
17	h	4/20/2023		26,316	12/20/2026	15.00%		0.00%			35		708			21,401,993	Extinguishment	g
19		7/28/2023		2,000	12/31/2024	0.00%		7.00%			-		100			-	Modification
				29,816							35		883			21,401,993

20		6/30/2024		-	12/20/2026	15.00%		0.00%			35		672			-	Modification
21	h	12/26/2024		1,861	12/20/2026	15.00%		0.00%			-		-			5,001,991	Modification	g
				1,861							35		672			5,001,991
			$	39,852						$	175	$	5,255			39,053,984

Added and capitalized to the principal amount of the original loan and the original loan terms apply.

The Centre Lane Senior Secured Credit Facility was amended to permit the Company to raise up to $6.0 million of total cash proceeds from the sale of its preferred stock prior to December 31, 2021, without having to make a mandatory prepayment of the loans. Additionally, the Company may issue up to $800,000 in dividends from the previous limit of $500,000 per annum.

New rates in effect in connection with Amendment 22.

Second Out Loans.

First Out Loans.

Third Out Loans.

There was no impact on principal or interest and no fees incurred by the Company as a result of Amendment 18 and Amendment 22, thus they are not included in the above table.

Our debt financing arrangements, including long-term debt, expose us to counterparty credit risk as they are solely with a single related party lender. We manage this risk by closely monitoring the related party's financial stability and ensuring it maintains a strong credit rating. No other financial institutions are involved in our debt obligations. As of March 31, 2025 and December 31, 2024, the carrying value of the Centre Lane Senior Secured Credit Facility was $77.8 million and $74.9 million, respectively, net of unamortized debt discount of $3.3 million and $4.0 million, respectively. The discount is being amortized over the remaining life of the Centre Lane Senior Secured Credit facility using the effective interest method.

During the three months ended March 31, 2025 and 2024, the Company recorded amortization of debt discount of $633,000 and $615,000, respectively, on the Centre Lane Senior Secured Credit Facility.

Interest expense for the three months ended March 31, 2025 and 2024, consisted of the following:


	Three Months Ended
	March 31, 2025		March 31, 2024
(in thousands)
Interest expense	$	2,387	$	2,376
Amortization		633		615
Total interest expense	$	3,020	$	2,991

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BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(Unaudited)

NOTE 11 – 10% CONVERTIBLE PROMISSORY NOTES

On November 30, 2018, the Company issued 10% convertible promissory notes ("Convertible Notes") in the amount of $80,000 to our then Chairman of the Board, a related party. The Convertible Notes were unsecured and matured five years from issuance and were convertible at the option of the holder into shares of common stock at any time prior to maturity at a conversion price of $0.40 per share. A beneficial conversion feature existed on the date the Convertible Notes were issued whereby the fair value of the underlying common stock into which the Convertible Notes was convertible was in excess of the face value of the Convertible Notes of $80,000.

The outstanding principal and interest of the Convertible Notes were due and payable in November 2023, and on July 1, 2024, the Company repaid the outstanding principal of $80,000 and outstanding interest of $43,000 on the Convertible Notes due to its former Chairman of the Board.

NOTE 12 – LEASES

The Company accounts for its operating lease under FASB ASC Topic 842, Leases (“ASC 842”), which requires lessees to recognize on the balance sheet at lease commencement, the lease assets and the related lease liabilities for the rights and obligations created by operating and finance leases with lease terms of more than 12 months.

Operating Lease

The Company leases its corporate offices in Boca Raton, Florida under a long-term non-cancellable lease agreement. An addendum to the lease dated June 14, 2022, set a lease renewal term of five years beginning upon completion of improvements to the office space by the landlord, which were completed on September 12, 2022. The annual base rent as of the beginning of this renewal term is approximately $143,000, with a provision for a 3% increase on each anniversary of the rent commencement date. The Company has the option to renew the lease for one additional five-year term.

At March 31, 2025 and December 31, 2024, the operating lease right-of-use asset was $235,000 and $253,000, respectively, and is included under assets on the consolidated balance sheets.

At March 31, 2025 and December 31, 2024, the operating lease right-of-use liability was $234,000 and $252,000, respectively, including the current portion of $83,000 and $79,000, respectively, and is included under liabilities on the consolidated balance sheets.

Over the lease term, the Company is required to amortize the operating lease asset and record interest expense on the lease liability created at lease commencement. Operating lease expense was approximately $45,000 and $40,000 for the three months ended March 31, 2025 and 2024, respectively.

The Company’s non-lease components are primarily related to property maintenance and other operating services, which vary based on future outcomes and are recognized in rent expense when incurred and not included in the measurement of the lease liability.

Operating Lease Subleases

On April 14, 2024 and July 1, 2024, the Company entered into two sublease agreements for its Boca Raton corporate office suites. The subleases will continue for the remaining term on the initial lease agreement of three years with no option to extend. The aggregate minimum annual rental income under the subleases is approximately $137,000 with 3% escalations per annum. The Company retained the ability to use the address as its corporate office.

At March 31, 2025 and December 31, 2024, the operating lease subleases right-of-use liability was $12,000, and is included as an offset to right-of-use assets within other non-current liabilities on the consolidated balance sheet.

Operating lease sublease income was approximately $34,000 for the three months ended March 31, 2025. There was no sublease income for the same period of 2024.

Finance Lease

On October 1, 2023, the Company entered into a lease agreement for computer equipment with a lease term of three years.

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BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(Unaudited)

At March 31, 2025 and December 31, 2024, finance lease asset was $37,000 and $42,000, respectively, and is included under assets on the consolidated balance sheets.

At March 31, 2025 and December 31, 2024, finance lease liability was $37,000 and $42,000, respectively, including the current portion of $23,000 and $22,000, respectively, and is included under liabilities on the consolidated balance sheets.

Finance lease expense for the three months ended March 31, 2025 was $7,200, inclusive of interest of $2,100 and amortization of $5,100. Finance lease expense for the three months ended March 31, 2024 was $7,000, inclusive of interest of $3,000 and amortization of $4,000.

As of March 31, 2025 and December 31, 2024, the asset and lease liability for the operating and finance lease are summarized as follows (in thousands):


	March 31, 2025			December 31, 2024
(in thousands)
Assets:
Total operating lease right-of-use asset	$	235		$	253
Total finance lease asset (1)	$	37		$	42

Liabilities:
Operating lease liability, current	$	83		$	79
Operating sublease liability, net of current portion		12			12
Operating lease liability, net of current portion		151			173
Total operating lease liability	$	246		$	264

Finance lease liability, current	$	23		$	22
Finance lease liability, net of current portion		14			20
Total finance lease liability	$	37		$	42

Weighted-average remaining lease term (in years):
Operating lease		2.50			2.75
Finance lease		1.50			1.75

Weighted-average discount rate:
Operating lease		14.39	%		14.39	%
Finance lease		21.12	%		21.12	%

(1) - Finance lease represents computer software, see Note 5, Property and Equipment, Net, to the Company's consolidated financial statements.

