UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

		For the quarterly period ended March 31, ~~2021~~2022

		or

	☐	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				~~Not applicable~~

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

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

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

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

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

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

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of ~~February 2,~~June 24, 2022 there were ~~151,099,871~~149,159,461 shares of the issuer’s ~~common stock issued and~~ ~~150,274,696~~ shares outstanding.

TABLE OF CONTENTS

		Page No.
	PART I - FINANCIAL INFORMATION

ITEM 1.	FINANCIAL ~~STATEMENTS~~STATEMENTS..	4

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF ~~OPERATIONS~~OPERATIONS..	2933

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET ~~RISK~~RISK..	3438

ITEM 4.	CONTROLS AND ~~PROCEDURES~~PROCEDURES..	3438

	PART II - OTHER INFORMATION

ITEM 1.	LEGAL ~~PROCEEDINGS~~PROCEEDINGS..	3539

ITEM 1A.	RISK ~~FACTORS~~FACTORS..	3539

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF ~~PROCEEDS~~PROCEEDS..	3639

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES.	3639

ITEM 4.	MINE SAFETY ~~DISCLOSURES~~DISCLOSURES..	3639

ITEM 5.	OTHER ~~INFORMATION~~INFORMATION..	3639

ITEM 6.	~~EXHIBITS~~EXHIBITS..	3740

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 ability to fully develop the Bright Mountain Media Ad Exchange Network and services platform;
	●	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;
	●	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 protect our content;
	●	our ability to protect our intellectual property rights;
	●	the success of our technology development efforts;
	●	additional competition resulting from our business expansion strategy;
	●	our dependence on third party service providers;
	●	our ability to detect advertising fraud;
	●	liability related to content which appears on our websites;
	●	regulatory risks and compliance with privacy laws;
	●	dependence on executive officers and certain key employees and consultants;
	●	our ability to hire qualified personnel;
	●	possible problems with our network infrastructure;
	●	ongoing material weaknesses in our disclosure controls and internal control over financial reporting;
	●	the impact on available working capital resulting from the payment of cash dividends to our affiliates;
	●	dilution to existing shareholders upon the conversion of outstanding preferred stock and convertible notes and/or the exercise of outstanding options and warrants, including warrants with cashless exercise rights;
	●	the illiquid nature of our common stock;
	●	risks associated with securities litigation; and
	●	provisions of our charter and Florida law which may have anti-takeover effects

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, ~~2020,~~2021, as filed with the Securities and Exchange Commission on ~~December 23, 2021~~June 13, 2022 and our other filings with the 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 2022” refers to the three months ended March 31, 2022, “first quarter of 2021” refers to the three months ended March 31, 2021, ~~“first quarter of 2020” refers to the three months ended March 31, 2020, “2020”~~and “2021” refers to the year ~~ending~~ended December 31, ~~2020.~~2021. The information which appears on our website at www.brightmountainmedia.com is not part of this ~~report.~~report.

PART 1 – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

March 31,
2021 December 31,
2020
(unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 1,547,632 $ 736,046
Accounts receivable, net 2,743,547 6,430,253
Note receivable, net 20,368 13,910
Right of use asset
48,910

-

Prepaid expenses and other current assets 776,215 940,214
Total Current Assets 5,136,672 8,120,422

Property and equipment, net 101,767 113,250
Website acquisition assets, net 5,200 5,600
Intangible assets, net 7,257,851 7,653,717
Goodwill 19,645,468 19,645,468
Prepaid services/consulting agreements - long term 664,593 664,593
Right of use asset
-
72,598
Other assets 260,374 253,650
Total Assets $ 33,071,925 $ 36,529,299

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable $ 8,033,593 $ 9,595,006
Accrued expenses 3,419,064 3,546,896
Accrued interest to related party 100,724 65,437
Premium finance loan payable 234,290 339,890
Deferred revenues 346,529 346,529
Long term debt, current portion 1,986,940 2,091,735
Operating lease liability, current portion 48,911 72,727
Total Current Liabilities 14,170,051 16,058,220

Long term debt to related parties, net 43,180 39,728
Long term debt 16,451,905 16,916,705
Total Liabilities 30,665,136 33,014,653
Commitments and Contingencies
Shareholders’ Equity
Convertible preferred stock, par value $0.01, 20,000,000 shares authorized
Series A-1, 2,000,000 shares designated, 1,200,000 shares issued and outstanding at March 31, 2021 and December 31, 2020 12,000 12,000
Series B-1, 6,000,000 shares designated, 0 shares issued and outstanding at March 31, 2021 and December 31, 2020 - -
Series E, 2,500,000 shares designated, issued and outstanding at March 31, 2021 and December 31, 2020 25,000 25,000
Series F, 4,344,017 shares designated, issued and outstanding at March 31, 2021 and December 31, 2020 43,440 43,440
Convertible preferred stock
Common stock, par value $0.01, 324,000,000 shares authorized, 118,666,416 and 118,162,150 issued and 117,841,241 and 117,336,975 outstanding at March 31, 2021 and December 31, 2020, respectively 1,186,665 1,181,622
Treasury stock, at cost; 825,175 shares at March 31, 2021 and December 31, 2020 (219,837 ) (219,837 )
Additional paid-in capital 97,032,165 96,427,166
Accumulated deficit (95,641,355 ) (93,932,080 )
Accumulated other comprehensive loss (31,289 ) (22,665 )
Total shareholders’ equity 2,406,789 3,514,646
Total Liabilities and Shareholders’ Equity $ 33,071,925 $ 36,529,299
~~See accompanying notes to unaudited condensed consolidated financial statements~~
~~BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES~~
~~CONSOLIDATED STATEMENTS OF OPERATIONS~~
2021 2020
For the Three Months Ended March 31,
2021 2020

Revenues
Advertising $ 2,399,720 $ 2,270,186

Cost of revenue
Advertising 1,366,843 1,823,082
Gross profit 1,032,877 447,104

Selling, general and administrative expenses 4,274,434 3,575,850

Loss from operations (3,241,557 ) (3,128,746 )

Other income (expense)
Interest income 187 10,993
Gain on forgiveness of PPP loan 1,706,735 -
Other (expense)/income
121,830
(215 )
Interest expense (261,182 ) -
Interest expense - related party (35,288 ) (2,023 )
Total other income 1,532,282 8,755

Net loss before tax (1,709,275 ) (3,119,991 )

Income tax benefit 0 89,210

Net loss (1,709,275 ) (3,030,781 )

Preferred stock dividends
Preferred stock dividends Series A-1, Series E, and Series F preferred stock (88,976 ) (118,252 )

Net loss attributable to common shareholders $ (1,798,251 ) $ (3,149,033 )

Other comprehensive loss $ (31,289 ) $ -

Comprehensive loss $ (1,829,540 ) $ (3,149,033 )

Basic and diluted net loss per share $ (0.02 ) $ (0.03 )
Weighted average shares outstanding - basic and diluted 118,979,833 106,098,560
~~See accompanying notes to unaudited condensed consolidated financial statements~~
~~BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES~~
~~CONSOLIDATED STATEMENTS OF CHANGE IN SHAREHOLDERS’ EQUITY~~
~~For the Three Months Ended March 31, 2021 and 2020~~
~~(Unaudited)~~
Shares Amount Shares Amount Shares Amount Capital Deficit Loss Equity
Preferred Stock Common Stock Treasury Stock Additional Paid-in Accumulated Accumulated Other Comprehensive Total Stockholders’
Shares Amount Shares Amount Shares Amount Capital Deficit Loss Equity
Balance, December 31, 2020 8,044,017 $ 80,440 118,162,150 $ 1,181,622 (825,175 ) $ (219,837 ) $ 96,427,166 $ (93,932,080 ) $ (22,665 ) $ 3,514,646
Net loss — — — — — — — (1,709,275 ) (1,709,275 )
Series A-1, E and F preferred stock dividend — — — — — — (88,978 ) — — (88,978 )
Stock option vesting expense 68,294 68,294
Issuance of common stock:
Issuance of common stock:Options exercise — — 100,000 1,000 — — 12,900 — — 13,900
Issuance of common stock:Warrants exercise 25,000 250 9,750 10,000
Adjustment from foreign currency translation, net
(8,624
)
(8,624
)
Issuance of common stock: To Oceanside personnel as part of acquisition agreement — — 379,266 3,793 — — 603,033 — — 606,826
Balance, March 31, 2021 (unaudited) 8,044,017 $ 80,440 118,666,416 $ 1,186,665 (825,175 ) $ (219,837 ) $ 97,032,165 $ (95,641,355 ) $ (31,289 ) $ 2,406,789
Preferred Stock Common Stock Treasury Stock Additional Paid-in Accumulated Accumulated Other Comprehensive Total Stockholders’
Shares Amount Shares Amount Shares Amount Capital Deficit Loss Equity
Balance, December 31, 2019 8,044,017 $ 80,440 100,782,956 $ 1,007,830 — $ — $ 84,265,623 $ (21,217,658 ) $ — $ 64,136,235
Balance 8,044,017 $ 80,440 100,782,956 $ 1,007,830 — $ — $ 84,265,623 $ (21,217,658 ) $ — $ 64,136,235
Net loss — — — — — — — (3,030,781 ) — (3,030,781 )
Series A-1, E and F preferred stock dividend — — — — — — (89,137 ) — — (89,137 )
Stock option vesting expense — — — — — — 36,595 36,595
Issuance of common stock:
Issuance of common stock:Services rendered — — 1,370,000 13,100 — — 2,111,021 — — 2,124,121
Issuance of common stock:Units consisting of one share of common stock and one warrant issued for cash — — 5,117,500 51,175 — — 2,123,762 — — 2,174,937
Balance, March 31, 2020 (unaudited) 8,044,017 $ 80,440 107,270,456 $ 1,072,105 — $ — $ 88,447,864 $ (24,248,439 ) $ — $ 65,351,970
Balance 8,044,017 $ 80,440 107,270,456 $ 1,072,105 — $ — $ 88,447,864 $ (24,248,439 ) $ — $ 65,351,970
March 31, December 31,
2022 2021
(unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 575,281 $ 781,320
Accounts receivable, net of allowance for doubtful accounts of $767,395 and $495,396, at March 31, 2022 and December 31, 2021, respectively 2,686,897 3,550,126
Note receivable, net 14,957 21,415
Prepaid expenses and other current assets 885,361 904,716
Total current assets 4,162,496 5,257,577

Property and equipment, net 58,587 65,122
Website acquisition assets, net 3,600 4,000
Intangible assets, net 5,668,668 6,064,535
Goodwill 19,645,468 19,645,468
Prepaid services/consulting agreements – long term 189,882 284,825
Other assets 242,565 242,686
Total assets $ 29,971,266 $ 31,564,213
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities
Accounts payable $ 8,455,898 $ 8,459,561
Accrued expenses 3,206,208 3,764,665
Accrued interest to related party 1,199,694 640,255
Premium finance loan payable 212,178 334,284
Deferred revenues 860,417 1,162,425
Long term debt, current portion 295,600 1,387,140
Long term debt to related parties, current portion, net - 7,316,402
Other current liabilities 84,645 5,052

Total current liabilities 14,314,640 23,069,784

Long term debt to related parties, net 24,190,054 15,217,569
Total liabilities 38,504,694 38,287,353

Commitments and Contingencies -

Shareholders’ deficit
Convertible preferred stock, par value $0.01, 20,000,000 shares authorized:
Series A-1, 2,000,000 shares designated, 0 shares issued and outstanding at March 31, 2022 and December 31, 2021 – –
Series B-1, 6,000,000 shares designated, 0 shares issued and outstanding at March 31, 2022 and December 31, 2021 – –
Series E, 2,500,000 shares designated, 125,000 shares issued and outstanding at March 31, 2022 and December 31, 2021; liquidation preference of ($0.40 per share) 1,250 1,250
Series F, 4,344,017 shares designated, 0 shares issued and outstanding at March 31, 2022 and December 31, 2021 – –
Preferred stock value
Common stock, par value $0.01, 324,000,000 shares authorized, 149,984,636 and 149,810,383 issued and 149,159,461 and 148,985,208 outstanding at March 31, 2022 and December 31, 2021, respectively 1,499,847 1,498,104
Treasury stock, at cost; 825,175 shares at March 31, 2022 and December 31, 2021 (219,837 ) (219,837 )
Additional paid-in capital 98,433,692 98,128,947
Accumulated deficit (108,260,922 ) (106,144,065 )
Accumulated other comprehensive income 12,542 12,461
Total shareholders’ deficit (8,533,428 ) (6,723,140 )
Total liabilities and shareholders’ deficit $ 29,971,266 $ 31,564,213

See accompanying notes to unaudited condensed consolidated financial statements
4
BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~OPERATIONS AND COMPREHENSIVE LOSS
~~March 31, 2021~~
~~(Unaudited)~~(unaudited)

2021 2020
For the Three Months Ended March 31,
2021 2020

Cash flows from operating activities:
Net loss $ (1,709,275 ) $ (3,030,781 )
Adjustments to reconcile net loss to net cash used in operations:
Depreciation 18,047 5,253
Amortization of debt discount 3,452 3,490
Amortization 396,266 928,199
Gain on settlement of liability - 36,595
Stock option compensation expense 68,294 3,213
Stock compensation for Oceanside shares 606,825 -
Gain on forgiveness of PPP loan (1,706,735 ) -
Write off doubtful accounts (291,990 )
Warrant expense for services rendered 10,000 91,718
Non-cash acquisition fee - 275,000
Non-cash compensation for services - (90,000 )
Change in deferred taxes - (89,210 )
Provision for bad debt 6,096 -
Changes in operating assets and liabilities:
Accounts receivable 3,963,976 789,915
Prepaid expenses and other current assets 163,999 (7,690 )
Prepaid services/consulting agreements - 93,182
Other assets (6,723 ) (58,849 )
Right of use asset and lease liability (128 ) (14,082 )
Accounts payable (1,561,413 ) (271,080 )
Accrued expenses (218,071 ) (44,192 )
Accrued interest – related party 35,287 2,023
Deferred revenues - 11,958
Net cash (used in) operating activities (222,093 ) (1,369,272 )

Cash flows from investing activities:
Cash paid for property & equipment (6,564 ) -
Net cash (used in) investing activities (6,564 ) -

Cash flows from financing activities:
Proceeds from issuance of common stock, net - 1,734,937
Payments of premium finance loan payable (105,600 ) (54,391 )
Proceeds from stock option exercises 13,900 -
Dividend payments 1,261 (23,747 )
Principal payments received (funded) for notes receivable (6,458 ) 25,483
Proceeds from PPP loan 1,137,140 -
Net cash provided by financing activities 1,040,243 1,682,282

Net increase in cash and cash equivalents 811,586 313,010
Cash and cash equivalents at the beginning of period 736,046 957,013
Cash and cash equivalents at end of period $ 1,547,632 $ 1,270,023
2022 2021
For the Three Months Ended March 31,
2022 2021

Revenues
Advertising $ 3,459,164 $ 2,399,720

Cost of revenue
Advertising 1,690,615 1,366,843
Gross profit 1,768,549 1,032,877

Selling, general and administrative expenses 3,887,359 4,274,434

Loss from operations (2,118,810 ) (3,241,557 )

Other income (expense)
Gain on forgiveness of PPP loan 841,540 1,706,735
Other income (expense) (157 ) 121,830
Interest expense (13 ) (260,995 )
Interest expense - related party (839,417 ) (35,288 )
Total other income, net 1,953 1,532,282

Net loss before tax (2,116,857 ) (1,709,275 )

Income tax benefit – –

Net loss (2,116,857 ) (1,709,275 )

Dividends
Series A-1, Series E, and Series F preferred stock (1,233 ) (88,976 )

Net loss attributable to common shareholders $ (2,118,090 ) $ (1,798,251 )

Other comprehensive income (loss) $ 81 $ (31,289 )

Comprehensive loss $ (2,118,009 ) $ (1,829,540 )

Basic and diluted net loss per common share $ (0.01 ) $ (0.02 )
Weighted average common shares outstanding - basic and diluted 149,101,377 118,979,833

See accompanying notes to unaudited condensed consolidated financial statements
5
BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGE IN SHAREHOLDERS’ (DEFICIT) EQUITY
For the Three Months Ended March 31, 2022 and 2021
(unaudited)
Shares Amount Shares Amount Shares Amount Capital Deficit Loss Deficit
Preferred Stock Common Stock Treasury Stock Additional Paid-in Accumulated Accumulated Other Comprehensive Total Stockholders’
Shares Amount Shares Amount Shares Amount Capital Deficit Loss Deficit
Balance, December 31, 2021 125,000 $ 1,250   149,810,383 $   1,498,104   (825,175 ) $   (219,837 ) $   98,128,947 $   (106,144,065 ) $ 12,461 $ (6,723,140 )
Net loss — — — — — — — (2,116,857 ) — (2,116,857 )
Series E preferred stock dividend — — — — — — (1,233 ) — — (1,233 )
Stock option vesting expense — — — — — — 28,916 — — 28,916
Issuance of common stock:
To Oceanside personnel as part of acquisition agreement — — 174,253 1,743 — — 277,062 — — 278,805
Adjustment from foreign currency translation, net — — — — — — — — 81 81
Balance, March 31, 2022 (unaudited) 125,000 $ 1,250 149,984,636 $ 1,499,847 (825,175 ) $ (219,837 ) $ 98,433,692 $ (108,260,922 ) $ 12,542 $ (8,533,428 )
Preferred Stock Common Stock Treasury Stock Additional Paid-in Accumulated Accumulated Other Comprehensive Total Stockholders’
Shares Amount Shares Amount Shares Amount Capital Deficit Loss Equity
Balance, December 31, 2020   8,044,017 $ 80,440   118,162,150 $   1,181,622   (825,175 ) $   (219,837 ) $   96,427,166 $ (93,932,080 ) $ (22,665 ) $ 3,514,646
Net loss — — — — — — — (1,709,275 ) (1,709,275 )
Series A-1, E and F preferred stock dividend — — — — — — (88,978 ) — — (88,978 )
Stock option vesting expense 68,294 68,294
Issuance of common stock:
Options exercise — — 100,000 1,000 — — 12,900 — — 13,900
Warrants exercise 25,000 250 9,750 10,000
Adjustment from foreign currency translation, net (8,624 ) (8,624 )
To Oceanside personnel as part of acquisition agreement — — 379,266 3,793 — — 603,033 — — 606,826
Balance, March 31, 2021 (unaudited) 8,044,017 $ 80,440 118,666,416 $ 1,186,665 (825,175 ) $ (219,837 ) $ 97,032,165 $ (95,641,355 ) $ (31,289 ) $ 2,406,789
See accompanying notes to unaudited condensed consolidated financial statements
6
BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
2022 2021
For the Three Months Ended March 31,
2022 2021
Cash flows from operating activities:
Net loss $ (2,116,857 ) $ (1,709,275 )
Adjustments to reconcile net loss to net cash used in operations:
Depreciation 3,385 18,047
Amortization of debt discount 279,978 3,452
Amortization 396,267 396,266
Stock option compensation expense 28,916 68,294
Stock compensation for Oceanside shares 116,744 606,825
Gain on forgiveness of PPP loan (841,540 ) (1,706,735 )
Write off doubtful accounts - (291,990 )
Warrant expense for services rendered - 10,000
Provision for bad debt 271,355 6,096
Changes in operating assets and liabilities:
Accounts receivable 591,955 3,963,976
Prepaid expenses and other current assets 114,298 163,999
Other assets 121 (6,723 )
Right of use asset and lease liability - (128 )
Accounts payable 55,185 (1,561,413 )
Accrued expenses (398,862 ) (218,071 )
Accrued interest – related party 559,439 35,287
Deferred revenues (302,008 ) -
Net cash used in operating activities (1,241,624 ) (222,093 )

Cash flows from investing activities:
Purchase of property and equipment - (6,564 )
Net cash (used in) provided by investing activities - (6,564 )

Cash flows from financing activities:
Payments of premium finance loan payable (122,106 ) (105,600 )
Proceeds from stock option exercises - 13,900
Dividend payments 1,233 1,261
Principal payments received (funded) for notes receivable 6,458 (6,458 )
Proceeds from debt financing 1,400,000 -
Repayments of debt (250,000 ) -
Proceeds from PPP loan - 1,137,140
Net cash provided by financing activities 1,035,585 1,040,243

Net (decrease) increase in cash and cash equivalents (206,039 ) 811,586
Cash and cash equivalents at the beginning of period 781,320 736,046
Cash and cash equivalents at end of period $ 575,281 $ 1,547,632
See accompanying notes to unaudited condensed consolidated financial statements
7

BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
March 31, ~~2021~~2022
(Unaudited)

For the Three Months Ended March 31,
2021 2020
Supplemental disclosure of cash flow information
Cash paid for
Interest $ - $ 2,023

Supplemental disclosure of non-cash investing and financing activities
Premium finance loan payable recorded as prepaid $ - $ 125,987
Issuance of common stock payable to Spartan Capital for consulting services $ - $ 2,212,400
For the Three Months Ended March 31,
2022 2021
Supplemental disclosure of cash flow information
Cash paid for Interest $ - $ -

Supplemental disclosure of non-cash investing and financing activities
Issuance of common shares to Oceanside to settle share liability $ 162,061 $ -

See accompanying notes to unaudited condensed consolidated financial statements
8

BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, ~~2021~~2022
~~(Unaudited)~~(unaudited)
NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

Organization and Nature of Operations

Bright Mountain Media, Inc. (the “Company” or “Bright Mountain” or “We”) is a Florida corporation formed on May 20, 2010. Its wholly owned subsidiary, Bright Mountain LLC, was formed as a Florida limited liability company in May 2011. Its wholly owned subsidiary, Bright Mountain, LLC (“BMLLC”) F/K/A Daily Engage Media Group, LLC (“Daily Engage”) was formed as a New Jersey limited liability company in February 2015. In August 2019, Bright Mountain Israel Acquisition, an Israeli company was formed and acquired the wholly owned subsidiary Slutzky & Winshman Ltd. (“S&W”) which then changed its name to Oceanside Media LLC (“Oceanside”)~~, see Note 4.~~. Further, on November 18, 2019, Bright Mountain, through its wholly owned subsidiary BMTM2, Inc., a Florida corporation, acquired News Distribution Network, Inc. (“NDN”), a Delaware company, which then changed its name to MediaHouse, Inc. (“MediaHouse”). On June 1, 2020, Bright Mountain acquired the wholly owned subsidiary CL Media Holdings, LLC D/B/A “Wild Sky Media” (“Wild Sky”). When used herein, the terms “BMTM, the “Company,” “we,” “us,” “our” or “Bright Mountain” refers to Bright Mountain Media, Inc. and its subsidiaries.

