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 ~~June~~September 30, 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

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 ~~August 10,~~November 11, 2022, there were 149,159,461shares of the issuer’s shares outstanding.

BRIGHT MOUNTAIN MEDIA, INC.

TABLE OF CONTENTS

		Page No.
	PART I - FINANCIAL INFORMATION

~~ITEM~~Item 1.	~~FINANCIAL STATEMENTS.~~Unaudited Condensed Consolidated Financial Statements:
	Condensed Consolidated Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021	4

~~ITEM 2.~~	~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.~~Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021	315

~~ITEM 3.~~	~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.~~Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Deficit for the Three and Nine Months Ended September 30, 2022 and 2021	366
	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	7
~~ITEM~~	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosure About Market Risk	38
Item 4.	~~CONTROLS AND PROCEDURES.~~Controls and Procedures	3639

	PART II - OTHER INFORMATION

~~ITEM~~Item 1.	~~LEGAL PROCEEDINGS.~~Legal Proceedings	3739
Item 1A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	Default Upon Securities	39
Item 4.	Mine Safety Disclosures	40
Item 5.	Other Information	40
Item 6.	Exhibits	40

~~ITEM 1A.~~	~~RISK FACTORS.~~Signatures	37

~~ITEM 2.~~	~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.~~	37

~~ITEM 3.~~	~~DEFAULTS UPON SENIOR SECURITIES.~~	37

~~ITEM 4.~~	~~MINE SAFETY DISCLOSURES.~~	37

~~ITEM 5.~~	~~OTHER INFORMATION.~~	37

~~ITEM 6.~~	~~EXHIBITS.~~	3841

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, 2021, as filed with the Securities and Exchange Commission on 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, ~~“second~~“third quarter of 2022” refers to the three months ended ~~June~~September 30, 2022, ~~“second~~“third quarter of 2021” refers to the three months ended ~~June~~September 30, 2021, and “2021” refers to the year ended December 31, 2021. The information which appears on our website at www.brightmountainmedia.com is not part of this report.

PART 1 – FINANCIAL INFORMATION

~~ITEM~~Item 1. ~~FINANCIAL STATEMENTS~~Financial Statements

BRIGHT MOUNTAIN MEDIA, INC. ~~AND SUBSIDIARIES~~

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share figures)

June 30, December 31,
2022 2021
(unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 417,188 $ 781,320
Accounts receivable, net of allowance for doubtful accounts of $718,318 and $495,396, at June 30, 2022 and December 31, 2021, respectively 3,490,699 3,550,126
Note receivable, net 15,476 21,415
Prepaid expenses and other current assets 766,007 904,716
Total current assets 4,689,370 5,257,577

Property and equipment, net 53,943 65,122
Website acquisition assets, net 3,200 4,000
Intangible assets, net 5,279,329 6,064,535
Goodwill 19,645,468 19,645,468
Prepaid services/consulting agreements – long term 104,939 284,825
Right-of-use asset 687,310 –
Other assets 237,181 242,686
Total assets $ 30,700,740 $ 31,564,213
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities
Accounts payable $ 8,521,440 $ 8,459,561
Accrued expenses 2,837,279 3,764,665
Accrued interest to related party 1,727,262 640,255
Premium finance loan payable 85,711 334,284
Deferred revenues 623,629 1,162,425
Long term debt, current portion – 1,387,140
Long term debt to related parties, current portion, net 3,632,192 7,316,402
Other current liabilities 70,468 5,052

Total current liabilities 17,497,981 23,069,784

Long term debt to related parties, net 22,186,784 15,217,569
Operating lease liability 691,340 –
Total liabilities 40,376,105 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 June 30, 2022 and December 31, 2021 – –
Series B-1, 6,000,000 shares designated, 0 shares issued and outstanding at June 30, 2022 and December 31, 2021 – –
Series E, 2,500,000 shares designated, 125,000 shares issued and outstanding at June 30, 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 June 30, 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 June 30, 2022 and December 31, 2021, respectively 1,499,846 1,498,103
Treasury stock, at cost; 825,175 shares at June 30, 2022 and December 31, 2021 (219,837 ) (219,837 )
Additional paid-in capital 98,462,565 98,128,948
Accumulated deficit (109,448,440 ) (106,144,065 )
Accumulated other comprehensive income 29,251 12,461
Total shareholders’ deficit (9,675,365 ) (6,723,140 )
Total liabilities and shareholders’ deficit $ 30,700,740 $ 31,564,213
September 30, December 31, ^*
2022 2021*
(unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 412 $ 781
Accounts receivable, net 3,904 3,550
Prepaid expenses and other current assets 769 926
Total Current Assets 5,085 5,257

Property and equipment, net 37 65
Intangible assets, net 4,896 6,069
Goodwill 19,645 19,645
Operating lease right-of-use asset 381 —
Other assets 240 528
Total Assets $ 30,284 $ 31,564
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued expenses $ 9,968 $ 10,967
Other liabilities 2,144 1,598
Interest payable – 10% Convertible Promissory Notes– related party 29 23
Interest payable – Centre Lane Senior Secured Credit Facility – related party 1,855 617
Deferred revenues 996 1,162
PPP Loan — 1,137
Note payable – BMLLC acquisition debt — 250
Note payable – Centre Lane Senior Secured Credit Facility – related party (current portion) 2,832 7,316
Total Current Liabilities 17,824 23,070

Note payable – Centre Lane Senior Secured Credit Facility – net of discount, related party 23,582 15,164
Note Payable – 10% Convertible Promissory Notes, net of discount, related party 64 54
Operating lease liability 333 —
Total liabilities 41,803 38,288

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, no shares issued or outstanding at September 30, 2022 and December 31, 2021 — —
Series B-1, 6,000,000 shares designated, no shares issued or outstanding at September 30, 2022 and December 31, 2021 — —
Series E, 2,500,000 shares designated, 125,000 shares issued and outstanding at September 30, 2022 and December 31, 2021; liquidation preference of $0.40 per share 1 1
Series F, 4,344,017 shares designated, no shares issued or outstanding at September 30, 2022 and December 31, 2021 — —
Convertible 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 September 30, 2022 and December 31, 2021, respectively 1,500 1,498
Treasury stock, at cost; 825,175 shares at September 30, 2022 and December 31, 2021 (220 ) (220 )
Additional paid-in capital 98,500 98,129
Accumulated deficit (111,366 ) (106,144 )
Accumulated other comprehensive income 66 12
Total shareholders’ deficit (11,519 ) (6,724 )
Total liabilities and shareholders’ deficit $ 30,284 $ 31,564
* Derived from audited condensed financial statements.

See accompanying notes to unaudited condensed consolidated financial statements
4

BRIGHT MOUNTAIN MEDIA, INC. ~~AND SUBSIDIARIES~~
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(unaudited)
(in thousands, except share and per share figures)

Three Months Ended Six Months Ended
June 30, 2022 June 30, 2021 June 30, 2022 June 30, 2021

Revenues
Advertising $ 5,716,779 $ 2,433,415 $ 9,175,943 $ 4,833,135

Cost of revenue
Advertising 2,899,290 1,476,108 4,589,905 2,842,951
Gross profit 2,817,489 957,307 4,586,038 1,990,184

Selling, general and administrative expenses 3,443,199 4,749,835 7,330,558 9,024,269

Loss from operations (625,710 ) (3,792,528 ) (2,744,520 ) (7,034,085 )

Other income (expense)
Gain on forgiveness of PPP loan 295,600 - 1,137,140 1,706,735
Other income (expense) 39,059 (82,357 ) 38,902 39,473
Interest expense (722 ) (75,211 ) (735 ) (336,206 )
Interest expense - related party (895,745 ) (539,215 ) (1,735,162 ) (574,503 )
Total other income (expense) (561,808 ) (696,783 ) (559,855 ) 835,499

Net loss before tax (1,187,518 ) (4,489,311 ) (3,304,375 ) (6,198,586 )
��
Income tax expense – – – –

Net loss (1,187,518 ) (4,489,311 ) (3,304,375 ) (6,198,586 )

Preferred stock dividends
Series A, Series E, and Series F preferred stock (1,247 ) (89,958 ) (2,480 ) (178,936 )

Net loss attributable to common shareholders $ (1,188,765 ) $ (4,579,269 ) $ (3,306,855 ) $ (6,377,522 )

Other comprehensive income (loss) $ 16,709 $ (82,324 ) $ 16,790 $ (113,613 )

Comprehensive loss $ (1,172,056 ) $ (4,661,593 ) $ (3,290,065 ) $ (6,491,135 )

Basic and diluted net loss per share $ (0.01 ) $ (0.04 ) $ (0.02 ) $ (0.05 )
Weighted average shares outstanding - basic and diluted 149,159,461 120,353,074 149,130,579 119,652,844

Three Months Ended Nine Months Ended
September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

Revenue $ 5,244 $ 3,805 $ 14,420 $ 8,638
Cost of revenue 3,098 1,708 7,726 4,568
Gross margin 2,146 2,097 6,694 4,070
General and administrative expenses 3,323 4,635 10,616 13,643
Loss from operations (1,177 ) (2,538 ) (3,922 ) (9,573 )
Financing income (expense)
Gain on forgiveness of PPP loan — 465 1,137 2,172
Other income (expense) 18 (54 ) 58 (15 )
Interest expense - Centre Lane Senior Secured Credit Facility- related party (744 ) (755 ) (2,468 ) (1,318 )
Interest expense - Convertible Promissory notes - related party (6 ) (6 ) (17 ) (17 )
Other interest expense (9 ) (1 ) (10 ) (336 )
Total financing income (expense) (741 ) (351 ) (1,300 ) 486
Net loss before income tax (1,918 ) (2,889 ) (5,222 ) (9,087 )
Income tax provision (benefit) — — — —
Net loss (1,918 ) (2,889 ) (5,222 ) (9,087 )

Dividends
Common stock deemed dividend — (212 ) — (212 )
Preferred stock dividends (1 ) (62 ) (3 ) (241 )

Net loss attributable to common shareholders $ (1,919 ) $ (3,163 ) $ (5,225 ) $ (9,540 )
Foreign currency translation 37 93 54 (21 )
Comprehensive loss $ (1,882 ) $ (3,070 ) $ (5,171 ) $ (9,561 )

Net loss per common share:
Basic and diluted $ (0.01 ) $ (0.03 ) $ (0.04 ) $ (0.08 )
Weighted average shares outstanding
Basic and diluted 149,159,461 125,744,703 149,140,312 121,718,466

See accompanying notes to unaudited condensed consolidated financial statements
5

BRIGHT MOUNTAIN MEDIA, ~~INC. AND SUBSIDIARIES~~INC
CONDENSED CONSOLIDATED STATEMENTS OF CHANGE IN SHAREHOLDERS’ (DEFICIT) EQUITY
For the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2022 and 2021
(unaudited)
(in thousands, except share figures)
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 $ 1,498,103 (825,175 ) $ (219,837 ) $ 98,128,948 $ (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 $ 1,499,846 (825,175 ) $ (219,837 ) $ 98,433,693 $ (108,260,922 ) $ 12,542 $ (8,533,428 )
Net loss — — — — — — — (1,187,518 ) — (1,187,518 )
Series E preferred stock dividend — — — — — — (1,247 ) — — (1,247 )
Stock option vesting expense — — — — — — 30,119 — — 30,119
Adjustment from foreign currency translation, net — — — — — — — — 16,709 16,709
Balance, June 30, 2022 (unaudited) 125,000 $ 1,250 149,984,636 $ 1,499,846 (825,175 ) $ (219,837 ) $ 98,462,565 $ (109,448,440 ) $ 29,251 $ (9,675,365 )

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
Beginning balance, value 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
Net loss - - (4,489,311 ) (4,489,311 )
Series A-1, E and F preferred stock dividend - - - (89,958 ) (89,958 )
Stock option vesting expense - - - 73,214 73,214
Issuance of common stock: -
To Centre Lane Partners as part of debt financing - - 3,150,000 31,500 - 2,465,556 2,497,056
Adjustment for currency translation - - - (82,324 ) (82,324 )
Balance, June 30, 2021 (unaudited) 8,044,017 $ 80,440 121,816,416 $ 1,218,165 (825,175 ) $ (219,837 ) $ 99,480,977 $ (100,130,666 ) $ (113,613 ) $ 315,466
Ending balance,
value
8,044,017 $ 80,440 121,816,416 $ 1,218,165 (825,175 ) $ (219,837 ) $ 99,480,977 $ (100,130,666 ) $ (113,613 ) $ 315,466