NOTE 13 – REVENUE RECOGNITION

The following table represents our revenue disaggregated by type:


	Three Months Ended
	March 31, 2025		March 31, 2024
(in thousands)
Revenue:
Digital publishing	$	583	$	434
Advertising technology		4,232		2,625
Consumer insights		7,039		6,690
Creative services		1,495		2,058
Media services		841		641
Total revenue	$	14,190	$	12,448

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BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(Unaudited)

Geographic Information

Revenue by geography is based on the country of the Company’s contracting entity. Total United States revenue was approximately 100% of total revenue for the three months ended March 31, 2025 and 2024, respectively.

As of March 31, 2025, and December 31, 2024, approximately 100% of our long-lived assets, including websites and other intangible assets used in revenue generation, were attributable to operations in the United States.

Deferred Revenue

The movement in deferred revenue during the three months ended March 31, 2025 and the year ended December 31, 2024 comprised the following:


	March 31, 2025			December 31, 2024
(in thousands)
Deferred revenue at the start of the period	$	2,883		$	4,569
Amounts invoiced during the period		17,685			40,529
Less: revenue recognized during the period		(14,190	)		(42,215	)
Deferred revenue at the end of the period	$	6,378		$	2,883

NOTE 14 – STOCK-BASED COMPENSATION

On April 14, 2022, the Board of Directors of the Company and the Compensation Committee of the Board of Directors adopted and approved the 2022 Bright Mountain Media Stock Option Plan (the “Stock Option Plan”). The Stock Option Plan provides for the grant of awards to eligible employees, directors and consultants in the form of stock options. The purpose of the Stock Option Plan is to provide an incentive to attract and retain directors, officers, consultants, advisors and employees whose services are considered valuable, to encourage a sense of proprietorship and to stimulate an active interest of such persons into our development and financial success. The Stock Option Plan has a term of 10 years and authorizes the issuance of up to 22,500,000 shares of the Company’s common stock. As of March 31, 2025, 11,923,017 shares were remaining under the Stock Option Plan for future issuance.

Options

As of March 31, 2025, options to purchase 10,576,983 shares of common stock were outstanding, in the aggregate, under the Company's 2013 Stock Option Plan, 2015 Stock Option Plan, 2019 Stock Option Plan, and the Stock Option Plan at a weighted-average exercise price of $0.10 per share. No further grants can be made under any of the Company's stock option plans other than the Stock Option Plan.

Compensation expense recorded in connection with the Stock Option Plan was $37,000 and $65,000 for the three months ended March 31, 2025 and 2024, respectively. These amounts have been recognized as a component of general and administrative expenses in the accompanying consolidated financial statements.

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BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(Unaudited)

The following table presents the activity of the Company’s outstanding common stock options for the three months ended March 31, 2025:


	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value

Common stock options:
Balance outstanding at December 31, 2024		10,459,033		$	0.10		8.0	$	79
Granted		400,000		$	0.04		-	$	-
Exercised		(50,400	)	$	-		-	$	-
Forfeited		(211,650	)	$	0.08		-	$	-
Expired		(20,000	)	$	0.75		-	$	-
Balance outstanding at March 31, 2025		10,576,983		$	0.10		7.8	$	63
Exercisable at March 31, 2025		4,217,014		$	0.15		7.1	$	36
Unvested at March 31, 2025		6,359,969		$	0.07		8.2	$	28

During the three months ended March 31, 2025, 400,000 options were issued. No options were issued during the three months ended March 31, 2024.

As of March 31, 2025, there were total unrecognized compensation costs related to non-vested share-based compensation arrangements of $192,000 to be recognized through July 2027.

The Company estimates the fair value of share-based compensation utilizing the Black-Scholes option pricing model, which is dependent upon several variables such as the expected option term, expected volatility of our stock price over the expected option term, expected risk-free interest rate over the expected option term, expected dividend yield rate over the expected option term, and an estimate of expected forfeiture rates.

The following table provides the weighted-average assumptions used in determining the fair value of the stock option awards for the three months ended March 31, 2025 and 2024:


	March 31, 2025			March 31, 2024

Expected life (years)	5.50 yrs			0 yrs
Expected volatility		449	%		0.00	%
Risk-free interest rate		4.40	%		0.00	%
Dividend yield		0.00	%		0.00	%
Expected forfeiture rate		0.00	%		0.00	%

The expected life is computed using the simplified method, which is the average of the vesting term and the contractual term. The expected volatility is based on an average of similar public company's historical volatility, as the Company's common stock is quoted in the over-the-counter market on the OTCQB Tier of the OTC Markets, Inc. The risk-free interest rate is based on the U.S. Treasury yields with terms equivalent to the expected term of the related option at the time of the grant.

Dividend yield is based on historical trends. While the Company believes these estimates are reasonable, the compensation expense recorded would increase if the expected life was increased, a higher expected volatility was used, or if the expected dividend yield increased. The Company has elected to account for forfeitures as they occur.

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BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(Unaudited)

NOTE 15 – FAIR VALUE MEASUREMENTS

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).

The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Level 1: Valuation is based on unadjusted quoted prices in active markets for identical assets and liabilities that are accessible at the reporting date. Because valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.

Level 2: Valuation is determined from pricing inputs that are other than quoted prices in active markets that are either directly or indirectly observable as of the reporting date. Observable inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and interest rates and yield curves that are observable at commonly quoted intervals.

Level 3: Valuation is based on inputs that are both significant to the fair value measurement and unobservable. Level 3 inputs includes situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value generally require significant management judgment or estimation.

Fair Value Considerations

Financial instruments recognized in the consolidated balance sheets consist of cash, cash equivalents, restricted cash, accounts receivable, other liabilities and accounts payable. The Company believes that the carrying value of its current financial instruments approximates their fair value due to the short-term nature of these instruments. The carrying value of the Centre Lane Senior Secured Credit Facility approximates the fair value due to their nature and level of risk.

Assets Measured at Fair Value on a Non-recurring Basis

The Company has certain non-financial assets that are measured at fair value on a non-recurring basis when there is an indicator of impairment, and they are recorded at fair value only when impairment is recognized. These assets include goodwill and intangible assets, net.

The below table shows the quantitative information for assets measured at fair value on a non-recurring basis:


	Quantitative Information about Level 3 Fair Value Measurements
	Fair Value		Valuation Technique	Unobservable Input	Rate (Weighted-Average Cost of Capital)
(in thousands)
Goodwill	$	7,785	Discounted cash flow	Discount rate	19.84%
Intangible assets, net	$	12,831	Discounted cash flow	Discount rate	19.84%

Goodwill and Intangibles Assets

Goodwill and intangible assets are tested for impairment at least annually, and if triggering events are noted prior to the annual assessment. Impairment is deemed to occur when the carrying value associated with the reporting unit exceeds the implied value associated with the reporting unit. We estimated the fair value of our reporting units utilizing an income approach (discounted cash flow method), which incorporated significant unobservable Level 3 inputs.

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BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(Unaudited)

During the year ended December 31, 2024, an impairment assessment was performed on goodwill for the Ad Network, Owned & Operating and Insights reporting units. The assessment used a qualitative assessment, including consideration of the economic, industry and market conditions in addition to the overall financial performance of the Company and these assets. Our qualitative assessment concluded that it was more likely than not that the estimated fair value of the Ad Network, Owned & Operating and Insights reporting units exceeds its carrying amount. Since the assets are considered recoverable, no impairment charge was recognized for the year ended December 31, 2024.