The Company is engaged in operating a proprietary, end-to-end digital media and advertising services platform designed to connect brand advertisers with demographically-targeted consumers – both large audiences and more granular segments – across digital, social and connected television (CTV) publishing formats. We define “end-to-end” as our process for taking ad buying from beginning to end, delivering a complete functional solution, usually without requiring any involvement from a third party.

Through acquisitions and organic software development initiatives, we have consolidated and plan to further condense key elements of the prevailing digital advertising supply chain through the elimination of industry “middlemen” and/or costly redundancy of services via our ad exchange network. Our aim is to enable and support a streamlined, end-to-end advertising model that addresses both demand (ad buy side) and supply (media sell side) for both direct sales teams and programmatic sales and publishing of digital advertisements that reach specific target audiences based on what, where, when and how that specific target audience elects to access certain web and/or streaming video content. Programmatic advertising relies on computer programs to use data and proprietary algorithms to select which ads to buy and for what price, while direct sales involve traditional interpersonal contact between ad buyers and advertising sales representative(s).

By selling advertisements on our current portfolio of 20 owned and operated websites and 13 CTV apps, coupled with acquisition or development of other niche web properties in the future, we are building depth in specific demographic verticals that allow us to package audiences into targeted consumer categories valued by advertisers.

Oceanside provides digital performance-based marketing services to customers which include primarily advertisers and advertising agencies that promote or sell products and/or services to consumers through digital media.

MediaHouse partners with content producers and online news market websites to distribute video and banner advertisements throughout the United States of America (“U.S.”).

Wild Sky owns and operates a collection of websites that offer significant global reach through its content and niche audiences and has become a wholly-owned subsidiary of the Company. Wild Sky is the home to parenting and lifestyle brands.

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BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022
(unaudited)
NOTE 2 - GOING CONCERN.

~~The accompanying~~These condensed consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and ~~are presented assuming~~the settlement of liabilities and commitments in the normal course of business. The Company’s management has evaluated whether there is substantial doubt about the Company’s ability to continue as a going concern ~~which contemplates~~and has determined that substantial doubt existed as of the ~~realization~~date of ~~assets and~~ the ~~satisfaction~~end of ~~liabilities in~~ the ~~normal course of business.~~period. This determination was based on the following factors: (i) The Company has sustained a net loss of $~~1,709,275~~2,116,857,; (ii) used cash ~~outflows~~ from operating activities of $~~222,093~~1,241,624 for the three months ended March 31, ~~2021, and~~2022; (iii) has an accumulated deficit of $~~95,641,355~~108,260,922 at March 31, ~~2021 that~~2022; (iv) the Company’s available cash as of the date of this filing will not be sufficient to fund its anticipated level of operations for the next 12 months; (v) the Company will require additional financing for the fiscal year ending December 31, 2022 to continue at its expected level of operations; and (vi) if the Company fails to obtain the needed capital, it will be forced to delay, scale back, or eliminate some or all of its development activities or perhaps cease operations. In the opinion of management, these factors, among others, raise substantial doubt about ~~its~~the ability of the Company to continue as a going ~~concern.~~concern as of the date of the end of the period and for one year from the issuance of these condensed consolidated financial statements.

The Company’s continuation as a going concern is dependent upon its ability to generate revenues, control its expenses and its ability to continue obtaining investment capital and loans from related parties and outside investors to sustain its current level of operations. Management continues raising capital through private placements and is exploring additional avenues for future fund-raising through both public and private sources. The Company is not currently involved in any binding agreements to raise private equity capital. The accompanying condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
~~BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~March 31, 2021~~
~~(Unaudited)~~

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

Principles of Consolidation and Basis of Presentation

The unaudited condensed consolidated financial statements include the accounts of the Company and all of its ~~wholly-owned~~wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in the unaudited condensed consolidated financial statements. The accompanying unaudited financial statements for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) applicable to interim financial information and the requirements of Form 10-Q and Article 8 of Regulation S-X of the ~~SEC.~~Securities Act of 1933. Accordingly, they do not include all of 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 condensed consolidated financial statements include all adjustments (consisting of normal recurring accruals) necessary for the fair presentation of the condensed consolidated financial position and the condensed consolidated results of operations. The condensed 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 condensed consolidated balance sheet information as of December 31, ~~2020~~2021 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, ~~2020,~~2021, as filed with the SEC on ~~December 23, 2021.~~June 13, 2022. The interim condensed consolidated financial statements should be read in conjunction with that report.

Revenue Recognition

The Company recognizes revenue in accordance with FASB ASC Topic 606, Revenue from Contracts with Customers(“ASC 606”). The Company recognizes revenues at a point-in-time when control of services is transferred to the customer. Cash received by the Company prior to when control of services is transferred to the customer is recorded as deferred revenue.

To determine revenue recognition for arrangements that the Company determines are within the scope of ~~Topic~~ASC 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that Company will collect the consideration it is entitled to in exchange for the advertising services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ~~Topic~~ASC 606, the Company assesses the advertising services promised within each contract and determines those that are performance obligations and assesses whether each promised advertising service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation based on relative fair values, when (or as) the performance obligation is satisfied.
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BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022
(unaudited)

The Company recognizes revenue from its own advertising platform, ad network partners and websites (“Ad Network”) through its publishing advertiser impressions and pay-for-click services, the Company’s owned and operated sites, our ad network, or platforms. Invalid traffic on the Ad Network may impact the amount collected and adjusted by our Ad Network.

The Company has one revenue stream generated directly from publishing advertisements, whether on the Company’s owned and operated sites, our ad network, or platforms. The revenue is earned when the ~~users~~website visitors view or click on the published website advertisements. Specific revenue recognition criteria for the advertising revenue stream is as follows:

●
Advertising revenues are generated by ~~users~~website visitors viewing or “clicking” on ~~or seeing~~ website advertisements utilizing direct-sold campaigns or several ad network partners.

● Revenues are recognized net of adjustments based on the traffic generated and is billed monthly. The Company subsequently settles these transactions with publishers at which time adjustments for invalid traffic may impact the amount collected.

There are no significant initial costs incurred to obtain contracts with customers, and no contract assets or contract liabilities recorded in our condensed consolidated financial ~~statements~~
10
~~BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~March 31, 2021~~
~~(Unaudited)~~
~~NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued).~~statements.

Leases

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

The Company determines if an arrangement is a lease at inception. Operating lease ~~ROU~~right-of-use assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the ~~remaining~~ lease ~~terms as of January 1, 2019.~~terms. Since the Company’s lease agreements does not provide an implicit rate, the Company estimated an incremental borrowing rate based on the information available ~~on January 1, 2019~~ in determining the present value of lease payments. Operating lease expense is recognized on a straight-line basis over the lease term, subject to any changes in the lease or expectations regarding the terms. Variable lease costs such as operating costs and property taxes are expensed as incurred.

Use of Estimates

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

Significant estimates included in the accompanying condensed consolidated financial statements include revenue recognition, the fair value of acquired assets for purchase price allocation in business combinations, valuation of goodwill and intangible assets, estimates of amortization period for intangible assets, estimates of depreciation period for fixed assets, the valuation of equity-based transactions, and the valuation allowance on deferred tax assets.
11
BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022
(unaudited)

Cash and Cash Equivalents

The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents are all maintained in bank accounts in the U.S. and other foreign countries in which the Company operates. Cash maintained in bank accounts outside of the U.S. is not significant. At March 31, 2022 and December 31, 2021, the Company had $575,281 and $781,320, respectively, in cash and cash equivalents.

Credit Risk

The Company maintains certain of its cash balances in various U.S. banks, which at times, may exceed federally insured limits. The Company has not incurred any losses on these accounts. In addition, the Company maintains various bank accounts in Thailand and Israel, which are not insured. During the ~~period~~three months ended March 31, 2022 and 2021, and the year ended December 31, 2021, we have not incurred material losses on these uninsured accounts. The Company minimizes the concentration of credit risk associated with its cash by maintaining its cash with high quality federally insured financial institutions. The Company performs ongoing evaluations of its trade accounts receivable customers and generally does not require collateral.
Fair Value of Financial Instruments and Fair Value Measurements

FASB ASC Topic 820, “Fair Value Measurement and ~~Disclosures:~~Disclosures (“~~ASU~~ASC 820”) defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s level within the fair value hierarchy is based on the lowest level of input significant to the fair value measurement.
11
~~BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~March 31, 2021~~
~~(Unaudited)~~
~~NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued).~~

The Company measures its financial assets and liabilities in accordance with GAAP. For certain of our financial instruments, including cash, accounts payable, accrued expenses, and the short-term portion of long-term debt, the carrying amounts approximate fair value due to their short maturities. We adopted accounting guidance for fair values measurements and disclosures (ASC 820). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and
Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

Financial instruments recognized in the condensed consolidated balance sheets consist of cash, accounts receivable, prepaid expenses and other current assets, note receivable, accounts payable, accrued expenses and premium finance loan payable. The Company believes that the carrying value of its current financial instruments approximates their fair values due to the short-term nature of these instruments. The carrying value of long-term debt to related parties and long-term debt to others approximates the current borrowing rate for similar debt instruments.

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BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022
(unaudited)
Financial Disclosures about Fair Value of Financial Instruments
The tables below set forth information related to the Company’s financial instruments (in thousands):
SCHEDULE OF FINANCIAL INSTRUMENTS
Level in Fair March 31, 2022 December 31, 2021
Value
Hierarchy
Carrying
Amount

Fair
Value

Carrying
Amount

Fair
Value


PPP Loan 2 $ 295,600 $ 295,600 $ 1,137,140 $ 1,137,140
Long-term debt to related parties 3 $ 28,216,564 $ 28,216,564 $ 26,414,064 $ 26,414,064
Non-interest bearing BMLLC acquisition debt 2 $ - $ - $ 250,000 $ 250,000
The following are the major categories of liabilities measured at fair value on a recurring basis ~~for the three months ended March 31, 2021,~~ using significant unobservable inputs (Level 3): as of March 31, 2022 and December 31, 2021:

Fair Value measurement using Level 3
SCHEDULE OF FAIR VALUE OF LIABILITIES ON RECURRING BASIS
Total long term debt at December 31, 2020 $ 16,916,705
Reclassification ⁽¹⁾ (464,800 )
Total long term debt at March 31, 2021 16,451,905
Total long term debt to related parties at December 31, 2021 $ 22,533,971
Addition: Related party debt ⁽²⁾ 1,400,000
Decrease: Related party debt amortization ⁽³⁾ 256,083
Total long term debt to related parties at March 31, 2022 $ 24,190,054
(1) Related to reclassification of Bright Mountain PPP loan
(2) Centre Lane debt financing from January 1, 2022 through March 31, 2022
(3) Debt discount additions and debt discount amortization on related party financings for the three months ended March 31, 2022
~~Fair Value measurement using Level 3~~Off-balance sheet arrangements

Balance at December 31, 2020 $ 16,916,705
Reclassification ⁽¹⁾
(464,800 )
Balance at March 31, 2021 $ 16,451,905
Notes Payable and related potential liabilities are excluded from the balance sheet when there are significant uncertainties associated with the likelihood that the liabilities will be paid in full or until such time that the amount of the liability can be reasonably determined or estimated. There are no off-balance sheet arrangements as of March 31, 2022 and December 31, 2021.
~~(1)~~ ~~Related to reclass of PPP loan~~

Accounts Receivable

Accounts receivable represent receivables from customers in the ordinary course of business. These are recorded at ~~invoices~~invoice amount on the date revenue is recognized. Receivables are recorded net of the allowance for doubtful accounts in the accompanying condensed consolidated balance sheets. The Company provides allowances for doubtful accounts for estimated losses resulting from the inability of its customers to repay their obligation. If the financial condition of the Company’s customers were to deteriorate, resulting in an impairment of their ability to repay, additional allowances may be required. The Company provides for potential uncollectible accounts receivable based on specific customer identification and historical collection experience adjusted for existing market conditions. If market conditions decline, actual collection experience may not meet expectations and may result in decreased cash flows and increased bad debt expense. The Company is also subject to adjustments from traffic settlements that are deducted from open invoices.

The policy for determining past due status is based on the contractual payment terms of each customer, which are generally net 30 or net 60 days. Once collection efforts by the Company and its collection agency are exhausted, the determination for charging off uncollectible receivables is made. As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company has recorded an allowance for doubtful accounts of $~~510,573~~767,395 and $~~774,826~~495,396, respectively. ~~The accounts receivable balance at January 1, 2020 amounted to $3,967,899~~.

13
BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022
(unaudited)
Property and Equipment

Property and equipment are recorded at cost, less accumulated depreciation. Depreciation is computed using the straight-line method based on the estimated useful lives of the related assets. Leasehold improvements are amortized over the lesser of the lease term or the useful life of the improvements.

Website Development Costs

The Company accounts for its website development costs in accordance with FASB ASC Topic 350-50, “Website Development Costs”. These costs, if any, are included in intangible assets in the accompanying condensed consolidated ~~financial statements.~~balance sheets. Upgrades or enhancements that add functionality are capitalized while other costs during the operating stage are expensed as incurred. The Company amortizes the capitalized website development costs over an estimated life of five years.
~~BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~March 31, 2021~~
~~(Unaudited)~~
~~NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued).~~

As of March 31, 2022 and December 31, 2021, all website development costs have been expensed. While it is likely that we will have significant amortization expense as we continue to acquire websites, we believe that intangible assets represent costs incurred by the acquired website to build value prior to acquisition and the related amortization and impairment charges of assets, if applicable, are not ongoing costs of doing business.

Amortization and Impairment of Long-Lived Assets

The Company evaluates long-lived assets, including amortizable intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Upon such an occurrence, recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to forecasted undiscounted future net cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated future cash flows, an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset. For long-lived assets held for sale, assets are written down to fair value, less cost to sell. Fair value is determined based on discounted cash flows, appraised values or management’s estimates, depending upon the nature of the assets.
Stock-Based Compensation

The Company accounts for share-based compensation related to instruments issued to employees and non-employees under GAAP, which requires the measurement and recognition compensation costs for all equity-based payment awards based on estimated fair values. The value of the portion of an employee award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The Company estimates the fair value of stock options by using the Black-Scholes option-pricing model. Share-based compensation expense is included in selling, general and administrative expenses on the accompanying condensed consolidated ~~statement~~statements of ~~operations.~~operations and comprehensive loss. We have elected to account for forfeitures as they occur.

Advertising, Marketing and Promotion Costs

Advertising ~~marketing~~ and ~~promotion~~marketing expenses are expensed as incurred and are included in selling, general and administrative expenses on the accompanying ~~statement~~consolidated statements of ~~operations.~~operations and comprehensive loss. For the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, advertising, marketing and promotion expense was $~~12,615~~5,709 and $~~11,856~~12,615, respectively.

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BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022
(unaudited)
Foreign currency translation

Assets and liabilities of the Company’s ~~foreign subsidiaries, Oceanside and Wild Sky’s Thailand~~Israeli subsidiary are translated from ~~the foreign currency~~Israeli shekels to United States dollars at exchange rates in effect at the balance sheet date. Income and expenses are translated at the exchange rates for the weighted average rates for the period. The translation adjustments for the reporting period will be included in our statements of comprehensive income. Based on the foreign ~~subsidiaries~~subsidiaries’ activities ~~see Note 4,~~ the impact of the currency exchange is immaterial for the three months ended March 31, ~~2021~~2022 and ~~2020.~~2021.

Income Taxes

We use the asset and liability method to account for income taxes. Under this method, deferred income taxes are determined based on the differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements which will result in taxable or deductible amounts in future years and are measured using the currently enacted tax rates and laws in the period those differences are expected to reverse. A valuation allowance is provided to reduce net deferred tax assets to the amount that, based on available evidence, is more likely than not to be realized.
~~BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~March 31, 2021~~
~~(Unaudited)~~
~~NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued).~~
The Company follows the provisions of FASB ASC Topic 740-10, Income Taxes ~~- Overall.~~– Overall (“ASC 740-10”). When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for unrecognized tax benefits in the accompanying condensed consolidated balance sheets along with any associated interest and penalties that would be payable to the taxing authorities upon examination. Interest and penalties associated with unrecognized tax expenses are recognized as tax expenses in the Statement of ~~Operations.~~Operations and comprehensive loss.

As of March 31, ~~2021,~~2022, tax years ~~2017~~2018 through ~~2020~~2021 remain open for Internal Revenue Service (“IRS”) audit. The Company has not received noany notice of audit or ~~any~~ notifications from the IRS for any of the open tax years.