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 $ 1 149,810,383 $ 1,498 (825,175 ) $ (220 ) $ 98,129 $ (106,144 ) $ 12 $ (6,724 )
Net income (loss) — — — — — — — (2,117 ) — (2,117 )
Series E preferred stock dividend — — — — — — (1 ) — — (1 )
Stock option vesting expense — — — — — — 29 — — 29
Oceanside acquisition — — 174,253 2 — — 277 — — 279
Balance, March 31, 2022 125,000 $ 1 149,984,636 $ 1,500 (825,175 ) $ (220 ) $ 98,434 $ (108,261 ) $ 12 $ (8,534 )
Net income (loss) — — — — — — — (1,187 ) — (1,187 )
Series E preferred stock dividend — — — — — — (1 ) — — (1 )
Stock option vesting expense — — — — — — 30 — — 30
Foreign currency translation, net — — — — — — — — 17 17
Balance, June 30, 2022 125,000 $ 1 149,984,636 $ 1,500 (825,175 ) $ (220 ) $ 98,463 $ (109,448 ) $ 29 $ (9,675 )
Series E preferred stock dividend — — — — — — (1 ) — — (1 )
Stock option vesting expense — — — — — — 38 — — 38
Foreign currency translation, net — — — — — — — — 37 37
Net income (loss) — — — — — — — (1,918 ) — (1,918 )
Balance, September 30, 2022 125,000 $ 1 149,984,636 $ 1,500 (825,175 ) $ (220 ) $ 98,500 $ (111,366 ) $ 66 $ (11,519 )
Preferred Stock Common Stock Treasury Stock Additional Paid-in Accumulated Accumulated Other Comprehensive
Total Stockholders’
Equity

Shares Amount Shares Amount Shares Amount Capital Deficit Loss (Deficit)
Balance, December 31, 2020 8,044,017 $ 80 118,162,150 $ 1,182 (825,175 ) $ (220 ) $ 96,427 $ (93,932 ) $                    (23 ) $          3,514
Net income (loss) — — — — — — — (1,709 ) (1,709 )
Series A-1, E and F preferred stock dividend — — — — — — (89 ) — — (89 )
Stock option vesting expense — — — — — — 68 — — 68
Options exercise — — 100,000 1 — — 13 — — 14
Warrants exercise — — 25,000 — — — 10 — — 10
Foreign currency translation, net — — — — — — — — (9 ) (9 )
Oceanside acquisition — — 379,266 4 — — 603 — — 607
Balance, March 31, 2021 8,044,017 $ 80 118,666,416 $ 1,187 (825,175 ) $ (220 ) $ 97,032 $ (95,641 ) $ (32 ) $ 2,406
Net income (loss) — — — — — — — (4,489 ) — (4,489 )
Series A-1, E and F preferred stock dividend — — — — — — (90 ) — — (90 )
Stock option vesting expense — — — — — — 73 — — 73
Centre Lane Partners debt financing — — 3,150,000 31 — — 2,466 — — 2,497
Foreign currency translation, net — — — — — — — — (82 ) (82 )
Balance, June 30, 2021 8,044,017 $ 80 121,816,416 $ 1,218 (825,175 ) $ (220 ) $ 99,481 $ (100,130 ) $ (114 ) $ 315
Beginning balance 8,044,017 $ 80 121,816,416 $ 1,218 (825,175 ) $ (220 ) $ 99,481 $ (100,130 ) $ (114 ) $ 315
Net income (loss) — — — — — — — (2,889 ) — (2,889 )
Series A-1, E and F preferred stock dividend — — — — — — (62 ) — — (62 )
Stock option vesting expense — — — — — — 38 — — 38
Centre Lane Partners debt financing — — 2,000,000 20 — — 42 — — 62
Common stock deemed dividend — — 10,398,700 104 — — 108 (212 ) — -
Conversion of Preferred stocks (7,919,017 ) (79 ) 7,919,017 79 — — — — — -
Foreign currency translation, net — — — — — — — — 93 93
Balance, September 30, 2021 125,000 $ 1 142,134,133 $ 1,421 (825,175 ) $ (220 ) $ 99,607 $ (103,231 ) $ (21 ) $ (2,443 )
Ending balance 125,000 $ 1 142,134,133 $ 1,421 (825,175 ) $ (220 ) $ 99,607 $ (103,231 ) $ (21 ) $ (2,443 )

See accompanying notes to unaudited condensed consolidated financial statements
6

BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)

For the Six Months Ended June 30,
2022 2021
Cash flows from operating activities:
Net loss $ (3,304,375 ) $ (6,198,586 )
Adjustments to reconcile net loss to net cash used in operations:
Depreciation 11,853 34,534
Amortization of debt discount 613,155 145,444
Amortization 786,006 792,533
Stock option compensation expense 59,035 141,507
Stock compensation for Oceanside shares 116,744 606,826
Gain on forgiveness of PPP loan (1,137,140 ) (1,706,735 )
Write off doubtful accounts - (239,575 )
Warrant expense for services rendered - 10,000
Provision for (Recovery of) bad debt 222,279 (141,070 )
Changes in operating assets and liabilities:
Accounts receivable (146,062 ) 4,395,054
Prepaid expenses and other current assets 318,595 352,384
Other assets 5,505 (7,069 )
Right of use asset and lease liability 4,030 (129 )
Accounts payable 67,295 (807,053 )
Accrued expenses (765,736 ) 133,846
Accrued interest – related party 1,122,007 429,059
Deferred revenues (538,796 ) -
Net cash used in operating activities (2,565,605 ) (2,059,030 )

Cash flows from investing activities:
Purchase of property and equipment (3,824 ) (5,337 )
Net cash used in investing activities (3,824 ) (5,337 )

Cash flows from financing activities:
Payments of premium finance loan payable (248,573 ) (222,745 )
Proceeds from stock option exercises - 13,900
Dividend payments (2,069 ) 2,522
Principal payments received (funded) for notes receivable 5,939 (6,977 )
Proceeds from related party debt financing 2,700,000 1,500,000
Repayments of debt (250,000 ) -
Proceeds from PPP loan - 1,137,140
Net cash provided by financing activities 2,205,297 2,423,840

Net (decrease) increase in cash and cash equivalents (364,132 ) 359,473
Cash and cash equivalents at the beginning of period 781,320 736,046
Cash and cash equivalents at end of period $ 417,188 $ 1,095,519
2022 2021
For the Nine Months Ended September 30,
2022 2021
Cash flows from operating activities:
Net loss $ (5,222 ) $ (9,087 )
Adjustments to reconcile net loss to net cash used in operations:
Depreciation 24 46
Amortization of debt discount 923 384
Amortization of intangibles 1,173 1,189
Stock based compensation 97 179
Stock compensation for Oceanside shares
117

608

Gain on forgiveness of PPP loan (1,137 ) (2,172 )
Write off doubtful accounts — (293 )
Warrant expense for services rendered — 10
Provision for bad debt 87 82
Changes in operating assets and liabilities:
Accounts receivable (387 ) 2,807
Prepaid expenses and other current assets 423 636
Accounts payable and accrued expenses (1,024 ) (171 )
Other liabilities 661 (340 )
Interest payable – Centre Lane Senior Secured Credit Facility, related party 1,334 945
Interest payable – 10% Convertible Promissory note, related party 6 6
Deferred revenue (166 ) 463
Net cash used in operating activities (3,091 ) (4,708 )

Cash flows from investing activities:
Purchase of property and equipment — (3 )
Net cash used in investing activities — (3 )

Cash flows from financing activities:
Proceeds from stock option exercises 1 14
Preference dividend payments (3 ) 3
Principal payments received (funded) for notes receivable 20 (1 )
Proceeds from Centre Lane Senior Secured Credit Facility, related party 3,050 3,100
Payment of interest on Centre Lane Credit Facility (96 ) —
Repayments of BMLLC acquisition debt (250 ) —
Proceeds from PPP loan — 1,137
Net cash provided by financing activities 2,722 4,253

Net decrease in cash and cash equivalents (369 ) (458 )
Cash and cash equivalents at the beginning of period 781 736
Cash and cash equivalents at end of period $ 412 $ 278

See accompanying notes to unaudited condensed consolidated financial statements
7

BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
~~June 30, 2022~~
(unaudited)
For the Six Months Ended June 30,
2022 2021
Supplemental disclosure of cash flow information
Cash paid for Interest $ - $ -

Supplemental disclosure of non-cash investing and financing activities
Recognition of right-of-use asset and operating lease liability $ 691,340 $ -
Issuance of common shares to Oceanside to settle share liability $ 162,061 $ -
Issuance of common stock to Centre Lane for debt issuance $ - $ 2,497,056
(in thousands)
For the Nine Months Ended September 30,
2022 2021
Supplemental disclosure of cash flow information
Cash paid for Interest $ 96 $ —

Non-cash investing and financing activities
Recognition of right-of-use asset and operating lease liability $ 380 $ —
Issuance of common shares to Oceanside to settle share liability $ 162 $ —
Common stock deemed dividend $ — $ 212
Conversion of Preferred shares to Common shares $ — $ 790
Issuance of common stock to Centre Lane for debt issuance $ — $ 2,559

See accompanying notes to unaudited condensed consolidated financial statements
8

BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
(Unaudited)
NOTE 1 – ~~NATURE~~DESCRIPTION OF ~~OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~BUSINESS..

Organization and Nature of Operations

Bright Mountain Media, Inc. (the “Company” or “Bright Mountain” or “We”), is a ~~Florida corporation formed~~holding Company which focuses 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 formeddigital media and acquired the wholly owned subsidiary Slutzky & Winshman Ltd. (“S&W”) which then changed its name to Oceanside Media LLC (“Oceanside”). Further, on November 18, 2019, Bright Mountain, through its wholly owned subsidiary BMTM2, Inc., a Florida corporation, acquired News Distribution Network, Inc. (“NDN”), a Delaware company, which then changed its name to MediaHouse, Inc. (“MediaHouse”). On June 1, 2020, Bright Mountain acquired the wholly owned subsidiary CL Media Holdings, LLC D/B/A “Wild Sky Media” (“Wild Sky”). When used herein, the terms “BMTM, the “Company,” “we,” “us,” “our” or “Bright Mountain” refers to Bright Mountain Media, Inc. and its subsidiaries.
advertising services. The Company is engaged in ~~operating~~content creation and technology development that helps brands connect with, and market to, targeted audiences in high quality environments using a ~~proprietary, end-to-end digital media and advertising services platform designed~~variety of formats 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.reach customers.

Digital Media
Our digital publishing business focuses on developing content that attracts an audience and monetizes that audience through advertising. The current portfolio of owned and operated websites is focused on moms, parenting, families, and more broadly, women. The portfolio includes popular websites including Mom.com, Cafemom.com, LittleThings.com, and MamasLatinas.com. This demographic is highly sought after by brands and their advertising agencies.
Advertising Servicing
Our advertising technology business focuses on targeted ads to audiences on owned and operated sites as well as third party publishers in a cost-effective manner through the deployment of proprietary technologies. 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~~by eliminating industry “middlemen” and/or costly redundancy of services via our ad ~~exchange network.~~exchange. Our ~~aim~~goal 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~~delivery of digital advertisements ~~that reach specific target audiences based on what, where, when~~using an array of audience targeting tools and ~~how that specific target audience elects to access certain web and/or streaming~~advertising formats (display, audio, video, ~~content.~~CTV, in-app). Programmatic advertising relies on ~~computer~~artificial intelligence powered software programs ~~to use~~that leverage data and proprietary algorithms to ~~select which ads to buy and for what~~match the optimal selection of an ad with bid price offered by advertisers, while direct sales involve traditional ~~interpersonal contact~~insertion order-based, pre-selected sales between an ad ~~buyers~~buyer and an advertising sales ~~representative(s)~~executive.
The Company generates revenue through sales of advertising services which generate revenue from advertisements placed on the Company’s owned and managed sites, as well as from advertisements placed on partner websites, for which the Company earns a share of the revenue. Additionally, we also generate advertising services revenue from facilitating the real-time buying and selling of advertisements at scale between networks of buyers, known as DSPs (Demand Side Platforms) and sellers known as SSPs (Supply Side Platforms).
Application to OTC
On July 1, 2022, the Company filed an application with the Over-The-Counter (“OTC”) Markets Group Inc. for a review of its candidature to be upgraded to the OTCQB exchange from the OTC Expert market as the Company is now current with its SEC filing obligations. The application was approved on August 19, 2022.
Amendment to Centre Lane Senior Secured Credit Agreement

~~By selling advertisements on our current portfolio~~On July 8, 2022, the Company and its subsidiaries entered into its fifteenth amendment 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 ~~20 owned and operated websites and 13 CTV apps, coupled with acquisition or development of other niche web properties~~$350,000, in the ~~future, we are building depth~~aggregate. Centre Lane Partners has been determined to qualify as a related party as shares were issued to Centre Lane Partners as part of the transaction. A related party is a party that can exercise significant influence over the Company in ~~specific demographic verticals that allow us to package audiences into targeted consumer categories valued by advertisers.~~making financial and/or operating decisions.
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.
~~NOTE 2 -~~ ~~GOING CONCERN~~.
These condensed consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company’s management has evaluated whether there is substantial doubt about the Company’s ability to continue as a going concern and has determined that substantial doubt existed as of the date of the end of the period. This determination was based on the following factors: (i) The Company has sustained a net loss of $~~3,304,375~~ ~~for the six months ended June 30, 2022; (ii) used cash from operating activities of $2,565,605~~ ~~for the six months ended June 30, 2022; (iii) has an accumulated deficit of $109,448,440~~ at June 30, 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 the ability of the Company to continue as a going concern as of the date of the end of the period and for one year from the issuance of these condensed consolidated financial statements.

