Form 10-Q - Quarterly report [Sections 13 or 15(d)]

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended March 31, 2024

or

o			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 Incorporation or Organization						I.R.S. Employer 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

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 x No o

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 x No o

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. o

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

As of May 13, 2024, there were 171,078,661 shares of the issuer’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, 2024 (unaudited) and December 31, 2023	5
	Unaudited Consolidated Statements of Operations and Comprehensive loss for the Three Months Ended March 31, 2024 and 2023	6
	Unaudited Consolidated Statements of Changes in Shareholders’ Deficit for the Three Months Ended March 31, 2024 and 2023	7
	Unaudited Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	43
Item 4.	Controls and Procedures	43

	PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	47
Item 1A.	Risk Factors	47
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 3.	Default Upon Securities	47
Item 4.	Mine Safety Disclosures	47
Item 5.	Other Information	47
Item 6.	Exhibits	48

	Signatures	49

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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 risks associated with:

•our history of losses;

•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;

•completed and proposed acquisitions;

•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 COVID-19 and other 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;

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

•risks associated with 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;

•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 the amount of our working capital as a result of the amount of cash dividends and outstanding interest we pay affiliates;

•dilution to existing shareholders upon the conversion of outstanding convertible notes and/or the exercise 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.

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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, including the Part II, Item 2, our Annual Report on Form 10-K for the year ended December 31, 2023 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 2024” refers to the three months ended March 31, 2024, “first quarter of 2023” refers to the three months ended March 31, 2023, and “2023” refers to the year ended December 31, 2023. 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, 2024		December 31, 2023*
	(unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	4,921	$	4,001
Accounts receivable, net	12,474		14,679
Prepaid expenses and other current assets	1,178		1,057
Total Current Assets	18,573		19,737
Property and equipment, net	161		199
Intangible assets, net	14,753		15,234
Goodwill	7,785		7,785
Operating lease right-of-use asset	290		306
Other assets, non-current	158		156
Total Assets	$	41,720	$	43,417
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current Liabilities
Accounts payable and accrued expenses	$	15,807	$	17,497
Other current liabilities	3,026		3,025
Interest payable – 10% Convertible Promissory Notes – related party	41		39
Interest payable – Centre Lane Senior Secured Credit Facility – related party	138		—
Deferred revenue	6,268		4,569
Note payable – 10% Convertible Promissory Notes, net of discount – related party	80		80
Note payable – Centre Lane Senior Secured Credit Facility – related party (current portion)	6,471		5,592
Total Current Liabilities	31,831		30,802
Other liabilities, non-current	286		325
Note payable – Centre Lane Senior Secured Credit Facility, net of discount – related party	60,648		58,674
Finance lease liability, non-current	37		42
Operating lease liability, non-current	234		239
Total liabilities	93,036		90,082

Shareholders’ deficit
Convertible preferred stock, par value $0.01, 20,000,000 shares authorized, no shares issued or outstanding at March 31, 2024 and December 31, 2023	—		—




Common stock, par value $0.01, 324,000,000 shares authorized, 172,382,586 and 172,103,134 issued and 171,032,411 and 171,277,959 outstanding at March 31, 2024 and December 31, 2023, respectively	1,724		1,721
Treasury stock, at cost; 1,350,175 and 825,175 shares at March 31, 2024 and December 31, 2023, respectively	(220)		(220)
Additional paid-in capital	101,483		101,405
Accumulated deficit	(154,599)		(149,833)
Accumulated other comprehensive income	296		262
Total shareholders’ deficit	(51,316)		(46,665)
Total liabilities and shareholders’ deficit	$	41,720	$	43,417


*			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, 2024		March 31, 2023

Revenue	$	12,448	$	1,498
Cost of revenue	9,311		970
Gross margin	3,137		528
General and administrative expenses	5,244		3,428

Loss from operations	(2,107)		(2,900)
Financing and other (expense) income
Other income	345		278
Interest expense - Centre Lane Senior Secured Credit Facility - related party	(2,991)		(1,163)
Interest expense - Convertible Promissory notes - related party	(2)		(5)
Other interest expense	(11)		(6)
Total financing and other (expense), net	(2,659)		(896)
Net loss before income tax	(4,766)		(3,796)
Income tax provision	—		—
Net loss	(4,766)		(3,796)






Foreign currency translation	34		14
Comprehensive loss	$	(4,732)	$	(3,782)

Net loss per common share:
Basic and diluted	$	(0.03)	$	(0.03)
Weighted average shares outstanding
Basic and diluted	171,231,775		149,708,905

See accompanying notes to unaudited consolidated financial statements.

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BRIGHT MOUNTAIN MEDIA, INC

CONSOLIDATED STATEMENTS OF CHANGE IN SHAREHOLDERS’ DEFICIT

For the Three Months Ended March 31, 2024 and 2023

(unaudited)

(in thousands, except share figures)


	Common Stock		Treasury Stock			Additional Paid-in Capital			Accumulated Deficit		Accumulated Other Comprehensive Income		Total Shareholders’ Deficit
		Shares	Amount		Shares			Amount
Balance, 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
Stock based compensation		—	—		—	—			65		—		—		65
Treasury stock		—	—		(525,000)	—			—		—		—		—
Foreign currency translation, net		—	—		—	—			—		—		34		34
Balance, March 31, 2024		172,382,586	$	1,724	(1,350,175)	$	(220)		$	101,483	$	(154,599)	$	296	$	(51,316)


	Common Stock		Treasury Stock			Additional Paid-in Capital			Accumulated Deficit		Accumulated Other Comprehensive Income		Total Shareholders’ Deficit
		Shares	Amount		Shares			Amount
Balance, December 31, 2022*		150,444,636	$	1,504	(825,175)	$	(220)		$	98,797	$	(114,269)	$	117	$	(14,071)
Net loss		—	—		—	—			—		(3,796)		$	—	(3,796)
Common stock issued for services rendered		190,000	2		—	—			29		—		—		31
Stock based compensation		—	—		—	—			25		—		—		25
Foreign currency translation, net		—	—		—	—			—		—		14		14
Balance, March 31, 2023		150,634,636	$	1,506	(825,175)	$	(220)		$	98,851	$	(118,065)	$	131	$	(17,797)

*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,
	2024		2023
Cash flows from operating activities:
Net loss	$	(4,766)	$	(3,796)
Adjustments to reconcile net loss to net cash provided by (used in) operations:
Depreciation	40		7

Interest paid-in kind on Centre Lane Credit Facility	2,238		789
Amortization of operating lease right-of-use asset	16		14
Amortization of debt discount	615		305
Amortization of intangibles	481		386

Stock based compensation	65		25



Common stock issued for services rendered	16		31
Expected credit losses (recoveries)	(37)		(188)
Changes in operating assets and liabilities:
Accounts receivable	2,243		2,509
Prepaid expenses and other current assets	(123)		142
Operating lease liability	(15)		1
Accounts payable and accrued expenses	(1,662)		(1,471)
Other liabilities	(30)		(96)
Interest payable – Centre Lane Senior Secured Credit Facility – related party	138		72
Interest payable – 10% Convertible Promissory note – related party	2		2
Deferred revenue	1,699		237
Net cash provided by (used) in operating activities	920		(1,031)
Cash flows from investing activities:
Purchase of property and equipment	(2)		(5)
Net cash used in investing activities	(2)		(5)
Cash flows from financing activities:



Principal payments on finance lease obligations	(4)		—
Proceeds from Centre Lane Senior Secured Credit Facility – related party	—		1,500



Net cash (used in) provided by financing activities	(4)		1,500
Effect of foreign exchange rates on cash	6		4
Net increase in cash and cash equivalents	920		468
Cash and cash equivalents at the beginning of period	4,001		316
Cash and cash equivalents at end of period	$	4,921	$	784
Supplemental disclosure of cash flow information

Interest paid-in-kind on Centre Lane Credit Facility	$	2,238	$	789

See accompanying notes to unaudited consolidated financial statements.

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BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(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”) has an end-to-end digital media and advertising services platform that efficiently connects brands with targeted consumer demographics. We focus on digital publishing, advertising technology, consumer insights, creative and media services.

During the year ended December 31, 2023, the Company completed the acquisition of two business units of Big Village (Big Village Insights, Inc. and Big Village Agency LLC (together, referred to as the "Big Village Entities")), in an all-cash transaction funded by the Centre Lane Senior Secured Credit Facility (the "Big Village Acquisition").

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, 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

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 ensures that ad placements are not only well-targeted, but also continuously optimized for maximum efficiency and ROI. 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.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(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,

•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, and

•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.

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 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, 2024, and 2023 have been prepared in accordance with generally accepted accounting principles 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 accounting principles generally accepted in the United States 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, 2023, 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, 2023. The interim consolidated financial statements should be read in conjunction with that report.

Going Concern and Liquidity

Historically, the Company has incurred losses, which has resulted in an accumulated deficit of approximately $154.6 million as of March 31, 2024. Cash flows provided by (used in) operating activities were $920,000 and $(1.0) million for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, the Company had approximately a $13.3 million working capital deficit, inclusive of $4.9 million in cash and cash equivalents.

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 Agreement or raising equity capital. The ability to access the capital market is also dependent upon the stock volume and market price of the Company's stock, which cannot be assured. Other measures include reducing or delaying certain business activities, reducing general and administrative expenses, including a reduction in headcount. The ultimate success of these plans is not guaranteed.

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 needs and continue as a going concern.

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.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(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, 2024 and December 31, 2023, 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 FDIC insured limit in the amount of $4.6 million as of March 31, 2024, and $3.7 million as of December 31, 2023.

As of March 31, 2024 and December 31, 2023, the Company exceeded the insurance limit of $28,000 for one of its international bank accounts by $49,000 and $31,000, respectively.

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, 2024, and December 31, 2023, the Company had $4.9 million and $4.0 million, respectively, in cash and cash equivalents.

Off-balance Sheet Arrangements

There were no off-balance sheet arrangements as of March 31, 2024 and December 31, 2023.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates, judgments and assumptions. We believe that the estimates, judgments and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of our 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, 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, 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 financial statements of our foreign subsidiaries, which have a functional currency in the respective country’s local currency, to U.S. dollars using month-end exchange rates for assets and liabilities and actual exchange rates for revenue, costs and expenses on the date of the transaction. Translation gains and losses as a result of consolidation are included in accumulated other comprehensive income. Transaction gains and losses are included within “general and administrative expense” on the consolidated statements of operations and comprehensive loss.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

Concentrations of Credit Risk

Financial instruments that potentially subject us to concentration of credit risk consist principally of cash and cash equivalents and accounts receivable. We place our cash and cash equivalents with high credit-quality financial institutions. Such deposits may be in excess of federally insured limits. In addition, the Company maintains various bank accounts in Thailand and Israel, 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 Company generates revenue as follows:

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

•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"),

The following table provides information about concentration that exceed 10% of revenue and accounts receivable for the period:


	Three Months Ended March 31,
	2024		2023

Revenue Concentration
Customers exceeding 10% of revenue	1		—
% of overall revenue
Customer 1	14.9	%	—	%

Total % of revenue	14.9	%	—	%


	March 31, 2024		December 31, 2023
Accounts Receivable Concentration
Customers exceeding 10% of accounts receivable	2		2
% of accounts receivable
Customer 1	25.7	%	15.7	%
Customer 2	13.2	%	10.5	%
Total % of accounts receivable	38.9	%	26.2	%

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

Reclassification

As of and for the year ending December 31, 2023, certain amounts have been reclassified for comparative purposes. Changes were made for foreign currency translation from operating activities to showing the cash and cash equivalent impact only as a separate line item below financing activities, right of use asset and liability showing a net position instead showing a separate line item for asset and liabilities and reclassification on other operating activities line items for accounts payable and accrued expenses on the consolidated statement of cash flows. Changes were made for other expenses under finance income (expense), to general and administrative expense, which impacted our loss from operations.

These reclassifications had no impact on the previously reported net loss for the three months ended March 31, 2023.