Concentrations

The Company generates revenues from through Ad Exchange Networks and through our Owned and Operated Ad Exchange Network. There was one customer who accounted for approximately 24.3% of the revenues for the three months ended March 31, 2022. No other customer was over 10% of revenues for the three months ended March 31, 2022. There was only one customer which accounted for greater than 10% of the revenue with approximately 11.3% ~~of the Ad Exchange Network Revenue~~ for the three months ended March 31, 2021. ~~One~~
As of March 31, 2022, one customer accounted for ~~accounts receivable in excess of~~more than 10%, of the accounts receivable balance, at ~~10.7~~24.3%,. As of December 31, 2021, two customers accounted for more than 10% of the accounts receivable balance, at13.1% and 12.0%. As of March 31, ~~2021. There is~~2022, one ~~large~~ vendor ~~who was owed approximately~~accounted for more than ~~8.2~~10% of the accounts payable, ~~due~~ at ~~March 31, 2021. There were two large customers which account for approximately~~ ~~10.9~~11.2% ~~and~~ ~~10.3~~%. As of ~~the Ad Exchange Network Revenue for the three months ended March~~December 31, ~~2020. None of the customers~~2021, one vendor accounted for ~~accounts receivable in excess of~~more than 10~~% at March 31, 2020. There is one large vendor who was owed approximately~~ 12% of the accounts payable ~~due~~balance, at ~~March 31, 2020.~~11.2%.

Credit Risk

The Company maintains certain of its cash balances in various U.S. banks, which at times, may exceed federally insured limits. The Company has not incurred any losses on these accounts. In addition, the Company maintains various bank accounts in Thailand, which are not insured. During the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, we have not incurred material losses on these uninsured accounts. The Company minimizes the concentration of credit risk associated with its cash by maintaining its cash with high quality federally insured financial institutions. The Company performs ongoing evaluations of its trade accounts receivable customers and generally does not require collateral.

15
BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022
(unaudited)
Concentration of Funding

Historically, the Company had a large portion of the funding provided through the sale of shares of the Company’s common stock with related ~~warrants,~~warrants; however, during the three months ended March 31, 2022 and 2021 no funding through the sale of shares occurred.

Basic and Diluted Net Earnings (Loss) Per Common Share

Earnings (loss) per share is calculated and reported under the “two-class” method. The “two-class” method is an earnings allocation method under which earnings per share is calculated for each class of common stock and participating security considering both dividends declared or accumulated and participation rights in undistributed earnings as if all such earnings had been distributed during the period. The Company has convertible preferred stock which have a right to participate in dividends; these are deemed to be participating securities. During periods of loss, there is no allocation required under the two-class method since the participating securities do not have a contractual obligation to fund the losses of the Company.

When applicable, basic earnings (loss) per share is calculated by dividing net income, after deducting dividends on convertible preferred stock and participating securities as well as undistributed earnings allocated to participating securities, by the average number of common shares outstanding during the period. Diluted earnings (loss) per share is calculated in a similar manner after consideration of the potential dilutive effect of common stock equivalents on the average number of common shares outstanding during the period. Common stock equivalents include warrants and stock options. Common stock equivalents are calculated based upon the treasury stock method using an average market price of common shares during the period. Dilution is not considered when a net loss is reported. Common stock equivalents that have an antidilutive effect are excluded from the computation of diluted earnings per share.

Segment Information

The Company currently operates in one reporting segment. The services segment is focused on producing advertising revenue generated by users “clicking” on website advertisements utilizing several ad network partners, and direct advertisers and subscription revenue generated by the sale of access to career postings on one of our ~~websites,~~websites; however, the latter is insignificant.
~~BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~March 31, 2021~~
~~(Unaudited)~~
~~NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued).~~

Recent Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13 (amended by ASU 2019-10), “~~Financial~~“Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, regarding the measurement of credit losses for certain financial instruments.” which replaces the incurred loss model with a current expected credit loss (“CECL”) model. The CECL model is based on historical experience, adjusted for current conditions and reasonable and supportable forecasts. The Company is required to adopt the new guidance on January 1, 2023. The Company is currently evaluating the impact this guidance will have on the consolidated financial statements.
In January 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-04 (amended by ASU 2019-10), “~~Intangibles~~“Intangibles – Goodwill and other (Topic 350): Simplifying the Test for Goodwill Impairment.” Which simplifies the test for goodwill impairment by removing the second step of the test. There is a one-step qualitative test and does not amend the optional qualitative assessment of goodwill impairment. The new standard is effective January 1, 2023 and is not expected to have a material impact on the Company’s consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, “~~Debt—~~“Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40)”. The ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. The FASB reduced the number of accounting models for convertible debt and convertible preferred stock instruments and made certain disclosure amendments to improve the information provided to users. The new standard is effective January 1, 2024 (early adoption is permitted, but not earlier than January 1, 2021). The ~~new standard~~Company is ~~not expected to have a material~~currently evaluating the impact on the Company’s consolidated financial statements.
16
BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022
(unaudited)

In March 2020, the FASB issued ASU No. 2020-04, “~~Reference~~“Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial ~~Reporting~~”Reporting” which provides optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates (“IBORs”) and, particularly, the risk of cessation of the LIBOR, regulators in several jurisdictions around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction based and less susceptible to manipulation. This accounting standards update provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. This new guidance may be adopted by the Company no later than December 1, 2022, with early adoption permitted. The potential adoption of this guidance is not expected to have a material impact on the consolidated financial statements.

15
~~BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~March 31, 2021~~
~~(Unaudited)~~
NOTE 4 – ~~ACQUISITIONS~~.
~~Wild Sky Media~~
~~On June 1, 2020, the Company entered into a membership interest purchase agreement (the “Purchase Agreement”) with Centre Lane Partners Master Credit Fund II, L.P. (“Centre Lane”) to purchase~~ ~~100%~~ ~~of the membership interests of CL Media Holdings, LLC (“Wild Sky”). The Company issued~~ ~~2,500,000~~ ~~shares of restricted common stock to Centre Lane and Centre Lane issued a first lien senior secured credit facility of $16,451,905~~. Per the credit facility with Center Lane, our loan payments begin December 1, 2021. There is no prepayment penalty associated with this credit facility. Certain future capital raises do require partial or full prepayments of the credit facility.
~~The Agreement provides for a senior secured five-year loan in the initial principal amount of $16,451,905. Pursuant to the Credit Agreement, the loan bears interest at six percent (~~6%) payment–in-kind interest (“PIK Interest”) which will be added to the outstanding principal balance. The Credit Agreement provides for no amortization for the first 18 months and 10% thereafter. Amortization is payable in equal quarterly installments on the principal balance after adding the PIK Interest with a bullet payment due at maturity on June 1, 2025. The loan under the Credit Agreement may be prepaid in minimum amounts $~~250,000~~. The loan balance can be prepaid with no penalty. The loan is guaranteed by Bright Mountain and certain of its domestic subsidiaries of which became party to a Guarantee Agreement dated as of the Effective Date and each domestic subsidiary that, subsequent to the Effective Date, becomes a subsidiary. The Credit Agreement contains negative covenants that, subject to certain exceptions, limits the ability of Bright Mountain and its subsidiaries to, among other things, incur debt, engage in new lines of business, incur liens, engage in mergers, consolidations, liquidations and dissolutions, dispose of assets of Bright Mountain and its subsidiaries, make investments, loans, advances, guarantees and acquisitions. Any equity raised up to $~~15,000,000~~ ~~in the first one-hundred eighty days from the Credit Agreement is excluded from the loan balance prepayment requirements.~~
Effective upon the closing of the Wild Sky Purchase Agreement, the Company agreed to pay Spartan Capital Securities LLC (“Spartan Capital”), a broker-dealer and member of FINRA, a finder’s fee in the form of Company common stock. Spartan Capital was issued ~~610,000~~ ~~shares (valued at $908,900) in December 2020.~~
~~The allocation of the purchase price to the assets acquired and liabilities assumed based on management’s estimate of fair values at the date of acquisition as follows:~~
~~SCHEDULE OF PURCHASE PRICE ALLOCATION TO ASSETS ACQUIRED AND LIABILITIES ASSUMED~~

June 1, 2020

Tangible assets acquired
Cash & cash equivalents $ 1,651,509
Accounts receivable, net 2,887,282
Prepaid expense 484,885
Fixed assets, net 124,575
Other assets 321,374
Intangible assets acquired:
Tradename – Trademarks 2,360,300
IP/Technology 1,412,000
Customer relationships 4,563,000
Less: Liabilities assumed
Accounts payable (922,153 )
Accrued expenses (524,188 )
Other current liabilities (235,503 )
Long term loan payable – PPP (1,706,735 )
Less: Deferred tax liability (247,577 )
Net assets acquired 10,168,769

Goodwill 9,973,136
Total purchase price $ 20,141,905
~~The table below summarizes the value of the total consideration given in the transaction:~~
~~SUMMARY OF TOTAL CONSIDERATION TRANSACTION~~

Amount

Debt issued $ 16,416,905
Shares issued 3,725,000
Total consideration $ 20,141,905
16
~~BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~March 31, 2021~~
~~(Unaudited)~~
~~NOTE 5~~ – PREPAID COSTS AND EXPENSES.

At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, prepaid expenses and other current assets consisted of the following:
SCHEDULE OF PREPAID ~~EXPENSES~~COSTS AND ~~OTHER CURRENT ASSETS~~EXPENSES

March 31,
2021
December 31,
2020
March 31, 2022
December 31, 2021
Prepaid insurance $ 237,748 $ 386,206 $ 300,423 $ 427,461
Prepaid consulting service agreements – Spartan ⁽¹⁾ 310,522 379,771 386,581 379,775
Prepaid software 127,025 -
Prepaid expenses – other 227,945 174,237 71,332 97,480
Prepaid expenses and other current assets $ 776,215 $ 940,214 $ 885,361 $ 904,716

(1) Spartan Capital is a broker-dealer that has assisted the Company with a range of services including capital raising activities, M&A advisory, and consulting services. The Company has a five-year agreement with Spartan Capital for the provision of such services and any prepayments made under the terms of this agreement starting October 2018 were capitalized and amortized over the remaining life of the agreement.

NOTE 65 – PROPERTY AND EQUIPMENT.

At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, property and equipment consisted of the following:
SCHEDULE OF PROPERTY AND EQUIPMENT
Estimated
Useful Life (Years)
March 31,
2021

December 31,
2020
Estimated
Useful Life (Years)
March 31, 2022

December 31, 2021

Furniture and fixtures 3-5 $ 79,918 $ 80,844 3-5 $ 40,665 $ 38,728
Leasehold improvements 3 - 1,388
Computer equipment 3 220,170 176,641 3 123,880 176,624
Total property and equipment 300,088 258,873 164,545 215,352
Less: accumulated depreciation (198,321 ) (145,623 ) (105,958 ) (150,230 )
Total property and equipment, net $ 101,767 $ 113,250 $ 58,587 $ 65,122

Depreciation expense for the three months ~~ending~~ended March 31, ~~2021~~2022 and ~~2020,~~2021, was $~~18,047~~3,385 and $~~5,253~~18,047, respectively.

17
BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022
(unaudited)
NOTE 76 – WEBSITE ACQUISITION AND INTANGIBLE ASSETS.

At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, website acquisitions, net consisted of the following:
SCHEDULE OF WEBSITE ACQUISITIONS, NET

March 31,
2021

December 31,
2020

March 31, 2022

December 31, 2021

Website acquisition assets $ 1,124,846 $ 1,124,846 $ 1,124,846 $ 1,124,846
Less: accumulated amortization (919,250 ) (918,850 ) (920,850 ) (920,450 )
Less: cumulative impairment loss (200,396 ) (200,396 ) (200,396 ) (200,396 )
Website Acquisition Assets, net $ 5,200 $ 5,600 $ 3,600 $ 4,000

At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, intangible assets, net consisted of the following:
SCHEDULE OF INTANGIBLE ASSETS
Useful Lives
March 31,
2021
December 31,
2020 Useful Lives
March 31, 2022
December 31, 2021
Trade name 5 years $ 3,749,600 $ 3,749,600 5 years $ 3,749,600 $ 3,749,600
Customer relationships 5 years 16,184,000 16,184,000 5 years 16,184,000 16,184,000
IP/Technology 5 years 7,223,000 7,223,000 5 years 7,223,000 7,223,000
Non-compete agreements 3-5 years 1,154,500 1,154,500 3-5 years 1,154,500 1,154,500
Total Intangible Assets $ 28,311,100 $ 28,311,100 $ 28,311,100 $ 28,311,100
Less: accumulated amortization (4,566,319 ) (4,170,454 ) (6,155,503 ) (5,759,636 )
Less: accumulated impairment loss (16,486,929 ) (16,486,929 ) (16,486,929 ) (16,486,929 )
Intangible assets, net $ 7,257,851 $ 7,653,717 $ 5,668,668 $ 6,064,535

Amortization expense for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 was $~~395,865~~396,267 and $~~928,199~~396,266, respectively, related to both the website acquisition costs and the intangible assets.

During 2020, the finite lived intangible assets associated with Oceanside and MediaHouse were tested for impairment valuation based on indicators of impairment noted by management, including decreased revenues. primarily resulting from the COVID-19 global pandemic when many companies in various industries were forced to restructure their advertising budgets and spending. The fair value of the respective assets was determined based on the projected future cash flows associated with the respective assets. These fair values were compared with the carrying values of the respective assets to determine if an impairment of the respective assets was warranted. It was determined that the carrying values of the finite lived intangible assets associated with Oceanside did not exceed the respective fair values of the assets, therefore no revaluation associated with these assets has been recognized. It was determined that the finite lived intangible assets associated with MediaHouse were deemed impaired based on an analysis of the carrying values and fair values of the assets. In September 2020, the Company recorded an impairment expense of $~~16,486,929~~ ~~within intangible assets impairment expense on the consolidated statement of operations.~~
NOTE 87 – GOODWILL

The following table ~~presents changes to goodwill from~~represents the allocation of Goodwill as of December 31, ~~2020 through~~2021 and March 31, ~~2021:~~2022:
SCHEDULE OF CHANGES GOODWILL
Owned &
Operated
Ad
Network
Total
December 31, 2020 goodwill $ 9,725,559 $ 9,919,909 $ 19,645,468
March 31, 2021 goodwill $ 9,725,559 $ 9,919,909 $ 19,645,468

Owned &
Operated

Ad
Network
Total
December 31, 2021 $ 9,725,559 $ 9,919,909 $ 19,645,468
March 31, 2022 $ 9,725,559 $ 9,919,909 $ 19,645,468

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. The ~~year 2020 has~~periods ended March 31, 2022 and December 31, 2021 have been marked by the COVID-19 ~~Global~~global pandemic when many companies in various industries were forced to restructure their advertising budgets and spending. This is evidenced by the reduced revenues from our customers in comparison with the 2019 year. The fair value of the respective reporting units was determined based on both the Income Approach (Discount Cash Flows) and the Market Multiples Approach. In September 2020, it was determined that the carrying value of the Goodwill associated with the Owned & Operated reporting unit was not deemed impaired; while recorded goodwill associated with the Ad Network reporting unit exceeded the fair value of the Goodwill and in September 2020, the Company recorded an impairment of $~~42,279,087~~.
1718
BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, ~~2021~~2022
~~(Unaudited)~~(unaudited)
NOTE 98 – ACCRUED EXPENSES.

At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively, accrued expenses consisted of the following:
SCHEDULE OF ACCRUED EXPENSES

March 31,
2021
December 31,
2020
March 31, 2022

December 31, 2021

(unaudited)
Accrued interest $ 839,532 $ 581,888
Accrued salaries and benefits 1,248,983 1,237,909 $ 1,259,169 $ 1,459,299
Accrued dividends 543,673 455,956 691,450 691,861
Accrued traffic settlement⁽¹⁾ 10,254 10,254 10,254 10,254
Accrued legal settlement⁽²⁾ 216,101 117,717 216,101 81,101
Accrued legal fees 143,839 113,683 174,878 182,537
Accrued other professional fees 96,150 206,613 255,920 592,421
Share issuance liability⁽⁴⁾ - 515,073 27,012 189,067
Accrued warrant penalty⁽³⁾ 262,912 262,912 366,899 366,899
Accrued Value-Added Tax payable 49,207 -
Other accrued expenses 57,620 44,891 155,318 191,226
Total accrued expenses $ 3,419,064 $ 3,546,896 $ 3,206,208 $ 3,764,665

(1) The Company negotiates with its publishing partners regarding questionable traffic to arrive at traffic settlements.
(2) Accrued legal settlement related to the Encoding legal matter. ~~Refer to~~See Note ~~11.~~10.
(3) The Company has sold units of its securities to various investors in several private placements. As part of each private placement, the Company agreed to file a registration statement with the SEC to register the resale of the shares by the respective holder in order to permit the public resale; such filing deadlines ranged from 120 to 270 days following the closing date of the respective placement and the Company was liable to pay a penalty fee for failure to file the resale registration statement within the allotted timeframe.
(4) Share issuance liability related to issuance of the Company’s common stock in connection with the Oceanside, MediaHouse and Wild Sky acquisitions and Oceanside employee share issuances.
NOTE 9 – NOTES PAYABLE

Long-term debt to related parties
Centre Lane Partners Master Credit Fund II, L.P. (“Center Lane Partners”), who sold the Company the Wild Sky business in June 2020 has partnered and assisted the Company from a liquidity perspective starting in April 2021. This relationship has been determined to qualify as a related party. A related party is a party that can exercise significant influence over the Company in making financial and/or operating decisions.
Effective June 1, 2020, the Company entered into a membership interest purchase agreement to acquire 100% of Wild Sky (the “Purchase Agreement”). The seller issued a first lien senior secured credit facility totaling $16,451,905, which consisted of $15,000,000 of initial indebtedness, repayment of Wild Sky’s existing accounts receivable factoring facility of approximately $900,000 and approximately $500,000 of expenses. The note bears interest at a rate of 6.0% per annum. Per the credit facility with the seller, our loan payments begin December 1, 2021. There is no prepayment penalty associated with this credit facility. Certain future capital raises do require partial or full prepayments of the credit facility. The membership interest purchase included a requirement that the opinion of the financial statements as of and for the year ended December 31, 2021 not include a “going concern opinion.” The Company defaulted on this requirement and on April 26, 2021, the Company obtained a waiver of this requirement from the lender. This term loan shall be repaid by June 30, 2025, with payments of 2.5% of outstanding principal beginning on June 30, 2023.
On April 26, 2021, the Company and certain of its subsidiaries entered into a First Amendment to Amended and Restated Senior Secured Credit Agreement (the “First Amendment”). The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent dated June 5, 2020 (the “Credit Agreement”). The Credit Agreement was amended to permit the Company to raise up to $6,000,000 of total cash proceeds from the sale of its preferred stock prior to December 31, 2021 without having to make a mandatory prepayment of the loans (the “Loans”) under the Credit Agreement. The interest rate on the Loans after April 26, 2021 was increased to 10.00% per annum from 6.00%, which can continue to be paid in-kind in lieu of cash payment. In addition, the Company may issue up to $800,000 in dividends from the previous limit of $500,000 per annum. In addition, the Company has issued 150,000 common shares to Centre Lane Partners as part of this transaction. This term loan shall be repaid by June 30, 2025, with payments of 2.5% of outstanding principal beginning on June 30, 2023.
19
BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, ~~2021~~2022
~~(Unaudited)~~(unaudited)