9

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.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
(Unaudited)
NOTE ~~3 –~~2 - 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 subsidiaries. All significant intercompany ~~accounts~~balances and transactions have been ~~eliminated.~~eliminated in consolidation. The accompanying unaudited financial statements for the three and ~~six~~nine months ended ~~June~~September 30, 2022, and 2021 have been prepared in accordance with ~~U.S.~~ generally accepted accounting principles in the United States of America (“GAAP”) ~~applicable to~~and in accordance with rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial ~~information and the requirements of Form 10-Q and Article 8 of Regulation S-X of the Securities Act of 1933.~~reporting. 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, 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, 2021, as filed with the SEC on June 13, 2022. The interim condensed consolidated financial statements should be read in conjunction with that report.

~~Prior Period Reclassification~~Going Concern and Liquidity
~~During~~Historically, the ~~June~~Company has incurred losses, which has resulted in an accumulated deficit of approximately $111.4 million as of September 30, 2022. Cash flows used in operating activities were $3.1 million and $4.7 million for the nine months ended September 30, 2022 ~~quarterly financial reporting close process,~~and 2021, respectively. As of September 30, 2022, the Company ~~identified an immaterial reclassification impacting~~had approximately a $12.7 million working capital deficit, inclusive of $412,000 in cash and cash equivalents to cover overhead expenses.
The Company’s ability to continue as a going concern is dependent on its ability to meet its liquidity needs through a combination of factors including but not limited to, cash and cash equivalents, working capital, the ~~three~~ongoing increase in revenue through increased sales and strategic capital raises. The ultimate success of these plans is not guaranteed.
In considering our forecast for the next twelve months ~~ended March 31, 2022. Specifically,~~and the ~~Company identified~~current cash and working capital as of the filing of this Form 10Q, such matters create a ~~reclassification of commissions from selling, general~~substantial doubt regarding the Company’s ability to meet our financial needs and ~~administrative expenses to cost of revenue on the~~continue as a going concern.
The accompanying condensed consolidated financial statements ~~of operations. This reclassification had no impact~~are prepared on a going concern basis and do not include any adjustments that might result from uncertainty about the ~~previously reported net loss for the three months ended March 31, 2022.~~Company’s ability to continue as a going concern.

~~Revenue Recognition~~
~~The Company recognizes revenue in accordance with Financial Accounting Standards Board (“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 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 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.
10
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 website visitors view or click the published website advertisements. Specific revenue recognition criteria for the advertising revenue stream is as follows:
● ~~Advertising revenues are generated by website visitors viewing or “clicking” on 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 recorded in our condensed consolidated financial statements.~~
~~Leases~~
~~The Company records leases in accordance with FASB ASC Topic 842,~~ ~~Leases~~ ~~(“ASC 842”).~~
The Company determines if an arrangement is a lease at inception. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease 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 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.

Foreign Currency
We translate the financial statements of our foreign subsidiaries, which have a functional currency in the respective country’s local currency, to U.S. dollars using month-end exchange rates for assets and liabilities and actual exchange rates for revenue, costs and expenses on the date of the transaction. Translation gains and losses are included within “general and administrative expense” on the condensed consolidated statements of operations. These gains and losses are immaterial to the financial statements.
1110

~~Cash and Cash Equivalents~~BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
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 JuneSeptember 30, 2022 ~~and December 31, 2021, the Company had $417,188~~ ~~and $781,320, respectively, in cash and cash equivalents.~~
(Unaudited)
Concentrations of Credit Risk

~~The Company maintains certain~~Financial instruments that potentially subject us to concentration of ~~its~~credit risk consist principally of cash ~~balances~~and cash equivalents and accounts receivable. We place our cash and cash equivalents with high credit-quality financial institutions. Such deposits may be in ~~various U.S. banks, which at times, may exceed~~excess of 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 three and six months ended June 30, 2022 and 2021, and the year ended December 31, 2021,~~To date, we have not ~~incurred material~~experienced any losses on ~~these uninsured accounts. The Company minimizes the concentration of credit risk associated with its~~our cash ~~by maintaining its~~and cash ~~with high quality federally insured financial institutions. The Company performs ongoing~~equivalents. We perform periodic evaluations of ~~its trade accounts receivable customers and generally does not require collateral.~~the relative credit standing of the financial institutions.

~~Fair Value~~We perform credit evaluations of ~~Financial Instruments~~our customers’ financial condition and ~~Fair Value Measurements~~
~~FASB ASC Topic 820,~~ ~~Fair Value Measurement and Disclosures~~ ~~(“ASC 820”) defines fair value as~~require no collateral from our customers. We maintain an allowance for doubtful accounts receivable based upon 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 useexpected collectability 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.accounts receivable balances.

The Company ~~measures its financial assets~~generates revenue through sales of advertising services which generate revenue from advertisements placed on the Company’s owned and ~~liabilities in accordance with GAAP. For certain~~managed sites, as well as from advertisements placed on partner websites, for which the Company earns a share of ~~our financial instruments, including cash,~~the revenue.
The follow table provides information about concentration that exceed 10% of revenue, accounts receivable and accounts payable ~~accrued expenses, and~~for 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:period.
SCHEDULE OF CUSTOMER CONCENTRATION RISK PERCENTAGE

Three Months Ended
September 30,

Nine Months Ended
September 30,

2022 2021 2022 2021

Revenue Concentration
Customers exceeding 10% of revenue 2 1 1 —
% of overall revenue
Customer 1 30.9 % 10.9 % 33.4 % — %
Customer 2 10.8 % — % — % — %
Total % of revenue 41.7 % 10.9 % 33.4 % — %

~~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, 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 carrying value for similar debt instruments.

September 30,
2022

December 31,
2021

Accounts Receivable Concentration
Customers exceeding 10% of receivable 2 2
% of accounts receivable 46.1 % 25.0 %

12

September 30,
2022

December 31,
2021

Accounts Payable Concentration
Vendors exceeding 10% of payable 1 1
% of accounts payable 11.9 % 11.2 %
~~Financial Disclosures about Fair Value of Financial Instruments~~
Cash and Cash Equivalents

The ~~tables below set forth information related~~Company considers all highly liquid investments with a maturity of three months or less, when acquired, to ~~the Company’s financial instruments (in thousands):~~
~~SCHEDULE OF FINANCIAL INSTRUMENTS~~
Level in Fair June 30, 2022 December 31, 2021

Value
Hierarchy

Carrying
Amount

Fair
Value

Carrying
Amount

Fair
Value

PPP Loan 2 $ - $ - $ 1,137,140 $ 1,137,140
Long-term debt to related parties, gross 3 $ 29,616,564 $ 29,616,564 $ 26,414,064 $ 26,414,064
Non-interest bearing BMLLC acquisition debt 2 $ - $ - $ 250,000 $ 250,000
be cash equivalents. The ~~following are the major categories of liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) as of June 30, 2022 and 2021:~~Company maintains its cash with various commercial banks.

~~Fair Value measurement using Level 3~~As of December 31, 2021, the Company exceeded the federally insured limits of $250,000 for interest and noninterest bearing deposits. The Company had cash balances with a single financial institution in excess of the FDIC insured limits by amounts of $0 and $190,000 as of September 30, 2022 and December 31, 2021, respectively. We monitor the financial condition of such institution and have not experienced any losses associated with these accounts.
~~SCHEDULE OF FAIR VALUE OF LIABILITIES ON RECURRING BASIS~~
Balance at December 31, 2020 $ 16,916,705
Reclassification ⁽¹⁾ (464,800 )
Balance at March 31, 2021 $ 16,451,905
Extinguishment ⁽²⁾ (16,451,905 )
Acquisition debt, Wild Sky, related party 17,376,834
Addition: Related party debt ⁽³⁾ 2,285,000
Addition: Related part debt ⁽⁴⁾ 80,000
Decrease: Related party debt amortization 328,922
Total Debt 19,741,834
Less: debt discount, related party⁽⁵⁾ (3,163,451 )
Less: current portion of long-term debt, related party (2,729,200 )
Balance at June 30, 2021 $ 13,849,183
Total long term debt to related parties at December 31, 2021 $ 22,533,971
Addition: Related party debt ⁽⁶⁾ 1,400,000
Decrease: Related party debt amortization ⁽⁷⁾ 256,083
Total long term debt to related parties at March 31, 2022 $ 24,190,054
Addition: Related party debt ⁽⁶⁾ 1,300,000
Decrease: Related party debt amortization ⁽⁷⁾ 328,922
Less: current portion of long-term debt, related party (3,632,192 )
Total long term debt to related parties at June 30, 2022 $ 22,186,784
~~(1)~~ ~~Related to reclassification of Bright Mountain PPP loan~~
~~(2)~~ ~~Centre Lane determined to be related party (See note 14) and applying FASB ASC Topic 470,~~ ~~Debt~~ ~~guidance~~
~~(3)~~ ~~Centre Lane debt financing on May 26, 2021~~
~~(4)~~ ~~Note payable to the Company’s Chairman of the Board~~
~~(5)~~ ~~Debt discount for Centre Lane debt and Note payable to the Company’s Chairman of the Board~~
~~(6)~~ ~~Centre Lane debt financing from January 1, 2022 through June 30, 2022~~
~~(7)~~ ~~Debt discount additions and debt discount amortization on related party financings for the three and six months ended June 30, 2022~~
Off-balance sheet arrangements

There are no off-balance sheet arrangements as of ~~June~~September 30, 2022 and December 31, 2021.

Reclassification
Reclassification of certain accounts has been made to previously reported amounts to conform to their treatment to the current period. Specifically, the Company identified a reclassification of commissions from general and administrative expenses to cost of revenue on the condensed consolidated statements of operations, reclassification between note receivable to prepaid expense and other current assets, website acquisition assets to intangible asset, as well as a reclassification between property and equipment and accumulated depreciation, accrued expenses to other liabilities on the condensed consolidated balance sheets. These reclassifications had no impact on the previously reported net loss for the three and nine months ended September 30, 2022 and 2021
Effective Accounting Pronouncements
In January 2017, the FASB issued Accounting Standards Update (“ASU”) No. 2017-04 (amended by ASU 2019-10), Intangibles – Goodwill and other (Topic 350): Simplifying the Test for Goodwill Impairment. which simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. The current guidance requires companies to calculate the implied fair value of goodwill in Step 2 by calculating the fair value of all assets (including any unrecognized intangible assets) and liabilities of the reporting unit and subtracting it from the fair value of the reporting unit previously calculated in Step 1. The amendments in this update modify the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. This update is effective beginning after December 15, 2021. We adopted this standard on January 1, 2022. The adoption of this standard did not have a material impact on our condensed consolidated financial statements for the period ended September 30, 2022.
1311

BRIGHT MOUNTAIN MEDIA, INC.
~~Accounts Receivable~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
(Unaudited)

~~Accounts receivable represent receivables from customers in~~In December 2019, the ~~ordinary course of business. These are recorded at invoice amount on~~FASB issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740) - Simplifying the ~~date revenue is recognized. Receivables are recorded net~~Accounting for Income Taxes. The ASU enhances and simplifies various aspects of the ~~allowance for doubtful accounts~~income tax accounting guidance in ASC 740, including requirements related to the ~~accompanying condensed consolidated balance sheets. The Company provides allowances for doubtful accounts for estimated losses resulting from the inability~~following: (1) hybrid tax regimes; (2) tax basis step-up in goodwill obtained in a transaction that is not a business combination; (3) separate financial statements of 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 mayentities 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~~tax; (4) intra-period tax allocation exception to the incremental approach; (5) ownership changes in investments; (6) interim-period accounting for enacted changes in tax law; and (7) year-to-date loss limitation in interim-period tax accounting. The amendments in ASU 2019-12 are ~~deducted from open invoices.~~effective for public business entities for fiscal years beginning after December 15, 2020, including interim periods therein. This update is effective beginning after December 15, 2021. We adopted this standard on January 1, 2022. The adoption of this standard did not have a material impact on our consolidated financial statements for the period ended September 30, 2022.

In January 2020, the FASB issued Accounting Standards Update (“ASU”) No. 2020-01, Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. The ~~policy~~amendments in this update clarify certain interactions between the guidance to account for ~~determining past due status~~certain equity securities. This update is ~~based~~effective beginning after December 15, 2021. We adopted this standard on January 1, 2022. The adoption of this standard did not have a material impact on our consolidated financial statements for the ~~contractual payment terms of each customer, which are generally net~~period ended September 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 June 30, 2022 and December 31, 2021, the Company has recorded an allowance for doubtful accounts of $~~718,318~~ ~~and $495,396, respectively.~~2022.