There was no triggering event or impairment for the three months ended March 31, 2025.

Centre Lane Senior Secured Credit Facility

The Company is required to perform an analysis of the change in each amendment to determine whether the change is a modification or an extinguishment of debt. Under a modification, no gain or loss is recorded, and a new effective interest rate is established based on the carrying value of the debt and revised cash flow. If the debt is extinguished, the old debt is derecognized and the new debt is recorded at fair value, which becomes the new carrying value.

The Company utilizes a third-party valuation company to calculate the present value of the cash flows under the terms of each new amendment and determines if it was substantially different by at least 10% from the present value of the remaining cash flow of the original debt instrument. Amendment Twenty-Two was considered a modification. For further information on modifications and extinguishments, see the amendments table within Note 10, Centre Lane Senior Secured Credit Facility, to the consolidated financial statements.

NOTE 16 – COMMITMENTS AND CONTINGENCIES

Litigation

In accordance with applicable accounting guidance, the Company establishes an accrued liability for litigation and regulatory matters when those matters present loss contingencies that are both probable and estimable. In such cases, there may be exposure to loss in excess of any amounts accrued. When a loss contingency is not both probable and estimable, the Company does not establish an accrued liability. As a litigation or regulatory matter develops, the Company, in conjunction with any outside counsel handling the matter, evaluates on an ongoing basis whether such matter presents a loss contingency that is probable and estimable. If, at the time of evaluation, the loss contingency related to a litigation or regulatory matter is not both probable and estimable, the matter will continue to be monitored for further developments that would make such loss contingency both probable and estimable. When a loss contingency related to a litigation or regulatory matter is deemed to be both probable and estimable, the Company will establish an accrued liability with respect to such loss contingency and record a corresponding amount of litigation-related expense. The Company will then continue to monitor the matter for further developments that could affect the amount of any such accrued liability.

Ladenburg

On July 11, 2023, Ladenburg Thalmann & Co. Inc. (“Ladenburg”) filed an action against the Company for breach of contract in the United States District Court for the Southern District of Florida (the “District Court”), Case No. 9:23-cv-81019-AMC. Ladenburg alleges that it entered into an Investment Banking Agreement (the “Agreement”) with the Company on September 1, 2020. According to Ladenburg, that Agreement provided that Ladenburg would be the exclusive investment advisor and banker for the Company. Ladenburg alleges that the Agreement entitles them to a fee for any financing transactions (debt financing or merger and acquisition transactions) that the Company engages in during the term of the contract. In April 2023, the Company informed Ladenburg of the impending acquisition of Big Village Insights, Inc. and Big Village Agency, LLC (together, the "Big Village Acquisition"). Ladenburg now seeks $1.5 million, plus interest, costs and attorneys’ fees and expenses as a result of that acquisition and debt financing, claiming that it is entitled to a fee. The Company disputes the allegations and disputes that Ladenburg is entitled to receive any fee since it did not perform any work pertaining to such acquisition. On November 27, 2024, the District Court entered a judgment in favor of Ladenburg and against the Company granting damages of $1.7 million to Ladenburg. On December 26, 2024, the Company filed a motion with the District Court requesting that the District Court reconsider its judgment. This motion was denied on January 30, 2025. On February 27, 2025, the Company appealed to the United States Court of Appeals for the Eleventh Circuit. The Company's appeal is presently ongoing. The outcome of this matter is not determinable as of the date of issuance of these consolidated financial statements.

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BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(Unaudited)

Other Litigation

Other litigation is defined as smaller claims or litigation that are neither individually nor collectively material. It does not include lawsuits that relate to collections.

The Company is party to various other legal proceedings that arise in the ordinary course of business, separate from normal course accounts receivable collections matters. Due to the inherent difficulty of predicting the outcome of these other legal proceedings, the Company cannot predict the eventual outcome of these matters, and it is reasonably possible that some of them could be resolved unfavorably to the Company. As a result, it is possible that the Company’s results of operations or cash flows in a particular fiscal period could be materially affected by an unfavorable resolution of pending litigation or contingencies. The outcome is not determinable as of the issuance of these consolidated financial statements.

NOTE 17 – STOCKHOLDERS’ DEFICIT

Preferred Stock

The Company has authorized 20,000,000 shares of preferred stock with a par value of $0.01 (the “Preferred Stock”), issuable in such series and with such designations, rights and preferences as the board of directors may determine. The Company’s board of directors has designated six series of preferred stock, consisting of:

10% Series A Convertible Preferred Stock (“Series A Stock”);

10% Series B Convertible Preferred Stock (“Series B Stock”);

10% Series C Convertible Preferred Stock (“Series C Stock”);

10% Series D Convertible Preferred Stock (“Series D Stock”);

10% Series E Convertible Preferred Stock (“Series E Stock”); and

10% Series F Convertible Preferred Stock (“Series F Stock”).

The designations, rights and preferences of the Series F-1, Series F-2 and Series F-3 are identical, other than the dividend rate, liquidation preference and date of automatic conversion into shares of our common stock.

Additional terms of the designations, rights and preferences of the Series F-1, Series F-2 and Series F-3 include:

•

the shares have no voting rights, except as may be provided under Florida law;

•

the shares pay cash dividends subject to the provisions of Florida law at the dividend rates set forth above, payable monthly in arrears;

•

the shares are convertible at any time at the option of the holder into shares of our common stock on a 1:1 basis. The conversion ratio is proportionally adjusted in the event of stock splits, recapitalization or similar corporate events. Any shares not previously converted will automatically convert into shares of our common stock on the dates set forth above;

•

the shares rank junior to the 10% Series A Convertible Preferred Stock and our 10% Series E Convertible Preferred Stock;

•

in the event of a liquidation or winding up of the Company, the shares have a liquidation preference of $0.50 per share for the Series F-1, $0.50 per share for the Series F-2 and $0.40 per share for the Series F-3; and

•

the shares are not redeemable by the Company.

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BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(Unaudited)

Other designations, rights and preferences of each series of preferred stock are identical, including:

•

shares do not have voting rights, except as may be permitted under Florida law;

•

shares are convertible into our common stock at the holder’s option on a one for one basis;

•

shares are entitled to a liquidation preference equal to a return of the capital invested; and

•

each share will automatically convert into shares of common stock five years from the date of issuance or upon a change in control.

Both the voluntary and automatic conversion formulas are subject to proportional adjustment in the event of stock splits, stock dividends and similar corporate events.

There were no shares of preferred stock issued or outstanding at March 31, 2025, and December 31, 2024.

At March 31, 2025 and December 31, 2024, there was an accrued unpaid preference dividend of $691,000. This amount is payable to the Company's former Chairman, Mr. Kip Speyer, and is included under other current liabilities in the consolidated balance sheets.

Common Stock

Shares of Common Stock under the Stock Option Plan

On April 14, 2022, the Board and the Compensation Committee of the Board adopted and approved the 2022 Stock Option Plan. The 2022 Stock Option Plan has a term of 10 years and authorizes the issuance of up to 22,500,000 shares of the Company’s common stock. As of March 31, 2025, 11,923,017 shares were remaining under the 2022 Stock Option Plan for future issuance.