On May 26, 2021, the Company and certain of its subsidiaries entered into a Second amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners (“the Second Amendment”). The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent dated June 5, 2020, as amended the Credit Agreement. The Credit Agreement was amended to provide for an additional loan amount of $1.5 million, in the aggregate. This term loan shall be repaid by June 30, 2025, with payments of 2.5% of outstanding principal beginning on June 30, 2023. In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”) totaling $0.750 million which will be added and capitalized to the principal amount of the original loan and the original loan terms apply. In addition, the Company has issued 3.0 million common shares to Centre Lane Partners as part of this transaction.
On August 12, 2021, the Company and certain of its subsidiaries entered into a Third amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners (“the Third Amendment”). The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent dated June 5, 2020, as amended the Credit Agreement. The Credit Agreement was amended to provide for an additional loan amount of $0.5 million, in the aggregate. This term loan shall be repaid by June 30, 2025, with payments of 2.5% of outstanding principal beginning on June 30, 2023. In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”) totaling $0.250 million which will be added and capitalized to the principal amount of the original loan and the original loan terms apply. In addition, the Company has issued 2.0 million common shares to Centre Lane Partners as part of this transaction.
On August 31, 2021, the Company and certain of its subsidiaries entered into a Fourth amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners (“the Fourth Amendment”). The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent dated June 5, 2020, as amended the Credit Agreement. The Credit Agreement was amended to provide for an additional loan amount of $1.1 million, in the aggregate. This term loan shall be repaid by June 30, 2025, with payments of 2.5% of outstanding principal beginning on June 30, 2023. In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”) totaling $0.550 million which will be added and capitalized to the principal amount of the original loan and the original loan terms apply. There was no issuance of common shares as part of this amendment.
On October 8, 2021, the Company and certain of its subsidiaries entered into a Fifth amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners (“the Fifth Amendment”). The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent dated June 5, 2020, as amended the Credit Agreement. The Credit Agreement was amended to provide for an additional loan amount of $725,000, in the aggregate. This term loan shall be repaid by June 30, 2025, with payments of 2.5% of outstanding principal beginning on June 30, 2023. In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”) totaling $800,000 which will be added and capitalized to the principal amount of the original loan and the original loan terms apply. There was no issuance of common shares as part of this amendment.
On November 5, 2021, the Company and certain of its subsidiaries entered into a Sixth amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners (“the Sixth Amendment”). The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent dated June 5, 2020, as amended the Credit Agreement. The Credit Agreement was amended to provide for an additional loan amount of $800,000, in the aggregate. This term loan shall be repaid by June 30, 2025, with payments of 2.5% of outstanding principal beginning on June 30, 2023. In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”) totaling $800,000 which will be added and capitalized to the principal amount of the original loan and the original loan terms apply. This amendment required the Company to issue 7,500,000 shares of the Company’s common stock to Centre Lane Partners prior to November 30, 2021.
20
~~NOTE 10 –~~ BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
NOTES ~~PAYABLE~~TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022
(unaudited)

On December 23, 2021, the Company and certain of its subsidiaries entered into a Seventh amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners (“the Seventh Amendment”). The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent dated June 5, 2020, as amended the Credit Agreement. The Credit Agreement was amended to provide for an additional loan amount of $500,000, in the aggregate. This term loan shall be repaid by June 30, 2025, with payments of 2.5% of outstanding principal beginning on June 30, 2023. In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”) totaling $500,000 which will be added and capitalized to the principal amount of the original loan and the original loan terms apply. There was no issuance of common shares as part of this amendment.
On January 26, 2022, the Company and certain of its subsidiaries entered into a Eighth amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners (“the Eighth Amendment”). The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent dated June 5, 2020, as amended the Credit Agreement. The Credit Agreement was amended to provide for an additional loan amount of $350,000, in the aggregate. This term loan shall be repaid by June 30, 2025, with payments of 2.5% of outstanding principal beginning on June 30, 2023. In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”) totaling $350,000 which will be added and capitalized to the principal amount of the original loan and the original loan terms apply. There was no issuance of common shares as part of this amendment.
On February 11, 2022, the Company and certain of its subsidiaries entered into a Ninth amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners (“the Ninth Amendment”). The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent dated June 5, 2020, as amended the Credit Agreement. The Credit Agreement was amended to provide for an additional loan amount of $250,000, in the aggregate. This term loan shall be repaid by June 30, 2023. In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”) totaling $12,500 which will be added and capitalized to the principal amount of the original loan and the original loan terms apply. There was no issuance of common shares as part of this amendment. Per the tenth amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners, the interest rate on this term loan was increased to 12% from 10%
On March 11, 2022, the Company and certain of its subsidiaries entered into a Tenth amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners (“the Tenth Amendment”). The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent dated June 5, 2020, as amended the Credit Agreement. The Credit Agreement was amended to provide for an additional loan amount of $300,000, in the aggregate. This term loan shall be repaid by June 30, 2023. In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”) totaling $15,000 which will be added and capitalized to the principal amount of the original loan and the original loan terms apply. There was no issuance of common shares as part of this amendment. Additionally, per the Tenth Amendment, original loan and amendments one through eight now have maturity dates of June 30, 2025, with quarterly payments of 2.5% of outstanding principal beginning on June 30, 2023. Amendments nine through fourteen have a maturity date of June 30, 2023.
On March 25, 2022, the Company and certain of its subsidiaries entered into an Eleventh amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners (“the Eleventh Amendment”). The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent dated June 5, 2020, as amended the Credit Agreement. The Credit Agreement was amended to provide for an additional loan amount of $500,000, in the aggregate. This term loan shall be repaid by June 30, 2023. In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”) totaling $25,000 which will be added and capitalized to the principal amount of the original loan and the original loan terms apply. There was no issuance of common shares as part of this amendment. See Note 15 for amendments to the Amended and Restated Senior Secured Credit Agreement subsequent to March 31, 2022.
21
BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022
(unaudited)
As part of these transactions and given that Centre Lane was determined to be a related party, an independent fair value analysis was performed by the Company and all related transactions were recorded accordingly. As of the First Amendment dated April 26, 2021, the Company evaluated the debt for extinguishment or debt modification under FASB ASC Topic 470-50, ~~Long-term~~Debt – Modifications and Extinguishments, and determined extinguishment was applicable. Under the rules, the Company extinguished the debt, which included the capitalized interest through April 26, 2021, and recorded it net of the debt discount, including all applicable fees and stock issuances. The debt discount determined for the First Amendment totaled $2,363,986 and is amortized over the remaining life of the loan and is included in interest expense – related party on the accompanying consolidated statement of operations and comprehensive loss or until the next debt modification or extinguishment is determined. For the Second Amendment, which occurred on May 26, 2021, the Company determined it was a debt modification. The Second Amendment provided the Company with debt financing of $1,500,000, an Exit fee of $750,000, and issuance of 3,000,000 shares of common stock issued to Centre Lane. The debt discount determined for the Second Amendment totaled $904,637. For the Third Amendment, which occurred on August 12, 2021, the Company determined it was a debt modification. The Third Amendment provided the Company with debt financing of $500,000, an Exit fee of $250,000, and issuance of 2,000,000 shares of common stock issued to Centre Lane. The debt discount determined for the Third Amendment totaled $322,529. For the Fourth Amendment, which occurred on August 31, 2021, the Company determined it was a debt modification. The Fourth Amendment provided the Company with debt financing of $1,100,000, an Exit fee of $550,000, and no common share issuance. The debt discount determined for the Fourth Amendment totaled $560,783. For the Fifth Amendment, which occurred on October 8, 2021, the Company determined it was a debt extinguishment. The Fifth Amendment provided the Company with debt financing of $725,000, an Exit fee of $362,500, and no common share issuance. The debt discount determined for the Fifth Amendment totaled $2,635,013. For the Sixth Amendment, which occurred on November 5, 2021, the Company determined it was a debt modification. The Sixth Amendment provided the Company with debt financing of $800,000, an Exit fee of $800,000, and no common share issuance. The debt discount determined for the Sixth Amendment totaled $902,745. For the Seventh Amendment, which occurred on December 23, 2021, the Company determined it was a debt modification. The Seventh Amendment provided the Company with debt financing of $500,000, an Exit fee of $500,000, and no common share issuance. The debt discount determined for the Seventh Amendment totaled $510,783. For the Eight Amendment, which occurred on January 26, 2022, the Company determined it was a debt modification. The Eighth Amendment provided the Company with debt financing of $350,000, an Exit fee of $350,000, and no common share issuance. The debt discount determined for the Eighth Amendment totaled $352,520. For the Ninth Amendment, which occurred on February 11, 2022, the Company determined it was a debt modification. The Ninth Amendment provided the Company with debt financing of $250,000, an Exit fee of $12,500, and no common share issuance. The debt discount determined for the Ninth Amendment totaled $19,700. For the Tenth Amendment, which occurred on March 11, 2022, the Company determined it was a debt modification. The Tenth Amendment provided the Company with debt financing of $300,000, an Exit fee of $15,000, and no common share issuance. The debt discount determined for the Sixth Amendment totaled $25,125. For the Eleventh Amendment, which occurred on March 25, 2022, the Company determined it was a debt modification. The Eleventh Amendment provided the Company with debt financing of $500,000, an Exit fee of $25,000, and no common share issuance. The debt discount determined for the Eleventh Amendment totaled $29,050.
The accumulated gross debt discount as of March 31, 2022 and December 31, 2021 totaled $8,626,871 and $8,200,476, respectively and will be amortized into the condensed consolidated statement of operations and comprehensive loss and included in the interest expense – related party over the remaining life of the loan or until the next debt modification or extinguishment is determined. Interest expense for note payable to related ~~parties~~party for the three months ended March 31, 2022 and 2021 was $804,129 and $255,506, respectively.
On July 31, 2019, the Company executed a Share Exchange Agreement and Plan of Merger (the “Oceanside Merger Agreement”) with Slutzky & Winshman Ltd., an Israeli company (“Oceanside”) and the shareholders of Oceanside (the “Oceanside Shareholders”). The merger closed on August 15, 2019, and the Company acquired all of the outstanding shares of S&W. Pursuant to the terms of the Merger Agreement, the Company issued 12,513,227 shares valued at $20,021,163 to owners and employees of Oceanside and contingent consideration of $750,000 paid through the delivery of unsecured, interest free, one and two-year promissory notes (the “Closing Notes”). At the time of the acquisition and under FASB ASC Topic 805, Business Combinations (“ASC 805”), these Closing Notes were recorded ratably as compensation expense into the statement of operations and comprehensive loss over the 24-month term and an accrued payable is being recognized over the same period. As of August 15, 2020, the Company did not make payment on the one year closing note and thereby defaulted on its obligation and the two-year closing note accelerated to become payable as of August 15, 2020. Upon default, the closing notes accrue interest at a 1.5% per month rate, or 18% annual rate. As a result, there was a total charge of $300,672 recorded during the third quarter of 2020 which was $250,000 of compensation expense and $50,672 of interest expense-related party. The total $750,000liability is recorded in accrued expenses. Interest expense for note payable to related party for the three months ended March 31, 2022 and 2021 was $33,288.
22
BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022
(unaudited)

During November 2018, the Company issued 10% convertible promissory notes in the amount of $80,000 to a related party, ~~to our~~the Chairman of the Board. The notes mature five years from issuance and is convertible at the option of the holder into shares of common stock at any time prior to maturity at a conversion price of $0.40 per share. A beneficial conversion feature exists on the date the convertible notes were issued whereby the fair value of the underlying common stock to which the notes are convertible into is in excess of the face value of the note of $70,000.

The principal balance of these notes payable was $80,000 ~~and $80,000~~ at March 31, ~~2021~~2022 and December 31, ~~2020, respectively~~2021, and discounts recognized upon respective origination dates as a result of the beneficial conversion feature total $~~36,820~~22,819 and $~~40,272~~26,271., respectively. At March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the total convertible notes payable to related party net of discounts was $~~43,180~~57,181 and $~~39,728~~53,729, respectively.
Interest expense for note payable to related party was $2,000 ~~and $2,023~~ ~~at March 31, 2021 and March 31, 2020, respectively~~ and discount amortization was $3,452 ~~and $3,490, respectively.~~
~~The unsecured and interest free Closing Notes of $750,000~~ as identified in Note 4 were recorded ratably as compensation expense into the statement of operations over the 24-month term and an accrued payable is being recognized over the same period. As of August 15, 2020, the Company did not make payment on the 1^st ~~closing notes and thereby defaulted on its obligation and the 2~~^nd ~~closing note accelerated to become payable as of August 15, 2020. Upon default, the closing notes accrue interest at a~~ ~~1.5%~~ ~~per month rate, or~~ ~~18%~~ ~~annual rate. As a result, there was a total charge of $300,672~~ ~~recorded during the 3~~^rd ~~quarter of 2020 which was $250,000~~ ~~of compensation expense and $50,672~~ ~~of interest expense-related party. The total $750,000~~ ~~liability is recorded in accrued expenses.~~
~~Interest expense for note payable to related party~~ for the three months ended March 31, ~~2021~~2022 and ~~2020 was $33,288~~ ~~and $~~0~~, respectively.~~2021.

Long-term debt

On February 17, 2021, under the Paycheck Protection Program (“PPP”) established by the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, administered by the Small Business Administration (“SBA”),the Company entered into a promissory note of $295,600 with Regions Bank (the ~~“Bright~~“Second Bright Mountain PPP Loan”) and has a two-year term and bears interest at a rate of ~~1.0%~~1.0% per annum. Monthly principal and interest payments are deferred for six months after the date of disbursement. The Second Bright Mountain PPP Loan may be prepaid at any time prior to maturity with no prepayment penalties. The Promissory Note contains customary events of default provisions. Under the terms of the CARES Act, PPP ~~Loan~~loan recipients can apply for and be granted forgiveness for all or a portion of loans granted under the PPP. This was the 2^ndsecond tranche available under the PPP program.

On March 23, 2021, under the Paycheck Protection Program (“PPP”) established by the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, administered by the Small Business Administration (“SBA”), the Company’s Wild Sky subsidiary entered into a promissory note of $841,540 with Holcomb Bank (the ~~“Wild~~“Second Wild Sky PPP Loan”) and has a ~~two-year~~two-year term and bears interest at a rate of ~~1.0%~~1.0% per annum. Monthly principal and interest payments are deferred for six months after the date of disbursement. The Second Wild Sky PPP Loan may be prepaid at any time prior to maturity with no prepayment penalties. The Promissory Note contains customary events of default provisions. Under the terms of the CARES Act, PPP Loan recipients can apply for and be granted forgiveness for all or a portion of loans granted under the PPP. This was the 2^ndsecond tranche available under the PPP ~~program.~~
19
~~BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
program and was forgiven as of March 23, 2022 and the Company recorded a non-cash gain on the PPP forgiveness during the three months ended March 31, ~~2021~~
~~(Unaudited)~~
~~NOTE 10 – NOTES PAYABLE (continued).~~2022.

On April 24, 2020, under the Paycheck Protection Program (“PPP”) established by the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, administered by the Small Business Administration (“SBA”),the Company entered into a promissory note of $464,800 with Regions Bank (the “Bright Mountain PPP Loan”) and has a ~~two-year~~two-year term and bears interest at a rate of ~~1.0%~~1.0% per annum. Monthly principal and interest payments are deferred for six months after the date of disbursement. The PPP Loan may be prepaid at any time prior to maturity with no prepayment penalties. The Promissory Note contains customary events of default provisions. Under the terms of the CARES Act, PPP Loan recipients can apply for and be granted forgiveness for all or a portion of loans granted under the PPP. On January 28, 2021, the Company applied for the promissory note to be forgiven by the SBA in whole or in ~~part; as of the date of this report, the Company that application is still in process. This loan was forgiven~~part and on July 16, 2021, by the ~~Small Business Administration (SBA). See Note 16 for Subsequent events information.~~Company obtained the forgiveness of the Bright Mountain PPP Loan in whole and recorded a non-cash gain on the PPP forgiveness during the year ended December 31, 2021.

Effective June 1, 2020, the Company acquired Wild Sky and assumed the $1,706,735 promissory note (the “Wild Sky PPP Loan”) with Holcomb Bank received under the PPP. The Wild Sky PPP Loan has a ~~two-year~~two-year term and bears interest at a rate of ~~1.0%~~1.0% per annum. Monthly principal and interest payments are deferred for six months after the date of disbursement. The Wild Sky PPP Loan may be prepaid at any time prior to maturity with no prepayment penalties. The Wild Sky PPP Loan contains customary events of default provisions. Under the terms of the CARES Act, PPP ~~Loan~~loan recipients can apply for and be granted forgiveness for all or a portion of loans granted under the PPP. On January 22, 2021, the Company applied for the promissory note to be forgiven by the SBA in whole or in part and on March 29, 2021, the Company obtained the forgiveness of the Wild Sky PPP Loan in whole and recorded a non-cash gain on the PPP forgiveness during the three months ended March 31, 2021.

23
~~Effective June 1, 2020, we entered into a membership interest purchase agreement to acquire~~
~~100%~~BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES ~~of Wild Sky The seller issued a first lien senior secured credit facility totaling $~~
~~16,451,905~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~, which consisted of $~~
~~15,000,000~~ ~~of initial indebtedness, repayment of Wild Sky’s existing accounts receivable factoring facility of approximately $900,000~~ ~~and approximately $500,000~~ ~~of expenses. The note bears interest at a rate of~~ ~~6.0%~~ per annum. Per the credit facility with the seller, our loan payments begin December 1, 2021. There is no prepayment penalty associated with this credit facility. Certain future capital raises do require partial or full prepayments of the credit facility. The membership interest purchase included a requirement that the opinion of the financial statements as of and for the year ended DecemberMarch 31, ~~2020 not include a “going concern opinion”; the Company has defaulted on this requirement but on April 26, 2021, the Company obtained a waiver from the lender waiving this requirement.~~2022
(unaudited)

At March 31, ~~2021~~2022 and December 31, ~~2020~~2021, a summary of the Company’s debt is as follows:
SCHEDULE OF LONG-TERM DEBT

March 31,
2021
December 31,
2020
March 31, 2022

December 31, 2021

Non-interest bearing BMLLC acquisition debt $ 385,000 $ 385,000 $ - $ 250,000
PPP loans 1,601,939 2,171,534 295,600 1,137,140
Wild Sky acquisition debt 16,451,906 16,451,906 18,146,564 18,146,564
Total debt 18,438,845 19,008,440
Less short-term debt and current portion of long term debt 1,986,940 2,091,735
Long Term Debt $ 16,451,905 $ 16,916,705
Centre Lane debt 9,990,000 8,187,500
Note payable debt to the Company’s Chairman of the Board 80,000 80,000
Total Debt 28,512,164 27,801,204
Less: debt discount, related party (4,026,510 ) (3,880,093 )
Less: current portion of long-term debt (295,600 ) (1,387,140 )
Less: current portion of long-term debt, related party - (7,316,402 )
Long term debt to related parties, net and long term debt $ 24,190,054 $ 15,217,569
Interest expense was $839,417 and $290,794 for the three months ended March 31, 2022 and 2021, respectively.

The minimum annual principal payments of notes payable at March 31, ~~2021~~2022 were:
SCHEDULE OF MATURITIES OF LONG-TERM OBLIGATION
March 31, 2021
2021 $ 1,660,706
2022 2,414,702
For the Twelve Months Ending:
2022 (remainder of the year) $ 110,158
2023 1,827,437 3,307,956
2024 1,629,493 2,450,545
2025 10,906,507 22,643,505
Total $ 18,438,845 $ 28,512,164
Premium Finance Loan Payable

The Company generally finances its annual insurance premiums through the use of short-term notes, payable in 10 equal monthly ~~installments.~~installments. Coverages financed include Directors and Officers and Errors and Omissions with premiums financed in ~~2020~~2021 and ~~2019~~2020 of $~~380,398~~406,522 and $~~194,592~~380,397, respectively.

Total Premium Finance Loan Payable balance for the Company’s policies was $~~234,290~~212,178 at March 31, ~~2021~~2022 and $~~339,890~~334,284 at December 31, ~~2020.~~2021.

NOTE 1110 – COMMITMENTS AND CONTINGENCIES.

The Company leases its corporate offices at 6400 Congress Avenue, Suite 2050, Boca Raton, Florida 33487 under a long-term non-cancellable operating lease agreement expiring on October 31, 2021. The lease terms require base rent payments of approximately $7,260 plus sales tax per month for the first twelve months commencing in September 2018, with a 3%3% escalation each year. Included in other assets is a required security deposit of $18,100. Rent is all-inclusive and includes electricity, heat, air-conditioning, and water.