Effective Accounting Pronouncements Adopted

In August 2020, the FASB issued 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 is effective January 1, 2024 (early adoption is permitted, but not earlier than January 1, 2021). This standard did not have an impact on our consolidated financial statements for the period March 31, 2024.

NOTE 3 – ACCOUNTS RECEIVABLE

Accounts receivable, net consisted of the following:


(in thousands)	March 31, 2024		December 31, 2023
Accounts receivable	$	10,866	$	13,799
Unbilled receivables (1)	1,934		1,252
	12,800		15,051
Less: allowance for current expected credit losses	(326)		(372)
Accounts receivable, net	$	12,474	$	14,679

(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, 2023 was $3.6 million.

Expected credit losses (recoveries) were approximately $(37,000) and $(188,000) for the three months ended March 31, 2024, and 2023, respectively. These amounts are included in general and administrative expenses in the consolidated statements of operations and comprehensive loss.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

NOTE 4 – PREPAID EXPENSES AND OTHER ASSETS

Prepaid expenses and other assets consisted of the following:


(in thousands)	March 31, 2024		December 31, 2023
Prepaid insurance(1)	$	433	$	618

Prepaid software	57		46
Deposits	158		156
Subscriptions	309		174
Other current assets	379		219
Total prepaid expenses and other assets	1,336		1,213
Less: other assets, non-current	(158)		(156)
Prepaid expenses and other current assets	$	1,178	$	1,057

(1) - The amount of $433,000 includes $371,000, which is being paid over a period of time and is included in accounts payable at March 31, 2024.

NOTE 5 – PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:


(in thousands)	Estimated Useful Life (Years)	March 31, 2024		December 31, 2023
Furniture and fixtures	3-5	$	8	$	8
Computer equipment	3	191		190
Computer software	5	206		206
		405		404
Less: accumulated depreciation		(244)		(205)
Property and equipment, net		$	161	$	199

Depreciation and amortization expense for the three months ended March 31, 2024, and 2023 was $40,000 and $7,000, respectively. The amounts are included in general and administrative expenses in the consolidated statements of operations and comprehensive loss.

NOTE 6 – INTANGIBLES ASSETS, NET

Website acquisitions, net consisted of the following:


(in thousands)	March 31, 2024		December 31, 2023
Website acquisition assets	$	1,124	$	1,124
Less: accumulated amortization	(1,124)		(1,123)

Website acquisition assets, net	$	—	$	1

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

Other intangible assets, net consisted of the following:


	As of March 31, 2024							As of December 31, 2023
(in thousands)	Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trade name	2 - 10	$	8,381	$	(3,324)	$	5,057	$	8,381	$	(3,167)	$	5,214
IP/technology	10	5,821		(2,279)		3,542		5,821		(2,180)		3,641
Customer relationships	5 - 10	13,380		(7,226)		6,154		13,380		(7,002)		6,378
Non-compete agreements	3 - 5	402		(402)		—		402		(402)		—
Total		$	27,984	$	(13,231)	$	14,753	$	27,984	$	(12,751)	$	15,233


(in thousands)	March 31, 2024		December 31, 2023
Website	$	—	$	1
Other intangibles	14,753		15,233
Total intangible, net	$	14,753	$	15,234

Amortization expense for the three months ended March 31, 2024 and 2023 was approximately $481,000 and $386,000, respectively. Amortization expense related to both the website acquisition costs and the intangible assets and is included in general and administrative expense in the statements of operations and comprehensive loss.

The Company performed an impairment assessment during the year ended December 31, 2023, and recorded an impairment loss of $2.9 million.

As of March 31, 2024, expected remaining amortization expense of intangible assets and website acquisition by fiscal year is as follows:


(in thousands)
Remainder of 2024	$	1,441
2025	1,845
2026	1,769
2027	1,769
2028	1,769
Thereafter	6,160

Total expected amortization expense	$	14,753

NOTE 7 – GOODWILL

The following table represents the allocation of goodwill as of March 31, 2024, and December 31, 2023:


(in thousands)	Owned & Operated		Ad Network		Insights		Total
December 31, 2023	$	2,865	$	4,013	$	907	$	7,785
Addition	—		—		—		—

March 31, 2024	$	2,865	$	4,013	$	907	$	7,785

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

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, 2023, an impairment assessment was performed on goodwill for the Ad Network, Owned & Operating and Insights reporting units. The assessment used a qualitative assessment which includes consideration of the economic, industry and market conditions in addition to the overall financial performance of the Company and these assets. Our qualitative assessment concluded that it was more likely than not that the estimated fair value of the Ad Network and Owned & Operating reporting units was less than the carrying value, hence, we performed a quantitative analysis. Our assessment for the Insights reporting unit did not have such a conclusion, hence a quantitative analysis was not required.

In a quantitative test, the fair value of a reporting unit is determined based on a discounted cash flow analysis and further analyzed using other methods of valuation. A discounted cash flow analysis requires us to make various assumptions, including assumptions about future cash flows, growth rates and discount rates. The assumptions about future cash flows and growth rates are based on our long-term projections. Assumptions used in our impairment testing are consistent with our internal forecasts and operating plans. Our discount rate is based on a market participant debt structure and cost of capital. If the fair value of the reporting unit exceeds its carrying amount, there is no impairment. To the extent the carrying amount exceeds its fair value, an impairment charge of the reporting unit’s goodwill would be necessary.

At December 31, 2023, our quantitative analysis showed that the implied fair value of our goodwill for the Ad Network and Owned & Operating reporting units was less than its carrying value which resulted in an impairment charge of approximately $14.1 million.

There was no triggering event or impairment for the three months ended March 31, 2024.

NOTE 8 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following:


(in thousands)	March 31, 2024		December 31, 2023
Accounts payable (1)	$	11,259	$	11,391
Accrued wages, commissions and bonus	188		353
Publisher cost	1,034		1,153
Professional fees	645		1,322
Subcontractor	2,444		3,013
Other	237		265
Total accounts payable and accrued expenses	$	15,807	$	17,497

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

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

NOTE 9 – OTHER CURRENT LIABILITIES

Other current liabilities consisted of the following:


(in thousands)	March 31, 2024		December 31, 2023
Current portion of long term lease	$	73	$	82
Dividend payable	692		692
Project advance expense (1)	1,409		1,401
Litigation reserves	1,113		1,152
Other current liabilities	25		23
Total other current liabilities	3,312		3,350
Less: other liabilities, non-current	(286)		(325)
Other current liabilities	$	3,026	$	3,025

(1) - Represents amount 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 income statement.

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, a subsidiary of the Company (the “Purchase Agreement”). To finance this acquisition, the Company obtained a first lien senior secured credit facility from Centre Lane Partners Master Credit Fund II, L.P. (“Centre Lane Partners”) in the amount of $16.5 million, comprised of $15.0 million of initial indebtedness, repayment of Wild Sky’s existing accounts receivable factoring facility of approximately $900,000 and approximately $500,000 of expenses.

On April 4, 2023, the Company entered into a commitment letter (the “Commitment Letter”) with Centre Lane Partners, pursuant to which they would provide financing in the form of a senior secured credit facility for the acquisition of the Big Village Entities.

On April 20, 2023, the Company and its subsidiaries entered into the Seventeenth Amendment to the Credit Agreement (the “Seventeenth Amendment”) with Centre Lane Partners. The Credit Agreement was amended, as provided in the Seventeenth Amendment, to provide for an additional term loan amount of $26.3 million to, among other things, finance the Acquisition. This term loan, which was provided by BV Agency, LLC, matures on April 20, 2026 and was issued at a discount of 5% or $1.3 million. Interest of 15% payable under the note is payable-in-kind in lieu of cash payment up to April 30, 2024, then 5% payable quarterly in cash and 10% payable-in-kind in lieu of cash payment until maturity of April 20, 2026.

As part of the Seventeenth Amendment, the Company is required to pay an amendment fee of 2% of the principal amount of the existing initial principal plus amendments one to eight ("First In Last Out Loans") and amendments nine to sixteen ("Last In First Out Loans"), totaling $706,000, additionally, an exit fee of $18,000 of the loan to finance the Big Village Acquisition. The outstanding principal on these at April 20, 2023 was $31.0 million and $4.3 million, respectively. These fees total $724,000 and are due and payable at maturity. Additionally, the maturity dates were extended to April 20, 2026.

Also, 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. The shares valued $1.9 million, based on a per share price of $0.09, which was the closing price of the Company’s common stock at close of market on April 19, 2023. The issuance of the shares of common stock were not registered under the Securities Act of 1933, as amended (“Securities Act”), in accordance with Section 4(a)(2) of the Securities Act as a transaction by an issuer not involving a public offering. As of March 31, 2024, BV Agency, LLC and Centre Lane Partners own approximately 12.4% and 8.8% of the Company’s outstanding common stock, respectively.

On July 28, 2023, the Company and its subsidiaries entered into the Nineteenth Amendment to the Credit Agreement (the “Nineteenth Amendment”) with Centre Lane Partners. The Credit Agreement was amended, as provided in the Nineteenth Amendment, to provide for an additional term loan amount of $2.0 million to, among other things, finance the

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

integration and further growth of the Company post-Acquisition. This term loan is part of the last in first out loans and matures on June 28, 2024.

Including the Nineteenth Amendment, Centre Lane Partners subsequently loaned the Company an additional $38.0 million to provide liquidity to fund operations beginning in April 2021 (as amended, the “Centre Lane Senior Secured Credit Facility”). This Centre Lane Senior Secured Credit Facility has been determined to qualify as a related party transaction as shares were issued to Centre Lane Partners as part of the transaction. A related party is a party that can exercise significant influence over the Company in making financial and/or operating decisions.

The original note issued under the Centre Lane Senior Secured Credit Facility initially bore interest at a rate of 6.0% per annum, with payments of 2.5% of outstanding principal beginning on June 30, 2023. The interest rate was increased to 10.0% pursuant to the first amendment to the Centre Lane Senior Secured Credit Facility and interest payable under the note is payable-in-kind (“PIK Interest”) in lieu of cash payment.

Commencing with the ninth amendment, the interest rate was increased to 12% per annum on all subsequent draws with 8% per annum payable quarterly in cash and 4% per annum payable-in-kind in lieu of cash payment. These “last in first out loans”, totaling $7.0 million inclusive of exit fees at March 31, 2024, are due and payable on April 20, 2026, excluding the amounts due under the Nineteenth Amendment which are due and payable on June 28, 2024.

In connection with the Nineteenth Amendment, adjustments were made to the interest rate for outstanding loans with the exception of the draw under the Seventeenth Amendment as follows:

•The interest rate per annum changed to 7.0% per annum plus the Secured Overnight Financing Rate ("SOFR"). At March 31, 2024, the SOFR was 5.33% per annum, and overall interest on these facilities was 12.33%, per annum at March 31, 2024;

•The cash pay rate for the last in first out loans was changed to the SOFR plus 3.0% per annum. At March 31, 2024, the rate was 8.33% per annum; and

•Effective July 1, 2024, the first in last out loans PIK Rate per annum will be 7.0% per annum plus SOFR plus 5.0% per annum.

There is no prepayment penalty associated with this Centre Lane Senior Secured Credit Facility. However, partial or full prepayments of the Centre Lane Senior Secured Credit Facility would be required in the event of certain future capital raises.

Optional Prepayment

The Company may, at any time, voluntarily prepay, in whole or in part, a minimum of $250,000 of the outstanding principal of the loans, plus any accrued but unpaid interest on the aggregate principal amount of the loans being prepaid.

Repayment of Loans

The Company is required to repay in cash to Centre Lane Partners (i) commencing with the fiscal quarter ending on June 30, 2023, in consecutive quarterly installments to be paid on the last day of each fiscal quarter of the Company, an amount equal to 2.5% of the outstanding aggregate principal amount of the original principal plus draws advanced by amendments 2 through 8 along with accrued and unpaid interest (after giving effect to capitalized PIK Interest) and (ii) on the maturity date all outstanding obligations (including, without limitation, all accrued and unpaid principal and interest on the principal amounts of the Loans (including any accrued but uncapitalized PIK Interest)) of the loan parties that are due and payable on such date. The outstanding amount for these draws at March 31, 2024 is $35.2 million, inclusive of interest paid in kind.