Issue of Common Stock

During the three months ended March 31, 2025, the Company issued shares of our common stock as follows (in thousands, except share data):


	Three Months Ended
	March 31, 2025
	Shares (#)		Value

Common stock issued for options exercised		50,400	$	2
Shares of common stock issued, net		50,400	$	2

During the three months ended March 31, 2024, the Company issued shares of our common stock as follows (in thousands, except share data):


	Three Months Ended
	March 31, 2024
	Shares (#)		Value

Common stock issued for services rendered		279,452	$	16
Shares of common stock issued, net		279,452	$	16

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BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(Unaudited)

Treasury Stock

During the three months ended March 31, 2025, one shareholder relinquished 200,000 shares of the Company's common stock, which were acquired by the Company at no cost to the Company. During the three months ended March 31, 2024, one shareholder relinquished 525,000 shares of the Company's common stock, which were acquired by the Company at no cost to the Company. A total of 1,550,175 shares of the Company's common stock, with a value of $220,000, are being held as Treasury Stock by the Company.

Warrants

At March 31, 2025 and December 31, 2024, we had 5,456,200 and 10,573,700 common stock warrants outstanding to purchase shares of our common stock, respectively, with exercise prices ranging between $0.65 and $1.00 per share. Of the 5,456,200 common stock warrants outstanding at March 31, 2025, 5,281,200 will expire in 2025, and 175,000 will expire in 2030.

Approximately 5,117,500 common stock warrants expired during the three months ended March 31, 2025, and 913,750 common stock warrants expired during the three months ended March 31, 2024.

A summary of the Company’s warrants outstanding as of March 31, 2025 and December 31, 2024, is presented below.


March 31, 2025
Exercise Price		Number Outstanding		Gross Cash Proceeds (if exercised)
$	0.65		-	$	-
$	0.75		5,281,200	$	3,961
$	1.00		175,000	$	175
			5,456,200	$	4,136


December 31, 2024
Exercise Price		Number Outstanding		Gross Cash Proceeds (if exercised)
$	0.65		-	$	-
$	0.75		10,398,700	$	7,799
$	1.00		175,000	$	175
			10,573,700	$	7,974

NOTE 18 – LOSS PER SHARE

As of March 31, 2025 and 2024, there were 177,515,227 and 172,382,586 shares of common stock issued, respectively, and 175,965,052 and 171,032,411 shares of common stock outstanding, respectively. Outstanding shares as of March 31, 2025 and 2024, have been adjusted to reflect 1,550,175 and 1,350,175 treasury shares, respectively.

Basic net loss per share is computed by dividing the net earnings attributable to common shareholders by the weighted-average number of common shares outstanding during the period.

Diluted loss per share is computed by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding, increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued. Conversion or exercise of the potential common shares is not reflected in diluted earnings per share unless the effect is dilutive. The dilutive effect, if any, of outstanding common share equivalents is reflected in diluted earnings per share by application of the treasury stock method, and if-converted method, as applicable.

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BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(Unaudited)

The following tables reconcile actual basic and diluted earnings per share for the three months ended March 31, 2025 and 2024.


	Three Months Ended
	March 31, 2025			March 31, 2024
(in thousands, except per share data)
Numerator:
Net loss	$	(3,231	)	$	(4,766	)
Denominator:
Weighted-average common shares outstanding:
Basic		175,974,990			171,231,775
Diluted		175,974,990			171,231,775
Net loss per common share
Basic	$	(0.02	)	$	(0.03	)
Diluted	$	(0.02	)	$	(0.03	)

The anti-dilutive securities excluded from the weighted-average shares used to calculate the diluted net loss per common share for the three months ended March 31, 2025 and 2024 were as follows:


	March 31, 2025		March 31, 2024
Shares unvested and subject to exercise of stock options		10,576,983		10,477,110
Shares subject to exercise of warrants		5,456,200		20,448,316

NOTE 19 – RELATED PARTIES

Centre Lane Partners

Centre Lane Partners has provided, and continues to provide, funding to assist the Company with its liquidity needs through the Centre Lane Senior Secured Credit Facility.

In connection with the Seventeenth Amendment, on April 20, 2023, the Company issued 21,401,993 shares of common stock of the Company to BV Agency, LLC, an entity beneficially owned by Centre Lane Partners. In connection with the Twenty-First Amendment, on December 26, 2024, the Company issued an additional 5,001,991 shares of common stock of the Company to BV Agency, LLC, an entity beneficially owned by Centre Lane Partners.

BV Agency, LLC, and Centre Lane Partners own approximately 15.0% and 8.6% of the Company’s outstanding common stock, respectively.

SEC rules define a related party as including (i) any director or executive officer of the Company, or any immediate family member thereof, (ii) any director nominee, or any immediate family member thereof, and (iii) a 5% or greater shareholder of the Company, or any immediate family member thereof. As a result, BV Agency, LLC, and Centre Lane Partners together are considered to be related parties of the Company. Through March 31, 2025, the Company has entered into 22 amendments to the Credit Agreement between itself and Centre Lane Partners.

The total related party debt owed to Centre Lane Partners was $81.1 million and $78.8 million as of March 31, 2025 and December 31, 2024, respectively. See Note 10, Centre Lane Senior Secured Credit Facility, to the Company’s consolidated financial statements for details on this facility.

Preferred Stock

At March 31, 2025 and December 31, 2024, there was an accrued unpaid preference dividend of $691,000. This amount is payable to the Company's former Chairman, Mr. Kip Speyer.

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BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2025

(Unaudited)

NOTE 20 – INCOME TAXES

The Company recorded a tax provision of $0 for the three months ended March 31, 2025 and 2024, due in large part to its expected tax losses for the period and maintained a full valuation allowance against its net deferred tax assets.

At March 31, 2025 and December 31, 2024, the Company had no unrecognized tax benefits or accrued interest and penalties recorded. No interest and penalties were recognized during the three months ended March 31, 2025 and 2024.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of our operations should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this report and in our Annual Report on Form 10-K for the year ended December 31, 2024. In addition to historical consolidated financial information, this discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to these differences include, but are not limited to, those identified below, and in the section "Cautionary Statement Regarding Forward-Looking Information", those discussed in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024, and those discussed in any subsequent filing we make with the SEC.

Business Overview

Organization and Nature of Operations

Bright Mountain Media, Inc. (together with its wholly-owned subsidiaries, the “Company,” “Bright Mountain” or “we”) is an end-to-end marketing services company that helps brands with the right audiences, at the right time, with the right message, both effectively and efficiently by removing the middlemen in the marketing workflow. Our end-to-end offerings combine consumer insights with creative services, media services, and advertising technology to deliver solutions to improve audience fidelity for brands. We focus on digital publishing, advertising technology, consumer insights, creative services, and media services.

Digital Publishing

Advertising Technology

Our advertising technology division focuses on delivering targeted ads to audiences on owned and operated sites as well as third-party publishers in a cost-effective manner through the deployment of proprietary technologies. By developing our own proprietary technology stack, we are able to pass along efficiencies to both the demand and supply side of the ecosystem. Our goal is to enable and support a streamlined, end-to-end advertising model that addresses both demand (buy side) and publisher supply (sell side) programmatic sales and delivery of digital advertisements using an array of audience targeting tools and advertising formats (display, audio, video, CTV, and in-app). Programmatic advertising relies on software programs that leverage data and proprietary algorithms to match the optimal selection of an ad with a bid price offered by advertisers.