20
~~BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~March 31, 2021~~
~~(Unaudited)~~
~~NOTE 11 – COMMITMENTS AND CONTINGENCIES (continued).~~
The ~~right of use asset and~~Company had one lease ~~liability is as follows as of March 31, 2021 and December 31, 2020:~~
~~SCHEDULE OF RIGHT OF USE ASSET AND LEASE LIABILITY~~
March 31, 2021 December 31, 2020
Assets
Operating lease right of use asset $ 48,910 $ 72,598

Liabilities
Operating lease liability $ 48,911 $ 72,727
for office space which expired in October 2021. The Company currently utilizes this office space under a month-to-month agreement. The Company signed a new lease agreement in June 2022. See Note 15 Subsequent events for more information. The Company’s non-lease components are primarily related to property maintenance and other operating services, which varies based on future outcomes and is recognized in rent expense when incurred and not included in the measurement of the lease liability. The Company did not have any variable lease payments for its operating lease for the three months ended March 31, 2022 and 2021.

24
~~The maturity of the Company’s operating lease liability for the 12 months ended March 31:~~
~~SCHEDULE OF MATURITY OF OPERATING LEASE LIABILITY~~
March 31, 2021
2021 $ 48,911
Total net lease liabilities $ 48,911
~~The following summarizes additional information related to the operating lease:~~
~~SCHEDULE OF ADDITIONAL INFORMATION RELATED TO OPERATING LEASE~~
~~March 31, 2021~~
~~Weighted-average remaining lease term~~ ~~0.58~~ ~~years~~
~~Weighted-average discount rate~~ ~~5.50~~ %
~~For the three months ended March 31, 2021 and 2020, rent expense was $48,432~~ ~~and $160,631, respectively.~~
BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, ~~2021~~2022
~~(Unaudited)~~(unaudited)
~~NOTE 11 – COMMITMENTS AND CONTINGENCIES (continued).~~
Legal

From time-to-time, the Company may be involved in litigation or be subject to claims arising out of our operations or content appearing on our websites in the normal course of business. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these ordinary course matters will not have a material adverse effect on our business.

Under the covenants of the Placement Agent Agreement with Spartan Capital and as disclosed in the Placement Offering Memorandum, the Company was obligated to make a filing with a stock exchange to list the Company’s shares. The Company was to make such filing by a listing deadline and have stock exchange approval by a listing approval deadline. In the event the Company was unable to meet to deadlines, the investors in the Offering would be entitled to one additional share of common stock for each share purchased in the Offering provided, however, that such deadlines and obligations of the Company to issue additional shares would be extended for so long as the Company was able to demonstrate to the reasonable satisfaction of the Placement Agent, which consent shall not be reasonably withheld that it had acted in good-faith in attempting to list such securities which included responding to comments from such exchange. The Company believes it has acted in good-faith and has no obligation. No litigation has been filed by Spartan at this time or any of the shareholders in connection with the matter. For more information, see Note 16 Subsequent events.
In 2020, Synacor, Inc commenced an action against MediaHouse, LLC, Inform, Inc. and the Company, alleging approximately $230,000 was owed based on invoices provided in 2019 in respect to that certain Content Provider & Advertising Agreement with MediaHouse. The Company has filed an answer and defenses and intends to defend the alleged claims. This is recorded as an accrued liability as of December 31, ~~2020. For more information, see Note 16 Subsequent events.~~2021. During January 2022, the Company entered into a settlement agreement related to the legal proceeding with Synacor. The agreement obligates the Company to pay $12,000 per month beginning January 24, 2022 for 12 consecutive months and then a final one-time payment in the amount of $40,000 to be paid on or before January 24, 2023. Notwithstanding, the Company has an early settlement option to pay-off the obligation with a discount if it pays $160,000 to Synacor on or before September 1, 2022, which amount shall be inclusive of the monthly installments previously mentioned prior to the date when early settlement payment is transmitted to Synacor.

A former employee of the Company filed a suit against the Company MediaHouse, Inc., and Gregory A. Peters, a former Executive, (the “Defendants”) alleging two counts of defamation. Any potential losses associated with this matter cannot be estimated at this time.
Bright Mountain has been sued by plaintiffs Joey Winshman, Eli Desatnik and Nadav Slutzy (“Plaintiffs”) in a lawsuit filed in the United States District Court for the Southern District of Florida on December 17, 2021 (the “Lawsuit”). Plaintiffs allege that BMM defaulted on its obligations to Plaintiffs under three promissory notes that arose from the merger between Bright Mountain Israel Acquisition Ltd., a wholly owned subsidiary of Bright Mountain, and Slutzky & Winshman Ltd. Plaintiffs seek to recover from Bright Mountain the principal balance of the promissory notes, interest, attorney’s fees, and costs. Discovery in the Lawsuit is underway and the parties continue to intermittently explore the possibility of settlement.

Encoding.com, Inc. (“Encoding”) was a former digital media customer of MediaHouse. Encoding had a long overdue outstanding receivable from MediaHouse’s predecessor company, Inform, Inc. MediaHouse did not assume the liability at acquisition. In 2020, the Company and Encoding agreed to settle the overdue receivable through the issuance of 175,000 warrants to purchase Company stock with a $1.00exercise price. This iswas recorded as an accrued liability as of December 31, 2020 and the warrants were issued in 2021.

Regardless of the outcome, litigation can have an adverse impact on our company because of defense and settlement costs, diversion of management resources and other factors. ~~For further updates~~
NOTE 11 – PREFERRED STOCK.
On August 31, 2021, W. Kip Speyer, the Company’s CEO, at that ~~could effect~~time, gave notice that all of his held preferred stock was converted in accordance with the ~~Legal~~original terms. Accordingly, 7,919,017 shares of the Company’s common stock is to be issued to Mr. Speyer. The Company notified the transfer agent on March 19, 2022 of the share issuance, and the issuance of the shares is a matter ~~please see Note 16~~of administration. Management confirmed with SEC legal counsel that the shareholder rights have transferred at the time of the exercise notice. The Company considers the Common Shares issued and outstanding as of the date of the conversion notice. The Company recognizes the conversion of the preferred stock on ~~Subsequent Events.~~August 31, 2021 and provides all rights as a common shareholder with regard to said shares to Mr. Speyer, including all voting rights. The Company confirms that there was no inducement to convert the shares and that the correct shares were issued in accordance with the original conversion terms. As of said date, the Company has an accrued dividend liability due to Mr. W. Kip Speyer recorded totaling $691,450.

2225

BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, ~~2021~~2022
~~(Unaudited)~~
~~NOTE 12 –~~ ~~PREFERRED STOCK~~.(unaudited)

The Company has authorized 20,000,000 shares of preferred stock with a par value of $0.01 (the “Preferred Stock”), issuable in such series and with such designations, rights and preferences as the board of directors may determine. The Company’s board of directors has previously designated five series of preferred stock, consisting of 10% Series A Convertible Preferred Stock (“Series A Stock”), 10% Series B Convertible Preferred Stock (“Series B Stock”), 10% Series C Convertible Preferred Stock (“Series C Stock”), 10% Series D Convertible Preferred Stock (“Series D Stock”) and 10% Series E Convertible Preferred Stock (“Series E Stock”).
~~On November 5, 2018, the Company filed Articles of Amendment to Amended and Restated Articles of Incorporation, as amended, which:~~
● ~~returned~~ ~~1,000,000~~ ~~shares of previously designated 10% Series B Convertible Preferred Stock,~~ ~~2,000,000~~ ~~shares of previously designated 10% Series C Convertible Preferred Stock and~~ ~~2,000,000~~ shares of previously designated 10% Series D Convertible Preferred Stock to the status of authorized but undesignated and unissued shares of our blank check preferred stock as there were no shares of any of these series outstanding and no intention to issue any such shares in the future: and
● ~~created three new series of preferred stock, 12% Series F-1 Convertible Preferred Stock (“Series F-1”) consisting of~~ ~~2,177,233~~ ~~shares, 6% Series F-2 Convertible Preferred Stock (“Series F-2”) consisting of~~ ~~1,408,867~~ ~~shares, and 10% Series F-3 Convertible Preferred Stock (“Series F-3”) consisting of~~ ~~757,917~~ ~~shares.~~

The designations, rights and preferences of the Series F-1, Series F-2 and Series F-3 are identical, other than the dividend rate, liquidation preference and date of automatic conversion into shares of our common stock. The Series F-1 pays dividends at the rate of ~~12%~~12% per annum and automatically converts into shares of our common stock on April 10, 2022. The Series F-2 pays dividends at the rate of 6%6% per annum and automatically converts into shares of our common on July 27, 2022. The Series F-3 pays dividends at the rate of ~~10%~~10% per annum and automatically converts into shares of our common stock on August 30, 2022. Additional terms of the designations, rights and preferences of the Series F-1, Series F-2 and Series F-3 include:

● the shares have no voting rights, except as may be provided under Florida law;
● the shares pay cash dividends subject to the provisions of Florida law at the dividend rates set forth above, payable monthly in arrears;
● the shares are convertible at any time at the option of the holder into shares of our common stock on a 1:1 basis. The conversion ratio is proportionally adjusted in the event of stock splits, recapitalization or similar corporate events. Any shares not previously converted will automatically convert into shares of our common stock on the dates set forth above;
● the shares rank junior to our 10% Series A Convertible Preferred Stock and our 10% Series E Convertible Preferred Stock;
● in the event of a liquidation or winding up of the Company, the shares have a liquidation preference of $0.50 per share for the Series F-1, $0.50 per share for the Series F-2 and $0.40 per share for the Series F-3; and
● the shares are not redeemable by the Company.

~~On July 18, 2019, the Company filed Articles of Amendment to Amended and Restated Articles of Incorporation, as amended, which:~~
● ~~Approved designation of~~ ~~2,000,000~~ ~~shares of the preferred stock as 10% series A-1 Convertible Preferred Stock and authorized the issuance of the Series A-1 Preferred Stock;~~
● ~~Dividends on the Series A-1 Preferred stock are cumulative and payable in cash;~~
● ~~Dividends shall be payable monthly in arrears within fifteen (15) days after the end of the month.~~
At both March 31, ~~2021~~2022 and December 31, ~~2020, there were~~2021 ~~1,200,000~~ ~~shares of Series A-1 Stock,~~ ~~2,500,000~~125,000 shares of Series E ~~Stock and~~ ~~4,344,017~~ ~~shares of Series F~~ Stock issued and outstanding. There are no shares of Series A-1 Stock, Series B Stock, Series B-1 Stock, Series C Stock, Series D or Series DF Stock issued and outstanding.

Other designations, rights and preferences of each of series of preferred stock are identical, including (i) shares do not have voting rights, except as may be permitted under Florida law, (ii) are convertible into shares of our common stock at the holder’s option on a one for one basis, (iii) are entitled to a liquidation preference equal to a return of the capital invested, and (iv) each share will automatically convert into shares of common stock five years from the date of issuance or upon a change in control. Both the voluntary and automatic conversion formulas are subject to proportional adjustment in the event of stock splits, stock dividends and similar corporate events.

Dividends paid for Convertible Preferred Stock were $0 during the three months ended March 31, 2022 and for Series ~~A-1,~~ E and F Convertible Preferred Stock ~~paid~~ were $1,261 during the three months ended March 31, ~~2021 and for Series E and F Convertible Preferred Stock were $~~2021.
~~23,747~~ ~~during the three months ended March 31, 2020.~~
Total preferred stock dividend accrued amounted to $~~544,932~~691,450 and $~~363,460~~691,861 as of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, respectively.

26
BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, ~~2021~~2022
~~(Unaudited)~~(unaudited)
NOTE 1312 – COMMON STOCK.

A) Stock issued for Cash

During the ~~first quarter of~~three months ended March 31, 2022 and 2021, the Company did not sell any of its securities through a private placement.

~~During the first quarter of 2020, the Company sold an aggregate of~~ ~~5,117,500~~ ~~units of its securities to~~ 57 accredited investors in a private placement exempt from registration under the Securities Act in reliance on exemptions provided by Section 4(a)(2) and Rule 506(b) of Regulation D resulting in gross proceeds to the Company of $~~2,558,750. Each unit, which was sold at a purchase price of $0.50, consisted of one share of common stock and~~ 1~~five-year~~ ~~warrant to purchase one share of common stock at an exercise price of $0.75~~ ~~per share. Spartan Capital, served as placement agent for the Company in this offering. As compensation for its services, Spartan Capital held back $383,813~~ ~~for commissions, $165,000~~ ~~to pay the accrued finder’s fee for the Oceanside acquisition, and $275,000~~ ~~in other consulting fees, resulting in net cash received by the Company of $1,734,937. The Company issued Spartan Capital Placement Agents Warrants to purchase an aggregate of~~ ~~511,750~~ shares of our common stock, including the cash commission and Placement Agent Warrants issued pursuant to the final closing on March 16, 2020 included in the Company’s consolidated statement of changes in shareholders’ equity for the three months ended March 31, 2020.
B) Stock issued for services

During the ~~first~~ three months asended March 31, 2022, the Company issued 174,253 shares of our common stock for the following concepts:
SCHEDULE OF COMMON SHARES ISSUED DURING THE PERIOD
Shares (#) Value
Shares issued to Oceanside employees per the acquisition agreement valued at $1.60 174,253 $ 278,805
Total 174,253 $ 278,805
During the three months ended March 31, 2021, the Company issued a net 504,266 shares of our common stock for the following concepts:
~~SCHEDULE OF COMMON SHARES ISSUED DURING THE PERIOD~~
Shares (#) Value
Options exercised by employees 100,000 $ 13,900
Warrants exercised 25,000 10,000
Shares issued to Oceanside employees per the acquisition agreement valued at $1.60 379,266 606,826
Total 504,266 $ 630,726
~~In February 2020, the Company issued~~ ~~650,000~~ ~~shares of our common stock to Spartan Capital for services rendered during 2019 based on the fair value of date of service, or $1.60~~ ~~a share valued at $1,040,000~~.
~~In February 2020, the Company issued~~ ~~660,000~~ ~~shares of our common stock to Spartan Capital for services rendered during 2019 based on the fair value of date of service, or $1.64~~ ~~a share valued at $1,082,400~~.
~~In March 2020, the Company issued~~ ~~60,000~~ ~~shares of our common stock to MZHCI, Inc for services rendered during 2020 based on the fair value of date of service, or $1.50~~ ~~a share valued at $90,000~~.

C) Stock issued for acquisitions
During the three months ended March 31, 2022 and 2021, ~~or the three months ended March 31, 2020,~~ the Company did not make any acquisitions.

24
~~BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES~~D) Stock issued for deemed dividend
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
During the three months ended March 31, 2022 and 2021, the Company did not issue any stock that resulted in a deemed dividend.
~~(Unaudited)~~
~~NOTE 13 – COMMON STOCK (continued).~~
Stock Option Compensation

The Company accounts for stock option compensation issued to employees for services in accordance with FASB ASC Topic 718, ~~“Compensation~~Compensation – Stock ~~Compensation”~~Compensation (“ASC 718”). ASC ~~Topic~~ 718 requires companies to recognize in the statement of operations and comprehensive loss the grant-date fair value of stock options and other equity-based compensation issued to employees. The value of the portion of an employee award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The Company accounts for non-employee share-based awards in accordance with the measurement and recognition criteria of ASU No. ~~2018- 07,~~2018-07, “Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting.”.The Company estimates the fair value of stock options by using the Black-Scholes option-pricing model.

Stock options issued to consultants and other non-employees as compensation for services provided to the Company are accounted for based on the fair value of the services provided or the estimated fair market value of the option, whichever is more reliably measurable in accordance with FASB ASC Topic 505, Equity, and ~~FASB~~ ASC 718, including related amendments and interpretations. The related expense is recognized over the period the services are provided.
27
BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022
(unaudited)

On April 20, 2011, the Company’s board of directors and majority stockholder adopted the 2011 Stock Option Plan (the “2011 Plan”), to be effective on January 3, 2011. The Company has reserved for issuance an aggregate of 900,000 shares of common stock under the 2011 Plan. The maximum aggregate number of shares of Company stock that shall be subject to Grants made under the Plan to any individual during any calendar year shall be 180,000 shares. On April 1, 2013, the Company’s board of directors and majority stockholder adopted the 2013 Stock Option Plan (the “2013 Plan”), to be effective on April 1, 2013. The Company has reserved for issuance an aggregate of 900,000 shares of common stock under the 2013 Plan. As of December 31, 2021 and March 31, ~~2021,~~2022, ~~647,000~~697,000 and 801,000 shares, respectively were remaining under the 2011 Plan for future issuance. As of March 31, 2022 and December 31, 2021, 567,000 shares were remaining under the 2013 Plan for future issuance.

On May 22, 2015, the Company’s board of directors and majority stockholder adopted the 2015 Stock Option Plan (the “2015 Plan”), to be effective on May 22, 2015. The Company has reserved for issuance an aggregate of 1,000,000 shares of common stock under the 2015 Plan. As of March 31, 2022 and December 31, 2021, 859,000 shares were remaining under the 2015 Plan for the future issuance.

On November 7, 2019, the Company’s board of directors and majority stockholder adopted the 2019 Stock Option Plan (the “2019 Plan”), to be effective on November 7, 2019. The Company has reserved for issuance an aggregate of 5,000,000 shares of common stock under the 2019 Plan. As of March 31, 2022 and December 31, 2021, ~~4,761,773~~4,861,773 and 4,261,773 shares, respectively, were remaining under the 2019 Plan for the future issuance.

The purpose of the 2011 Plan, 2013 Plan, 2015 Plan and 2019 Plan (the “Plans” are to provide an incentive to attract and retain directors, officers, consultants, advisors and employees whose services are considered valuable, to encourage a sense of proprietorship and to stimulate an active interest of such persons into our development and financial success. Under the 2015 Plan, the Company is authorized to issue incentive stock options intended to qualify under Section 422 of the Code, non-qualified stock options, stock appreciation rights, performance shares, restricted stock and long-term incentive awards. The Company’s board of directors will administer the 2011 Plan until such time as such authority has been delegated to a committee of the board of directors. The material terms of each option granted pursuant to the 2011 Plan by the Company shall contain the following terms: (i) that the purchase price of each share purchasable under an incentive option shall be determined by the Committee at the time of grant, (ii) the term of each option shall be fixed by the Committee, but no option shall be exercisable more than 10 years after the date such option is granted and (iii) in the absence of any option vesting periods designated by the Committee at the time of grant, options shall vest and become exercisable in terms and conditions, consistent with the Plan, as may be determined by the Committee and specified in the Grant Instrument. See note 15 Subsequent events for more information.

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

The Company believes this valuation methodology is appropriate for estimating the fair value of stock options granted to employees and directors, which is subject to ASC ~~Topic~~ 718 requirements. These amounts are estimates and thus may not be reflective of actual future results, nor amounts ultimately realized by recipients of these grants. The Company recognizes share-based compensation expense on a straight- line basis over the requisite service period for each award.

The expected life is computed using the simplified method, which is the average of the vesting term and the contractual term. The expected volatility is based on an average of similar public company’s historical ~~volatility.~~volatility as the Company’s stock has limited trading volume history. The risk-free interest rate is based on the U.S. Treasury yields with terms equivalent to the expected term of the related option at the time of the grant. Dividend yield is based on historical trends. While the Company believes these estimates are reasonable, the compensation expense recorded would increase if the expected life was increased, a higher expected volatility was used, or if the expected dividend yield increased.

28
BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022
(unaudited)
The Company recorded $~~68,294~~28,916 and $~~36,595~~68,294 of non-cash stock-based stock option compensation expense for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. The stock option expense for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively has been recognized as a component of general and administrative expenses in the accompanying consolidated financial statements.

As of March 31, ~~2021,~~2022, there were total unrecognized compensation costs related to non-vested share-based compensation arrangements of $~~419,692~~124,622 to be recognized through ~~March~~May 2025.