On June 30, 2023, the Company and its subsidiaries entered into its Eighteenth Amendment with Centre Lane Partners regarding installment payments which were due on June 30, 2023. The Eighteenth Amendment required equal monthly installments on July 3, 2023, August 7, 2023 and September 5, 2023, respectively. There was no impact on principal or interest and no fees incurred by the Company as a result of this amendment.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

In connection with the Nineteenth Amendment, quarterly installments equal to 2.5% of the outstanding aggregate principal are due on the first in last out loans commencing March 31, 2024.

There was no payment on the principal loan balance for the three months ended March 31, 2024, and 2023.

Interest payable at March 31, 2024 was $138,000. There was no payment toward outstanding interest for the three months ended March 31, 2024, and 2023.

Fees

Under the terms of the Centre Lane Senior Secured Credit Facility, the Company is also required to pay Centre Lane Partners a non-refundable annual administration fee equal to $35,000 for agency services provided under this agreement. The Centre Lane Senior Secured Credit Facility provides that this fee shall be in all respects fully earned, due and paid-in-kind by the Company on the effective date (“Effective Date”) of the Centre Lane Senior Secured Credit Facility and on each anniversary of the Effective Date during the term of this agreement by adding and capitalizing the full amount of such fee to the outstanding principal balance of the loans. The accumulated administrative fee since inception of the facility is $140,000 and is included in outstanding principal. There was no administrative fee charged during the three months ended March 31, 2024 and 2023.

The below table summarizes the loan balance at March 31, 2024, and December 31, 2023:


(in thousands)	March 31, 2024		December 31, 2023

Note payable – Centre Lane Senior Secured Credit Facility – related party (current portion)	$	6,471	$	5,592
Note payable – Centre Lane Senior Secured Credit Facility – net of discount, related party	60,648		58,674
Net principal at March 31, 2024 and December 31, 2023	67,119		64,266
Add: debt discount	5,347		5,962
Outstanding principal at March 31, 2024 and December 31, 2023	$	72,466	$	70,228

The below table summarizes the movement in the outstanding principal from inception through March 31, 2024:


(in thousands)	March 31, 2024		December 31, 2023
Opening balance	$	70,228	$	33,109
Add:
Draws	—		29,816
Exit and other fees	—		917
Interest capitalized	2,238		6,656
	72,466		70,498
Less: Payment	—		(270)
Outstanding principal	$	72,466	$	70,228

Amendments to Centre Lane Senior Secured Credit Facility

Commencing April 2021, the Company and certain of its subsidiaries entered into various amendments to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners. The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent. The Credit Agreement was amended to provide for additional loans used for working capital. In addition, and as part of the transaction, there are Exit Fees (the “Exit Fees”), which will be added and capitalized to the principal

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

amount of the original loan. As of March 31, 2024, there were nineteen amendments to the Centre Lane Senior Secured Credit Facility.

Consistent with FASB ASC Topic 470 Debt, (“ASC 470”), the Company is required to perform an analysis of the change in each amendment to determine whether the change is a modification or an extinguishment of debt. Under a modification, no gain or loss is recorded, and a new effective interest rate is established based on the carrying value of the debt and revised cash flow. If the debt is extinguished, the old debt is derecognized and the new debt is recorded as fair value, which becomes the new carrying value. A gain or loss is recorded for the difference between the net carrying value 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.

In connection with the Seventeenth Amendment, the Company determined that the change was an extinguishment consistent with ASC 470, Debt, the old debt of $35.5 million was derecognized and the new debt of $62.7 million was recognized at estimated fair value. A gain on extinguishment was recognized against additional paid in capital of $671,000, as Centre Lane Partners is a related party.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

The below table summarizes the amendments that were executed by the Company since the inception of the facility to March 31, 2024, (in thousands, except for share data):


Number	Date	Draw $’000		Repayment Date	Interest Rate (PIK)(D)		Interest Rate (Cash)(E)		Agency Fee		Exit Fee(A)		Common Stock Issued	Accounting Impact
1	04/26/21	$	—	April 20, 2026	12.33	%	—		$	—	$	—	150,000	Extinguishment	(B)
2	05/26/21	1,500		April 20, 2026	12.33	%	—		—		750		3,000,000	Modification	(F)
3	08/12/21	500		April 20, 2026	12.33	%	—		—		250		2,000,000	Modification	(F)
4	08/31/21	1,100		April 20, 2026	12.33	%	—		—		550		—	Modification	(F)
5	10/08/21	725		April 20, 2026	12.33	%	—		—		363		—	Extinguishment	(F)
6	11/05/21	800		April 20, 2026	12.33	%	—		—		800		7,500,000	Modification	(F)
7	12/23/21	500		April 20, 2026	12.33	%	—		70		500		—	Modification	(F)
		$	5,125						$	70	$	3,213	12,650,000

8	01/26/22	350		April 20, 2026	12.33	%	—		—		350		—	Modification	(F)
9	02/11/22	250		April 20, 2026	4.00	%	8.33	%	—		13		—	Modification	(G)
10	03/11/22	300		April 20, 2026	4.00	%	8.33	%	—		15		—	Modification	(G)
11	03/25/22	500		April 20, 2026	4.00	%	8.33	%	—		25		—	Modification	(G)
12	04/15/22	450		April 20, 2026	4.00	%	8.33	%	—		23		—	Modification	(G)
13	05/10/22	500		April 20, 2026	4.00	%	8.33	%	35		25		—	Modification	(G)
14	06/10/22	350		April 20, 2026	4.00	%	8.33	%	—		18		—	Modification	(G)
15	07/08/22	350		April 20, 2026	4.00	%	8.33	%	—		18		—	Modification	(G)
		$	3,050						$	35	$	487	—

16	02/10/23	1,500		April 20, 2026	4.00	%	8.33	%	—		75		—	Modification	(G)
17	04/20/23	26,316		April 20, 2026	15.00	%	—	%	35		708		21,401,993	Extinguishment	(C)
19	07/28/23	2,000		June 28, 2024	4.00	%	8.33	%	—		$	100	—	Modification	(G)
		$	29,816						$	35	$	883	21,401,993

Total		$	37,991						$	140	$	4,583	34,051,993


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

(B)			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.

(C)			15% PIK until April 20, 2024, then 5% cash and 10% PIK thereafter.

(D)			New rates in effect in connection with Amendment 19, Amendment 1 through 8, the PIK rate was 10%.

(E)			New rates in effect in connection with Amendment 19, Amendment 9 through 16, the cash rate was 8%.

(F)			First In Last Out Loans.

(G)			Last In First Out Loans.

(H)			As discussed above, there was no impact on principal or interest and no fees incurred by the Company as a result of Amendment 18, thus it is not included in above table.

Draws advanced by Amendments 2 through 8 totaling $5.5 million and exit fees totaling $3.6 million, were due for full repayment on February 28, 2022; prior to this date, the loan agreement allowed the Company to waive the accrual of interest on these amounts. There was no repayment of these amounts, and as a result, on March 11, 2022, amendment 10 was executed, changing the repayment date of the outstanding principal and commencing interest accrual on the exit fees.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

All amounts advanced for Amendments 9 through 16 were due on June 30, 2023 along with accrued and unpaid interest, however, the maturity date was changed to April 20, 2026 with amendment 17. The outstanding amount at March 31, 2024 is $7.0 million, inclusive of interest paid in kind.

As of March 31, 2024 and December 31, 2023, the carrying value of the Centre Lane Senior Secured Credit Facility was $67.1 million and $64.3 million, respectively, net of unamortized debt discount of $5.3 million and $6.0 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, 2024, and 2023, the Company recorded amortization of debt discount of $615,000 and $301,000, respectively on the Centre Lane Senior Secured Credit Facility.

Interest expense for the three months ended March 31, 2024, and 2023 consisted of the following:


	Three Months Ended
(in thousands)	March 31, 2024		March 31, 2023
Interest expense	$	2,376	$	862
Amortization	615		301
Total interest expense	$	2,991	$	1,163

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 the Chairman of the Board, a related party. The Convertible Notes are 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 principal balance of these Convertible Notes payable was $80,000 at March 31, 2024 and December 31, 2023.

Interest expense for the Convertible Notes was $2,000 for the three months ended March 31, 2024. Interest expense for the Convertible Notes was $5,000, inclusive of interest of $2,000 and discount amortization of $3,000, for the three months ended March 31, 2023.

The outstanding principal and interest of the Convertible Notes was due and payable in November 2023. The loan remains unpaid at March 31, 2024 with outstanding principal of $80,000 and interest payable of $41,000. The outstanding principal continues to accrue interest.

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 which was signed on June 14, 2022, with a lease term of five years beginning upon completion of improvements to the office space by the landlord, which was completed on September 12, 2022. The annual base rent is $100,000, with a provision for a 3% increase on each anniversary of the rent commencement date. The Company has the option to renew the lease for one additional five-year term.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

At March 31, 2024 and December 31, 2023 the operating lease right-of-use asset was $290,000 and $306,000, respectively, and is included under assets on the consolidated balance sheet.

At March 31, 2024 and December 31, 2023 the operating lease right-of-use liability was $288,000 and $303,000, respectively, including current portion of $54,000 and $64,000, respectively, and is included under liabilities on the consolidated balance sheet.

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 $40,000 for the three months March 31, 2024 and 2023.

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.

Finance Lease

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

At March 31, 2024 and December 31, 2023, finance lease asset was $56,000 and $60,000, respectively, and is included under assets on the consolidated balance sheets.

At March 31, 2024 and December 31, 2023, finance lease liability was $56,000 and $60,000, including the current portion of $19,000 and $18,000, and is included under liabilities on the consolidated balance sheets.

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

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

As of March 31, 2024 and December 31, 2023, the right-of-use asset and lease liability for the operating and finance lease are summarized as follows (in thousands):


	March 31, 2024			December 31, 2023
Assets
Operating lease	$	290		$	306
Finance lease(1)	56			60
	$	346		$	366

Liabilities
Operating lease liability, current	$	54		$	64
Operating lease liability, net of current portion	234			239
Total operating lease liability	$	288		$	303

Finance lease obligations, current	$	19		$	18
Finance lease obligations, net of current portion	37			42
Total finance lease obligations	$	56		$	60

Weighted average remaining lease terms (in years):
Operating lease	3.5			3.75
Finance lease	2.5			2.75

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".

NOTE 13 – REVENUE RECOGNITION

The following table represents our revenue disaggregated by type:


	Three Months Ended
(in thousands)	March 31, 2024		March 31, 2023

Revenue:
Digital publishing	$	434	$	954
Advertising technology	2,625		544
Consumer insights	6,690		—
Creative services	2,058		—
Media services	641		—
Total revenue	$	12,448	$	1,498

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

Geographic Information

Revenue by geographical region consists of the following:


	Three Months Ended
(in thousands)	March 31, 2024		March 31, 2023

Revenue:
United States	$	12,448	$	1,460
Israel	—		38



Total revenue	$	12,448	$	1,498

Revenue by geography is generally based on the country of the Company’s contracting entity. Total United States revenue was approximately 100% and 97% of total revenue for the three months ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, and December 31, 2023, approximately 100% of our long-lived assets were attributable to operations in the United States. Long-lived assets include websites and other intangibles assets that are utilized in overall revenue generation.

Deferred Revenue

The movement in deferred revenue during the three months ended March 31, 2024 and the year ended December 31, 2023 comprised the following:


(in thousands)	March 31, 2024		December 31, 2023
Deferred revenue at start of the period	$	4,569	$	737
Amounts invoiced during the period	11,556		31,864
Business combination	—		4,534
Less: revenue recognized during the period	(9,857)		(32,566)
Deferred revenue at end of the period	$	6,268	$	4,569

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, 2024, 12,022,890 shares were remaining under the Stock Option Plan for future issuance.