Consumer Insights

Our consumer insights division focuses on providing primary and secondary research, competitive intelligence, and expert insight to address customers' strategic issues. We provide cutting-edge and dynamic research, offering clients a comprehensive perspective on their consumers. This insight extends to strategic guidance on the optimal timing and channels to effectively connect with target audiences. Our cutting-edge approach combines advanced data analytics and comprehensive market research, to uncover actionable insights that drive informed decision-making.

Creative Services

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Media Services

Our media services division focuses on advertisers and agencies by providing access to premium inventory, and leveraging data to optimize programmatic campaigns. Our aim is to empower clients to access the most sought-after advertising spaces across diverse platforms tailored to their specific needs and preferences. Our data-driven approach ensures that ad placements are not only well-targeted, but also continuously optimized for maximum efficiency and return on investment. Our commitment to combining premium inventory access with data-driven programmatic campaign optimization makes us an indispensable partner in the success of our clients' advertising and marketing endeavors.

The Company generates revenue through:

•

the selling of advertisements placed on our owned and managed sites and on partner websites where we earn a share of the revenue;

•

fees for facilitating the seamless, real-time exchange of advertisements on a large scale, bridging networks of buyers (referred to as "DSPs") and networks of sellers (referred to as "SSPs");

•

provision of creative and media services to advertisers.

Key Factors Affecting Our Performance

Seasonal Fluctuations. Typically advertising technology companies report a material portion of their revenues during the third and fourth calendar quarters as a result of back-to-school and holiday-related advertising spend. We continue to experience this trend in our advertising technology division. Because of seasonal fluctuations, there can be no assurance that the results of any quarter or full year will be indicative of results for future years or quarters.

Limited Number of Customers. During the three months ended March 31, 2025 and 2024, one customer represented 15.4% and 14.9% of revenue, respectively. The loss of this customer could have a material adverse impact on our results of operations in future periods.

Managing Industry Dynamics. We operate in the rapidly evolving digital advertising industry. Advances in programmatic advertising technologies, and the efficient and automated method of purchasing ads online, has enabled publishers to auction their ad inventory to more buyers simultaneously, in real time. As advertisers stay ahead of evolving trends in consumer engagement with digital media, an expansive opportunity for innovation emerges. Our commitment to understanding customer needs empowers us, and our continuous pursuit of innovation enables swift adaptation to industry shifts. This approach not only facilitates the development of cutting-edge solutions, but also does so in a cost-effective manner.

As regulatory concerns accelerate the impact on existing industry standards, companies are actively seeking new methods to finely tailor their messages to target audiences. Tech companies will be limited in how they monetize personal information for advertising purposes. This trend is exemplified by two imminent developments: (1) the anticipated erosion of Google's third-party cookies and (2) the data security measures integrated into Apple iPhones. Consequently, companies must explore innovative methods to better understand their target audiences and have the tools to effectively engage with them.

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Key Operating and Financial Metrics

We monitor the following key financial and operational metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. The following is our analysis for the three months ended March 31, 2025 and 2024:


	Three Months Ended
	March 31, 2025			March 31, 2024
(in thousands)
Revenue	$	14,190		$	12,448
Cost of revenue		9,918			9,311
Gross margin		4,272			3,137
General and administrative expenses		4,524			5,244
Financing and other expense, net		2,979			2,659
Net loss	$	(3,231	)	$	(4,766	)

Adjusted EBITDA (loss) (1)	$	816		$	(1,113	)

(1) For a reconciliation of net loss to Adjusted EBITDA see “Use of Non-GAAP Financial Measures” below.

Revenue

The Company generates revenue through:

•

the selling of advertisements placed on our owned and managed sites and on partner websites where we earn a share of the revenue;

•

fees for facilitating the seamless, real-time exchange of advertisements on a large scale, bridging networks of buyers (referred to as "DSPs") and networks of sellers (referred to as "SSPs");

•

provision of creative and media services to advertisers.

Revenue increased $1.7 million, or 14%, for the three months ended March 31, 2025, compared to the same period in 2024. See below for a detailed analysis of revenue for the three months ended March 31, 2025, and 2024.

Cost of Revenue

Cost of revenue includes internal labor and payment to third parties for services performed to drive revenue, which includes the publisher cost paid for ad exchange on third party sites, advertising fees, personnel costs, technology and data related costs, fees paid for content creation, influencers, writers, and sales commission.

Cost of revenue increased approximately $607,000, or 7%, for the three months ended March 31, 2025 compared to the same period in 2024. See below for a detailed analysis of cost of revenue for the three months ended March 31, 2025, and 2024.

General and Administrative Expenses

General and administrative expenses consist primarily of (i) personnel and related costs for our executive, finance and accounting, human resources, and, administrative personnel, including salaries, benefits, bonuses, and stock-based compensation; (ii) legal, accounting, and other professional service fees; (iii) other corporate expenses; (iv) information technology costs; and (v) facility costs.

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General and administrative expenses decreased approximately $720,000, or 14%, for the three months ended March 31, 2025 compared to the same period in 2024. See below for a detailed analysis of general and administrative expenses for the three months ended March 31, 2025 and 2024.

Results of Operations

The following is our analysis of the results of operations for the periods indicated below. This analysis should be read in conjunction with the consolidated financial statements and the notes to those statements that are included elsewhere in this Quarterly Report on Form 10-Q.

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024

Net loss for the quarter ended March 31, 2025 was $3.2 million as compared to a net loss of $4.8 million for the same period in 2024. The following is our analysis for the period:


	Three Months Ended
	March 31, 2025			March 31, 2024			Change
(in thousands)
Revenue	$	14,190		$	12,448		$	1,742		14	%
Cost of revenue		9,918			9,311			607		7	%
Gross margin		4,272			3,137			1,135		36	%
General and administrative expenses		4,524			5,244			(720	)	(14	)%
Loss from operations		(252	)		(2,107	)		1,855		(88	)%
Financing and other expense, net		(2,979	)		(2,659	)		(320	)	12	%
Net loss	$	(3,231	)	$	(4,766	)	$	1,535		(32	)%

Gross margin percentage		30	%		25	%				5	%

Revenue

Our revenue increased $1.7 million, or 14%, for the three months ended March 31, 2025, compared to the same period in 2024. The increase in revenue was largely attributable to our advertising technology division. The Company focuses on digital publishing, advertising technology, consumer insights, creative services, and media services. Changes in revenue generated by each such division are set forth below:


	Three Months Ended
	March 31, 2025		March 31, 2024		Change
(in thousands)
Digital publishing	$	583	$	434	$	149		34	%
Advertising technology		4,232		2,625		1,607		61	%
Consumer insights		7,039		6,690		349		5	%
Creative services		1,495		2,058		(563	)	(27	)%
Media services		841		641		200		31	%
	$	14,190	$	12,448	$	1,742		14	%

Digital Publishing

Digital publishing revenue increased by $149,000, or 34%, for the three months ended March 31, 2025, compared to the same period in 2024. Approximately $583,000, or 4%, of the Company’s revenue for the three months ended March 31, 2025, was generated from our digital publishing customers, compared to $434,000, or 3%, for the same period in 2024. This increase reflects a one-time payment that is non-recurring in nature, and which we received on account of a contract that has ended.