A summary of the Company’s stock option activity during the three months ended March 31, ~~2021~~2022 is presented below:
SCHEDULE OF STOCK OPTION ACTIVITY

Number of
Options

Weighted
Average
Exercise
Price

Weighted
Average
Remaining
Contractual
Term

Aggregate
Intrinsic
Value

Balance Outstanding, December 31, 2021 1,415,227 $ 0.62 6.2 $ —
Granted — — — —
Exercised — — — —
Forfeited — — — —
Expired (54,000 ) — — —
Balance Outstanding, March 31, 2022 1,361,227 $ 0.62 6.2 $ —
Exercisable at March 31, 2022 678,364 $ 0.73 3.5 $ —
Summarized information with respect to options outstanding under the option plans at March 31, 2022 is as follows:
SCHEDULE OF OPTIONS OUTSTANDING UNDER OPTION PLANS
Options Outstanding
Range or
Exercise Price

Number
Outstanding

Weighted
Average
Exercise
Price

Remaining
Average
Contractual Life
(In Years)

Number
Exercisable

Weighted
Average
Exercise
Price

$ 0.01 - 0.13 650,000 $ 0.01 9.4 25,000 $ 0.01
$ 0.14 - 0.24 — — — — —
$ 0.25 - 0.49 72,000 0.28 0.9 72,000 0.28
$ 0.50 - 0.85 501,000 0.69 3.2 501,000 0.69
$ 0.86 - 1.75 138,227 1.64 7.7 80,364 1.63

Total 1,361,227 $ 0.44 6.5 678,364 $ 0.73
NOTE 13 – RELATED PARTIES.

Centre Lane Partners Master Credit Fund II, L.P. (“Center Lane Partners”), who sold the Company the Wild Sky business in June 2020 has partnered and assisted the Company from a liquidity perspective during 2021 and through the three months ended March 31, 2022. This relationship has been determined to qualify as a related party. A related party is a party that can exercise significant influence over the Company in making financial and/or operating decisions.
29
BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, ~~2021~~2022
~~(Unaudited)~~(unaudited)
~~NOTE 13 – COMMON STOCK (continued).~~

Number of
Options

Weighted
Average
Exercise
Price

Weighted
Average
Remaining
Contractual
Term

Aggregate
Intrinsic
Value

Balance Outstanding, December 31, 2020 1,375,227 $ 0.76 4.1 $ 3,201,237
Granted 100,000 0.33 9.3 276,213
Exercised (100,000 ) — — —
Forfeited (100,000 ) — — —
Expired (310,000 ) — — —
Balance Outstanding, March 31, 2021 965,227 $ 0.22 2.7 $ 3,477,450
Exercisable at March 31, 2021 668,432 $ 0.673 4.0 $ 886,942
~~Summarized information with respect to options outstanding under the option plans at March 31, 2021 is as follows:~~
~~SCHEDULE OF OPTIONS OUTSTANDING UNDER OPTION PLANS~~
Options Outstanding
Range or
Exercise Price

Number
Outstanding

Weighted
Average
Exercise
Price

Remaining
Average
Contractual Life
(In Years)

Number
Exercisable

Weighted
Average
Exercise
Price

$ 0.14 - $0.24 - $ 0.00 - - $ 0.00
0.25 - 0.49 126,000 0.28 1.5 126,000 0.28
0.50 - 0.85 501,000 0.69 4.2 498,500 0.69
0.86 - 1.75 138,227 1.64 8.7 43,932 1.62
1.76 - 2.10 100,000 2.10 9.3 — 0.00
2.11 - 3.05 100,000 3.05 9.3 — 0.00

Total 965,227 $ 1.16 5.6 668,432 $ 0.67
~~NOTE 14 –~~ ~~RELATED PARTIES~~.
~~During November 2018, Mr. W. Kip Speyer, the Company’s Chairman of the Board, entered into two convertible note agreements with the company totaling $80,000. These notes have a conversion price of $0.40~~ ~~per share and resulted in the recognition of a beneficial conversion feature recorded as a debt discount. These notes payable total $43,180~~ ~~and $39,728~~ ~~at March 31, 2021 and December 31, 2020. The notes are reported net of their unamortized debt discount of $36,820~~ ~~and $40,272~~ ~~as of March 31, 2021 and December 31, 2020, respectively.~~
~~During the three months ended March 31, 2021 and 2020 we paid cash dividends on the outstanding shares of the Company’s Series E and F Preferred Stock of $~~0 ~~and $23,747, respectively held by affiliates of the Company.~~
On July 31, 2019, the Company executed a Share Exchange Agreement and Plan of Merger (the “Oceanside Merger Agreement”) with Slutzky & Winshman Ltd., an Israeli company (“Oceanside”) and the shareholders of Oceanside (the “Oceanside Shareholders”). The merger closed on August 15, 2019, and the Company acquired all of the outstanding shares of S&W. Pursuant to the terms of the Merger Agreement, we issued ~~12,513,227~~ ~~shares valued at $20,021,163~~ ~~to owners and employees of Oceanside and contingent consideration of $750,000~~ paid through the delivery of unsecured, interest free, one and two year promissory notes (the “Closing Notes”). At the time of the acquisition and under ASC 805, these Closing Notes were recorded ratably as compensation expense into the statement of operations over the 24-month term and an accrued payable is being recognized over the same period. As of August 15, 2020, the Company did not make payment on the 1^st ~~closing notes and thereby defaulted on its obligation and the 2~~^nd ~~closing note accelerated to become payable as of August 15, 2020. Upon default,~~ ~~the closing notes accrue interest at a 1.5% per month rate, or 18% annual rate. For the three months ended March 31, 2021, $33,288~~ ~~of interest expense-related party was recorded.~~
~~NOTE 15 –~~ ~~INCOME TAXES~~.
~~The Company recorded $~~0 ~~tax provision for the three months ending March 31, 2021, due in large part to its expected tax losses for the year and maintaining a full valuation allowance against its net deferred tax assets.~~
~~At March 31, 2021 and December 31, 2020, the Company had~~ 0 ~~unrecognized tax benefits or accrued interest and penalties recorded. No interest and penalties were recognized during the three months ending March 31, 2021.~~
~~BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~March 31, 2021~~
~~(Unaudited)~~
~~NOTE 16 –~~ ~~SUBSEQUENT EVENTS~~.
As disclosed in Note 10, the Company obtained the forgiveness of the Wild Sky PPP Loan in whole. Further, on May 26, 2021, the Company applied for the Bright Mountain PPP Loan to be forgiven by the SBA in whole or in part and on July 16, 2021, the Company obtained the forgiveness of the Bright Mountain PPP Loan in whole.

On April 26, 2021, the Company and certain of its subsidiaries entered into a First Amendment to Amended and Restated Senior Secured Credit Agreement (the “First ~~Amendment to Credit Agreement”~~Amendment”). The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners ~~Master Credit Fund II, L.P. (“Center Lane Partners”)~~ as Administrative Agent and Collateral Agent dated June 5, 2020 (the “Credit Agreement”). The Credit Agreement was amended to permit the Company to raise up to $6,000,000 of total cash proceeds from the sale of its preferred stock prior to December 31, 2021 without having to make a mandatory prepayment of the loans (the “Loans”) under the Credit Agreement. The interest rate on the Loans after April 26, 2021 was increased to ~~10.00%~~10.00% per annum from ~~6.00%~~6.00%, which can continue to be paid in-kind in lieu of cash payment. ~~The Credit Agreement was further amended to permit the Company to provide audited financial statements for the year ended December 31,2020 on or before June 14, 2021.~~ In addition, the Company may issue up to $800,000 in dividends from the previous limit of $500,000 per annum. In addition, the Company has issued 150,000 common shares to Centre Lane Partners as part of this transaction. This term loan shall be repaid by June 30, 2025, with payments of 2.5% of outstanding principal beginning on June 30, 2023.

~~During~~On May 26, 2021, the Company ~~settled~~and certain of its subsidiaries entered into a Second amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners (“the Second Amendment”). The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent dated June 5, 2020, as amended the Credit Agreement. The Credit Agreement was amended to provide for an additional loan amount of $1.5 million, in the aggregate. This term loan shall be repaid by June 30, 2025, with payments of 2.5% of outstanding ~~debt with Encoding.com, Inc.~~principal beginning on June 30, 2023. In addition, and as part of the transaction, there is an Exit Fee (“~~Encoding”~~the Exit Fee”) ~~was a former digital media customer~~totaling $0.750 million which will be added and capitalized to the principal amount of ~~MediaHouse. Encoding had a long overdue outstanding receivable from MediaHouse’s predecessor company, Inform, Inc. MediaHouse did not assume~~ the ~~liability at acquisition.~~original loan and the original loan terms apply. In ~~2020,~~addition, the Company has issued 3.0 million common shares to Centre Lane Partners as part of this transaction.
On August 12, 2021, the Company and ~~Encoding agreed~~certain of its subsidiaries entered into a Third amendment to ~~settle~~ the ~~overdue receivable through~~ Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners (“the Third Amendment”). The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent dated June 5, 2020, as amended the Credit Agreement. The Credit Agreement was amended to provide for an additional loan amount of $0.5 million, in the aggregate. This term loan shall be repaid by June 30, 2025, with payments of 2.5% of outstanding principal beginning on June 30, 2023. In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”) totaling $0.250 million which will be added and capitalized to the principal amount of the original loan and the original loan terms apply. In addition, the Company has issued 2.0 million common shares to Centre Lane Partners as part of this transaction.
On August 31, 2021, the Company and certain of its subsidiaries entered into a Fourth amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners (“the Fourth Amendment”). The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent dated June 5, 2020, as amended the Credit Agreement. The Credit Agreement was amended to provide for an additional loan amount of $1.1 million, in the aggregate. This term loan shall be repaid by June 30, 2025, with payments of 2.5% of outstanding principal beginning on June 30, 2023. In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”) totaling $0.550 million which will be added and capitalized to the principal amount of the original loan and the original loan terms apply. There was no issuance of common shares as part of this amendment.
~~175,000~~
On October 8, 2021, the Company and certain of its subsidiaries entered into a Fifth amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners (“the Fifth Amendment”). The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent dated June 5, 2020, as amended the Credit Agreement. The Credit Agreement was amended to provide for an additional loan amount of $725,000, in the aggregate. This term loan shall be repaid by June 30, 2025, with payments of 2.5% of outstanding principal beginning on June 30, 2023. ~~warrants~~In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”) totaling $800,000 which will be added and capitalized to ~~purchase Company stock with a $1.00~~ ~~exercise price. This is recorded as an accrued liability as~~the principal amount of ~~December 31, 2020~~the original loan and the ~~warrants were issued~~original loan terms apply. There was no issuance of common shares as part of this amendment.
On November 5, 2021, the Company and certain of its subsidiaries entered into a Sixth amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners (“the Sixth Amendment”). The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent dated June 5, 2020, as amended the Credit Agreement. The Credit Agreement was amended to provide for an additional loan amount of $800,000, in ~~May~~the aggregate. This term loan shall be repaid by June 30, 2025, with payments of 2.5% of outstanding principal beginning on June 30, 2023. In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”) totaling $800,000 which will be added and capitalized to the principal amount of the original loan and the original loan terms apply. This amendment required the Company to issue 7,500,000 shares of the Company’s common stock to Centre Lane Partners prior to November 30, 2021.

30
~~Between May 26,~~
BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022
(unaudited)
On December 23, 2021, the Company and certain of its subsidiaries entered into a Seventh amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners (“the Seventh Amendment”). The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent dated June 5, 2020, as amended the Credit Agreement. The Credit Agreement was amended to provide for an additional loan amount of $500,000, in the aggregate. This term loan shall be repaid by June 30, 2025, with payments of 2.5% of outstanding principal beginning on June 30, 2023. In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”) totaling $500,000 which will be added and capitalized to the principal amount of the original loan and the original loan terms apply. There was no issuance of common shares as part of this amendment.
On January 26, 2022, the Company and certain of its subsidiaries entered into ~~seven~~an Eighth amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners (“the Eighth Amendment”). The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent dated June 5, 2020, as amended the Credit Agreement. The Credit Agreement was amended to provide for an additional loan amount of $350,000, in the aggregate. This term loan shall be repaid by June 30, 2025, with payments of 2.5% of outstanding principal beginning on June 30, 2023. In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”) totaling $350,000 which will be added and capitalized to the principal amount of the original loan and the original loan terms apply. There was no issuance of common shares as part of this amendment.
On February 11, 2022, the Company and certain of its subsidiaries entered into a Ninth amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners (“the Ninth Amendment”). The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent dated June 5, 2020, as amended the Credit Agreement. The Credit Agreement was amended to provide for an additional loan amount of $250,000, in the aggregate. This term loan shall be repaid by June 30, 2023. In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”) totaling $12,500 which will be added and capitalized to the principal amount of the original loan and the original loan terms apply. There was no issuance of common shares as part of this amendment. Per the tenth amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners, the interest rate on this term loan was increased to 12% from 10%
On March 11, 2022, the Company and certain of its subsidiaries entered into a Tenth amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners (“the Tenth Amendment”). The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent dated June 5, 2020, as amended the Credit Agreement. The Credit Agreement was amended to provide for an additional loan amount of $300,000, in the aggregate. This term loan shall be repaid by June 30, 2023. In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”) totaling $15,000 which will be added and capitalized to the principal amount of the original loan and the original loan terms apply. There was no issuance of common shares as part of this amendment. Additionally, per the Tenth Amendment, the original loan and amendments one through eight now have maturity dates of June 30, 2025, with payments of 2.5% of outstanding principal beginning on June 30, 2023. Amendments nine through fourteen have a maturity date of June 30, 2023.
On March 25, 2022, the Company and certain of its subsidiaries entered into an Eleventh amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners (“the Eleventh Amendment”). The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent dated June 5, 2020, as amended the Credit Agreement. The Credit Agreement was amended to provide for an additional loan amount of $500,000, in the aggregate. This term loan shall be repaid by June 30, 2023. In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”) totaling $25,000 which will be added and capitalized to the principal amount of the original loan and the original loan terms apply. There was no issuance of common shares as part of this amendment. See Note 15 for amendments to the Amended and Restated Senior Secured Credit Agreement subsequent to March 31, 2022.
31
BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2022
(unaudited)
The accumulated gross debt discount as of March 31, 2022 and December 31, 2021 totaled $8,626,871 and $8,200,476, respectively and will be amortized into the condensed consolidated statement of operations and comprehensive loss and included in the interest expense – related party over the remaining life of the loan or until the next debt modification or extinguishment is determined. Interest expense for note payable to related party for the three months ended March 31, 2022 and 2021 was $804,129 and $255,506, respectively.
The total related party debt owed to Centre Lane Partners was $28,136,564 and $26,334,064 as of March 31, 2022 and December 31, 2021, respectively. The debt owed to Centre Lane Partners is reported net of their unamortized debt discount of $4,026,510 and $3,853,822 as of March 31, 2022 and December 31, 2021, respectively. For further clarification, please see Note 9, Notes Payable.
As discussed in Note 9, notes payable to the CEO amounted to $57,181 and $53,729 as of March 31, 2022 and December 31, 2021, respectively, and are reported net of their unamortized debt discount of $22,819 and $26,271 as of March 31, 2022 and December 31, 2021, respectively. See Note 9 further discussion on these notes payable.
During the three months ended March 31, 2022 and 2021, we paid cash dividends on the outstanding shares of the Company’s Series E and F Preferred Stock of $0 and $1,261, respectively, held by affiliates of the Company.
The unsecured and interest free Closing Notes of $750,000 related to the Oceanside acquisition were recorded ratably as compensation expense into the condensed consolidated statement of operations and comprehensive loss over the 24-month term and an accrued payable is being recognized over the same period. As of August 15, 2020, the Company did not make payment on the First Closing Note and thereby defaulted on its obligation and the Second Closing Note accelerated to become payable as of August 15, 2020. Upon default, the Closing Notes accrue interest at a 1.5% per month rate, or 18% annual rate. As a result, there was a total charge of $300,672 recorded during the third quarter of 2020 which was $250,000 of compensation expense and $50,672 of interest expense-related party. For the three months ended March 31, 2022 and 2021, $33,288 of interest expense-related party was recorded.
NOTE 14 – INCOME TAXES.
The Company recorded $0 tax provision for the three months ended March 31, 2022 and 2021, due in large part to its expected tax losses for the year and maintaining a full valuation allowance against its net deferred tax assets.
At March 31, 2022 and December 31, 2021, the Company had 0 unrecognized tax benefits or accrued interest and penalties recorded. No interest and penalties were recognized during the three months ended March 31, 2022 and 2021.
NOTE 15 – SUBSEQUENT EVENTS.
Between April 15, 2022 and June 10, 2022, the Company and certain of its subsidiaries entered into three amendments to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners Master Credit Fund II, L.P. (“Centre Lane Partners”). The Company and its subsidiaries are parties to a credit agreement between itself and Centre Lane Partners as Administrative Agent and Collateral Agent dated June 5, 2020, as amended (the “Credit Agreement”). The Credit Agreement was amended to provide for an additional loan amount of $~~5.475~~1.3 million, in the aggregate. This term loan ~~shall be repaid by February 15, 2022.~~matures on June 30, 2023. In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”) totaling $~~3.562~~65 ~~million~~thousand which will be added and capitalized to the principal amount of the ~~original loan~~term loan.
On April 14, 2022, the Board of Directors of the Company and the ~~original loan terms apply. In addition,~~Compensation Committee of the ~~Company has issued~~Board adopted and approved the 2022 Bright Mountain Media Stock Option Plan (the “Stock Option Plan”). The Stock Option Plan will be presented for stockholder approval at the Company’s 2022 Annual Meeting of Stockholders. The Stock Option Plan provides for the grants of awards to eligible employees, directors and consultants in the form of stock options. stock. The Stock Option Plan is the successor to the Company’s prior stock option plans and accordingly no new grants will be made under the prior plans from and after the date hereof. The Stock Option Plan is a term of ~~12.5~~10 ~~million~~years and authorizes the issuance of up to 22,500,000 shares of the Company’s common ~~shares to Centre Lane Partners as part of these transactions.~~stock.

On June 28, 2021 Bright Mountain Media, Inc (the “Company”) issued a press release that effective at the close of business on June 30, 2021, Bright Mountain Media, Inc’s., common stock (“BMTM”) ceased trading on the OTCQB and its shares began trading on the OTC Pink Market on July 1, 2021. The common stock will continue to trade with the symbol BMTM. Furthermore, on September 28, 2021, Bright Mountain Media, Inc. shares of common stock began trading on the Expert Market from the OTC Pink Sheets. The Company’s Common Stock will continue to be on the Expert Market until such time as14, 2022, the Company ~~has become current in its filings with the Securities and Exchange Commission at which point it will seek to have its shares restored~~signed a second lease addendum (“Second Addendum”) to the ~~OTC markets.~~lease for the Boca Raton headquarters office space with approximately 4,500 square feet. The new lease term is for five years beginning upon completion of improvements to the office space by the Landlord. For the interim period from signing of the Second Addendum to the completion of the improvements (estimated at approximately 2 months), the monthly rent will be $7,719. Thereafter, for the 1st year, the cash rent will be $11,893 per month. Rent increases yearly at 3% from years two through five.