~~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 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.
As of June 30, 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 statements of operations and comprehensive loss. We have elected to account for forfeitures as they occur.
14
~~Advertising, Marketing and Promotion Costs~~
Advertising and marketing expenses are expensed as incurred and are included in selling, general and administrative expenses on the accompanying consolidated statements of operations and comprehensive loss. For the three months ended June 30, 2022 and 2021, advertising, marketing and promotion expense was $~~12,400~~ ~~and $16,087, respectively. For the six months ended June 30, 2022 and 2021, advertising, marketing and promotion expense was $18,109~~ ~~and $28,702, respectively.~~
~~Foreign currency translation~~
Assets and liabilities of the Company’s Israeli subsidiary are translated from 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’ activities the impact of the currency exchange is immaterial for the three and six months ended June 30, 2022 and 2021.
~~Income Taxes~~
~~The Company follows the provisions of FASB ASC Topic 740-10,~~ ~~Income Taxes – Overall~~ (“ASC 740-10”). When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. 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 and comprehensive loss.
As of June 30, 2022, tax years 2018 through 2021 remain open for Internal Revenue Service (“IRS”) audit. The Company has not received any notice of audit or 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~~ ~~41.7% of the revenues for the three months ended June 30, 2022. There was one customer who accounted for approximately~~ ~~34.9% of the revenues for the six months ended June 30, 2022. There was one customer who accounted for approximately~~ 12~~% of the revenues for the three months ended June 30, 2021. There was one customer who accounted for approximately~~ 12~~% of revenues for the six months ended June 30, 2021. No other customer was over 10% of revenues for the three and six months ended June 30, 2022 and 2021.~~
~~As of June 30, 2022, one customer accounted for more than~~ 10~~% of the accounts receivable balance, at~~ ~~30.9%. As of December 31, 2021, two customers accounted for more than~~ 10~~% of the accounts receivable balance, at~~ ~~13.1% and~~ ~~12.0%. As of June 30, 2022, one vendor accounted for more than~~ 10~~% of the accounts payable, at~~ ~~10.9%. As of December 31, 2021, one vendor accounted for more than~~ 10~~% of the accounts payable balance, at~~ ~~11.2~~%.
~~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.
15
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; however, the latter is insignificant.
Recent Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-13 (amended by ASU 2019-10), ~~“Financial~~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 Company’s consolidated financial statements.

In January 2017, the FASB issued ASU No. 2017-04 (amended by ASU 2019-10), “Intangibles – Goodwill and other (Topic 350): Simplifying the Test for Goodwill Impairment.” Which simplifies the test for goodwill impairment by removing the second step of the test. There is a one-step qualitative test and does not amend the optional qualitative assessment of goodwill impairment. The new standard is effective January 1, 2023 and is not expected to have a material impact on the Company’s consolidated financial statements.
In August 2020, the FASB issued ~~ASU~~Accounting Standards Update (“ASU”) No. 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 Company is currently evaluating the impact this guidance will have on the Company’s consolidated financial statements.

In ~~March 2020,~~October 2021, the FASB issued ~~ASU~~Accounting Standards Update (“ASU”) No. ~~2020-04, “Reference Rate Reform~~2021-08, Business Combinations (Topic ~~848)~~805): ~~Facilitation~~Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The amendments in this update require that an entity (acquirer) recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. For public business entities, the amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The amendments in this update should be applied prospectively to business combinations occurring on or after the effective date of the Effects of Reference Rate Reform on Financial Reporting” which provides optional expedient and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. In response to the concerns about structural risks of interbank offered rates (“IBORs”) and, particularly, the risk of cessationamendments. Early adoption of the ~~LIBOR, regulators~~amendments is permitted, including adoption in ~~several jurisdictions around~~an interim period. An entity that early adopts in an interim period should apply the ~~world have undertaken reference rate reform initiatives~~amendments (1) retrospectively to ~~identify alternative reference rates~~all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that ~~are more observable~~includes the interim period of early application and (2) prospectively to all business combinations that occur on or ~~transaction based and less susceptible to manipulation. This accounting standards update provides companies with optional guidance to ease~~after the ~~potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. This new guidance may be adopted by~~date of initial application. The Company is currently evaluating the ~~Company no later than December 1, 2022, with early adoption permitted. The potential adoption of~~impact this guidance ~~is not expected to~~will have ~~a material impact~~ on the Company’s consolidated financial statements.

1612

BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
(Unaudited)
NOTE 3 – ACCOUNTS RECEIVABLE
Accounts receivable, net consisted of the following (in thousands):
SCHEDULE OF ACCOUNTS RECEIVABLES
September 30, December 31,
2022 2021
Accounts receivable $ 4,406 $ 4,048
Unbilled receivables 67 —
Total 4,473 4,048
Less allowance for doubtful accounts (569 ) (498 )
Accounts receivable, net $ 3,904 $ 3,550
Bad debt expense included a recovery of $136,000 and an expense of $223,000 for the three months ended September 30, 2022, and 2021, respectively, and expenses of $87,000 and $82,000 for the nine months ended September 30, 2022, and 2021, respectively.
NOTE 4 – PREPAID COSTS AND ~~EXPENSES~~OTHER ASSETS.

~~At June 30, 2022 and December 31, 2021, respectively, prepaid~~Prepaid expenses and other ~~current~~ assets consisted of the ~~following:~~following (in thousands):
SCHEDULE OF PREPAID COSTS AND ~~EXPENSES~~OTHER ASSETS
June 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021
Prepaid insurance $ 177,286 $ 427,461 $ 49 $ 427
Prepaid consulting service agreements – Spartan ⁽¹⁾ 404,076 379,775 397 380
Prepaid software 153,509 - 208 —
Prepaid expenses – other 31,136 97,480
Prepaid expenses and other current assets $ 766,007 $ 904,716
Deposits 234 285
Other 121 362
Total prepaid costs and other assets 1,009 1,454
Less: Non-current other assets – Spartan ⁽¹⁾ (240 ) (528 )
Total Prepaid expenses and other current assets $ 769 $ 926

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

NOTE 5 – PROPERTY AND EQUIPMENT.

~~At June 30, 2022 and December 31, 2021, respectively, property~~Property and equipment consisted of the ~~following:~~following (in thousands):
SCHEDULE OF PROPERTY AND EQUIPMENT

Estimated
Useful Life (Years)
June 30, 2022 December 31, 2021
Estimated
Useful Life (Years)
September 30, 2022 December 31, 2021
Furniture and fixtures 3-5 $ 40,541 $ 38,728 3-5 $ 133 $ 39
Computer equipment 3 116,948 176,624 3 245 176
Total property and equipment 157,489 215,352
Total 378 215
Less: accumulated depreciation (103,546 ) (150,230 ) (341 ) (150 )
Total property and equipment, net $ 53,943 $ 65,122
Property and equipment, net $ 37 $ 65

Depreciation and amortization expense for the three months ended ~~June~~September 30, 2022, and 2021 was $~~8,468~~12,000 and $~~16,487~~12,000, respectively, and $24,000 and $46,000 for the nine months ended September 30, 2022, and 2021, respectively.

~~Depreciation expense for~~The amounts are included in general and administrative expenses in the ~~six months ended June 30, 2022 and 2021, was $11,853~~ ~~and $34,534, respectively.~~consolidated statements of operations.
~~NOTE 6 –~~ ~~WEBSITE ACQUISITION AND INTANGIBLE ASSETS~~.
~~At June 30, 2022 and December 31, 2021, respectively, website acquisitions, net consisted of the following:~~
~~SCHEDULE OF WEBSITE ACQUISITIONS, NET~~
June 30, 2022 December 31, 2021
Website acquisition assets $ 1,124,846 $ 1,124,846
Less: accumulated amortization (921,250 ) (920,450 )
Less: cumulative impairment loss (200,396 ) (200,396 )
Website Acquisition Assets, net $ 3,200 $ 4,000

1713

~~At June~~BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022 ~~and December 31, 2021, respectively,~~
(Unaudited)
NOTE 6 – INTANGIBLES ASSETS, NET
Website acquisitions, net consisted of the following (in thousands):
SCHEDULE OF WEBSITE ACQUISITIONS, NET
September 30, 2022 December 31, 2021
Website acquisition assets $ 1,124 $ 1,124
Less: accumulated amortization (921 ) (920 )
Less: cumulative impairment loss (200 ) (200 )
Website Acquisition Assets, net $ 3 $ 4
Other intangible assets, net consisted of the ~~following:~~following (in thousands):
SCHEDULE OF INTANGIBLE ASSETS
As of September 30, 2022 As of December 31, 2021
Useful Lives June 30, 2022 December 31, 2021 Weighted Average Useful Life (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount
Trade name 5 years $ 3,749,600 $ 3,749,600 2.0 $ 2,759 $ (1,499 ) $ 1,260 $ 2,759 $ (1,141 ) $ 1,618
IP/Technology 7.1 1,983 (863 ) 1,120 1,983 (753 ) 1,230
Customer relationships 5 years 16,184,000 16,184,000 2.2 6,680 (4,191 ) 2,489 6,680 (3,494 ) 3,186
IP/Technology 5 years 7,223,000 7,223,000
Non-compete agreements 3-5 years 1,154,500 1,154,500 0.4 402 (378 ) 24 402 (371 ) 31
Total Intangible Assets $ 28,311,100 $ 28,311,100
Less: accumulated amortization (6,544,842 ) (5,759,636 )
Less: accumulated impairment loss (16,486,929 ) (16,486,929 )
Intangible assets, net $ 5,279,329 $ 6,064,535
Total 3.4 $ 11,824 $ (6,931 ) $ 4,893 $ 11,824 $ (5,759 ) $ 6,065
September 30, 2022 December 31, 2021
Website $ 3 $ 4
Other intangibles 4,893 6,065 )
Total intangible, net $ 4,896 $ 6,069

Amortization expense for the three months ended ~~June~~September 30, 2022, and 2021 was approximately $~~389,739~~387,000 and $~~395,868~~396,000, respectively, related to both the website acquisition costs and the intangible assets. Amortization expense for the ~~six~~nine months ended ~~June~~September 30, 2022, and 2021 was approximately $~~786,006~~1.2 million and $~~792,533~~1.2, million, respectively, related to both the website acquisition costs and the intangible assets.

As of September 30, 2022, expected remaining amortization expense of intangible assets and website acquisition by fiscal year is as follows (in thousands):
SCHEDULE OF AMORTIZATION EXPENSE OF INTANGIBLE ASSETS AND WEBSITE ACQUISITION

Remainder of 2022 $ 385
2023 1,542
2024 1,542
2025 780
2026 147
Thereafter 497
Total expected amortization expense $ 4,893
14
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
(Unaudited)
NOTE 7 – GOODWILL

The following table represents the allocation of Goodwill as of September 30, 2022, and December 31, 2021 ~~and June 30, 2022:~~(in thousands):
SCHEDULE OF CHANGES GOODWILL

Owned &
Operated

Ad
Network
Total
Owned &
Operated

Ad
Exchange
Total
September 30, 2022 $ 9,725 $ 9,920 $ 19,645
December 31, 2021 $ 9,725,559 $ 9,919,909 $ 19,645,468 $ 9,725 $ 9,920 $ 19,645
June 30, 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. No triggering events were identified in the current period.

NOTE 8 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES.

~~At June 30, 2022~~Accounts payable and ~~December 31, 2021, respectively,~~ accrued expenses consisted of the ~~following:~~following, (in thousands):
SCHEDULE OF ACCOUNTS PAYABLE AND ACCRUED EXPENSES
June 30, 2022 December 31, 2021
Accrued salaries and benefits $ 986,103 $ 1,459,299
Accrued dividends 691,861 691,861
Accrued traffic settlement⁽¹⁾ 10,254 10,254
Accrued legal settlement⁽²⁾ 216,101 81,101
Accrued legal fees 139,786 182,537
Accrued other professional fees 219,136 592,421
Share issuance liability⁽⁴⁾ 27,012 189,067
Accrued warrant penalty⁽³⁾ 366,899 366,899
Accrued Value-Added Tax payable 47,545 -
Other accrued expenses 132,582 191,226
Total accrued expenses $ 2,837,279 $ 3,764,665
September 30, 2022 December 31, 2021
Accounts payable $ 7,680 $ 8,461
Accrued wages, commissions and bonus
573 1,459
Publisher cost
939 —
Professional fees 577 775
Other 199 272
Total accounts payable and accrued expenses $ 9,968 $ 10,967

~~(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. See Note 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.~~
18
NOTE 9 – ~~NOTES PAYABLE~~CENTRE LANE SENIOR SECURED CREDIT FACILITY

~~Long-term debt~~Effective June 1, 2020, the Company entered into a membership interest purchase agreement to ~~related parties~~acquire 100
% of Wild Sky Media, a subsidiary (the “Purchase Agreement”). To finance this acquisition, the Company obtained a first lien senior secured credit facility from Centre Lane Partners Master Credit Fund II, L.P. (“~~Center~~Centre Lane Partners”)~~, who sold~~ in the amount of $16.5 million, comprising $15.0 million of initial indebtedness, repayment of Wild Sky’s existing accounts receivable factoring facility of approximately $900,000 and approximately $500,000 of expenses.
Centre Lane Partners subsequently loaned the Company ~~the Wild Sky business in June 2020 has partnered and assisted the Company from a~~an additional $8.2 million to provide liquidity ~~perspective starting~~to fund operations beginning in April ~~2021.~~2021 (the “Credit Facility” as amended). This ~~relationship~~Credit Facility has been determined to qualify as a related ~~party.~~party transaction as shares were issued to Centre Lane Partners as part of the transaction. A related party is a party that can exercise significant influence over the Company in making financial and/or operating decisions.