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Advertising Technology

Advertising technology revenue increased by $1.6 million, or 61%, for the three months ended March 31, 2025, compared to the same period in 2024. Approximately $4.2 million, or 30%, of the Company’s revenue for the three months ended March 31, 2025, was generated from our advertising technology customers compared to $2.6 million, or 21%, for the same period in 2024. This growth was driven by our ability to leverage our resources to attract top advertisers, which in turn has allowed us to onboard premium publishers. This led to an increase in volume, as well as rates and overall revenue.

Consumer Insights

Consumer insights revenue increased by $349,000, or 5%, for the three months ended March 31, 2025, compared to the same period in 2024. Approximately $7.0 million, or 49%, of the Company’s revenue for the three months ended March 31, 2025 was generated from our consumer insights customers compared to $6.7 million, or 54%, for the same period in 2024.

Creative Services

Creative services revenue decreased by $563,000, or 27%, for the three months ended March 31, 2025, compared to the same period in 2024. Approximately $1.5 million, or 11%, of the Company’s revenue for the three months ended March 31, 2025, was generated from our creative services customers compared to $2.1 million, or 17% for the same period in 2024. This decrease was primarily related to a decrease in the number of projects for smaller tier revenue customers.

Media Services

Media services revenue increased by $200,000, or 31%, for the three months ended March 31, 2025, compared to the same period in 2024. Approximately $841,000, or 6%, of the Company’s revenue for the three months ended March 31, 2025, was generated from our media services customers compared to $641,000, or 5%, for the same period in 2024. This increase was primarily related to the timing of customer needs and the moving of certain projects from year-end 2024 to the first quarter of 2025.

Cost of Revenue


	Three Months Ended
	March 31, 2025		March 31, 2024		Change
(in thousands)
Direct salaries and labor costs	$	1,813	$	1,930	$	(117	)	(6	)%
Direct project costs		3,634		3,149		485		15	%
Non-direct project costs		999		2,088		(1,089	)	(52	)%
Publisher costs		3,025		1,798		1,227		68	%
Content creation		179		193		(14	)	(7	)%
Sales commissions		259		101		158		156	%
Other		9		52		(43	)	-83	%
	$	9,918	$	9,311	$	607		7	%

Cost of revenue increased $607,000, or 7%, for the three months ended March 31, 2025, compared to the same period for 2024. This increase is due to the factors discussed below:

Direct Salaries and Labor Cost

Direct salaries and labor cost decreased $117,000, or 6%, for the three months ended March 31, 2025, when compared to the same period in 2024. Approximately $1.8 million, or 18%, of the Company's cost of revenue for the three months ended March 31, 2025, was a result of direct salaries and labor cost compared to $1.9 million, or 21% for the same period in 2024. These costs represent salary and labor cost of employees that work directly on customer projects for our consumer insights, creative services, and media services divisions.

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Direct Project Cost

Direct project cost increased $485,000, or 15%, for the three months ended March 31, 2025 when compared to the same period in 2024. Approximately $3.6 million, or 37%, of the Company's cost of revenue for the three months ended March 31, 2025, was a result of direct project cost compared to $3.1 million, or 34%, during the same period in 2024. These costs include payments made to third-parties that are directly attributable to the completion of projects that allow for revenue recognition for our consumer insights, creative services, and media services divisions.

Non-Direct Project Cost

Non-direct cost was $1.0 million, or 10%, of the Company's cost of revenue for the three months ended March 31, 2025, compared to $2.1 million, or 22%, for the same period in 2024. These costs represent overall client service costs that are not specifically related to a particular project, but relate to services for our consumer insights, creative services, and media services divisions. The decrease in non-direct project costs is related to the decrease in revenue from our creative services division.

Publisher Cost

Publisher cost was $3.0 million, which represents 31% of overall cost of revenue, and $1.8 million, or 19%, of overall cost of revenue, for the three months ended March 31, 2025 and 2024, respectively. We experienced an increase of $1.2 million, or 68%, for the three months ended March 31, 2025, compared to the same period in 2024. This increase is consistent with the increase noted in revenue for our advertising technology division. These costs represent payments to media providers and website publishers.

Gross Margin

Gross margin was $4.3 million and $3.1 million for the three months ended March 31, 2025 and 2024, respectively. Our gross margin increased $1.1 million, or 36%, for the three months ended March 31, 2025, when compared to the same period of 2024. Gross margin as a percentage of revenue increased to 30% for the three months ended March 31, 2025 compared to 25% for the same period of 2024.

General and Administrative Expenses


	Three Months Ended
	March 31, 2025			March 31, 2024			Change
(in thousands)
Personnel costs	$	1,828		$	2,492		$	(664	)	(27	)%
Legal fees		453			280			173		62	%
Professional fees		764			845			(81	)	(10	)%
Insurance		131			203			(72	)	(35	)%
Depreciation		13			40			(27	)	(68	)%
Amortization		485			481			4		1	%
Website expenses		329			297			32		11	%
Data processing		304			414			(110	)	(27	)%
Other		217			192			25		13	%
	$	4,524		$	5,244		$	(720	)	(14	)%

Gross margin as a percentage of general and administrative expense		94	%		60	%				35	%

General and administrative expenses decreased by $720,000, or 14%, for the three months ended March 31, 2025, compared to the same period in 2024. The decrease is due to a combination of factors as discussed below.

Personnel Cost

Personnel cost decreased by approximately $664,000, or 27%, for the three months ended March 31, 2025, compared to the same period in 2024. This change is mainly driven by a decrease in the Company's head count by a net change of 51 employees. The Company employee's headcount was 116 and 167 at March 31, 2025 and 2024, respectively.

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Legal Fees

Legal fees increased by $173,000, or 62%, for the three months ended March 31, 2025, compared to the same period in 2024. This increase is due largely to payments made as part of the ongoing litigation with Ladenburg. For a full description of litigation matters, see Note 16, Commitments and Contingencies, to the consolidated financial statements.

Data Processing

Data processing decreased by $110,000, or 27%, for the three months ended March 31, 2025, compared to the same period in 2024. This reduction is due largely to the reclassification of certain components of data processing costs from data processing to website expenses.

Financing Expense (Income)


	Three Months Ended
	March 31, 2025			March 31, 2024			Change
(in thousands)
Interest expense	$	3,026		$	3,004		$	22	1	%
Other expense (income)		(47	)		(345	)		298	(86	)%
Total financing and other expense, net	$	2,979		$	2,659		$	320	12	%

Financing and other expense, net increased by $320,000, or 12%, for the three months ended March 31, 2025, compared to the same period in 2024.

Use of Non-GAAP Financial Measure

Non-GAAP results are presented only as a supplement to the financial statements and for use within management's discussion and analysis based on U.S. generally accepted accounting principles ("GAAP"). The non-GAAP financial information is provided to enhance the reader's understanding of the Company's financial performance, but non-GAAP measures should not be considered in isolation or as a substitute for financial measures calculated in accordance with GAAP.