Options

As of March 31, 2024, options to purchase 10,477,110 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 $0.12 per share. No further grants can be made under any of the Company's stock option plans other than the Stock Option Plan.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

Compensation expense recorded in connection with the Stock Option Plan was $65,000 and $25,000 for the three months ended March 31, 2024 and 2023, respectively. These amounts have been recognized as a component of general and administrative expenses in the accompanying consolidated financial statements.

The following table presents the activity of the Company’s outstanding stock options of common stock for the three months ended March 31, 2024:


Common Stock Options	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Balance Outstanding, December 31, 2023	10,728,360	$	0.12	8.7	$	568


Forfeited	(251,250)	$	0.20	—	$	—

Balance Outstanding, March 31, 2024	10,477,110	$	0.12	8.3	$	145
Exercisable at, March 31, 2024	2,079,454	$	0.30	5.9	$	49
Unvested at, March 31, 2024	8,397,656	$	0.07	9.0	$	97

As of March 31, 2024, there were total unrecognized compensation costs related to non-vested share-based compensation arrangements of $405,000 to be recognized through July 2027.

The following table provides the weighted average assumptions used in determining the fair value of the stock-based awards for the three months ended March 31, 2024 and 2023:


	March 31, 2024		March 31, 2023
Expected Term (years)	0		6.25
Expected volatility	—	%	499	%
Risk free interest rate	—	%	3.61	%
Dividend yield	—	%	—	%
Expected forfeiture rate	—	%	—	%

During the three months ended March 31, 2023, 425,000 options were issued, there were no options issued for the same period of 2024.

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

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

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, accounts receivable, other liabilities and accounts payable. The Company believes that the carrying value of its current financial instruments approximates their fair value due to the short-term nature of these instruments. The carrying value of the Centre Lane Senior Secured Credit Facility and the 10% Convertible Promissory Note approximates the fair value due to their nature and level of risk.

Assets Measured at Fair Value on a Nonrecurring 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:

($ in thousands)

Quantitative Information about Level 3 Fair Value Measurements

Fair Value

Valuation Technique

Unobservable Input

Rate (Weighted Average Cost of Capital

Goodwill

7,785

Discounted cash flow

Discount rate

21.12%

Intangible assets, net

14,753

Discounted cash flow

Discount rate

21.12%

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.

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 as fair value, which becomes the new carrying value.

Amendment seventeen was considered an extinguishment. The Company utilized a third party valuation company to calculate the present value of the cash flows under the terms of the amendment and determine if it was considered substantially different by at least a 10% difference from the present value of the remaining cash flow of the original debt instrument.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

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, 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 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. The outcome of this matter is not determinable as of the date of issuance of these financial statements.

Other Litigation

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

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

NOTE 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:

1.10% Series A Convertible Preferred Stock (“Series A Stock”);

2.10% Series B Convertible Preferred Stock (“Series B Stock”);

3.10% Series C Convertible Preferred Stock (“Series C Stock”);

4.10% Series D Convertible Preferred Stock (“Series D Stock”);

5.10% Series E Convertible Preferred Stock (“Series E Stock”); and

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

6.10% 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.

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

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

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

•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, 2024, and December 31, 2023.

At March 31, 2024 and December 31, 2023, there was an accrued unpaid preference dividend of $691,000. This amount is payable to the Company's Chairman, Mr. Kip Speyer, and is included under other liabilities in the consolidated balance sheet at March 31, 2024.

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, 2024, 12,022,890 shares were remaining under the 2022 Stock Option Plan for future issuance.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

Issue of Common Stock

During the three months ended March 31, 2024, the Company issued 279,452 shares of our common stock to the Board for services rendered with a fair value of $16,000.

During the three months ended March 31, 2023, the Company issued 190,000 shares of our common stock to the Board for services rendered with a fair value of $31,000.

Treasury Stock

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 for a value of $0. A total of 1,350,175 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, 2024 and December 31, 2023, we had 20,448,316 and 21,362,066 common stock warrants outstanding to purchase shares of our common stock with exercise prices ranging between $0.65 and $1.00 per share.

Approximately 913,750 common stock warrants expired during the three months ended March 31, 2024, and no common stock warrants expired during the three months ended March 31, 2023.

A summary of the Company’s warrants outstanding as of March 31, 2024 and December 31, 2023, is presented below:


March 31, 2024
Warrants as of March 31, 2024 Exercise Price		Number Outstanding	Gross cash proceeds if exercised
$	1.00	4,992,308	$	4,992
$	0.75	15,456,008	$	11,592

		20,448,316	$	16,584


December 31, 2023
Warrants as of December 31, 2023 Exercise Price		Number Outstanding	Gross cash proceeds if exercised
$	1.00	4,992,308	$	4,992
$	0.75	15,456,008	$	11,592
$	0.65	913,750	$	594
		21,362,066	$	17,178

NOTE 18 – LOSS PER SHARE

As of March 31, 2024, and 2023, there were 172,382,586 and 150,634,636 shares of common stock issued, respectively, and 171,032,411 and 149,809,461 shares of common stock outstanding, respectively. Outstanding shares as of March 31, 2024, and 2023, have been adjusted to reflect 1,350,175 and 825,175 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.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

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

The following tables reconcile actual basic and diluted earnings per share for the three months ended March 31, 2024, and 2023.


(in thousands, except per share data)	Three Months Ended
	March 31, 2024		March 31, 2023
Loss per share:
Numerator:
Net loss	$	(4,766)	$	(3,796)


Denominator
Weighted-average common shares outstanding
Basic and diluted	171,231,775		149,708,905
Net loss per common share
Basic and diluted	$	(0.03)	$	(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, 2024, and 2023 were as follows:


	March 31,
	2024	2023
Shares unvested and subject to exercise of stock options	10,477,110	6,500,160
Shares subject to exercise of warrants	20,448,316	35,998,316

Shares subject to convertible notes stock conversion	—	200,000

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.

BV Agency, LLC and Centre Lane Partners own approximately 12.4% and 8.8% 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, 2024, the Company has entered into 19 amendments to the Credit Agreement between itself and Centre Lane Partners.

The total related party debt owed to Centre Lane Partners was $72.5 million and $70.2 million as of March 31, 2024 and December 31, 2023, respectively. See Note 10, Centre Lane Senior Secured Credit Facility for details on this facility.

BRIGHT MOUNTAIN MEDIA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2024

(Unaudited)

Convertible Promissory Note

As discussed in Note 11, 10% Convertible Promissory Notes, the note payable to the Chairman of the Board amounted to $80,000 as of March 31, 2024, and December 31, 2023, respectively. See Note 11, 10% Convertible Promissory Notes for further discussion on these notes payable.

Preferred Stock

At March 31, 2024 and December 31, 2023, there was an accrued unpaid preference dividend of $691,000. This amount is payable to the Company's Chairman, Mr. Kip Speyer.

NOTE 20 – INCOME TAXES

The Company recorded a tax provision of $0 for the three months ended March 31, 2024, and 2023, due in large part to its expected tax losses for the period and maintaining a full valuation allowance against its net deferred tax assets.

At March 31, 2024 and December 31, 2023, 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, 2024, and 2023.

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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, 2023. 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 those discussed in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023, and in any subsequent filing we make with the SEC.

Business Overview

Organization and Nature of Operations

Digital Publishing

Advertising Technology

Consumer Insights

Creative Services

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Media Services

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;

•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");

Key Factors Affecting Our Performance

Seasonal Fluctuations. Typically advertising technology companies report a material portion of their revenues during the third and fourth calendar quarter 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, 2024, one customer represented 14.9% of revenue; there was no such concentration for the three months ended March 31, 2023.

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, 2024 and 2023:


(in thousands)	Three Months Ended March 31,
	2024		2023
Revenue	$	12,448	$	1,498
Cost of revenue	9,311		970
Gross margin	3,137		528
General and administrative expenses	5,244		3,428

Financing and (expense), net	(2,659)		(896)
Net loss from operations	(4,766)		(3,796)

Adjusted EBITDA( 1)	$	(1,168)	$	(2,081)

(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;

•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");

Revenue increased $10.9 million, or 731%, for the three months ended March 31, 2024, compared to the same period in 2023. See below for a detailed analysis of revenue for the three months ended March 31, 2024, and 2023.

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.

Costs of revenue increased approximately $8.3 million, or 860%, for the three months ended March 31, 2024 compared to the same period in 2023. See below for a detailed analysis of cost of revenue for the three months ended March 31, 2024, and 2023.

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

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compensation; (ii) legal, accounting and other professional service fees; (iii) other corporate expenses; (iv) information technology costs; and (v) facility costs.

General and administrative expenses increased approximately $1.8 million, or 53%, for the three months ended March 31, 2024 compared to the same period in 2023. See below for a detailed analysis of general and administrative expenses for the three months ended March 31, 2024 and 2023.

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, 2024 Compared to Three Months Ended March 31, 2023

Net loss from operations for the quarter ended March 31, 2024 was $4.8 million as compared to a net loss of $3.8 million for the same period in 2023. The following is our analysis for the period.


(in thousands)	Three Months Ended March 31,
	2024			2023			Change			% Change
Revenue	$	12,448		$	1,498		$	10,950		731	%	increased
Cost of revenue	9,311			970			8,341			860	%	increased
Gross margin	3,137			528			2,609			494	%	increased
General and administrative expense	5,244			3,428			1,816			53	%	increased

Loss from operations	(2,107)			(2,900)			793			(27)	%	decreased
Financing and other expense, net	(2,659)			(896)			(1,763)			197	%	increased

Net loss from operations	$	(4,766)		$	(3,796)		$	(970)		26	%	increased

Gross margin %	25		%	35		%	(10)		%	(28)	%	decreased

Revenue

Our revenue showed an overall increase of $10.9 million, or 731%, for the three months ended March 31, 2024, compared to the same period in 2023, which was driven by $9.4 million in revenue as a result of the Big Village Acquisition, and was partially offset by macroeconomic factors, coupled with an overall reduction in spending by some customers due to inflationary concerns, which led to lower than normal rates and lower earnings. The macroeconomic impacts significantly reduced direct sales by digital publishing customers as well as traffic on our website, which resulted in lower revenue in these divisions.

The Company focuses on digital publishing, advertising technology, consumer insights, creative and media services. Revenue generated by each such division is set forth below:


(in thousands)	Three Months Ended March 31,
	2024		2023		Change		% Change
Digital publishing	$	434	$	954	(520)		(55)	%	decreased
Advertising technology	2,625		544		2,081		383	%	increased
Consumer insights	6,690		—		6,690		100	%	increased
Creative services	2,058		—		2,058		100	%	increased
Media services	641		—		641		100	%	increased
	$	12,448	$	1,498	$	10,950	731	%	increased

Digital Publishing

Digital publishing revenue decreased by $520,000, or 55%, for the three months ended March 31, 2024 compared to the same period in 2023. Approximately $434,000, or 3%, of the Company’s revenue for the three months ended March 31, 2024 was generated from our digital publishing customers, compared to $954,000, or 64%, for the same period in 2023. This division was significantly impacted by macroeconomic factors, which reduced traffic to our website, coupled with an overall reduction in spending by some customers related to inflationary concerns and reduction in website traffic.

Advertising Technology

Advertising technology revenue increased by $2.1 million, or 383%, for the three months ended March 31, 2024 compared to the same period in 2023. Approximately $2.6 million, or 21%, of the Company’s revenue for the three months ended March 31, 2024 was generated from our advertising technology customers compared to $544,000, or 36%, for the same period in 2023.

Consumer Insights

Consumer insights revenue, which is a new offering we acquired with the Big Village Acquisition, increased by $6.7 million, or 100%, for the three months ended March 31, 2024 compared to the same period in 2023, and represented approximately 54% of the Company’s revenue for the three months ended March 31, 2024.