~~Effective June 1, 2020,~~The note issued under 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~~Credit Facility bears interest at a rate of 6.0% per ~~annum. Per~~annum and matures June 30, 2025, with payments of 2.5% of outstanding principal beginning on June 30, 2023. The interest rate was increased to 10.0% at the ~~credit facility~~first amendment and 12% after the ninth amendment, in each case, with interest payable-in-kind (“PIK Interest”) in lieu of cash payment. See below for a summary of amendments to the ~~seller, our loan payments begin December 1, 2021.~~ Credit Facility.
There is no prepayment penalty associated with this ~~credit facility. Certain~~Credit Facility. However, certain future capital raises do require partial or full prepayments of the ~~credit facility.~~ Credit Facility.
Optional Prepayment
The ~~membership~~Company may at anytime, voluntarily prepay, in whole or in part a minimum of $250,000 of the outstanding principal of the loans, plus any accrued but unpaid interest ~~purchase~~on the aggregate principal amount of the loans being prepaid.
Repayment of Loans
The Company is required to repay in cash to Centre Lane Partners (i) commencing with the Fiscal Quarter ending on June 30, 2023, in consecutive quarterly installments to be paid on the last day of each Fiscal Quarter of the Company, an amount equal to 2.5% of the outstanding aggregate principal amount of the Loans (after giving effect to capitalized PIK Interest) and (ii) on the Maturity Date all outstanding Obligations (including, without limitation, all accrued and unpaid principal and interest on the principal amounts of the Loans (including any accrued but uncapitalized PIK Interest)) of the Loan Parties that are due and payable on such date.
During the three and nine months ended September 30, 2022, and 2021 the Company paid approximately $96,000 and $0 toward outstanding interest payable. There was no payment on the principal loan balance for the three or nine months ended September 30, 2022, and 2021.
Fees
Under the terms of the Credit Facility, the Company is also required to pay Centre Lane Partners a non-refundable annual administration fee equal to $35,000 for agency services provided under this Agreement. The Credit Facility provides that this fee shall be in all respects fully earned, due and paid-in-kind by the Company on the effective date (“Effective Date”) of the Credit Facility and on each anniversary of the Effective Date during the term of this Agreement by adding and capitalizing the full amount of such fee to the outstanding principal balance of the Loans. For the nine months ended September 30, 2022, the accumulated administrative fee was $105,000 and is included ~~a requirement~~in outstanding principal.
Default on Facility
The Credit Facility includes restrictive covenants that, among other things, require that the auditor’s opinion ofon the financial statements as of and for the year ended December 31, ~~2021~~2020, does not include a “going concern ~~opinion.~~qualification.” 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~~
15
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, ~~2025, with payments of 2.5% of outstanding principal beginning on June 30, 2023~~2022.
(Unaudited)

OnThe below table summarizes the loan balances and accrued interest for the periods ended September 30, 2022, and December 31, 2021, (in thousands):
SCHEDULE OF LOAN BALANCES AND ACCRUED INTEREST
September 30, 2022 December 31, 2021

Note payable – Centre Lane Senior Secured Credit Facility – net of discount, related party (Current Portion) $ 2,832 $ 7,316
Note payable – Centre Lane Senior Secured Credit Facility – net of discount, related party 23,582 15,164
Net principal 26,414 22,480
Add: debt discount 3,490 3,854
Outstanding principal $ 29,904 $ 26,334
The below table summarizes the movement in the outstanding principal from inception through September 30, 2022, (in thousands):
SCHEDULE OF OUTSTANDING PRINCIPAL FROM INCEPTION

September 30, 2022
Original loan $ 16,417
Add:
Additional draw 8,175
Exit and other fees 3,805
Interest capitalized 1,657
Total 13,637
Less: Payment (150 )
Outstanding principal $ 29,904
16
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
(Unaudited)
Amendments to Credit Facility
Commencing in April ~~26,~~ 2021, the Company and certain of its subsidiaries entered into ~~a First Amendment~~various amendments to ~~Amended and Restated~~the Senior Secured Credit Agreement ~~(the “First Amendment”). The Company and its subsidiaries are parties to a credit agreement between itself and~~with Centre Lane ~~Partners as Administrative Agent and Collateral Agent dated June 5, 2020 (the “Credit Agreement”). The Credit Agreement was amended~~Partners. As of September 30, 2022, there were 15 amendments 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~~.Facility.

Consistent with FASB ASC Topic 870 Debt, (“ASC 470”), the Company is required to perform an analysis of the change in each amendment to determine whether the change is a modification or an extinguishment of debt. Under a modification, no gain or loss is recorded, and a new effective interest rate is established based on the carrying value of the debt and revised cash flow. If the debt is extinguished, the old debt is derecognized and the new debt is recorded as fair value, which becomes the new carrying value. A gain or loss is recorded for the difference between the net carrying value or the original debt and the fair value of the new debt. Interest expense is recorded based on the effective interest rate of the new debt. A debt is considered extinguished if the present value of the new cash flows under the term of the new debt is at least 10% different from the present value of the remaining cash flows under the terms of the old debt.
On ~~May 26, 2021,~~July 8, 2022, the Company and certain of its subsidiaries entered into ~~a Second~~its fifteenth amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners Master Credit Fund II, L.P. (“~~the Second Amendment”~~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”). The Credit Agreement was amended to provide for an additional loan amount of $~~1.5~~350,000 ~~million,~~ in the aggregate. This term loan ~~shall be repaid by June 30, 2025, with payments of 2.5% of outstanding principal beginning~~matures on June 30, 2023. In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”) totaling $~~0.750~~18,000 ~~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.~~term loan.

~~On August 12, 2021,~~Based on external assessment performed on the amendment of the Credit Facility on July 8, 2022, the Company determined that it was a modification, and ~~certain of its subsidiaries entered into a Third amendment to~~did not recognize any gain.
The below table summarizes the ~~Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners (“~~amendments that were executed by 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~~since 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~~inception of the ~~transaction, there is an Exit Fee totaling $~~facility to September 30, 2022, (in thousands), except for share data:
~~0.250~~SCHEDULE OF AMENDMENTS EXECUTED SINCE INCEPTION OF FACILITY ~~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.~~
Amendment Number Amendment Date Additional Loan $’000 New Repayment Date New Interest Rate Exit Fee (B) Common Stock Issued Accounting Impact
1(A) April 26, 2021 $ - June 30, 2025 10 % $ - 150,000 Extinguishment
2 May 26, 2021 1,500 June 30, 2025 - % 750 3,000,000 Modification
3 August 12, 2021 500 June 30, 2025 - % 250 2,000,000 Modification
4 August 31, 2021 1,100 June 30, 2025 - % 550 - Modification
5 October 8, 2021 725 June 30, 2025 - % 363 - Extinguishment
6 November 5, 2021 800 June 30, 2025 - % 800 7,500,000 Modification
7 December 23, 2021 500 June 30, 2025 - % 500 - Modification
8 January 26, 2022 350 June 30, 2025 - % 350 - Modification
9 February 11, 2022 250 June 30, 2023 12 % 13 - Modification
10 March 11, 2022 300 June 30, 2023 - % 15 - Modification
11 March 25, 2022 500 June 30, 2023 - % 25 - Modification
12 April 15, 2022 450 June 30, 2023 - % 23 - Modification
13 May 10, 2022 500 June 30, 2023 - % 25 - Modification
14 June 10, 2022 350 June 30, 2023 - % 18 - Modification
15 July 8, 2022 350 June 30, 2023 - % 18 - Modification
$ 8,175 $ 3,700 12,650,000
(A) The Credit Facility 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. Additionally, the Company may issue up to $800,000 in dividends from the previous limit of $500,000 per annum.
(B) Added and capitalized to the principal amount of the original loan and the original loan terms apply.

1917

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 $BRIGHT MOUNTAIN MEDIA, INC.
~~1.1~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~million, in the aggregate.~~
~~This term loan shall be repaid by June~~September 30, ~~2025, with payments of 2.5% of outstanding principal beginning on June 30, 2023.~~2022 ~~In addition, and as part of the transaction, there is an 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.~~(Unaudited)

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 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 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.~~
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 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 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 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%
20
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 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 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.~~
On April 15, 2022, the Company and certain of its subsidiaries entered into a Twelfth amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners (“the Twelfth 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 $~~450,000, 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 totaling $22,500~~ ~~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.~~
On May 10, 2022, the Company and certain of its subsidiaries entered into a Thirteenth amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners (“the Thirteenth 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 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.~~
On June 10, 2022, the Company and certain of its subsidiaries entered into a Fourteenth amendment to the Amended and Restated Senior Secured Credit Agreement between itself and Centre Lane Partners (“the Fourteenth 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, 2023.~~ ~~In addition, and as part of the transaction, there is an Exit Fee totaling $17,500~~ 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. See Note 15 for amendments to the Amended and Restated Senior Secured Credit Agreement subsequent to June 30, 2022.
21
As ~~part~~ of ~~these transactions~~September 30, 2022, and ~~given that Centre Lane was determined to be a related party, an independent fair~~December 31,2021, the carrying value ~~analysis was performed by the Company and all related transactions were recorded accordingly. As~~ of the ~~First Amendment dated April 26, 2021, the Company evaluated the debt for extinguishment or debt modification under FASB ASC Topic 470-50,~~ ~~Debt – Modifications~~facility was $26.4 million 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~~$22.5 million, respectively, net of ~~the~~unamortized debt discount ~~including all applicable fees~~of $3.5 million and ~~stock issuances.~~$3.9 million, respectively. The ~~debt~~ discount ~~determined for the First Amendment totaled $2,363,986~~ ~~and~~ is being amortized over the remaining life of the ~~loan and is included in~~Senior Secured Credit facility using the effective 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 Tenth 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. For the Twelfth Amendment, which occurred on April 15, 2022, the Company determined it was a debt modification. The Twelfth Amendment provided the Company with debt financing of $450,000, an Exit fee of $22,500, and no common share issuance. The debt discount determined for the Twelfth Amendment totaled $36,002. For the Thirteenth Amendment, which occurred on May 10, 2022, the Company determined it was a debt modification. The Thirteenth 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 Thirteenth Amendment totaled $38,502. For the Fourteenth Amendment, which occurred on June 10, 2022, the Company determined it was a debt modification. The Fourteenth Amendment provided the Company with debt financing of $350,000, an Exit fee of $17,500, and no common share issuance. The debt discount determined for the Fourteenth Amendment totaled $31,002~~.method.

~~The accumulated gross debt discount as of June 30, 2022 and December 31, 2021 totaled $8,732,377~~ ~~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 and nine months ended ~~June~~September 30, 2022, and 2021 ~~was $~~consisted of the following (in thousands):
~~856,574~~SCHEDULE OF INTEREST EXPENSE ~~and $~~
September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
Three Months Ended Nine Months Ended
September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
Interest expense $ 433 $ 520 $ 1,555 $ 945
Amortization 311 235 913 373
Total interest expense $ 744 $ 755 $ 2,468 $ 1,318
~~360,903, respectively. Interest expense for note payable to related party for the six months ended June 30, 2022 and 2021 was $1,657,251~~ ~~and $360,903, respectively.~~

NOTE 10 – OCEANSIDE SHARE EXCHANGE LOAN
22

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.~~Oceanside. Pursuant to the terms of the Oceanside Merger Agreement, the Company issued 12,513,227 shares valued at $~~20,021,163~~20.0 million to owners and employees of Oceanside and contingent consideration of $750,000 paid through the delivery of unsecured, interest free, one and two-year promissory notes (the “Closing ~~Notes”~~Note(s)”).
At the time of the acquisition and under FASB ASC Topic 805, Business Combinations (“ASC 805”), these Closing Notes were recorded ratably as compensation expense into the statement of operations and comprehensive loss over the 24-month term and the Company recorded an accrued payable ~~is being recognized~~ over the same period.
As of August 15, 2020, the Company did not make payment on the ~~one year closing note~~one-year Closing Note and thereby defaulted on its obligation and the two-year ~~closing note~~Closing Note accelerated to become payable as of August 15, 2020. Upon default, the ~~closing notes~~Closing Notes accrue interest at a ~~1.5~~%1.5% per month rate, or 18%18% annual ~~rate.~~rate. As a result, ~~there was~~the Company recorded a total charge of $~~300,672~~301,000 ~~recorded~~ during the third quarter of 2020, ~~which was~~comprised of $250,000 ~~of compensation~~in Compensation expense and $~~50,672~~51,000 ~~of interest expense-related party.~~in Interest expense. The ~~total~~Company also established a reserve for the $750,000 ~~liability~~Closing Note principal balance which is ~~recorded~~included in ~~accrued expenses. Interest expense~~Litigation reserves.
On September 6, 2022, the Company’s Board of Directors approved a settlement with the Oceanside Shareholders providing for ~~note~~payment of $650,000 payable ~~to related party~~over a 50-month period commencing January 2023. The Company recognize a gain of approximately $286,000 which includes $100,000 for the ~~three months ended June 30, 2022 and 2021 was $33,657~~reduction in the settlement amount and $~~33,567~~186,000~~, respectively. Interest expense for note payable to related party for~~ representing interest that was previously accrued as of December 30, 2021. The amount is included in Litigation settlement in the ~~six months ended June~~condensed consolidated statement of operations.
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022 ~~and 2021 was $~~
(Unaudited)
~~66,945~~
NOTE 11 –.10% CONVERTIBLE PROMISSORY NOTES

During November 2018, the Company issued 10% ~~convertible promissory~~Convertible Promissory notes in the amount of $80,000 to ~~a related party,~~ the Chairman of the ~~Board.~~Board, a related party. The notes are unsecured and mature five years from issuance and isare 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~~80,000.