All of the items included in the reconciliation from net loss before taxes to EBITDA and from EBITDA to Adjusted EBITDA are either (i) non-cash items (e.g., depreciation, amortization of purchased intangibles, stock-based compensation, etc.) or (ii) items that management does not consider to be useful in assessing the Company's ongoing operating performance (e.g., M&A costs, income taxes, gain on sale of investments, loss on disposal of assets, etc.). In the case of the non-cash items, management believes that investors can better assess the Company's operating performance if the measures are presented without such items because, unlike cash expenses, these adjustments do not affect the Company's ability to generate free cash flow or invest in its business.

We use, and we believe investors benefit from the presentation of, EBITDA and Adjusted EBITDA in evaluating our operating performance because it provides us and our investors with an additional tool to compare our operating performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our core operations. We believe that EBITDA is useful to investors and other external users of our financial statements in evaluating our operating performance because EBITDA is widely used by investors to measure a company's operating performance without regard to items such as interest expense, taxes, and depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired.

Because not all companies use identical calculations, the Company's presentation of non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. However, these measures can still be useful in evaluating the Company's performance against its peer companies because management believes the measures provide users with valuable insight into key components of GAAP financial disclosures.

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A reconciliation of net loss before taxes to non-GAAP EBITDA and Adjusted EBITDA is as follows:


	Three Months Ended
	March 31, 2025			March 31, 2024
(in thousands)
Net loss before tax	$	(3,231	)	$	(4,766	)
Depreciation expense		13			40
Amortization of intangibles		485			481
Amortization of debt discount		633			615
Other interest expense		6			11
Interest expense - Centre Lane Senior Secured Credit Facility and Convertible Promissory Notes		2,387			2,378
EBITDA		293			(1,241	)
Stock compensation expense		37			65
Non-recurring professional fees		241			-
Non-recurring legal fees		245			55
Non-recurring severance expense		-			8
Adjusted EBITDA (loss)	$	816		$	(1,113	)

Liquidity and Capital Resources

Liquidity is the ability of a company to generate sufficient cash to satisfy its needs for cash. The following table summarizes total current assets, total current liabilities, and net working capital (deficit) as of March 31, 2025, as compared to December 31, 2024.


	March 31, 2025			December 31, 2024
(in thousands)
Total current assets	$	19,620		$	20,299
Total current liabilities		34,444			33,780
Net working capital (deficit)	$	(14,824	)	$	(13,481	)

As of March 31, 2025, we had a cash balance of $2.2 million and a restricted cash balance of $1.9 million compared with a cash balance of $2.5 million and a restricted cash balance of $1.9 million as of December 31, 2024. The Company’s liquidity needs, and a discussion of how it intends to meet those needs, is discussed below. See –“Going Concern.”

Going Concern

Historically, the Company has incurred losses, which have resulted in an accumulated deficit of approximately $170.1 million as of March 31, 2025. Cash flows (used in) provided by operating activities were $(350,000) and $920,000 for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, the Company had a working capital deficit of approximately $14.8 million, inclusive of $2.2 million in cash and cash equivalents and $1.9 million in restricted cash.

The Company's current cash and working capital, as of the filing of this Quarterly Report on Form 10-Q, is not expected to be sufficient to fund its anticipated level of operations over the next twelve months. As a result, such matters create a substantial doubt regarding the Company’s ability to meet its financial obligations and continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to meet its liquidity needs through a combination of factors. During the next year, we anticipate that we will need approximately $5.6 million to meet our contractual obligations in addition to amounts needed for our working capital needs. The Company is currently exploring several strategic alternatives, including restructuring or refinancing its debt, or seeking additional debt, including borrowing under the Centre Lane Senior Secured Credit Facility, or raising equity capital. The ability to access the capital markets depends, in part, upon the volume and market price of the Company's stock, which cannot be assured. Other measures include reducing or delaying certain business activities, and reducing general and administrative expenses, including a reduction in headcount. The ultimate success of these plans is not guaranteed.

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Financing Arrangement Summary

Centre Lane Senior Secured Credit Facility

On June 5, 2020, the Company and its subsidiaries entered into to the Amended and Restated Senior Secured Credit Facility between themselves, the lenders party thereto and Centre Lane Partners Master Credit Fund II, L.P., as Administrative Agent and Collateral Agent (“Centre Lane Partners”), as amended (the “Credit Agreement”). The Credit Agreement has been amended numerous times to change the terms, including the amounts outstanding, the interest rate, the maturity date and other payment terms.

As of March 31, 2025, Centre Lane Partners has loaned the Company $38.9 million through Amendments One through Eight (the "Second Out Loans"), Amendments Nine through Sixteen (the "First Out Loans"), and Amendments Seventeen, Twenty-One, and Twenty-Two (the "Third Out Loans").

•

Extending the maturity date of the First Out Loans (which no longer include the Seventeenth Amendment Term Loans and the Twenty-First Amendment Term Loans), Second Out Loans (formerly defined as the Last Out Loans), and Third Out Loans (comprised of the Seventeenth Amendment Term Loans and the Twenty-First Amendment Term Loans) from April 20, 2026 to December 20, 2026;

•

Changing the Second Out Loans PIK rate to the Term Secured Overnight Financing Rate (“SOFR”) plus 3% and the Second Out loans cash interest rate to 2%;

•

Changing the First Out Loans cash interest rate to the Term SOFR plus 2%;

•

Changing the Third Out Loans PIK rate to 15%;

•

Adjusting the amortization of the First Out Loans such that an installment of $700,000 is paid on March 31, 2025, and quarterly installments of $575,000 are paid thereafter until maturity.

The outstanding principal owed to Centre Lane Partners was $81.1 million and $78.8 million as of March 31, 2025 and December 31, 2024, respectively. Of the amount outstanding at March 31, 2025, approximately $5.3 million is due by March 31, 2026. The balance of $75.8 million is due in December 2026.

For a full description of the Centre Lane Senior Secured Credit Facility, see Note 10, Centre Lane Senior Secured Credit Facility, to the consolidated financial statements.

Summary of Cash Flows

The following table summarizes cash flow activities during the three months ended March 31, 2025 and 2024:


	Three Months Ended
(in thousands)	March 31, 2025			March 31, 2024
Cash flow (used in) provided by operating activities	$	(350	)	$	920
Cash flow used in investing activities		(10	)		(2	)
Cash flow used in financing activities		(4	)		(4	)
Net increase in cash and cash equivalents, net of impact of exchange rates	$	(365	)	$	920

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Operating Activities

Our largest source of operating cash is cash collections from customers from revenue. Our primary uses of our operating cash, are for cost of revenue expenses, personnel-related expenditures and other general administrative expenses.

For the three months ended March 31, 2025, cash used in operating activities was $350,000. The primary factors affecting our operating cash flows during the period were our net loss of $3.2 million, adjusted for non-cash charges of $485,000 for amortization of intangible assets, $633,000 of amortization of debt discount, $2.3 million in interest paid in kind on the Centre Lane Senior Secured Credit Facility, $37,000 for stock compensation expense, and a $585,000 net change in operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities were a $3.9 million decrease in accounts payable and a $543,000 decrease in other liabilities, partially offset by a $3.5 million increase in deferred revenue and a $762,000 decrease in accounts receivable.