Creative Services

Creative services revenue, which we also acquired as part of the Big Village Acquisition, increased by $2.1 million, or 100%, for the three months ended March 31, 2024 compared to the same period in 2023, and represented approximately 17% of the Company’s revenue for the three months ended March 31, 2024.

Media Services

Media services revenue, which we also acquired as part of the Big Village Acquisition, increased by $641,000, or 100%, for the three months ended March 31, 2024 compared to the same period in 2023, and represented approximately 5% of the Company’s revenue for the three months ended March 31, 2024.

Cost of Revenue


(in thousands)	Three Months Ended March 31,
	2024		2023		Change		% Change
Direct salaries and labor cost	$	1,930	$	—	$	1,930	100	%	increased
Direct project cost	3,149		—		3,149		100	%	increased
Non-direct project cost	2,088		—		2,088		100	%	increased
Publisher cost	1,798		486		1,312		270	%	increased
Content creation	193		291		(98)		(34)	%	decreased
Sales commission	101		51		50		98	%	increased
Other	52		142		(90)		(63)	%	decreased
	$	9,311	$	970	$	8,341	860	%	increased

Cost of revenue increased $8.3 million, or 860%, for the three months ended March 31, 2024, compared to the same period for 2023, which was driven by $7.2 million in cost as a result of the Big Village Acquisition.

Direct Salaries and Labor Cost

Direct salaries and labor cost was $1.9 million for the three months ended March 31, 2024, and represents 21% of overall cost of revenue for this period. These costs represent salary and labor cost of employees that work directly on

customer projects for our consumer insights, creative and media services, which divisions we acquired as part of our acquisition of the Big Village Entities.

Direct Project Cost

Direct project cost was $3.1 million for the three months ended March 31, 2024, and represents 34% of overall cost of revenue for this period. 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 and media services, which divisions we acquired as part of our acquisition of the Big Village Entities.

Non-Direct Project Cost

Non-direct cost was $2.1 million for the three months ended March 31, 2024, and represents 22% of overall cost of revenue for this period. These costs represent overall client service costs that are not specifically related to a particular project, but relate to services we acquired as part of our acquisition of the Big Village Entities.

Publisher Cost

Publisher cost was $1.8 million, which represents 19% of overall cost of revenue, and $486,000, or 50%, of overall cost of revenue, for the three months ended March 31, 2024 and 2023, respectively. We experienced an increase of $1.3 million, or 270%, for the three months ended March 31, 2024 compared to the same period in 2023. These costs represent payments to media providers and website publishers.

Gross Margin

Gross margin was $3.1 million, and $528,000 for the three months ended March 31, 2024 and 2023, respectively. Our gross margin increased $2.6 million, or 494%, for the three months ended March 31, 2024, when compared to the same period of 2023, primarily due to the Big Village Acquisition. Gross margin as a percentage of revenue decreased to 25% for the three months ended March 31, 2024 compared to 35% for the same period of 2023.

General and Administrative Expenses


(in thousands)	Three Months Ended March 31,
	2024			2023			Change			% Change

Personnel cost	$	2,492		$	1,745		$	747		43	%	increased
Legal expense	280			53			227			428	%	increased
Professional fees	845			785			60			8	%	increased
Insurance	203			159			44			28	%	increased
Depreciation and amortization expense	521			393			128			33	%	increased
Data processing	414			34			380			1118	%	increased
Website expense	297			309			(12)			(4)	%	decreased
Other	192			(50)			242			(484)	%	increased
Total	$	5,244		$	3,428		$	1,816		53	%	increased

Gross margin as a percentage of general and administrative expense	60		%	15		%	45		%	296	%

General and administrative expenses increased by $1.8 million, or 53%, for the three months ended March 31, 2024, compared to the same period in 2023. The increase is due to a combination of factors as discussed below.

Personnel Cost

Personnel cost increased by approximately $747,000, or 43%, for the three months ended March 31, 2024 compared to the same period in 2023. This change is mainly driven by an increase in head count as a result of the acquisition of the Big Village Entities during the year ended December 31, 2023. This increase in head count was partially offset by a decrease in the Company's head count by a net amount of 23 employees or 12%, including nine employees that were

terminated as a reduction in force. The Company incurred severance cost of approximately $8,000 in connection with this reduction.

The Company incurred severance cost of approximately $122,000 associated with an headcount reduction during the three months ended March 31, 2023.

The Company employee's headcount was 167 and 52 at March 31, 2024 and 2023, respectively.

Legal Fees

Legal fees increased by $227,000, or 428%, for the three months ended March 31, 2024, compared to the same period in 2023.

Data Processing

Data processing increased by $380,000 or 1118% for the three months ended March 31, 2024, compared to the same period in 2023.

Financing and Other Expense (Income), Net


(in thousands)	Three Months Ended March 31,
	2024		2023		Change		% Change
Interest expense	$	3,004	$	1,174	$	1,830	156	%	increased
Other expense (income)	(345)		(278)		(67)		24	%	increased
Total financing and other expense, net	$	2,659	$	896	$	1,763	197	%	increased

Financing and other expense, net increased by $1.8 million, or 197%, for the three months ended March 31, 2024, compared to the same period in 2023. This increase was largely attributable to a $1.8 million increase in interest expense related to the Centre Lane Senior Secured Credit Facility, which reflected higher principal and fees due to the Centre Lane Senior Secured Credit Facility amendments during the year ended December 31, 2023.

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.

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


(in thousands)	Three Months Ended March 31,
	2024		2023

Net loss before tax plus:	$	(4,766)	$	(3,796)
Depreciation expense	40		7
Amortization of intangibles	481		386

Amortization of debt discount	615		305
Other interest expense	11		6
Interest expense - Centre Lane Senior Secured Credit Facility and Convertible Promissory Notes - related party	2,378		864
EBITDA	(1,241)		(2,228)
Stock compensation expense	65		25

Non-restructuring severance expense	8		122


Adjusted EBITDA	$	(1,168)	$	(2,081)

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, 2024, as compared to December 31, 2023.


(in thousands)	March 31, 2024		December 31, 2023
Total current assets	$	18,573	$	19,737
Total current liabilities	31,831		30,802
Net working capital deficit	$	(13,258)	$	(11,065)

As of March 31, 2024, we had a cash balance of $4.9 million compared with a cash balance of $4.0 million as of December 31, 2023. 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 has resulted in an accumulated deficit of approximately $154.6 million as of March 31, 2024. Cash flows provided by (used in) operating activities were $920,000 and $(1.0) million for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, the Company had a working capital deficit of approximately $13.3 million, inclusive of $4.9 million in cash and cash equivalents.

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 $10.3 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 Agreement or raising equity capital. The ability to access the capital markets is also dependent upon the volume and market price of the Company's stock, which cannot be assured. Other measures include reducing or delaying certain business activities, or reducing general and administrative expenses, including a reduction in headcount. The ultimate success of these plans is not guaranteed.

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 Agreement 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.

The outstanding principal owed to Centre Lane Partners was $72.5 million and $70.2 million as of March 31, 2024 and December 31, 2023, respectively, and matures on April 20, 2026. Of the amount outstanding at March 31, 2024, $879,000, $3.0 million, $879,000, $879,000 and $879,000 are due on March 31, 2024, June 30, 2024, September 30, 2024 December 31, 2024 and March 31, 2025, respectively. The balance of $66.0 million is due in 2025 or later.

The amount due under the Credit Agreement bears interest of 7.0% per annum plus the Secured Overnight Financing Rate ("SOFR"). At March 31, 2024, the SOFR was 5.33%, thus the overall interest rate on this facility was 12.33% per annum at March 31, 2024.

Interest is paid in kind at 12.33% per annum on approximately $35.2 million of the amount owed under the Credit Agreement, and at 15% per annum on $30.3 million of the amount owed under the Credit Agreement. With respect to the remaining $7.0 million owed under the facility, interest is paid in kind at 4% per annum and in cash at the SOFR plus 3.0% (for a total interest rate of 8.33% per annum at March 31, 2024).

Effective July 1, 2024, the $35.2 million outstanding under the Centre Lane Senior Secured Credit Facility will bear interest at 7.0% per annum, plus the SOFR plus 5.0%.

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.

10% Convertible Promissory Note

During November 2018, the Company issued a 10% convertible promissory note (the "Convertible Note") in the amount of $80,000 to the Chairman of the Board, a related party. The Convertible Note is unsecured, matured five years from issuance and was convertible at the option of the holder into shares of our common stock at any time prior to maturity at a conversion price of $0.40 per share. The outstanding principal and interest of the Convertible Note was due and payable in November 2023. At March 31, 2024, approximately $121,000 inclusive of principal and interest is due and payable, and the outstanding principal continues to accrue interest.

For a full description of the Convertible Note, see Note 11, "10% Convertible Promissory Note" to the consolidated financial statements.

Summary of Cash Flows

The following table summarizes cash flow activities during for the three months ended March 31, 2024 and 2023:


(in thousands)	Three Months Ended March 31, 2024
	2024		2023
Cash flow provided by (used) in operating activities	$	920	$	(1,031)
Cash flow (used in) investing activities	(2)		(5)
Cash flow (used in) provided by financing activities	(4)		1,500
Net increase in cash and cash equivalents, net of impact of exchange rates	$	926	$	468

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, 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.

For the three months ended March 31, 2023, cash used in operating activities was $1.0 million. The primary factors affecting our operating cash flows during the period were our net loss of $3.8 million, adjusted for non-cash charges of $386,000 for amortization of intangible assets, $305,000 of amortization of debt discount, $789,000 in interest paid in kind on the Centre Lane Senior Secured Credit Facility, $25,000 of stock-based compensation expense, $188,000 for the recoveries of expected credit losses, and a $1.4 million net change in operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities were a $2.5 million increase in accounts receivable and a $142,000 increase in prepaid and other current assets, offset by a $1.5 million decrease in accounts payable and accrued expense, a $72,000 decrease in interest payable on the Centre Lane Senior Secured Credit Facility, and a $237,000 decrease in deferred revenue.

Investing Activities

Cash used in investing activities of $2,000 and $5,000 for the three months ended March 31, 2024 and 2023, respectively, was due entirely to the purchase of property and equipment.

Financing Activities

During the three months ended March 31, 2024, and 2023 the Company raised $0 and $1.5 million, respectively, of debt financing from the Centre Lane Senior Secured Credit Facility, which was used primarily to fund our working capital.

Contractual Obligations and Commitments

There were no other material changes in our contractual obligations and commitments from those disclosed above and in the Annual Report on Form 10-K for the year ended December 31, 2023.

Off-Balance Sheet Arrangements

As of March 31, 2024 and December 31, 2023, 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.

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, 2023.

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.

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, 2024. 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, 2024, due to the existence of the material weaknesses in the Company’s internal control over financial reporting described below, the Company’s disclosure controls and procedures were not effective.

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 integrates the operations acquired through the Big Village Acquisition, there is a risk of identifying deficiencies in our overall internal controls. Our focus is on implementing and maintaining effective financial management systems and internal controls, on an ongoing process. However, given that all such controls are not yet fully operational, management has concluded that a material weakness exists in the Company’s internal controls over financial reporting, rendering them ineffective at December 31, 2023.

As set forth below, management will take steps to remediate the material weaknesses identified below. Notwithstanding the material weaknesses described below, we have performed additional analyses and other procedures to enable management to conclude that our consolidated financial statements included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial condition and results of operations as of and for the quarter ended March 31, 2024.

Outlined below are the material weaknesses identified by management, along with the remedial actions planned.

Material Weaknesses

A material weakness is a deficiency, or a combination of deficiencies, in internal controls over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. As of December 31, 2023, management identified certain material weaknesses.