~~On August 31, 2021, the Company’s Chairman of the Board, W. Kip Speyer, converted his preferred shares into common shares of the Company. In that transaction, he converted~~ ~~7,919,017~~ ~~preferred shares into~~ ~~7,919,017~~ ~~common shares of the Company. As of said date, the Company has an accrued dividend liability due to Mr. W. Kip Speyer recorded totaling $695,773~~.
2732
~~BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~
~~March 31, 2021~~
~~(Unaudited)~~
~~NOTE 16 – SUBSEQUENT EVENTS. (continued)~~
On September 22, 2021, the Company entered into a Share Issuance Settlement with Spartan Capital Securities, LLC (“Spartan”). Under the terms of the Agreement, the Company agreed to issue a total of ~~10,398,700~~ of its common stock (the “Shares”) to seventy-five accredited investors who participated in the Company’s Private Placement Offering, which began in November 2019 and was completed in August 2020 (the “Private Placement”). As previously disclosed, under the terms of Private Placement, if the Company did not file a listing application of its common stock on the NYSE American Exchange within an agreed time period after the Company had received at least $~~1,500,000~~ of net proceeds, contemplated by the Placement Agent Agreement (the “Listing Application Deadline”) and obtained listing approval from the NYSE American within a 120 days from the Listing Application Deadline the Company would issue to each Investor in such Offering an additional share of common stock provided that if the Listing was not obtained by Listing Approval Deadline, the Listing Approval Deadline would be extended for so long and to the extent that the Company could demonstrate to Spartan’s reasonable satisfaction that it has used and continuing to use good faith efforts to obtain Listing Approval. The Company believes it has acted in good faith, but in order to avoid protracted and expensive litigation as to whether the Company was obligated to issue the Shares to the private placement investors, and without admitting or denying that the Company had any such obligation, the Company has agreed to issue the Shares to the private placement investors as set forth above.
Effective December 1, 2021, the Company appointed Mr. Matthew Drinkwater as its new Chief Executive Officer (CEO). Mr. Drinkwater joins the Company with an extensive track record of adding value to the companies he has worked for over his professional career in several key senior executive and sales roles at companies such as buzzfeed, twitter, groupon inc., yahoo and america online (aol). Mr. W. Kip Speyer will remain with the Company in his role of Chairman of the Board and transition his CEO role to Mr. Drinkwater.
On December 3, 2021, the Company received formal notification that an event of default had occurred under the Closing Notes as part of the Oceanside acquisition that was later followed up with a notice of summons in a civil action on December 28, 2021 by the Oceanside selling shareholders. The Company is reviewing its obligations under the Notes.
~~During January 2022, the Company entered into a settlement agreement related to the legal proceeding from Note 11 with Synacor. The agreement obligates the Company to pay $12,000~~ ~~per month beginning January 24, 2022 for 12 consecutive months and then a final one-time payment in the amount of $40,000~~ ~~to be paid on or before January 24, 2023. Notwithstanding, the Company has an early settlement option to pay-off the obligation with a discount if it pays $160,000~~ ~~to Synacor on or before September 1, 2022, which amount shall be inclusive of the monthly installments previously mentioned prior to the date when early settlement payment is transmitted to Synacor.~~
~~On January 14, 2022, the Board of Directors nominated and elected Mr. Matthew Drinkwater, the Company’s Chief Executive Officer to the Board of Directors of the Company.~~
28
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion of our unaudited condensed consolidated financial condition and results of operations for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 should be read in conjunction with the unaudited condensed consolidated financial statements and the notes to those statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth later in this report under Part II, Item 1A. in Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, ~~2020~~2021 as filed with the Securities and Exchange Commission on ~~December 23, 2021~~June 13, 2022 (the “2020 Form 10-K”) and our other filings with the SEC. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements. All information in this section for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 is unaudited and derived from the unaudited condensed consolidated financial statements appearing elsewhere in this report; unless otherwise noted, all information for the year ended December 31, ~~2020~~2021 is derived from our audited consolidated financial statements appearing in the ~~2020 10-K.~~2021 Form 10-K as filed with the SEC on June 13, 2022.

Executive Overview of First Quarter ~~2021~~2022 Results

Our key user metrics and financial results for the first quarter of 2022, for the three months ended March 31, ~~2021,~~2022, are more fully discussed and described herein and should be read in context with the disclosure on this page. The first quarter results are as follows:

User metrics:

● Quarterly ad impressions delivered were approximately ~~1.2 billion in the first quarter of 2021 and approximately 1.5~~1.1 billion for the three months ended March 31, ~~2020;~~2022 and 2021.

First quarter ~~2021~~2022 financial results:

● Advertising revenue increased ~~5.7%~~44% in the three months ended March 31, ~~2021~~2022 from the same period of ~~2020;~~2021.

● Gross profit increased ~~131.0%~~71% in the three months ended March 31, ~~2021~~2022 from the same period of ~~2020;~~2021.

● Selling, general and administrative expenses ~~increased 19.5%~~decreased 9% in the three months ended March 31, ~~2021~~2022 from the same period of ~~2020;~~2021.

● Included within ~~the~~selling, general, and administrative expenses for the three months ended March 31, ~~2021~~2022 are ~~$396,266~~$396,267 of non-cash amortization of the intangible assets,~~, $88,155~~ and $48,428 of non-cash compensation expense related to issuance of BMTM shares to employees of Oceanside per the original acquisition agreement, $10,000 of stock compensation for a warrant exercise from Spartan Capital employee, and $68,294 of stock option basedstock-based compensation. Included within the expenses for the three months ended March 31, 2020 are $952,622 of non-cash amortization of the intangible assets, $442,500 of non-cash expenses associated with the equity raise, and $281,618 of acquisition related audit and consulting fees, and $36,595 of stock based compensation;

● Net cash used in operating activities was ~~$(222,093) for the first three months of 2021 as compared to $(1,369,272)~~($1,241,624) for the three months ~~of 2020.~~ended March 31, 2022 as compared to ($222,093) for the three months ended March 31, 2021.
33
Overview

Bright Mountain Media, Inc. is an end-to-end digital media and advertising services platform, efficiently connecting brands with targeted consumer demographics. Through the removal of middlemen in the advertising services process, Bright Mountain Media efficiently connects brands with targeted consumer demographics while maximizing revenue to publishers. Bright Mountain Media’s assets include the Bright Mountain, LLC ad network, MediaHouse (f/k/a NDN), Oceanside (f/k/a S&W Media), Wild Sky Media and 24 owned and/or managed websites.

We generate revenue sales of advertising services which generate revenue from advertisements (ad impressions) placed on our owned and managed sites, as well as from advertisements we place on partner websites, for which we earn a share of the revenue. We also generate advertising services revenue from facilitating the real-time buying and selling of advertisements at scale between networks of buyers, often called DSPs (Demand Side Platforms) and sellers, often called SSPs (Supply Side Platforms).

When fully developed Bright Mountain’s full suite of advertising solutions will include:

● The ability for advertisers to purchase advertising space on a variety of digital publications;

● Leading targeting technology, allowing advertisers to pinpoint their marketing efforts to reach geo-targeted, specific demographics across desktop, tablet, and mobile devices;

● The ability to handle any ad format, including video, display, and native advertisements;

● Ad serving and self-service features for publishers and advertisers; and

● Server-to-server integration with other advertiser and publisher platforms for extremely quick transactions and ad deployments.

Bright Mountain’s platform will be a marketplace for publishers and advertisers where they will be able to choose from various features to maximize their earning potential. Advertisers have the ability to directly target desired demographics on ~~publishers~~publishers’ sites through our platform. Publishers will be able to select a variety of ad units for their video, mobile, display and native advertisements, and have the ability to create their own unique ad formats.

We have begun expansion with the recent acquisition of Wild Sky Media. Wild Sky Media offers massive global reach through hyper-engaging content and multicultural audiences. This is achieved through their six websites focusing on parenting and lifestyle brands. The websites include Mom.com, Cafemom.com, LittleThings.com, mamaslatinas.com, revelist.com, and babynamewizard.com.

Key initiatives

Our growth strategy is based upon:

● completing and launching the Bright Mountain Media advertising solutions marketplace;

● expanding our sales revenues through organic growth;

● continuing to pursue acquisition candidates that are strategic to our business plan;

● evaluating expenses attributed to our non-strategic business lines; and

● continuing to automate our processes and reduce overhead where possible without impacting our customer ~~experience~~experience.

3034

Results of operations

Revenues, Cost of Revenue, ~~and~~ Gross Profit Margins, selling, general and administrative expenses, and other income (expense)

For the Three Months Ended March 31, For the Three Months Ended March 31,
2021 2020 Change % Change 2022 2021 Change % Change

Advertising revenues $ 2,399,720 $ 2,270,186 $ 129,534 5.7 % $ 3,459,164 $ 2,399,720 $ 1,059,444 44 %
Cost of revenue $ 1,366,843 $ 1,823,082 $ (456,239 ) (25.0 %)
Total cost of revenue $ 1,690,615 $ 1,366,843 $ 323,772 24 %
Gross Profit $ 1,032,877 $ 447,104 $ 585,773 131.0 % $ 1,768,549 $ 1,032,877 $ 735,672 71 %
Gross profit margin as a percentage of advertising revenues 43.0 % 19.7 % 51.1 % 43.0 %

~~Our advertising~~Advertising revenue for the ~~first quarter of 2021~~three months ended March 31, 2022 was ~~5.7%~~44% higher than the comparable period in ~~2020. Approximately $1,590,625 of~~2021. The main reason for the ~~2021~~increase was higher programmatic revenue ~~is attributable to the acquisition of~~at our Wild Sky Media which occurred on June 1, 2020. Our legacy revenues decreased approximately $1,461,091 due to decreased advertising spend in key industries due to the COVID-19 virus which affected our legacy businesses, as well as a negative impact from our MediaHouse operation since we restructured it at the end of 2020.and BMLLC businesses.

We incur costs of sales associated with the advertising revenue. These costs include revenue share payments to media providers and website publishers. Approximately $689,643 of the 2021 cost of revenue is attributable to the acquisition of Wild Sky Media which occurred on June 1, 2020 and is not in the comparable period ending March 31, 2020. As such, theOur gross profit margin ~~excluding Wild Sky,~~percentage increased 810 basis points (51.1% versus 43.0%) for the three months ended March 31, 2022 compared to the comparable prior period, ~~over period would have decreased~~mainly due to ~~16.3% versus 19.7% mainly driven by lower sales volume. The digital publishing~~higher margins in our programmatic business ~~has generally higher gross margins than~~due to the ~~Advertising Network business.~~increased use of our proprietary RTB exchange platform which eliminates the use of third parties and the increase of new clients with improved margins.
Selling, General and Administrative Expenses

For the Three Months Ended March 31, For the Three Months Ended March 31,
2021 2020 $ Change % Change 2022 2021 $ Change % Change

Selling, general and administrative expense $ 4,274,434 $ 3,575,850 $ 698,584 19.5 % $ 3,887,359 $ 4,274,434 $ (387,075 ) (9 )%
Selling, general and administrative as a percentage of total revenue 178.1 % 157.5 %
Selling, general and administrative expense as a percentage of total revenue 112.4 % 178.1 %

Selling, general and administrative costs ~~increased~~decreased approximately ~~$2,059,749~~$387,075, or (9%) for the three months ended March 31, 2022 compared to the same period in 2021, mainly due to ~~the operating activities of Wild Sky Media, which are not reflected~~reduced costs related to some reductions in the prior period expenses. The Company also has increased its expenses associated with amortization of intangibles of approximately $381,465 with the acquisition of Wild Sky Media, which closed on June 1, 2020.headcount throughout our operations, and professional fees.

Selling, general and administrative expenses are expected to increase as we execute our planned growth strategy of launching and operating the Bright Mountain Media ad exchange network which will include additional administrative support. Subject to the availability of additional working capital, the Company also intends to add ~~administrative~~ staff to its accounting department to improve controls over its accounting and reporting processes. As the Company expands the size of the accounting department, ~~the~~its use of consultants is expected to decrease.
Other income, net
For the Three Months Ended March 31,
2022 2021 $ Change % Change

Other income, net $ 1,953 $ 1,532,282 $ (1,530,329 ) (100 )%
Other income decreased approximately $1,530,329, or (100%) for the three months ended March 31, 2022 compared to the same period in 2021, mainly due to reduced PPP loan forgiveness by $865,195 and increased interest expense – related party of $804,129.
35
Non-GAAP financial measure

We report adjusted EBITDA as a supplemental measure to U.S. generally accepted accounting principles (“GAAP”). This measure is one of the primary metrics by which we evaluate the performance of our business, on which our internal budgets are based. We believe that investors have access to, and we are obligated to provide, the same set of tools that we use in analyzing our results. This non-GAAP measure should be considered in addition to results prepared in accordance with GAAP but should not be considered a substitute for or superior to GAAP results. We endeavor to compensate for the limitations of the non-GAAP measure presented by providing the comparable GAAP measure with equal or greater prominence and description of the reconciling items, including quantifying such items to derive the non-GAAP measure. We encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measure.

Our adjusted EBITDA is defined as operating income/loss excluding:

● non-cash stock option compensation expense;
● depreciation;
● equity raise expenses;
● professional fees;
● acquisition-related items consisting of amortization expense and impairment expense;
● interest; and
● amortization on debt discount.

We believe this measure is useful for analysts and investors as this measure allows a more meaningful year-to-year comparison of our performance. Moreover, our management uses this measure internally to evaluate the performance of our business as a whole. The above items are excluded from adjusted EBITDA measure because these items are non-cash in nature, and we believe that by excluding these items, adjusted EBITDA corresponds more closely to the cash operating income/loss generated from our business. Adjusted EBITDA has certain limitations in that it does not take into account the impact to our statement of operations and comprehensive loss of certain ~~expenses~~expenses.

The following is an unaudited reconciliation of net (loss) to adjusted net (loss) and Adjusted EBITDA for the periods presented:

For the Three Months Ended
March 31,

For the Three Months Ended March 31,

2021 2020 2022 2021

Net loss $ (1,709,275 ) $ (3,119,991 )
Net (loss) before tax $ (2,116,857 ) $ (1,709,275 )
plus:
Stock compensation expense 170,048 36,595 145,665 170,048
Depreciation expense 18,047 5,253 3,385 18,047
Amortization expense 396,266 928,199 396,266 396,266
Gain on debt forgiveness (1,706,735 ) -
Gain on forgiveness of PPP loan (841,540 ) (1,706,735 )
Professional fees 45,000 143,284 45,000
Amortization on debt discount 3,452 3,490 279,978 3,452
Bad debt 271,355 -
Capital raise expenses 261 -
Interest expense 260,995 13 260,995
Interest expense – related party 35,288 2,023 839,417 35,288
$ (2,486,914 ) $ (2,114,431 )
Adjusted EBITDA $ (878,773 ) $ (2,486,914 )

3236

Liquidity and capital resources

Liquidity is the ability of a company to generate sufficient cash to satisfy its needs for cash. The following table summarized total current assets, total current liabilities and working ~~capital~~ (deficit) at March 31, ~~2021~~2022 as compared to December 31, ~~2020.~~2021.

March 31,
2021 December 31,
2020
Total current assets $ 5,136,672 $ 8,120,422
Total current liabilities 14,170,051 16,058,220
Working capital $ (9,033,379 ) $ (7,937,798 )
~~The increase in cash is mainly a result of receipts of $1,137,140 from the proceeds of the 2~~^nd ~~tranche of PPP loans during the three months ended March 31, 2021. The decrease in our current assets is mostly reflective of decreases in accounts receivable and prepaid expenses.~~
March 31, 2022 December 31, 2021
Total current assets $ 4,162,496 $ 5,257,577
Total current liabilities 14,314,640 23,069,784
Net working deficit $ (10,152,144 ) $ (17,812,207 )

As we continue our efforts to grow our business, we expect that our monthly cash operating overhead will continue to increase as we add personnel, although at a lesser rate, and we are not able at this time to quantify the amount of this expected increase. InDuring 2021, we implemented policies and procedures around cash collections to prevent the aging of accounts receivables that ~~was~~we experienced in 2020. Cash collection efforts have been successful, and we feel that we have appropriately reserved for uncollectible amounts at March 31, ~~2021.~~2022.

During February and March 2021, the Company received ~~2 loan~~two loans with proceeds totaling $1,137,140 (the “PPP Loans”) under the 2^ndsecond tranche of the Paycheck Protection Program (the “PPP”). The PPP was established under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and is administered by the U.S. Small Business ~~Administration.~~Administration (“SBA”). The Second Bright Mountain and Second Wild Sky PPP ~~Loan is evinced~~Loans are evidenced by a promissory ~~note~~notes (the “Promissory ~~Note”~~Notes”) with Regions Bank and ~~has~~Holcomb Bank, respectively, and have a two-year term and ~~bears~~bear interest at a rate of 1.0% per annum. Monthly principal and interest payments are deferred for six months after the date of disbursement. The PPP Loans may be prepaid at any time prior to maturity with no prepayment penalties. The Promissory Note contains customary events of default provisions. Under the terms of the CARES Act, PPP ~~Loan~~loan recipients can apply for and be granted forgiveness for all or a portion of loans granted under the PPP. On March 23, 2022, the Company obtained PPP forgiveness for the second Wild Sky loan totaling $841,540. No assurance is provided that the Company will obtain forgiveness of the Second Bright Mountain PPP ~~Loan~~Loans in whole or in part.

During January through March 31, 2022, the Company received $1.4 million in debt financing from Centre Lane Partners. The use of the funds was for general working capital needs. During May 26, 2021 and December 31, 2021, the Company received $5.1 million in debt financing from Centre Lane Partners. The use of the funds was for general working capital needs.
Going concern ~~and management’s liquidity plans~~

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company’s management has evaluated whether there is substantial doubt about the Company’s ability to continue as a going concern and has determined that substantial doubt existed as of the date of the end of the period covered by this report. This determination was based on the following factors: (i) the Company ~~sustained a net loss~~used cash of ~~$1,709,275 and used net cash~~approximately $1.2 million in ~~operating activities of $222,093~~operations for the three months ended March 31, ~~2021. The~~2022; (ii) the Company’s available cash as of the date of this filing will not be sufficient to fund its anticipated level of operations for the next 12 months; (iii) the Company ~~had an accumulated deficit~~will require additional financing for the fiscal year ending December 31, 2022 to continue at its expected level of ~~$95,641,355 at March 31, 2021.~~operations; and (iv) if the Company fails to obtain the needed capital, it will be forced to delay, scale back, or eliminate some or all of its development activities or perhaps cease operations. In the opinion of management, these factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern as of the date of the end of the period covered by this report and for one year from the issuance of these consolidated financial statements.

The report of our independent registered public accounting firm on our audited consolidated financial statements at December 31, ~~2020~~2021 and ~~2019~~2020 and for the years then ended ~~contains~~contained an explanatory paragraph regarding substantial doubt of our ability to continue as a going concern based upon our net losses, cash used in operations and accumulated deficit. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. There are no assurances we will be successful into manage our ~~efforts~~working capital deficit, or to ~~generate revenues~~manage our cash versus liabilities, or ~~report profitable operations~~our ability to continue obtaining investment capital and loans from related parties and outside investors or to continue as a going concern, in which event investors would lose their entire investment in our company.

Our ability to fully implement the Bright Mountain Media Ad Exchange Network and maximize the value of our assets are dependent upon our ability to raise additional capital sufficient for our short-term and long-term growth plans. Historically, we have been dependent upon debt financing and equity capital raises to provide adequate funds to meet our working capital needs. During the three months ended March 31, ~~2021, we did not raise any debt or equity capital. During the three months ended March 31, 2020~~2022, we raised ~~$2,558,750 through the sale~~$1,400,000 of ~~our securities in one private placement.~~ debt financing (see Note 13 Related Parties for more information).
While we have engaged a placement agent to assist us in raising capital, the placement agent is acting on a best-efforts basis and there are no assurances we will be successful in raising additional capital during 2022 through the sale of our securities. Any delay in raising sufficient funds will delay the implementation of our business strategy and could adversely impact our ability to significantly increase our revenues in future periods. In addition, if we are unable to raise the necessary additional working capital, absent a significant increase in our revenues, most particularly from our advertising segment, of which there is no assurance, we will be unable to continue to grow our company and may be forced to reduce certain operating expenses to conserve our working capital.
37

Summary of cash flows

March 31,
For the three months ended March 31,

2021 2020 2022 2021
Net cash (used in) operating activities $ (222,093 ) $ (1,369,272 ) $ (1,241,624 ) $ (222,093 )
Net cash (used in) provided by investing activities $ (6,564 ) $ -
Net cash used in investing activities $ - $ (6,564 )
Net cash provided by financing activities $ 1,040,243 $ 1,682,282 $ 1,035,585 $ 1,040,243
During the three months ended March 31, 2022, the Company raised $1,400,000 of debt financing which was used primarily to fund our working capital. We used cash primarily to fund our net loss of $2,116,857.