For the three months ended March 31, 2024, cash flow provided by operating activities was $920,000. The primary factors affecting our operating cash flows during the period were our net loss of $4.8 million, adjusted for non-cash charges of $481,000 for amortization of intangible assets, $615,000 of amortization of debt discount, $2.2 million in interest paid-in-kind on the Centre Lane Senior Secured Credit Facility, $65,000 for stock option compensation expense, and a $2.3 million net change in operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities were a $2.2 million decrease in accounts receivables partially offset by a $1.7 million decrease in accounts payable and accrued expenses, an increase in prepaid expenses and other current assets of $123,000, a $138,000 increase in interest payable on the Centre Lane Senior Secured Credit Facility, and a $1.7 million increase in deferred revenue.

Investing Activities

Cash used in investing activities of $10,000 and $2,000 for the three months ended March 31, 2025 and 2024, respectively, was attributable to the purchase of property and equipment.

Financing Activities

During the three months ended March 31, 2025 and 2024, the Company used cash of $4,000 in financing activities, which is attributable to principal payments on finance lease obligations.

Contractual Obligations and Commitments

There were no other material changes in our contractual obligations and commitments from those disclosed above in Note 10, Centre Lane Senior Secured Credit Facility, and Note 12, Leases, to the consolidated financial statements, and in the Annual Report on Form 10-K for the year ended December 31, 2024.

Off-Balance Sheet Arrangements

As of March 31, 2025 and December 31, 2024, there were no off-balance sheet arrangements between us and any other entity that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to shareholders.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments, and assumptions are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of our unaudited consolidated financial statements as well as reported amounts of revenue and expenses during the periods presented. Our unaudited consolidated financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result.

Significant estimates included in the accompanying consolidated financial statements include, valuation of goodwill and intangible assets, allowance for current expected credit losses, the determination of the relative selling prices of our services, percentage of completion for revenue recognition, estimates of amortization period for intangible assets, estimates of depreciation period for property and equipment, discount rates used in the valuation of right-of-use assets and lease liabilities, litigation reserves, the valuation of equity-based transactions, the valuation of the Center Lane Senior Secured Facility to determine whether a debt modification or extinguishment has occurred, and the valuation allowance on deferred tax assets.

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Critical accounting policies are those policies that management believes are very important to the portrayal of our financial position and results of operations, and that require management to make estimates that are difficult, subjective or otherwise complex. For further information on all of our significant accounting policies, see the Company’s audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Recent Accounting Pronouncements

Recent accounting pronouncements are detailed in the “Summary of Significant Accounting Policies” in Note 2 to our unaudited consolidated financial statements.

Smaller Reporting Company Status

We are a “smaller reporting company” as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We may continue to be a smaller reporting company even though we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as the market value of our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As a smaller reporting company as defined in Rule 12b-2 of the Exchange Act, we are not required to include information otherwise required by this Item 3 to Form 10-Q.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer (its principal executive officer) and Chief Financial Officer (its principal financial officer), have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2025. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that as of and for the period ended March 31, 2025, our disclosure controls and procedures were effective to provide assurance at a reasonable level that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

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

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We continue to review our internal control over financial reporting and may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business.

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

As the Company continues to improve its accounting staff and processes, internal controls are at the forefront of our efforts to produce accurate and complete financial statements. The Company has provided standard operating procedures to ensure each process is both functioning and performed correctly. This allows for documented updates and improvements. The implementation of the month end close software also elevated our internal controls and documentation. Management does recognize that without updated systems, the manual processes will allow for possible material weaknesses in the future.

Notwithstanding the significant deficiencies described below, based on the Company's continued improvements in its accounting staff and processes described above, the Company's Chief Executive Officer and Chief Financial Officer evaluated our internal controls and concluded that as of and for the quarter ended March 31, 2025, they were effective, and that our consolidated financial statements included in this Quarterly Report on Form 10-Q fairly represent, in all material respects, our financial condition and results of operations as of and for the quarter ended March 31, 2025.

Outlined below are the significant deficiencies identified by management, along with the remedial actions planned.

Significant Deficiency

A significant deficiency or a combination of deficiencies in internal control over financial reporting is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the Company’s financial reporting. The presence of such a deficiency does not mean that a material misstatement has occurred, but it indicates the possibility of such an occurrence in the future.

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As the Company continues to update and integrate its accounting and project systems, we have identified deficiencies in our overall internal controls, specifically as identified below:

•

Inadequate controls related to revenue recognition and cost of revenue processes leading to the possibility of the misstatement of material transactions impacting financial statements.

•

Ineffectiveness of the Company’s information technology systems and controls concerning financial information.

•

Inadequate controls related to share cancellation processes leading to the possibility of misstatement of transactions impacting financial statements.

To address these weaknesses, the Company has initiated a remediation plan comprising the following measures:

•

Updating the information technology general controls ("ITGC") risk assessment to ensure reliability, integrity, security, and confidentiality of the Company’s infrastructure and data.

•

Examination of information technology systems to ascertain necessary updates to support the financial reporting process.

•

Implementing the compliance option in Floqast to identify and document key controls. This will create a key control matrix to establish and document controls related to revenue recognition, cost of sales, equity, and other processes to enhance internal controls over financial reporting.

•

In the year ended December 31, 2024, the accounting and finance department improved with the hiring of an experienced operational Controller and Accounting Manager as well as the VP of Finance. These positions complement and collaborate with the existing SEC Reporting Manager. We believe this will strengthen our department as we work towards strong internal controls and provide guidance beyond the finance functions for those we rely on to provide information to support our financial reporting process.

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

Changes in Internal Control over Financial Reporting

Other than the matters set forth above, there were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the quarter ended March 31, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

For a description of developments to legal proceedings during the three months ended March 31, 2025, see “Litigation” under Note 16, Commitments and Contingencies, to our consolidated financial statements.

Item 1A. Risk Factors.

For the quarter ended March 31, 2025, one customer represented 22.4% of our total accounts receivable balance and another customer represented 10.2% of that balance. Inability to collect these amounts could have a material adverse impact on our operations.

Beyond this, there have been no other material changes to the Risk Factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

None.

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Item 6. Exhibits.


		Incorporated by Reference			Filed or Furnished
No.	Exhibit Description	Form	Date Filed	Number	Herewith

10.1	Twenty-Second Amendment to Amended and Restated Senior Secured Credit Agreement, dated March 31, 2025				X

10.2	Annex A to the Credit Agreement, dated March 31, 2025				X

10.3	Amendment to Employment Agreement dated January 1, 2025 by and between the Company and Ethan Rudin				X

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

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

32.1*	Certification of the Principal Executive Officer pursuant to Section 1350				X

32.2*	Certification of the Principal Financial Officer pursuant to Section 1350				X

101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document				X

101.SCH	Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents				X

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

* This certification is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	BRIGHT MOUNTAIN MEDIA, INC.

May 12, 2025	By:	/s/ Matthew Drinkwater
		Matthew Drinkwater,
		Interim Chairman of the Board and Chief Executive Officer
		(Principal Executive Officer)

		/s/ Ethan Rudin
		Ethan Rudin,
		Chief Financial Officer
		(Principal Financial and Accounting Officer)