As the Company continues to integrate the operations assumed as part of the Big Village Acquisition, we have identified deficiencies in our overall internal controls, specifically as identified below:

•Inadequate controls related to revenue recognition, cost of revenue, and the accounts payable and accrual process

leading to potential omission or misstatement of material transactions impacting financial statements; and

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

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 incorporate operations from the Big Village Acquisition;

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

•Collaboration with a third-party company to ensure SOX compliance, establish and document controls related to revenue recognition, accounts payable, and other processes to enhance internal controls over financial reporting; and

•Expansion of our finance department through the hiring of certified public accountants with prior auditing experience, knowledge of SEC filings and technical issues. In the year ended December 31, 2023, two additional certified public accountants were onboarded, tasked with month end close oversights and SEC reporting. We believe this will strengthen our finance 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 and as funds allow.

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, 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constraints, and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

For a description of developments to legal proceedings during the three months ended March 31, 2024, see “Litigation” under Note 16, “Commitments and Contingencies” to our consolidated financial statements.

Item 1A. Risk Factors.

There have been no material changes to the Risk Factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

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

On March 26, 2024, the Company issued an aggregate of 279,452 shares of its common stock to the independent members of the Board for services rendered. Such issuances were exempt from the registration requirements of the Securities Act pursuant to Section 4(a)(2) thereof because they involved a private offering.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

None.

Item 5. Other Information.

None.

Item 6. Exhibits.

No.

Exhibit Description

Form

Date Filed

Number

Herewith

31.1

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

Filed

31.2

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

Filed

32.1*

Certification of the Principal Executive Officer pursuant to Section 1350

Filed

32.2*

Certification of the Principal Financial Officer pursuant to Section 1350

Filed

101.INS

Inline XBRL Instance Document

Filed

101.SCH

Inline XBRL Taxonomy Extension Schema Document

Filed

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Filed

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

Filed

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

Filed

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Filed

104

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

* 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.

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 14, 2024	By:	/s/ Matthew Drinkwater
		Matthew Drinkwater,
		Chief Executive Officer and Director (Principal Executive Officer)

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

EXHIBIT 31.1

Rule 13a-14(a)/15d-14(a) Certification

I, Matthew Drinkwater, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the period ended March 31, 2024, of Bright Mountain Media, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Dated: May 14, 2024			/s/ Matthew Drinkwater
			Matthew Drinkwater,
			Chief Executive Officer, Principal Executive Officer

EXHIBIT 31.2

Rule 13a-14(a)/15d-14(a) Certification

I, Ethan Rudin, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the period ended March 31, 2024, of Bright Mountain Media, Inc.;

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Dated: May 14, 2024			/s/ Ethan Rudin
			Ethan Rudin,
			Chief Financial Officer, Principal Financial Officer

EXHIBIT 32.1

Section 1350 Certification

In connection with the Quarterly Report of Bright Mountain Media, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2024, as filed with the Securities and Exchange Commission (the “Report”), I, Matthew Drinkwater, Chief Executive Officer and Principal Executive Officer of the Company, do each hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and

2.The information contained in the Report fairly presents, in all material respects, the financial conditions and results of operations of the Company.


May 14, 2024			/s/ Matthew Drinkwater
			Matthew Drinkwater,
			Chief Executive Officer, Principal Executive Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signatures that appear in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EXHIBIT 32.2

Section 1350 Certification

In connection with the Quarterly Report of Bright Mountain Media, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2024, as filed with the Securities and Exchange Commission (the “Report”), I, , Miriam Martinez, Principal Financial Officer of the Company, do each hereby certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and

2.The information contained in the Report fairly presents, in all material respects, the financial conditions and results of operations of the Company.


May 14, 2024			/s/ Ethan Rudin
			Ethan Rudin,
			Chief Financial Officer, Principal Financial Officer

Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2024	May 13, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2024
Document Transition Report	false
Entity File Number	000-54887
Entity Registrant Name	Bright Mountain Media, Inc.
Entity Incorporation, State or Country Code	FL
Entity Tax Identification Number	27-2977890
Entity Address, Address Line One	6400 Congress Avenue
Entity Address, Address Line Two	Suite 2050
Entity Address, City or Town	Boca Raton
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33487
City Area Code	561
Local Phone Number	998-2440
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		171,078,661
Amendment Flag	false
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Entity Central Index Key	0001568385

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Current Assets
Cash and cash equivalents	$ 4,921	$ 4,001
Accounts receivable, net	12,474	14,679
Prepaid expenses and other current assets	1,178	1,057
Total Current Assets	18,573	19,737
Property and equipment, net	161	199
Intangible assets, net	14,753	15,234
Goodwill	7,785	7,785
Operating lease	290	306
Other assets, non-current	158	156
Total Assets	41,720	43,417
Current Liabilities
Accounts payable and accrued expenses	15,807	17,497
Other current liabilities	3,026	3,025
Deferred revenue	6,268	4,569
Total Current Liabilities	31,831	30,802
Unpaid settlement amount, long term portion	286	325
Finance lease obligations, net of current portion	37	42
Operating lease liability, non-current	234	239
Total liabilities	93,036	90,082
Shareholders’ deficit
Convertible preferred stock, par value $0.01, 20,000,000 shares authorized, no shares issued or outstanding at March 31, 2024 and December 31, 2023	0	0
Common stock, par value $0.01, 324,000,000 shares authorized, 172,382,586 and 172,103,134 issued and 171,032,411 and 171,277,959 outstanding at March 31, 2024 and December 31, 2023, respectively	1,724	1,721
Treasury stock, at cost; 1,350,175 and $825,175 shares at March 31, 2024 and December 31, 2023, respectively	(220)	(220)
Additional paid-in capital	101,483	101,405
Accumulated deficit	(154,599)	(149,833)
Accumulated other comprehensive income	296	262
Total shareholders’ deficit	(51,316)	(46,665)
Total liabilities and shareholders’ deficit	41,720	43,417
10% Convertible Promissory Notes
Current Liabilities
Interest payable – 10% Convertible Promissory Notes – related party	41	39
Notes payable - related party	80	80
Centre Lane Senior Secured Credit Facility
Current Liabilities
Interest payable – 10% Convertible Promissory Notes – related party	138	0
Notes payable - related party	6,471	5,592
Note payable – Centre Lane Senior Secured Credit Facility – net of discount, related party	$ 60,648	$ 58,674

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2024	Dec. 31, 2023
Preferred stock, par or stated value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized (in shares)	20,000,000	20,000,000
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0
Common stock, par or stated value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized (in shares)	324,000,000	324,000,000
Common stock, issued (in shares)	172,382,586	172,103,134
Common stock, outstanding (in shares)	171,032,411	171,277,959
Treasury stock (in shares)	1,350,175	825,175
10% Convertible Promissory Notes
Debt instrument, interest rate, percent	10.00%

Consolidated Statements of Operations and Comprehensive Loss - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Revenue	$ 12,448,000	$ 1,498,000
Cost of revenue	9,311,000	970,000
Gross margin	3,137,000	528,000
General and administrative expenses	5,244,000	3,428,000
Loss from operations	(2,107,000)	(2,900,000)
Financing and other (expense) income
Other income	345,000	278,000
Other interest expense	(11,000)	(6,000)
Total financing and other (expense), net	(2,659,000)	(896,000)
Net loss before income tax	(4,766,000)	(3,796,000)
Income tax provision	0	0
Net loss	(4,766,000)	(3,796,000)
Foreign currency translation	34,000	14,000
Comprehensive loss	$ (4,732,000)	$ (3,782,000)
Net loss per common share:
Basic (in dollars per share)	$ (0.03)	$ (0.03)
Diluted (in dollars per share)	$ (0.03)	$ (0.03)
Weighted average shares outstanding
Basic (in shares)	171,231,775	149,708,905
Diluted (in shares)	171,231,775	149,708,905
Centre Lane Senior Secured Credit Facility
Financing and other (expense) income
Interest expense, related party	$ (2,991,000)	$ (1,163,000)
10% Convertible Promissory Notes
Financing and other (expense) income
Interest expense, related party	$ (2,000)	$ (5,000)

Consolidated Statements of Change in Shareholders' Deficit - USD ($) $ in Thousands	Total	Common Stock	Treasury Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income
Common stock, beginning balance (in shares) at Dec. 31, 2022		150,444,636
Treasury stock, beginning balance (in shares) at Dec. 31, 2022			(825,175)
Beginning balance at Dec. 31, 2022	$ (14,071)	$ 1,504	$ (220)	$ 98,797	$ (114,269)	$ 117
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	$ (3,796)				(3,796)
Common stock issued for services rendered (in shares)	190,000	190,000
Common stock issued for services rendered	$ 31	$ 2		29
Stock based compensation	25			25
Foreign currency translation	14					14
Common stock, ending balance (in shares) at Mar. 31, 2023		150,634,636
Treasury stock, ending balance (in shares) at Mar. 31, 2023			(825,175)
Ending balance at Mar. 31, 2023	$ (17,797)	$ 1,506	$ (220)	98,851	(118,065)	131
Common stock, beginning balance (in shares) at Dec. 31, 2023	172,103,134	172,103,134
Treasury stock, beginning balance (in shares) at Dec. 31, 2023	(825,175)		(825,175)
Beginning balance at Dec. 31, 2023	$ (46,665)	$ 1,721	$ (220)	101,405	(149,833)	262
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	$ (4,766)
Common stock issued for services rendered (in shares)	279,452	279,452
Common stock issued for services rendered	$ 16	$ 3		13
Stock based compensation	65			65
Acquisition of treasury stock (in shares)			(525,000)
Foreign currency translation	$ 34
Common stock, ending balance (in shares) at Mar. 31, 2024	172,382,586	172,382,586
Treasury stock, ending balance (in shares) at Mar. 31, 2024	(1,350,175)		(1,350,175)
Ending balance at Mar. 31, 2024	$ (51,316)	$ 1,724	$ (220)	$ 101,483	$ (154,599)	$ 296

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities:
Net loss	$ (4,766)	$ (3,796)
Adjustments to reconcile net loss to net cash provided by (used in) operations:
Depreciation	40	7
Interest paid-in kind on Centre Lane Credit Facility	2,238	789
Amortization of operating lease right-of-use asset	16	14
Amortization of debt discount	615	305
Amortization of intangibles	481	386
Stock based compensation	65	25
Common stock issued for services rendered	16	31
Expected credit losses (recoveries)	(37)	(188)
Changes in operating assets and liabilities:
Accounts receivable	2,243	2,509
Prepaid expenses and other current assets	(123)	142
Operating lease liability	(15)	1
Accounts payable and accrued expenses	(1,662)	(1,471)
Other liabilities	(30)	(96)
Deferred revenue	1,699	237
Net cash provided by (used) in operating activities	920	(1,031)
Cash flows from investing activities:
Purchase of property and equipment	(2)	(5)
Net cash used in investing activities	(2)	(5)
Cash flows from financing activities:
Principal payments on finance lease obligations	(4)	0
Proceeds from Centre Lane Senior Secured Credit Facility – related party	0	1,500
Net cash (used in) provided by financing activities	(4)	1,500
Effect of foreign exchange rates on cash	6	4
Net increase in cash and cash equivalents	920	468
Cash and cash equivalents at the beginning of period	4,001	316
Cash and cash equivalents at end of period	4,921	784
Supplemental disclosure of cash flow information
Interest paid-in kind on Centre Lane Credit Facility	2,238	789
10% Convertible Promissory Notes
Adjustments to reconcile net loss to net cash provided by (used in) operations:
Amortization of debt discount		3
Centre Lane Senior Secured Credit Facility
Changes in operating assets and liabilities:
Interest payable	138	72
10% Convertible Promissory Notes
Changes in operating assets and liabilities:
Interest payable	$ 2	$ 2

Consolidated Statements of Cash Flows (Parenthetical)	Mar. 31, 2024	Nov. 30, 2018
10% Convertible Promissory Notes
Short-Term Debt [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	10.00%	10.00%

DESCRIPTION OF BUSINESS AND DEVELOPMENTS	3 Months Ended
DESCRIPTION OF BUSINESS AND DEVELOPMENTS	Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
DESCRIPTION OF BUSINESS AND DEVELOPMENTS	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”) has an end-to-end digital media and advertising services platform that efficiently connects brands with targeted consumer demographics. We focus on digital publishing, advertising technology, consumer insights, creative and media services. During the year ended December 31, 2023, the Company completed the acquisition of two business units of Big Village (Big Village Insights, Inc. and Big Village Agency LLC (together, referred to as the "Big Village Entities")), in an all-cash transaction funded by the Centre Lane Senior Secured Credit Facility (the "Big Village Acquisition"). 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, 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 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 ensures that ad placements are not only well-targeted, but also continuously optimized for maximum efficiency and ROI. 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, •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, and •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.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

Going Concern and Liquidity

Cash and Cash Equivalents

As of March 31, 2024 and December 31, 2023, the Company exceeded the insurance limit of $28,000 for one of its international bank accounts by $49,000 and $31,000, respectively.