The principal balance of these notes payable was $80,000 at ~~June~~September 30, 2022 and December 31, 2021, and discounts recognized upon ~~respective~~these origination dates as a result of the beneficial conversion feature total $~~19,328~~16,000 and $~~26,271~~26,000, respectively. At ~~June~~September 30, 2022 and December 31, 2021, the total ~~convertible notes~~10% Convertible Promissory note payable ~~to related party net of discounts~~ was $~~60,672~~64,000 and $~~53,729~~54,000, net of discount, respectively.
Interest expense for the 10% Convertible Promissory note ~~payable to related party~~ was $~~2,023~~6,000 inclusive of interest of $2,000 and discount amortization was $~~3,491~~4,000 for the three months ended ~~June~~September 30, 2022, and ~~2021.~~2021, respectively. Interest expense for the 10% Convertible Promissory note ~~payable to related party~~ for the ~~six~~nine months ended ~~June~~September 30, 2022, and 2021 was $~~4,023~~17,000, inclusive of interest of $7,000 and discount amortization was $~~6,943~~10,000., respectively.

~~Long-term debt~~NOTE 12 – PAYCHECK PROTECTION PROGRAM

~~On February 17, 2021, under the~~The Paycheck Protection Program (“PPP”) was established by the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, administered by the Small Business Administration (“SBA”),. During 2020 to 2021, the Company and one of its subsidiaries. Wild Sky Media, entered into ~~a promissory note of $295,600~~ ~~with Regions Bank (the “Second Bright Mountain~~agreements to borrow funds under the PPP ~~Loan”) and has a~~ ~~two-year term and bears interest at a rate of~~ ~~1.0%~~ per annum. Monthly principal and interest payments are deferred for six months after the date of disbursement. The Second Bright Mountain PPP Loan may be prepaid at any time prior to maturity with no prepayment penalties. The Promissory Note contains customary events of default provisions.program. Under the terms of the CARES Act, PPP loan recipients ~~can~~could apply for and be granted forgiveness for all, or a portion of loans granted under the PPP. ~~This was the second tranche available under the~~
Bright Mountain PPP ~~program and was forgiven as of June 15, 2022 and the Company recorded a non-cash gain on the PPP forgiveness during the three months ended June 30, 2022.~~Loan

On ~~March 23, 2021, under~~April 24, 2020, 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 subsidiaryCompany entered into a promissory note of $~~841,540~~465,000 with ~~Holcomb~~Regions Bank (the ~~“Second Wild Sky~~“Bright Mountain PPP Loan”) ~~and has~~which had 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 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 second tranche available under the PPP 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, 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 term and bears interest at a rate of~~ ~~1.0%~~ per annum. Monthly principal and interest payments are deferred for six months after the date of disbursement. The 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 and on July 16, 2021, the Company obtained the forgiveness of the Bright Mountain PPP Loan in whole and recorded a non-cash gain of $465,000on the PPP forgiveness during the ~~year~~nine months ended ~~December 31,~~September 30, 2021.
Second Bright Mountain PPP Loan
On February 17, 2021, the Company entered into a promissory note of $296,000 with Regions Bank (the “Second Bright Mountain PPP Loan”) which had a two-year term and bears interest at a rate of 1.0% per annum. This was the second tranche available under the PPP program and was forgiven as of June 15, 2022, and the Company recorded a non-cash gain of $296,000 on the PPP forgiveness during the nine months ended September 30, 2022.
23
Wild Sky PPP Loan

Effective June 1, 2020, the Company acquired Wild Sky and assumed the $~~1,706,735~~1.7 million promissory note (the “Wild Sky PPP Loan”) with Holcomb Bank received ~~under the PPP. The Wild Sky PPP Loan has a~~ ~~two-year term and bears interest at a rate of~~ ~~1.0%~~ per annum. Monthly principal and interest payments are deferred for six months after the date of disbursement. The Wild Sky PPP Loan may be prepaid at any time prior to maturity with no prepayment penalties. The Wild Sky PPP Loan contains customary events of default provisions. Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of loans granted under the PPP. On January 22, 2021, the Company applied for the promissory note to be forgiven by the SBA in whole or in part and on March 29, 2021, the Company obtained the forgiveness of the Wild Sky PPP Loan in whole and recorded a non-cash gain of $1.7 million on the PPP forgiveness during the ~~three~~nine months ended ~~March 31,~~September 30, 2021.

~~At June 30, 2022 and December 31, 2021, a summary of the Company’s debt is as follows:~~Second Wild Sky PPP Loan
~~SCHEDULE OF LONG-TERM DEBT~~
June 30, 2022 December 31, 2021
Non-interest bearing BMLLC acquisition debt $ - $ 250,000
PPP loans - 1,137,140
Wild Sky acquisition debt 18,181,564 18,146,564
Centre Lane debt 11,355,000 8,187,500
Note payable debt to the Company’s Chairman of the Board 80,000 80,000
Total Debt 29,616,564 27,801,204
Less: debt discount, related party (3,797,588 ) (3,880,093 )
Less: current portion of long-term debt - (1,387,140 )
Less: current portion of long-term debt, related party (3,632,192 ) (7,316,402 )
Long term debt to related parties, net and long term debt $ 22,186,784 $ 15,217,569
~~Interest expense was $895,745~~ ~~and $539,216~~ ~~for the three months ended June 30, 2022 and 2021, respectively. Interest expense was $1,735,162~~ ~~and $574,504~~ ~~for the six months ended June 30, 2022 and 2021, respectively.~~
~~The minimum annual principal payments of notes payable at June 30, 2022 were:~~
~~SCHEDULE OF MATURITIES OF LONG-TERM OBLIGATION~~
For the Twelve Months Ending:
2022 (remainder of the year) $ -
2023 4,527,348
2024 2,416,395
2025 22,672,821
Total $ 29,616,564
~~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.~~ ~~Coverages financed include Directors and Officers and Errors and Omissions with premiums financed in~~On March 23, 2021, ~~and 2020~~Wild Sky entered into a promissory note of $~~406,522~~841,000 with Holcomb Bank (the “Second Wild Sky PPP Loan”) which had a two-year term and bears interest at a rate of 1.0% per annum. This was the second tranche available under the PPP program and was forgiven as of March 23, 2022, and the Company recorded a non-cash gain of $~~380,397~~841,000~~, respectively.~~ on the PPP forgiveness during the nine months ended September 30, 2022.

~~Total Premium Finance Loan Payable balance for the Company’s policies was $85,711~~ ~~at June 30, 2022 and $334,284~~ ~~at December 31, 2021.~~
2419

BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
(Unaudited)
NOTE 13 – REVENUE RECOGNITION
The following table represents our revenues disaggregated by type (in thousands):
SCHEDULE OF REVENUES DISAGGREGATION

Three Months Ended Nine Months Ended
September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

Revenue:
Digital media $ 2,464 $ 2,768 $ 6,407 $ 5,828
Advertising services 2,780 1,037 8,013 2,810
Total revenues $ 5,244 $ 3,805 $ 14,420 $ 8,638
Geographic Information
Revenue by geographical region consist of the following (in thousands):
SCHEDULE OF REVENUE BY GEOGRAPHICAL REGION INFORMATION

Three Months Ended Nine Months Ended
September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

Revenue:
Unites States $ 4,902 $ 3,372 $ 13,375 $ 7,536
Israel 342 433 1,045 1,102
Total revenue $ 5,244 $ 3,805 $ 14,420 $ 8,638
Revenue by geography is generally based on the country of the Company’s contracting entity. Total United States revenue was approximately 93% of total revenue for the three and nine months ended September 30, 2022, respectively, and 89% and 87% for the three and nine months ended September 30, 2021, respectively.
As of September 30, 2022, and December 31, 2021, approximately 100% of our long-lived assets were attributable to operations in the United States. Long-lived assets include websites and other intangibles assets that are utilized in overall revenue generation.
Deferred Revenue
The movement in deferred revenue during the nine months ended September 30, 2022, and the year ended December 31, 2021, comprised the following (in thousands):
SCHEDULE OF DEFERRED REVENUE
September 30, 2022 December 31, 2021
Deferred revenue at start of the period $ 1,162 $ 347
Amounts invoiced during the period 433 1,059
Less: revenue recognized during the period (599 ) (244 )
Deferred revenue at end of the period $ 996 $ 1,162
20
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
(Unaudited)
NOTE 14 – STOCK BASED COMPENSATION
On April 14, 2022, the Board of Directors of the Company and the Compensation Committee of the Board adopted and approved the 2022 Bright Mountain Media Stock Option Plan (the “Stock Option Plan”). The Stock Option Plan provides for the grant of awards to eligible employees, directors and consultants in the form of stock options. The purpose of the Stock Option Plan is to provide an incentive to attract and retain directors, officers, consultants, advisors and employees whose services are considered valuable, to encourage a sense of proprietorship and to stimulate an active interest of such persons into our development and financial success. The Stock Option Plan is the successor to the Company’s prior stock option plans (2011, 2013, 2015, and 2019 Plans) and accordingly no new grants will be made under the prior plans from and after the date hereof. The Stock Option Plan has a term of 10 years and authorizes the issuance of up to 22,500,000 shares of the Company’s common stock. As of September 30, 2022, 16,524,340 shares were remaining under the 2022 Plan for the future issuance.
Options
As of September 30, 2022, options to purchase 5,975,660 shares of common stock were outstanding under the Stock Option Plan at a weighted average exercise price of $0.31 per share.
Compensation expense recorded in connection with the Stock Option Plan was $38,000 and $100,000 for the three months ended September 30, 2022, and 2021, respectively and $97,000 and $179,000 for the nine months ended September 30, 2022, and 2021, respectively. These amounts have been recognized as a component of general and administrative expenses in the accompanying condensed consolidated financial statements.
The following table presents the activity of the Company’s outstanding stock options of common stock for the nine months ended September 30, 2022:
SCHEDULE OF STOCK OPTION ACTIVITY
Common Stock Options
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 5,070,433 0.01 9.6 —
Exercised (100,000 ) — — —
Forfeited (338,000 ) — — —
Expired (72,000 ) — — —
Balance Outstanding, September 30, 2022 5,975,660 $ 0.31 7.9 $ —
Exercisable at September 30, 2022 642,864 $ 0.75 3.1 $ —
Unvested at September 30, 2022 5,332,796 $ 0.04 2.1 $ —
The intrinsic value of the options exercised during the nine months ended September 30, 2022, and 2021 was $0.
Summarized information with respect to options outstanding under the stock option plans at September 30, 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 5,062,433 $ 0.01 9.6 12,500 $ 0.01
$ 0.14 – 0.24 225,000 0.20 9.88 — —
$ 0.25 – 0.49 54,000 0.28 0.7 54,000 0.28
$ 0.50 – 0.85 501,000 0.69 2.7 501,000 0.69
$ 0.86 – 1.75 133,227 1.64 7.2 75,364 1.63

Total 5,975,660 $ 0.11 8.9 642,864 $ 0.75
As of September 30, 2022, there were total unrecognized compensation costs related to non-vested share-based compensation arrangements of $146,000 to be recognized through May 2026.
The following table provides the weighted average assumptions used in determining the fair value of the stock-based awards for the nine months ended September 30, 2022, and 2021:
SCHEDULE OF STOCK OPTIONS WEIGHTED AVERAGE ASSUMPTIONS

September 30,
2022

September 30,
2021

Expected Term (years) 6.25 6.25
Expected volatility 96% - 104 % 94% - 96 %
Risk -free interest rate 2.73% - 2.93 % 0.67 %
Dividend yield 0 % 0 %
Expected forfeiture rate 0 % 0 %
21
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
(Unaudited)
NOTE 15 – FAIR VALUE MEASUREMENTS
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).
The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
Level 1: Valuation is based on unadjusted quoted prices in active markets for identical assets and liabilities that are accessible at the reporting date. Because valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.
Level 2: Valuation is determined from pricing inputs that are other than quoted prices in active markets that are either directly or indirectly observable as of the reporting date. Observable inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and interest rates and yield curves that are observable at commonly quoted intervals.
Level 3: Valuation is based on inputs that are both significant to the fair value measurement and unobservable. Level 3 inputs include situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value generally require significant management judgment or estimation.
Fair Value Considerations
Financial instruments recognized in the condensed consolidated balance sheets consist of cash, accounts receivable, other liabilities and accounts payable. The Company believes that the carrying value of its current financial instruments approximates their fair value due to the short-term nature of these instruments. The carrying value of the Centre Lane Senior Secured Credit Facility and the 10% Convertible Promissory Note approximates the fair value due to their nature and level of risk.
NOTE 16 – COMMITMENTS AND CONTINGENCIES.
Lease Agreements
The Company accounts for its operating lease under FASB ASC Topic 842, Leases (“ASC 842”), which requires lessees to recognize on the balance sheet at lease commencement, the lease assets and the related lease liabilities for the rights and obligations created by operating and finance leases with lease terms of more than 12 months.