During the three months ended March 31, 2021, we used cash primarily to fund our net loss of $1,709,275 for the period.
~~During the three months ended March 31, 2021 the Company received proceeds of $1,137,140 through the granting of the 2~~^nd ~~tranche of PPP loans from the US Government and paid dividends of $1,261.~~

Critical accounting policies

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses during the reported periods. The more critical accounting estimates include estimates related to revenue recognition and accounts receivable allowances. We also have other key accounting policies, which involve the use of estimates, judgments and assumptions that are significant to understanding our results, which are described in Note 1 to our unaudited condensed consolidated financial statements appearing elsewhere in this report.

Recent accounting pronouncements

The recent accounting standards that have been issued or proposed by the FASB or other standards-setting bodies as described in Note 13 appearing earlier in this report that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption.

All other newly issued accounting pronouncements, but not yet effective, have been deemed either immaterial or not applicable.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable for a smaller reporting company.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures. We maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under Securities Exchange Act of 1934 (the “Exchange Act”). In designing and evaluating our disclosure controls and procedures, our management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
38

Based on his evaluation as of the end of the period covered by this report, our Chief Financial Officer concluded that our disclosure controls and procedures were not effective such that the information relating to our company, required to be disclosed in our Securities and Exchange Commission reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and (ii) is accumulated and communicated to our management, including our Chief Executive Officer, to allow timely decisions regarding required disclosure as a result of continuing material weaknesses in our internal control over financial reporting as described in our Annual Report on Form 10-K for the year ended December 31, ~~2020.~~2021. A material weakness is a deficiency, or combination of deficiencies, that results in more than a remote likelihood that a material misstatement of annual or interim financial statements will not be prevented or detected.

We have implemented changes and will continue to monitor our internal control 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. We do not, however, expect that the material weaknesses in our disclosure controls will be remediated until such time as we have added to our accounting and administrative staff allowing improved internal control over financial reporting.

Changes in Internal Control over Financial Reporting. We ~~have begun~~continue to strategically ~~planning~~plan changes in our internal control over financial reporting ~~during~~through this fiscal quarter, Q1 ~~2021.~~2022.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None, except as previously disclosed.

ITEM 1A. RISK FACTORS.

We incorporate by reference the risk factors disclosed in Part I, Item 1A of our ~~2020~~2021 Form 10-K subject to the new or modified risk factors appearing below that should be read in conjunction with the risk factors disclosed in such Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

During the period from January 1, ~~2021~~2022 through March 31, ~~2021,~~2022, Bright Mountain Media, Inc. did not sell any ~~units of its~~equity securities.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

None.

ITEM 5. OTHER INFORMATION.

None.
39

ITEM 6. EXHIBITS.

No. Exhibit Description Form Date Filed Number Herewith

31.1 Rule 13a-14(a)/15d-14(a) certification of Principal Executive Officer Filed

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

32.1 Section 1350 certification of Principal Executive Officer and principal financial and accounting officer 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)

40

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.

~~February 7,~~June 30, 2022 By: /s/ Matthew Drinkwater

Matthew Drinkwater, Chief Executive Officer,
Principal Executive Officer

By: /s/ Edward A. Cabanas

Edward A. Cabanas, Chief Financial Officer, Principal
Financial and Accounting Officer
3841

	March 31, 2021			December 31, 2020
		*(unaudited)*
ASSETS
Current Assets
Cash and cash equivalents	$	1,547,632		$	736,046
Accounts receivable, net		2,743,547			6,430,253
Note receivable, net		20,368			13,910
Right of use asset		48,910			-
Prepaid expenses and other current assets		776,215			940,214
Total Current Assets		5,136,672			8,120,422

Property and equipment, net		101,767			113,250
Website acquisition assets, net		5,200			5,600
Intangible assets, net		7,257,851			7,653,717
Goodwill		19,645,468			19,645,468
Prepaid services/consulting agreements - long term		664,593			664,593
Right of use asset		-			72,598
Other assets		260,374			253,650
Total Assets	$	33,071,925		$	36,529,299

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Accounts payable	$	8,033,593		$	9,595,006
Accrued expenses		3,419,064			3,546,896
Accrued interest to related party		100,724			65,437
Premium finance loan payable		234,290			339,890
Deferred revenues		346,529			346,529
Long term debt, current portion		1,986,940			2,091,735
Operating lease liability, current portion		48,911			72,727
Total Current Liabilities		14,170,051			16,058,220

Long term debt to related parties, net		43,180			39,728
Long term debt		16,451,905			16,916,705
Total Liabilities		30,665,136			33,014,653
Commitments and Contingencies
Shareholders’ Equity
Convertible preferred stock, par value $0.01, 20,000,000 shares authorized
Series A-1, 2,000,000 shares designated, 1,200,000 shares issued and outstanding at March 31, 2021 and December 31, 2020		12,000			12,000
Series B-1, 6,000,000 shares designated, 0 shares issued and outstanding at March 31, 2021 and December 31, 2020		-			-
Series E, 2,500,000 shares designated, issued and outstanding at March 31, 2021 and December 31, 2020		25,000			25,000
Series F, 4,344,017 shares designated, issued and outstanding at March 31, 2021 and December 31, 2020		43,440			43,440
Convertible preferred stock
Common stock, par value $0.01, 324,000,000 shares authorized, 118,666,416 and 118,162,150 issued and 117,841,241 and 117,336,975 outstanding at March 31, 2021 and December 31, 2020, respectively		1,186,665			1,181,622
Treasury stock, at cost; 825,175 shares at March 31, 2021 and December 31, 2020		(219,837	)		(219,837	)
Additional paid-in capital		97,032,165			96,427,166
Accumulated deficit		(95,641,355	)		(93,932,080	)
Accumulated other comprehensive loss		(31,289	)		(22,665	)
Total shareholders’ equity		2,406,789			3,514,646
Total Liabilities and Shareholders’ Equity	$	33,071,925		$	36,529,299

	2021			2020
	For the Three Months Ended March 31,
	2021			2020

Revenues
Advertising	$	2,399,720		$	2,270,186

Cost of revenue
Advertising		1,366,843			1,823,082
Gross profit		1,032,877			447,104

Selling, general and administrative expenses		4,274,434			3,575,850

Loss from operations		(3,241,557	)		(3,128,746	)

Other income (expense)
Interest income		187			10,993
Gain on forgiveness of PPP loan		1,706,735			-
Other (expense)/income		121,830			(215	)
Interest expense		(261,182	)		-
Interest expense - related party		(35,288	)		(2,023	)
Total other income		1,532,282			8,755

Net loss before tax		(1,709,275	)		(3,119,991	)

Income tax benefit		0			89,210

Net loss		(1,709,275	)		(3,030,781	)

Preferred stock dividends
Preferred stock dividends Series A-1, Series E, and Series F preferred stock		(88,976	)		(118,252	)

Net loss attributable to common shareholders	$	(1,798,251	)	$	(3,149,033	)

Other comprehensive loss	$	(31,289	)	$	-

Comprehensive loss	$	(1,829,540	)	$	(3,149,033	)

Basic and diluted net loss per share	$	(0.02	)	$	(0.03	)
Weighted average shares outstanding - basic and diluted		118,979,833			106,098,560

	Shares		Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Loss			Equity
	Preferred Stock				Common Stock				Treasury Stock						Additional Paid-in			Accumulated			Accumulated Other Comprehensive			Total Stockholders’
	Shares		Amount		Shares		Amount		Shares			Amount			Capital			Deficit			Loss			Equity
Balance, December 31, 2020		8,044,017	$	80,440		118,162,150	$	1,181,622		(825,175	)	$	(219,837	)	$	96,427,166		$	(93,932,080	)	$	(22,665	)	$	3,514,646
Net loss		—		—		—		—		—			—			—			(1,709,275	)					(1,709,275	)
Series A-1, E and F preferred stock dividend		—		—		—		—		—			—			(88,978	)		—			—			(88,978	)
Stock option vesting expense																68,294									68,294
Issuance of common stock:
Issuance of common stock:Options exercise		—		—		100,000		1,000		—			—			12,900			—			—			13,900
Issuance of common stock:Warrants exercise						25,000		250								9,750									10,000
Adjustment from foreign currency translation, net																						(8,624	)		(8,624	)
Issuance of common stock: To Oceanside personnel as part of acquisition agreement		—		—		379,266		3,793		—			—			603,033			—			—			606,826
Balance, March 31, 2021 (unaudited)		8,044,017	$	80,440		118,666,416	$	1,186,665		(825,175	)	$	(219,837	)	$	97,032,165		$	(95,641,355	)	$	(31,289	)	$	2,406,789

	March 31,			December 31,
	2022			2021
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	575,281		$	781,320
Accounts receivable, net of allowance for doubtful accounts of $767,395 and $495,396, at March 31, 2022 and December 31, 2021, respectively		2,686,897			3,550,126
Note receivable, net		14,957			21,415
Prepaid expenses and other current assets		885,361			904,716
Total current assets		4,162,496			5,257,577

Property and equipment, net		58,587			65,122
Website acquisition assets, net		3,600			4,000
Intangible assets, net		5,668,668			6,064,535
Goodwill		19,645,468			19,645,468
Prepaid services/consulting agreements – long term		189,882			284,825
Other assets		242,565			242,686
Total assets	$	29,971,266		$	31,564,213
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities
Accounts payable	$	8,455,898		$	8,459,561
Accrued expenses		3,206,208			3,764,665
Accrued interest to related party		1,199,694			640,255
Premium finance loan payable		212,178			334,284
Deferred revenues		860,417			1,162,425
Long term debt, current portion		295,600			1,387,140
Long term debt to related parties, current portion, net		-			7,316,402
Other current liabilities		84,645			5,052

Total current liabilities		14,314,640			23,069,784

Long term debt to related parties, net		24,190,054			15,217,569
Total liabilities		38,504,694			38,287,353

Commitments and Contingencies		-

Shareholders’ deficit
Convertible preferred stock, par value $0.01, 20,000,000 shares authorized:
Series A-1, 2,000,000 shares designated, 0 shares issued and outstanding at March 31, 2022 and December 31, 2021		–			–
Series B-1, 6,000,000 shares designated, 0 shares issued and outstanding at March 31, 2022 and December 31, 2021		–			–
Series E, 2,500,000 shares designated, 125,000 shares issued and outstanding at March 31, 2022 and December 31, 2021; liquidation preference of ($0.40 per share)		1,250			1,250
Series F, 4,344,017 shares designated, 0 shares issued and outstanding at March 31, 2022 and December 31, 2021		–			–
Preferred stock value
Common stock, par value $0.01, 324,000,000 shares authorized, 149,984,636 and 149,810,383 issued and 149,159,461 and 148,985,208 outstanding at March 31, 2022 and December 31, 2021, respectively		1,499,847			1,498,104
Treasury stock, at cost; 825,175 shares at March 31, 2022 and December 31, 2021		(219,837	)		(219,837	)
Additional paid-in capital		98,433,692			98,128,947
Accumulated deficit		(108,260,922	)		(106,144,065	)
Accumulated other comprehensive income		12,542			12,461
Total shareholders’ deficit		(8,533,428	)		(6,723,140	)
Total liabilities and shareholders’ deficit	$	29,971,266		$	31,564,213

	Level 1:	Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
	Level 2:	Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active; and
	Level 3:	Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

	Level in Fair		March 31, 2022				December 31, 2021
	Value Hierarchy		Carrying Amount		Fair Value		Carrying Amount		Fair Value

PPP Loan		2	$	295,600	$	295,600	$	1,137,140	$	1,137,140
Long-term debt to related parties		3	$	28,216,564	$	28,216,564	$	26,414,064	$	26,414,064
Non-interest bearing BMLLC acquisition debt		2	$	-	$	-	$	250,000	$	250,000

Total long term debt at December 31, 2020	$	16,916,705
Reclassification ⁽¹⁾		(464,800	)
Total long term debt at March 31, 2021		16,451,905

Total long term debt to related parties at December 31, 2021	$	22,533,971
Addition: Related party debt ⁽²⁾		1,400,000
Decrease: Related party debt amortization ⁽³⁾		256,083
Total long term debt to related parties at March 31, 2022	$	24,190,054

	(1)	Related to reclassification of Bright Mountain PPP loan
	(2)	Centre Lane debt financing from January 1, 2022 through March 31, 2022
	(3)	Debt discount additions and debt discount amortization on related party financings for the three months ended March 31, 2022


Balance at December 31, 2020	$	16,916,705
Reclassification ⁽¹⁾		(464,800	)
Balance at March 31, 2021	$	16,451,905

	June 1, 2020
Tangible assets acquired
Cash & cash equivalents	$	1,651,509
Accounts receivable, net		2,887,282
Prepaid expense		484,885
Fixed assets, net		124,575
Other assets		321,374
Intangible assets acquired:
Tradename – Trademarks		2,360,300
IP/Technology		1,412,000
Customer relationships		4,563,000
Less: Liabilities assumed
Accounts payable		(922,153	)
Accrued expenses		(524,188	)
Other current liabilities		(235,503	)
Long term loan payable – PPP		(1,706,735	)
Less: Deferred tax liability		(247,577	)
Net assets acquired		10,168,769

Goodwill		9,973,136
Total purchase price	$	20,141,905

	Amount

Debt issued	$	16,416,905
Shares issued		3,725,000
Total consideration	$	20,141,905

	March 31, 2021		December 31, 2020		March 31, 2022		December 31, 2021
Prepaid insurance	$	237,748	$	386,206	$	300,423	$	427,461
Prepaid consulting service agreements – Spartan ⁽¹⁾		310,522		379,771		386,581		379,775
Prepaid software						127,025		-
Prepaid expenses – other		227,945		174,237		71,332		97,480
Prepaid expenses and other current assets	$	776,215	$	940,214	$	885,361	$	904,716

	Estimated Useful Life (Years)		March 31, 2021			December 31, 2020			Estimated Useful Life (Years)	March 31, 2022			December 31, 2021
Furniture and fixtures		3-5	$	79,918		$	80,844		3-5	$	40,665		$	38,728
Leasehold improvements		3		-			1,388
Computer equipment		3		220,170			176,641		3		123,880			176,624
Total property and equipment				300,088			258,873				164,545			215,352
Less: accumulated depreciation				(198,321	)		(145,623	)			(105,958	)		(150,230	)
Total property and equipment, net			$	101,767		$	113,250			$	58,587		$	65,122

	Useful Lives	March 31, 2021			December 31, 2020			Useful Lives	March 31, 2022			December 31, 2021
Trade name	5 years	$	3,749,600		$	3,749,600		5 years	$	3,749,600		$	3,749,600
Customer relationships	5 years		16,184,000			16,184,000		5 years		16,184,000			16,184,000
IP/Technology	5 years		7,223,000			7,223,000		5 years		7,223,000			7,223,000
Non-compete agreements	3-5 years		1,154,500			1,154,500		3-5 years		1,154,500			1,154,500
Total Intangible Assets		$	28,311,100		$	28,311,100			$	28,311,100		$	28,311,100
Less: accumulated amortization			(4,566,319	)		(4,170,454	)			(6,155,503	)		(5,759,636	)
Less: accumulated impairment loss			(16,486,929	)		(16,486,929	)			(16,486,929	)		(16,486,929	)
Intangible assets, net		$	7,257,851		$	7,653,717			$	5,668,668		$	6,064,535

(1)	The Company negotiates with its publishing partners regarding questionable traffic to arrive at traffic settlements.
(2)	Accrued legal settlement related to the Encoding legal matter. ~~Refer to~~See Note ~~11.~~10.
(3)	The Company has sold units of its securities to various investors in several private placements. As part of each private placement, the Company agreed to file a registration statement with the SEC to register the resale of the shares by the respective holder in order to permit the public resale; such filing deadlines ranged from 120 to 270 days following the closing date of the respective placement and the Company was liable to pay a penalty fee for failure to file the resale registration statement within the allotted timeframe.
(4)	Share issuance liability related to issuance of the Company’s common stock in connection with the Oceanside, MediaHouse and Wild Sky acquisitions and Oceanside employee share issuances.

		March 31, 2021
2021	$	1,660,706
2022		2,414,702
For the Twelve Months Ending:
2022 (remainder of the year)			$	110,158
2023		1,827,437		3,307,956
2024		1,629,493		2,450,545
2025		10,906,507		22,643,505
Total	$	18,438,845	$	28,512,164

	March 31, 2021		December 31, 2020
Assets
Operating lease right of use asset	$	48,910	$	72,598

Liabilities
Operating lease liability	$	48,911	$	72,727

	~~March 31, 2021~~
~~Weighted-average remaining lease term~~		~~0.58~~ ~~years~~
~~Weighted-average discount rate~~		~~5.50~~	%


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


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


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


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

	●	~~Dividends on the Series A-1 Preferred stock are cumulative and payable in cash;~~

	●	~~Dividends shall be payable monthly in arrears within fifteen (15) days after the end of the month.~~

	Shares (#)		Value
Shares issued to Oceanside employees per the acquisition agreement valued at $1.60		174,253	$	278,805
Total		174,253	$	278,805

	Shares (#)		Value
Options exercised by employees		100,000	$	13,900
Warrants exercised		25,000		10,000
Shares issued to Oceanside employees per the acquisition agreement valued at $1.60		379,266		606,826
Total		504,266	$	630,726

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Balance Outstanding, December 31, 2021		1,415,227		$	0.62		6.2	$	—
Granted		—			—		—		—
Exercised		—			—		—		—
Forfeited		—			—		—		—
Expired		(54,000	)		—		—		—
Balance Outstanding, March 31, 2022		1,361,227		$	0.62		6.2	$	—
Exercisable at March 31, 2022		678,364		$	0.73		3.5	$	—

		Options Outstanding
Range or Exercise Price		Number Outstanding		Weighted Average Exercise Price		Remaining Average Contractual Life (In Years)		Number Exercisable		Weighted Average Exercise Price
$	0.01 - 0.13		650,000	$	0.01		9.4		25,000	$	0.01
$	0.14 - 0.24		—		—		—		—		—
$	0.25 - 0.49		72,000		0.28		0.9		72,000		0.28
$	0.50 - 0.85		501,000		0.69		3.2		501,000		0.69
$	0.86 - 1.75		138,227		1.64		7.7		80,364		1.63

Total			1,361,227	$	0.44		6.5		678,364	$	0.73

	●	Advertising revenue increased ~~5.7%~~44% in the three months ended March 31, ~~2021~~2022 from the same period of ~~2020;~~2021.

	●	Gross profit increased ~~131.0%~~71% in the three months ended March 31, ~~2021~~2022 from the same period of ~~2020;~~2021.

	●	Selling, general and administrative expenses ~~increased 19.5%~~decreased 9% in the three months ended March 31, ~~2021~~2022 from the same period of ~~2020;~~2021.

	●	Included within ~~the~~selling, general, and administrative expenses for the three months ended March 31, ~~2021~~2022 are ~~$396,266~~$396,267 of non-cash amortization of the intangible assets,~~, $88,155~~ and $48,428 of non-cash compensation expense related to issuance of BMTM shares to employees of Oceanside per the original acquisition agreement, $10,000 of stock compensation for a warrant exercise from Spartan Capital employee, and $68,294 of stock option basedstock-based compensation. Included within the expenses for the three months ended March 31, 2020 are $952,622 of non-cash amortization of the intangible assets, $442,500 of non-cash expenses associated with the equity raise, and $281,618 of acquisition related audit and consulting fees, and $36,595 of stock based compensation;

	●	Net cash used in operating activities was ~~$(222,093) for the first three months of 2021 as compared to $(1,369,272)~~($1,241,624) for the three months ~~of 2020.~~ended March 31, 2022 as compared to ($222,093) for the three months ended March 31, 2021.

	●	The ability for advertisers to purchase advertising space on a variety of digital publications;

	●	Leading targeting technology, allowing advertisers to pinpoint their marketing efforts to reach geo-targeted, specific demographics across desktop, tablet, and mobile devices;

	●	The ability to handle any ad format, including video, display, and native advertisements;

	●	Ad serving and self-service features for publishers and advertisers; and

	●	Server-to-server integration with other advertiser and publisher platforms for extremely quick transactions and ad deployments.