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, 2024, and December 31, 2023, the Company had $4.9 million and $4.0 million, respectively, in cash and cash equivalents.

Off-balance Sheet Arrangements

There were no off-balance sheet arrangements as of March 31, 2024 and December 31, 2023.

Use of Estimates

Foreign Currency

Concentrations of Credit Risk

The Company generates revenue as follows:

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

•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"),

The following table provides information about concentration that exceed 10% of revenue and accounts receivable for the period:


	Three Months Ended March 31,
	2024		2023

Revenue Concentration
Customers exceeding 10% of revenue	1		—
% of overall revenue
Customer 1	14.9	%	—	%

Total % of revenue	14.9	%	—	%


	March 31, 2024		December 31, 2023
Accounts Receivable Concentration
Customers exceeding 10% of accounts receivable	2		2
% of accounts receivable
Customer 1	25.7	%	15.7	%
Customer 2	13.2	%	10.5	%
Total % of accounts receivable	38.9	%	26.2	%

Reclassification

These reclassifications had no impact on the previously reported net loss for the three months ended March 31, 2023.

Effective Accounting Pronouncements Adopted

ACCOUNTS RECEIVABLE

3 Months Ended

Mar. 31, 2024

Receivables [Abstract]

ACCOUNTS RECEIVABLE

Accounts receivable, net consisted of the following:


(in thousands)	March 31, 2024		December 31, 2023
Accounts receivable	$	10,866	$	13,799
Unbilled receivables (1)	1,934		1,252
	12,800		15,051
Less: allowance for current expected credit losses	(326)		(372)
Accounts receivable, net	$	12,474	$	14,679

(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, 2023 was $3.6 million.

PREPAID EXPENSES AND OTHER ASSETS

3 Months Ended

Mar. 31, 2024

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

PREPAID EXPENSES AND OTHER ASSETS

Prepaid expenses and other assets consisted of the following:


(in thousands)	March 31, 2024		December 31, 2023
Prepaid insurance(1)	$	433	$	618

Prepaid software	57		46
Deposits	158		156
Subscriptions	309		174
Other current assets	379		219
Total prepaid expenses and other assets	1,336		1,213
Less: other assets, non-current	(158)		(156)
Prepaid expenses and other current assets	$	1,178	$	1,057

(1) - The amount of $433,000 includes $371,000, which is being paid over a period of time and is included in accounts payable at March 31, 2024.

PROPERTY AND EQUIPMENT

3 Months Ended

Mar. 31, 2024

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:


(in thousands)	Estimated Useful Life (Years)	March 31, 2024		December 31, 2023
Furniture and fixtures	3-5	$	8	$	8
Computer equipment	3	191		190
Computer software	5	206		206
		405		404
Less: accumulated depreciation		(244)		(205)
Property and equipment, net		$	161	$	199

INTANGIBLES ASSETS, NET

3 Months Ended

Mar. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLES ASSETS, NET

Website acquisitions, net consisted of the following:


(in thousands)	March 31, 2024		December 31, 2023
Website acquisition assets	$	1,124	$	1,124
Less: accumulated amortization	(1,124)		(1,123)

Website acquisition assets, net	$	—	$	1

Other intangible assets, net consisted of the following:


	As of March 31, 2024							As of December 31, 2023
(in thousands)	Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trade name	2 - 10	$	8,381	$	(3,324)	$	5,057	$	8,381	$	(3,167)	$	5,214
IP/technology	10	5,821		(2,279)		3,542		5,821		(2,180)		3,641
Customer relationships	5 - 10	13,380		(7,226)		6,154		13,380		(7,002)		6,378
Non-compete agreements	3 - 5	402		(402)		—		402		(402)		—
Total		$	27,984	$	(13,231)	$	14,753	$	27,984	$	(12,751)	$	15,233


(in thousands)	March 31, 2024		December 31, 2023
Website	$	—	$	1
Other intangibles	14,753		15,233
Total intangible, net	$	14,753	$	15,234

The Company performed an impairment assessment during the year ended December 31, 2023, and recorded an impairment loss of $2.9 million.

As of March 31, 2024, expected remaining amortization expense of intangible assets and website acquisition by fiscal year is as follows:


(in thousands)
Remainder of 2024	$	1,441
2025	1,845
2026	1,769
2027	1,769
2028	1,769
Thereafter	6,160

Total expected amortization expense	$	14,753

GOODWILL

3 Months Ended

Mar. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL

The following table represents the allocation of goodwill as of March 31, 2024, and December 31, 2023:


(in thousands)	Owned & Operated		Ad Network		Insights		Total
December 31, 2023	$	2,865	$	4,013	$	907	$	7,785
Addition	—		—		—		—

March 31, 2024	$	2,865	$	4,013	$	907	$	7,785

There was no triggering event or impairment for the three months ended March 31, 2024.

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

3 Months Ended

Mar. 31, 2024

Payables and Accruals [Abstract]

ACCOUNTS PAYABLE AND ACCURED EXPENSES

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following:


(in thousands)	March 31, 2024		December 31, 2023
Accounts payable (1)	$	11,259	$	11,391
Accrued wages, commissions and bonus	188		353
Publisher cost	1,034		1,153
Professional fees	645		1,322
Subcontractor	2,444		3,013
Other	237		265
Total accounts payable and accrued expenses	$	15,807	$	17,497

OTHER CURRENT LIABILITIES

3 Months Ended

Mar. 31, 2024

Other Liabilities Disclosure [Abstract]

OTHER CURRENT LIABILITIES

Other current liabilities consisted of the following:


(in thousands)	March 31, 2024		December 31, 2023
Current portion of long term lease	$	73	$	82
Dividend payable	692		692
Project advance expense (1)	1,409		1,401
Litigation reserves	1,113		1,152
Other current liabilities	25		23
Total other current liabilities	3,312		3,350
Less: other liabilities, non-current	(286)		(325)
Other current liabilities	$	3,026	$	3,025

CENTRE LANE SENIOR SECURED CREDIT FACILITY

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

CENTRE LANE SENIOR SECURED CREDIT FACILITY

integration and further growth of the Company post-Acquisition. This term loan is part of the last in first out loans and matures on June 28, 2024.

In connection with the Nineteenth Amendment, adjustments were made to the interest rate for outstanding loans with the exception of the draw under the Seventeenth Amendment as follows:

•The cash pay rate for the last in first out loans was changed to the SOFR plus 3.0% per annum. At March 31, 2024, the rate was 8.33% per annum; and

•Effective July 1, 2024, the first in last out loans PIK Rate per annum will be 7.0% per annum plus SOFR plus 5.0% per annum.

Optional Prepayment

Repayment of Loans

In connection with the Nineteenth Amendment, quarterly installments equal to 2.5% of the outstanding aggregate principal are due on the first in last out loans commencing March 31, 2024.

There was no payment on the principal loan balance for the three months ended March 31, 2024, and 2023.

Interest payable at March 31, 2024 was $138,000. There was no payment toward outstanding interest for the three months ended March 31, 2024, and 2023.

Fees

The below table summarizes the loan balance at March 31, 2024, and December 31, 2023:


(in thousands)	March 31, 2024		December 31, 2023

Note payable – Centre Lane Senior Secured Credit Facility – related party (current portion)	$	6,471	$	5,592
Note payable – Centre Lane Senior Secured Credit Facility – net of discount, related party	60,648		58,674
Net principal at March 31, 2024 and December 31, 2023	67,119		64,266
Add: debt discount	5,347		5,962
Outstanding principal at March 31, 2024 and December 31, 2023	$	72,466	$	70,228

The below table summarizes the movement in the outstanding principal from inception through March 31, 2024:


(in thousands)	March 31, 2024		December 31, 2023
Opening balance	$	70,228	$	33,109
Add:
Draws	—		29,816
Exit and other fees	—		917
Interest capitalized	2,238		6,656
	72,466		70,498
Less: Payment	—		(270)
Outstanding principal	$	72,466	$	70,228

Amendments to Centre Lane Senior Secured Credit Facility

amount of the original loan. As of March 31, 2024, there were nineteen amendments to the Centre Lane Senior Secured Credit Facility.

The below table summarizes the amendments that were executed by the Company since the inception of the facility to March 31, 2024, (in thousands, except for share data):


Number	Date	Draw $’000		Repayment Date	Interest Rate (PIK)(D)		Interest Rate (Cash)(E)		Agency Fee		Exit Fee(A)		Common Stock Issued	Accounting Impact
1	04/26/21	$	—	April 20, 2026	12.33	%	—		$	—	$	—	150,000	Extinguishment	(B)
2	05/26/21	1,500		April 20, 2026	12.33	%	—		—		750		3,000,000	Modification	(F)
3	08/12/21	500		April 20, 2026	12.33	%	—		—		250		2,000,000	Modification	(F)
4	08/31/21	1,100		April 20, 2026	12.33	%	—		—		550		—	Modification	(F)
5	10/08/21	725		April 20, 2026	12.33	%	—		—		363		—	Extinguishment	(F)
6	11/05/21	800		April 20, 2026	12.33	%	—		—		800		7,500,000	Modification	(F)
7	12/23/21	500		April 20, 2026	12.33	%	—		70		500		—	Modification	(F)
		$	5,125						$	70	$	3,213	12,650,000

8	01/26/22	350		April 20, 2026	12.33	%	—		—		350		—	Modification	(F)
9	02/11/22	250		April 20, 2026	4.00	%	8.33	%	—		13		—	Modification	(G)
10	03/11/22	300		April 20, 2026	4.00	%	8.33	%	—		15		—	Modification	(G)
11	03/25/22	500		April 20, 2026	4.00	%	8.33	%	—		25		—	Modification	(G)
12	04/15/22	450		April 20, 2026	4.00	%	8.33	%	—		23		—	Modification	(G)
13	05/10/22	500		April 20, 2026	4.00	%	8.33	%	35		25		—	Modification	(G)
14	06/10/22	350		April 20, 2026	4.00	%	8.33	%	—		18		—	Modification	(G)
15	07/08/22	350		April 20, 2026	4.00	%	8.33	%	—		18		—	Modification	(G)
		$	3,050						$	35	$	487	—

16	02/10/23	1,500		April 20, 2026	4.00	%	8.33	%	—		75		—	Modification	(G)
17	04/20/23	26,316		April 20, 2026	15.00	%	—	%	35		708		21,401,993	Extinguishment	(C)
19	07/28/23	2,000		June 28, 2024	4.00	%	8.33	%	—		$	100	—	Modification	(G)
		$	29,816						$	35	$	883	21,401,993

Total		$	37,991						$	140	$	4,583	34,051,993


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

(B)			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.

(C)			15% PIK until April 20, 2024, then 5% cash and 10% PIK thereafter.

(D)			New rates in effect in connection with Amendment 19, Amendment 1 through 8, the PIK rate was 10%.

(E)			New rates in effect in connection with Amendment 19, Amendment 9 through 16, the cash rate was 8%.

(F)			First In Last Out Loans.

(G)			Last In First Out Loans.

(H)			As discussed above, there was no impact on principal or interest and no fees incurred by the Company as a result of Amendment 18, thus it is not included in above table.