The Company leases its corporate offices ~~at 6400 Congress Avenue, Suite 2050, Boca Raton, Florida 33487~~ under a long-term non-cancellable operating lease agreement that expired on October 31, ~~2021~~.2021. On June 14, 2022, the Company signed a second lease addendum (“Second Addendum”) to the lease ~~for the Boca Raton headquarters office space~~ with ~~approximately~~ ~~4,500~~ ~~square feet. The new~~a lease term is for five years beginning upon completion of improvements to the office space by the ~~Landlord. For the interim period from signing~~Landlord, which was completed on September 12, 2022. The annual base rent is $96,000, with a provision for a 3% increase on each anniversary of the ~~Second Addendum to the completion of the improvements (estimated at approximately 2 months), the monthly~~ rent ~~will be $7,719~~commencement date. ~~Thereafter, for the 1st year, the cash rent will be $11,893~~ ~~per month.~~ ~~Rent increases yearly at 3% from years two through five.~~ The Company has the option to renew the lease for one additional ~~five year~~five-year term.

~~The right-of-use~~At September 30, 2022, the operating lease liability was $381,000 and is included under liabilities on the condensed consolidated balance sheet.
At September 30, 2022, the operating lease asset was $381,000 and is included under assets on the condensed consolidated balance sheet.
Over the lease term, the Company is required to amortize the operating lease asset and record interest expense on the lease liability ~~is as follows as~~created at lease commencement. Operating lease expense was approximately $6,000 for the three and nine months ended September 30, 2022. Rent expense prior to commencement of ~~June~~the lease was $3,000, net of landlord incentives and $95,000 for the three and nine months ended September 30, 2022, ~~and December 31, 2021:~~respectively.
~~SCHEDULE OF RIGHT OF USE ASSET AND LEASE LIABILITY~~
June 30, 2022 December 31, 2021
Assets
Operating lease right of use asset $ 687,310 $ -

Liabilities
Operating lease liability $ 691,340 $ -

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 and six months ended June 30, 2022 and 2021.~~
~~The maturity of the Company’s operating lease liability at June 30, 2022:~~
~~SCHEDULE OF MATURITY OPERATING LEASE LIABILITY~~

2022 (remainder of year) $ 19,570
2023 108,060
2024 112,680
2025 117,038
2026 122,346
Thereafter 758,010
Total undiscounted operating lease payments 1,237,704
Less: Imputed interest (546,364 )
Present value of operating lease liability $ 691,340
~~The following summarizes additional information related to the operating lease:~~
~~SCHEDULE OF ADDITIONAL INFORMATION RELATED TO OPERATING LEASE~~
~~June 30, 2022~~
~~Weighted-average remaining lease term~~ ~~10.1~~
~~Weighted-average discount rate~~ ~~11.6~~ %
~~For the three months ended June 30, 2022 and 2021, rent expense was $44,802~~ ~~and $53,588, respectively. For the six months ended June 30, 2022 and 2021, rent expense was $94,374~~ ~~and $102,020, respectively.~~
~~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.

2522

BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
(Unaudited)
Rent expense was $60,000 and $162,000 for the three and nine months ended September 30, 2021.
As of September 30, 2022, and December 31, 2021, the right-of-use asset and lease liability for the operating lease are summarized as follows (in thousands):
SCHEDULE OF RIGHT OF USE ASSET AND LEASE LIABILITY
September 30, 2022 December 31, 2021
Assets
Operating lease right-of-use asset $ 381 $       -

Liabilities
Operating lease liability, current $ 48 $ -
Operating lease liability, net of current portion 333 -
Total operating lease liability $ 381 $ -
Litigation
In accordance with applicable accounting guidance, the Company establishes an accrued liability for litigation and regulatory matters when those matters present loss contingencies that are both probable and estimable. In such cases, there may be exposure to loss in excess of any amounts accrued. When a loss contingency is not both probable and estimable, the Company does not establish an accrued liability. As a litigation or regulatory matter develops, the Company, in conjunction with any outside counsel handling the matter, evaluates on an ongoing basis whether such matter presents a loss contingency that is probable and estimable. If, at the time of evaluation, the loss contingency related to a litigation or regulatory matter is not both probable and estimable, the matter will continue to be monitored for further developments that would make such loss contingency both probable and estimable. When a loss contingency related to a litigation or regulatory matter is deemed to be both probable and estimable, the Company will establish an accrued liability with respect to such loss contingency and record a corresponding amount of litigation-related expense. The Company will then continue to monitor the matter for further developments that could affect the amount of any such accrued liability.
Synacor Litigation
In 2020, Synacor, Inc . (“Synacor”) commenced an action against MediaHouse, LLC, Inform, Inc. and the Company, alleging approximately $230,000was owed based on invoices ~~provided~~issued 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, 2021.~~ During January 2022, the Company entered into a settlement agreement related to the legal ~~proceeding~~proceedings with ~~Synacor.~~Synacor totaling $184,000. The agreement obligates the Company to pay $12,000per month beginning January 24, 2022, for 12 consecutive months and then a final one-time payment in the amount of $40,000to be paid on or before January 24, 2023. ~~Notwithstanding,~~The Company previously reserved approximately $245,000 towards this litigation, and following the settlement, the Company ~~has~~recognized an ~~early~~adjustment of $61,000 included in litigation settlement ~~option to pay-off~~on the ~~obligation~~condensed consolidated statements of operations.
At September 30, 2022, the Company paid $108,000 in connection with ~~a discount if it pays~~the Synacor settlement agreement , leaving an outstanding balance of $~~160,000~~76,000 ~~to Synacor~~. This amount is included in other liabilities on ~~or before~~the condensed consolidated balance sheet at 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.~~30, 2022.
MediaHouse Defamation

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~~
On August 2, 2022, the parties engaged in mediation, which resulted in a settlement of the lawsuit on August 4, 2022. The Company agreed to pay $62,500 over a 12-month period, with ~~this matter cannot be estimated~~the first payment commencing on September 8, 2022, and final payment due on August 1, 2023. Approximately $57,000 was outstanding at ~~this time.~~September 30, 2022. This amount is included in other liabilities on the condensed consolidated balance sheet.
23
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
(Unaudited)
Slutzky & Winshman – Default on Obligations

Bright Mountain has been sued by plaintiffs Joey Winshman, Eli Desatnik and Nadav Slutzy (“Plaintiffs”) in a lawsuit filed in the United States District Court for the Southern District of Florida on December 17, 2021 (the “Lawsuit”). Plaintiffs allege that ~~BMM~~Bright Mountain defaulted on its obligations to Plaintiffs under three promissory notes that arose from the merger between Bright Mountain Israel Acquisition Ltd., a wholly owned subsidiary of Bright Mountain, and Slutzky & Winshman Ltd. 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~~On September 6, 2022, the Company’s Board of Directors approved a ~~former digital media customer~~settlement of ~~MediaHouse. Encoding had~~$650,000 payable over a ~~long overdue outstanding receivable from MediaHouse’s predecessor company, Inform, Inc. MediaHouse did not assume~~50-month period commencing January 2023. See Note 10, Oceanside Share Exchange Loan for details of the ~~liability at acquisition. In 2020, the Company and Encoding agreed to settle the overdue receivable through the issuance of~~ settlement.
~~175,000~~ ~~warrants to purchase Company stock with a $~~
~~1.00~~Other Litigation ~~exercise price. This was recorded as an accrued liability as of December 31, 2020 and the warrants were issued in 2021.~~

~~Regardless of the outcome,~~Other litigation ~~can have an adverse impact on our company because of defense and settlement costs, diversion of management resources and other factors.~~is defined as smaller claims or litigations that are neither individually or collectively material. It does not include lawsuits that relate to collections.

The Company is party to various other legal proceedings that arise in the ordinary course of business, separate from normal course accounts receivable collections matters. Due to the inherent difficulty of predicting the outcome of these litigations and other legal proceedings, the Company cannot predict the eventual outcome of these matters, and it is reasonably possible that some of them could be resolved unfavorably to the Company. As a result, it is possible that the Company’s results of operations or cash flows in a particular fiscal period could be materially affected by an unfavorable resolution of pending litigation or contingencies. However, the Company believes that the resolution of these other proceedings will not, based on information currently available, have a material adverse effect on the Company’s financial position or results of operations.
NOTE 1117 – ~~PREFERRED STOCK~~STOCKHOLDERS’ DEFICIT.
Preferred Stocks

On August 31, 2021, W. Kip Speyer, the Company’s CEO, at that time, gave notice that all of his held preferred stock was converted in accordance with the original terms. Accordingly, 7,919,017 shares of the Company’s common stock ~~is to be~~were 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 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 August 31, 2021 and ~~provides~~provided all rights as a common shareholder with regard to said shares to Mr. Speyer, including all voting rights. The Company confirms that there was no inducement to convert the shares and that the correct shares were issued in accordance with the original conversion terms. ~~As of said date,~~Approximately $691,000 in outstanding dividend related to this preferred stock is included in other liabilities on the ~~Company has an accrued dividend liability due to Mr. W. Kip Speyer recorded totaling $691,450~~.condensed consolidated balance sheet.

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~~Board of ~~directors~~Directors may determine. The Company’s ~~board~~Board of ~~directors~~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”).
26

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~~the 10% Series A Convertible Preferred Stock and our 10% Series E Convertible Preferred Stock;
● in the event of a liquidation or winding up of the Company, the shares have a liquidation preference of $0.50 per share for the Series F-1, $0.50 per share for the Series F-2 and $0.40 per share for the Series F-3; and

● the shares are not redeemable by the Company.
24

BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
(Unaudited)
At ~~both June~~September 30, 2022, and December 31, 2021, 125,000 shares of Series E Stock were 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 F 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 $~~1,247~~1,000 during the three months ended ~~June~~September 30, 2022 and for Series E and F Convertible Preferred Stock were $~~836~~0 during the three months ended ~~June~~September 30, 2021. Dividends paid for Convertible Preferred Stock were $~~2,069~~2,000 during the ~~six~~nine months ended ~~June~~September 30, 2022 and for Series E and F Convertible Preferred Stock were $~~2,522~~3,000 during the ~~three~~nine months ended ~~June~~September 30, 2021.

~~Total preferred stock dividend accrued amounted to $~~~~691,861~~Common Stocks ~~as of June 30, 2022 and December 31, 2021.~~
~~NOTE 12 –~~ ~~COMMON STOCK~~.
~~A) Stock issued for Cash~~
~~During the six months ended June 30, 2022 and 2021, the Company did not sell any of its securities through a private placement.~~
~~B) Stock issued for services~~
~~During the six months ended June 30, 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
27
~~During the six months ended June 30, 2021, the Company issued a net~~ ~~3,654,266~~ ~~shares of our common stock for the following concepts:~~
Shares (#) Value
Shares issued to Centre Lane related to debt financing 3,150,000 $ 2,497,056
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 3,654,266 $ 3,127,782
~~C) Stock issued for acquisitions~~
~~During the six months ended June 30, 2022 and 2021, the Company did not make any acquisitions.~~
~~D) Stock issued for deemed dividend~~
~~During the six months ended June 30, 2022 and 2021, the Company did not issue any stock that resulted in a deemed dividend.~~
~~Stock Option Compensation~~

~~The Company accounts for stock option compensation issued to employees for services in accordance with FASB ASC Topic 718,~~ ~~Compensation –~~Shares of Common Stock ~~Compensation~~ ~~(“ASC 718”). ASC 718 requires companies to recognize in~~under 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, ~~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.~~Option Plan
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 ASC 718, including related amendments and interpretations. The related expense is recognized over the period the services are provided.~~

On April 14, 2022, the Board of Directors of the Company and the Compensation Committee of the Board adopted and approved the 2022 Bright Mountain Media Stock Option Plan (the “Stock Option Plan”). The Stock Option Plan will be presented for stockholder approval at the Company’s 2022 Annual Meeting of Stockholders. The Stock Option Plan provides for the grants of awards to eligible employees, directors and consultants in the form of stock options. The purpose of the 2022 Plan (the “Plan” is to provide an incentive to attract and retain directors, officers, consultants, advisors and employees whose services are considered valuable, to encourage a sense of proprietorship and to stimulate an active interest of such persons into our development and financial success. The Stock Option Plan is the successor to the Company’s prior stock option plans (2011, 2013, 2015, and 2019 Plans) and accordingly no new grants will be made under the prior plans from and after the date hereof. The Stock Option Plan is a term of 10 years and authorizes the issuance of up to 22,500,000 shares of the Company’s common stock. As of ~~June~~September 30, 2022, ~~16,311,340~~16,524,340 shares were remaining under the 2022 Plan for the future issuance.