During the three months ended March 31, 2024, and 2023, the Company recorded amortization of debt discount of $615,000 and $301,000, respectively on the Centre Lane Senior Secured Credit Facility.

Interest expense for the three months ended March 31, 2024, and 2023 consisted of the following:


	Three Months Ended
(in thousands)	March 31, 2024		March 31, 2023
Interest expense	$	2,376	$	862
Amortization	615		301
Total interest expense	$	2,991	$	1,163

10% CONVERTIBLE PROMISSORY NOTES

The principal balance of these Convertible Notes payable was $80,000 at March 31, 2024 and December 31, 2023.

10% CONVERTIBLE PROMISSORY NOTES

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

10% CONVERTIBLE PROMISSORY NOTES

CENTRE LANE SENIOR SECURED CREDIT FACILITY

integration and further growth of the Company post-Acquisition. This term loan is part of the last in first out loans and matures on June 28, 2024.

In connection with the Nineteenth Amendment, adjustments were made to the interest rate for outstanding loans with the exception of the draw under the Seventeenth Amendment as follows:

•The cash pay rate for the last in first out loans was changed to the SOFR plus 3.0% per annum. At March 31, 2024, the rate was 8.33% per annum; and

•Effective July 1, 2024, the first in last out loans PIK Rate per annum will be 7.0% per annum plus SOFR plus 5.0% per annum.

Optional Prepayment

Repayment of Loans

In connection with the Nineteenth Amendment, quarterly installments equal to 2.5% of the outstanding aggregate principal are due on the first in last out loans commencing March 31, 2024.

There was no payment on the principal loan balance for the three months ended March 31, 2024, and 2023.

Interest payable at March 31, 2024 was $138,000. There was no payment toward outstanding interest for the three months ended March 31, 2024, and 2023.

Fees

The below table summarizes the loan balance at March 31, 2024, and December 31, 2023:


(in thousands)	March 31, 2024		December 31, 2023

Note payable – Centre Lane Senior Secured Credit Facility – related party (current portion)	$	6,471	$	5,592
Note payable – Centre Lane Senior Secured Credit Facility – net of discount, related party	60,648		58,674
Net principal at March 31, 2024 and December 31, 2023	67,119		64,266
Add: debt discount	5,347		5,962
Outstanding principal at March 31, 2024 and December 31, 2023	$	72,466	$	70,228

The below table summarizes the movement in the outstanding principal from inception through March 31, 2024:


(in thousands)	March 31, 2024		December 31, 2023
Opening balance	$	70,228	$	33,109
Add:
Draws	—		29,816
Exit and other fees	—		917
Interest capitalized	2,238		6,656
	72,466		70,498
Less: Payment	—		(270)
Outstanding principal	$	72,466	$	70,228

Amendments to Centre Lane Senior Secured Credit Facility

amount of the original loan. As of March 31, 2024, there were nineteen amendments to the Centre Lane Senior Secured Credit Facility.

The below table summarizes the amendments that were executed by the Company since the inception of the facility to March 31, 2024, (in thousands, except for share data):


Number	Date	Draw $’000		Repayment Date	Interest Rate (PIK)(D)		Interest Rate (Cash)(E)		Agency Fee		Exit Fee(A)		Common Stock Issued	Accounting Impact
1	04/26/21	$	—	April 20, 2026	12.33	%	—		$	—	$	—	150,000	Extinguishment	(B)
2	05/26/21	1,500		April 20, 2026	12.33	%	—		—		750		3,000,000	Modification	(F)
3	08/12/21	500		April 20, 2026	12.33	%	—		—		250		2,000,000	Modification	(F)
4	08/31/21	1,100		April 20, 2026	12.33	%	—		—		550		—	Modification	(F)
5	10/08/21	725		April 20, 2026	12.33	%	—		—		363		—	Extinguishment	(F)
6	11/05/21	800		April 20, 2026	12.33	%	—		—		800		7,500,000	Modification	(F)
7	12/23/21	500		April 20, 2026	12.33	%	—		70		500		—	Modification	(F)
		$	5,125						$	70	$	3,213	12,650,000

8	01/26/22	350		April 20, 2026	12.33	%	—		—		350		—	Modification	(F)
9	02/11/22	250		April 20, 2026	4.00	%	8.33	%	—		13		—	Modification	(G)
10	03/11/22	300		April 20, 2026	4.00	%	8.33	%	—		15		—	Modification	(G)
11	03/25/22	500		April 20, 2026	4.00	%	8.33	%	—		25		—	Modification	(G)
12	04/15/22	450		April 20, 2026	4.00	%	8.33	%	—		23		—	Modification	(G)
13	05/10/22	500		April 20, 2026	4.00	%	8.33	%	35		25		—	Modification	(G)
14	06/10/22	350		April 20, 2026	4.00	%	8.33	%	—		18		—	Modification	(G)
15	07/08/22	350		April 20, 2026	4.00	%	8.33	%	—		18		—	Modification	(G)
		$	3,050						$	35	$	487	—

16	02/10/23	1,500		April 20, 2026	4.00	%	8.33	%	—		75		—	Modification	(G)
17	04/20/23	26,316		April 20, 2026	15.00	%	—	%	35		708		21,401,993	Extinguishment	(C)
19	07/28/23	2,000		June 28, 2024	4.00	%	8.33	%	—		$	100	—	Modification	(G)
		$	29,816						$	35	$	883	21,401,993

Total		$	37,991						$	140	$	4,583	34,051,993


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

(B)			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.

(C)			15% PIK until April 20, 2024, then 5% cash and 10% PIK thereafter.

(D)			New rates in effect in connection with Amendment 19, Amendment 1 through 8, the PIK rate was 10%.

(E)			New rates in effect in connection with Amendment 19, Amendment 9 through 16, the cash rate was 8%.

(F)			First In Last Out Loans.

(G)			Last In First Out Loans.

(H)			As discussed above, there was no impact on principal or interest and no fees incurred by the Company as a result of Amendment 18, thus it is not included in above table.

During the three months ended March 31, 2024, and 2023, the Company recorded amortization of debt discount of $615,000 and $301,000, respectively on the Centre Lane Senior Secured Credit Facility.

Interest expense for the three months ended March 31, 2024, and 2023 consisted of the following:


	Three Months Ended
(in thousands)	March 31, 2024		March 31, 2023
Interest expense	$	2,376	$	862
Amortization	615		301
Total interest expense	$	2,991	$	1,163

10% CONVERTIBLE PROMISSORY NOTES

The principal balance of these Convertible Notes payable was $80,000 at March 31, 2024 and December 31, 2023.

LEASES

3 Months Ended

Mar. 31, 2024

Leases [Abstract]

LEASES

Operating Lease

At March 31, 2024 and December 31, 2023 the operating lease right-of-use asset was $290,000 and $306,000, respectively, and is included under assets on the consolidated balance sheet.

Finance Lease

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

At March 31, 2024 and December 31, 2023, finance lease asset was $56,000 and $60,000, respectively, and is included under assets on the consolidated balance sheets.

As of March 31, 2024 and December 31, 2023, the right-of-use asset and lease liability for the operating and finance lease are summarized as follows (in thousands):


	March 31, 2024			December 31, 2023
Assets
Operating lease	$	290		$	306
Finance lease(1)	56			60
	$	346		$	366

Liabilities
Operating lease liability, current	$	54		$	64
Operating lease liability, net of current portion	234			239
Total operating lease liability	$	288		$	303

Finance lease obligations, current	$	19		$	18
Finance lease obligations, net of current portion	37			42
Total finance lease obligations	$	56		$	60

Weighted average remaining lease terms (in years):
Operating lease	3.5			3.75
Finance lease	2.5			2.75

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".

LEASES

Operating Lease

At March 31, 2024 and December 31, 2023 the operating lease right-of-use asset was $290,000 and $306,000, respectively, and is included under assets on the consolidated balance sheet.

Finance Lease

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

At March 31, 2024 and December 31, 2023, finance lease asset was $56,000 and $60,000, respectively, and is included under assets on the consolidated balance sheets.

As of March 31, 2024 and December 31, 2023, the right-of-use asset and lease liability for the operating and finance lease are summarized as follows (in thousands):


	March 31, 2024			December 31, 2023
Assets
Operating lease	$	290		$	306
Finance lease(1)	56			60
	$	346		$	366

Liabilities
Operating lease liability, current	$	54		$	64
Operating lease liability, net of current portion	234			239
Total operating lease liability	$	288		$	303

Finance lease obligations, current	$	19		$	18
Finance lease obligations, net of current portion	37			42
Total finance lease obligations	$	56		$	60

Weighted average remaining lease terms (in years):
Operating lease	3.5			3.75
Finance lease	2.5			2.75

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".

REVENUE RECOGNITION

3 Months Ended

Mar. 31, 2024

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

The following table represents our revenue disaggregated by type:


	Three Months Ended
(in thousands)	March 31, 2024		March 31, 2023

Revenue:
Digital publishing	$	434	$	954
Advertising technology	2,625		544
Consumer insights	6,690		—
Creative services	2,058		—
Media services	641		—
Total revenue	$	12,448	$	1,498

Geographic Information

Revenue by geographical region consists of the following:


	Three Months Ended
(in thousands)	March 31, 2024		March 31, 2023

Revenue:
United States	$	12,448	$	1,460
Israel	—		38



Total revenue	$	12,448	$	1,498

Deferred Revenue

The movement in deferred revenue during the three months ended March 31, 2024 and the year ended December 31, 2023 comprised the following:


(in thousands)	March 31, 2024		December 31, 2023
Deferred revenue at start of the period	$	4,569	$	737
Amounts invoiced during the period	11,556		31,864
Business combination	—		4,534
Less: revenue recognized during the period	(9,857)		(32,566)
Deferred revenue at end of the period	$	6,268	$	4,569

STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

STOCK BASED COMPENSATION

Options

The following table presents the activity of the Company’s outstanding stock options of common stock for the three months ended March 31, 2024:


Common Stock Options	Number of Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Balance Outstanding, December 31, 2023	10,728,360	$	0.12	8.7	$	568


Forfeited	(251,250)	$	0.20	—	$	—

Balance Outstanding, March 31, 2024	10,477,110	$	0.12	8.3	$	145
Exercisable at, March 31, 2024	2,079,454	$	0.30	5.9	$	49
Unvested at, March 31, 2024	8,397,656	$	0.07	9.0	$	97

As of March 31, 2024, there were total unrecognized compensation costs related to non-vested share-based compensation arrangements of $405,000 to be recognized through July 2027.

The following table provides the weighted average assumptions used in determining the fair value of the stock-based awards for the three months ended March 31, 2024 and 2023:


	March 31, 2024		March 31, 2023
Expected Term (years)	0		6.25
Expected volatility	—	%	499	%
Risk free interest rate	—	%	3.61	%
Dividend yield	—	%	—	%
Expected forfeiture rate	—	%	—	%

During the three months ended March 31, 2023, 425,000 options were issued, there were no options issued for the same period of

FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

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:

Fair Value Considerations

Assets Measured at Fair Value on a Nonrecurring Basis

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

($ in thousands)

Quantitative Information about Level 3 Fair Value Measurements

Fair Value

Valuation Technique

Unobservable Input

Rate (Weighted Average Cost of Capital

Goodwill

7,785

Discounted cash flow

Discount rate

21.12%

Intangible assets, net

14,753

Discounted cash flow

Discount rate

21.12%

Goodwill and Intangibles Assets

We estimated the fair value of our reporting units utilizing an income approach (discounted cash flow method), which incorporated significant unobservable Level 3 inputs.

Centre Lane Senior Secured Credit Facility

COMMITMENTS AND CONTINGENCIES	3 Months Ended
COMMITMENTS AND CONTINGENCIES	Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	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, 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 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. The outcome of this matter is not determinable as of the date of issuance of these financial statements. Other Litigation

STOCKHOLDERS’ DEFICIT

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

STOCKHOLDERS' DEFICIT

STOCKHOLDERS’ DEFICIT