~~The Company estimates the fair value~~Issue 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.Common Stock

During the nine months ended September 30, 2022, the Company issued 174,253 shares of our common stock for the following concepts (in thousands, except share data):
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 $ 279
During the nine months ended September 30, 2021, the Company issued a net 16,052,966 shares of our common stock for the following concepts (in thousands, except share data):
Shares (#) Value
Shares issued to Centre Lane related to debt financing 5,150,000 $ 2,559
Options exercised by employees 100,000 14
Warrants exercised 25,000 10
Stock issued for deemed dividend (1) 10,398,700 -
Shares issued to Oceanside employees per the acquisition agreement valued at $1.60 379,266 607
Total 16,052,966 $ 3,190
(1) On September 22, 2021, the Company entered into a share issuance settlement with Spartan Capital Securities, LLC (“Spartan”). Under the terms of the agreement, the Company agreed to issue a total of 10,398,700 of its common stock to seventy-five accredited investors who participated in the Company’s Private Placement Offering, which began in November 2019 and was completed in August 2020. This issuance was determined to be a deemed dividend.
2825

BRIGHT MOUNTAIN MEDIA, INC.
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 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.NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
The expected life is computed using the simplified method, which is the average of the vesting term and the contractual term. The expected volatility is based on an average of similar public company’s historical volatility as the Company’s 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.(Unaudited)
~~The Company recorded~~Warrants
At September 30, 2022, we had 35,823,316 common stock warrants outstanding to purchase shares of our common stock with an exercise price ranging between $~~30,119~~0.65 and $~~74,722~~1.00 ~~of non-cash stock-based stock option compensation expense for the three months ended June 30, 2022 and 2021, respectively. The Company recorded $59,035~~ ~~and $143,016~~ of non-cash stock-based stock option compensation expense for the six months ended June 30, 2022 and 2021, respectively. The stock option expense for the three and six months ended June 30, 2022 and 2021, respectively has been recognized as a component of general and administrative expenses in the accompanying condensed consolidated financial statements.
~~As of June 30, 2022, there were total unrecognized compensation costs related to non-vested share-based compensation arrangements of $97,511~~ ~~to be recognized through May 2026.~~
per share. A summary of the Company’s ~~stock option activity during the six months ended June 30,~~warrants outstanding as of September 31, 2022, and 2021, respectively is presented below:
SCHEDULE OF ~~STOCK OPTION ACTIVITY~~WARRANT OUTSTANDING

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 4,845,433 0.01 9.8 —
Exercised — — — —
Forfeited — — — —
Expired (72,000 ) — — —
Balance Outstanding, June 30, 2022 6,188,660 $ 0.31 8.0 $ —
Exercisable at June 30, 2022 672,864 $ 0.73 3.4 $ —
Warrants as of
September 30, 2022
Number Gross cash proceeds
Exercise Price Outstanding if exercised
$ 1.00 4,817,308 $ 4,817,308
$ 0.65 15,550,000 $ 10,107,500
$ 0.75 15,456,008 $ 11,592,006
35,823,316 $ 26,516,814
Warrants as of
September 30, 2021
Number Gross cash proceeds
Exercise Price Outstanding if exercised
$ 1.00 4,817,308 $ 4,817,308
$ 0.65 15,550,000 $ 10,107,500
$ 0.75 15,456,008 $ 11,592,006
35,823,316 $ 26,516,814

~~Summarized information~~During 2021, a total of 25,000 warrants were exercised at $0.40 per share.
Treasury Stocks
During the year ended December 2020, the Company executed a settlement agreement with ~~respect to options outstanding under~~three shareholders who relinquished their Bright Mountain common stock shares. A total of 825,175 shares were acquired with a value of $220,000. The shares are being held as Treasury Stock by the ~~option plans~~Company and will be resold at ~~June 30, 2022 is as follows:~~later dates.

~~SCHEDULE OF OPTIONS OUTSTANDING UNDER OPTION PLANS~~NOTE 18 – LOSS PER SHARE
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 5,495,433 $ 0.01 9.8 37,500 $ 0.01
$ 0.25 - 0.49 54,000 0.28 1.0 54,000 0.28
$ 0.50 - 0.85 501,000 0.69 3.0 501,000 0.69
$ 0.86 - 1.75 138,227 1.64 7.4 80,364 1.63

Total 6,188,660 $ 0.10 9.1 672,864 $ 0.73
As of September 30, 2022, and September 30, 2021, there were 149,984,636 and 149,810,383 shares of common stock issued, respectively, and 149,159,461 and 148,985,208 shares of common stock outstanding, respectively. Outstanding shares as of September 30, 2022, and September 30, 2021, have been adjusted to reflect 825,175 treasury shares.

Basic net loss per share is computed by dividing the net earnings attributable to common shareholders by the weighted average number of common shares outstanding during the period.
Diluted earnings per share is computed by dividing net income attributable to common shareholders by the weighted average number of common shares outstanding, increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued. Conversion or exercise of the potential common shares is not reflected in diluted earnings per share unless the effect is dilutive. The dilutive effect, if any, of outstanding common share equivalents is reflected in diluted earnings per share by application of the treasury stock method, and if-converted method as applicable.
2926

BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
(Unaudited)
The following tables reconcile actual basic and diluted earnings per share for the three and nine months ended September 30, 2022, and September 30, 2021 (in thousands except per share data).
SCHEDULE OF LOSS PER SHARE

Three Months ended Nine Months ended
September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
Net loss $ (1,918 ) $ (2,889 ) $ (5,222 ) $ (9,087 )
Preferred stock dividends (1 ) (274 ) (3 ) (453 )
Net loss available to common shareholders, basic and diluted computation (1,919 ) (3,163 ) (5,225 ) (9,540 )

Weighted average shares - denominator basic and diluted computation 149,159,461 125,744,703 149,140,312 121,718,466
Loss per common share – basic and diluted $ (0.01 ) $ (0.03 ) $ (0.04 ) $ (0.08 )
The anti-dilutive securities excluded from the weighted-average shares used to calculate the diluted net loss per common share were as follows:
SCHEDULE OF ANTI DILUTIVE SECURITIES EXCLUDED FROM THE WEIGHTED-AVERAGE SHARES

As of
September 30, 2022 September 30, 2021
Shares subject to outstanding common stock options 5,975,660 915,227
Shares subject to outstanding warrants 35,823,316 35,823,316
Shares subject to preferred stock 125,000 125,000
Anti-dilutive securities excluded from the weighted-average shares 125,000 125,000
NOTE 1319 – RELATED PARTIES.
Centre Lane Partners

Centre Lane Partners Master Credit Fund II, L.P. (“~~Center~~Centre Lane Partners”), who sold the ~~Company the~~ Wild Sky business to the Company in June 2020 has partnered and assisted the Company from a liquidity perspective during 2021 and through the ~~three and six~~nine months ended ~~June~~September 30, 2022. This relationship has been determined to qualify as a related party. A related party is a party that can exercise significant influence over the Company in making financial and/or operating decisions. Through ~~June~~September 30, 2022, the Company has entered into ~~fourteen~~fifteen amendments to the Amended and Restated Senior Secured Credit agreement between itself and Centre Lane Partners. See Note 9 - ~~Notes Payable~~Centre Lane Senior Secured Credit Facility for more information.

The total related party debt owed to Centre Lane Partners was $~~29,616,564~~29.9 million and $~~26,334,064~~26.3 million as of ~~June~~September 30, 2022 and December 31, 2021, respectively. ~~The debt owed to~~See Note 9, Centre Lane ~~Partners is reported net of their unamortized debt discount of $~~Senior Secured Credit Facility for details on this facility.
~~3,797,588~~ ~~and $~~
~~3,853,822~~Convertible Promissory Note ~~as of June 30, 2022 and December 31, 2021, respectively. For further clarification, please see Note 9, Notes Payable.~~

As discussed in Note ~~9, notes~~11, Convertible Promissory Note, the note payable to the Chairman of the Board amounted to $~~60,672~~80,000 and $~~53,729~~80,000 as of ~~June~~September 30, 2022, and December 31, 2021, respectively, ~~and are reported net of their unamortized debt discount of $19,328~~ ~~and $26,271~~ ~~as of June 30, 2022 and December 31, 2021, respectively.~~ See Note 911, Convertible Promissory Note for further discussion on these notes payable.

Preferred Stocks
During the three months ended ~~June~~September 30, 2022, and 2021, wethe Company paid cash dividends on the outstanding shares of the Company’s Series E and F Preferred Stock of $~~836~~2,000 and $~~1,261~~0, respectively, held by affiliates of the Company. During the ~~six~~nine months ended ~~June~~September 30, 2022, and 2021, wethe Company paid cash dividends on the outstanding shares of the Company’s Series E and F Preferred Stock of $~~2,069~~3,000 and $~~2,522~~3,000, respectively held by affiliates of the Company.
27
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2022
(Unaudited)
Oceanside Acquisition

The unsecured and interest free Closing Notes of $750,000 related to the Oceanside acquisition were recorded ratably as compensation expense into the 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~~one year closing note and thereby defaulted on its obligation and the ~~Second Closing Note~~two-year closing note accelerated to become payable as of August 15, 2020. Upon default, the ~~Closing Notes~~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. Interest expense for note payable to related party~~expense. The Company established a reserve for the ~~three months ended June 30,~~$750,000 which was included in litigation reserves.
On September 6, 2022, ~~and 2021 was~~the Company’s Board of Directors approved a settlement of $~~33,657~~650,000 payable over a 50 month period commencing January 2023. The Company recognize a gain of approximately $286,000 which includes $100,000 for the reduction in the settlement and $~~33,567~~186,000~~, respectively. Interest expense for note payable~~ representing interest that was previously accrued up to ~~related party for~~December 30, 2021, the ~~six months ended June 30, 2022 and 2021 was $66,945~~.amount is included in Litigation settlement in the condensed consolidated statement of operations.

NOTE 1420 – INCOME TAXES.

The Company recorded $0 tax provision for the three and ~~six~~nine months ended ~~June~~September 30, 2022, and 2021, due in large part to its expected tax losses for the ~~year~~period and maintaining a full valuation allowance against its net deferred tax assets.

At ~~June~~September 30, 2022 and December 31, 2021, the Company had 0no unrecognized tax benefits or accrued interest and penalties recorded. No interest and penalties were recognized during the three and ~~six~~nine months ended ~~June~~September 30, 2022, and 2021.

NOTE 1521 – SUBSEQUENT EVENTS.
On July 1, 2022, the Company filed an application with the OTCQB for a review of its candidature to be upgraded to the OTCQB exchange from the OTC Expert market as the Company is now current with its SEC filing obligations. This process is expected to take between eight to ten weeks.

~~On July 8,~~Management has considered subsequent events through November 14, 2022, the ~~Company~~date this report was issued, and certain of its subsidiaries entered into its fifteenth amendment 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 anthere were no events that required additional ~~loan amount of $350~~ ~~thousand, in the aggregate. This term loan matures on~~ ~~June 30, 2023. In addition, and as part of the transaction, there is an Exit Fee (“the Exit Fee”) totaling $~~18 ~~thousand which will be added and capitalized to the principal amount of the term loan.~~
The Company announced that it accepted the resignation of its Chief Financial Officer, Edward Cabanas on July 26, 2022, effective August 15, 2022, and appointed Miriam Martinez as the Company’s new Chief Financial Officer. Pursuant to an Offer Letter, Ms. Martinez will receive an annual base salary of $~~225,000~~. In addition to base salary, Ms. Martinez is eligible to participate in all of the Company’s Benefits Plans as are set forth in the Company’s Employee Manual. In addition, Ms. Martinez has been granted ~~225,000~~ ~~options to purchase an equal number of shares of the Company’s common stock as part of the 2022 company Stock Option Plan.~~disclosure.

3028

~~ITEM~~Item 2. ~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.~~Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our ~~unaudited condensed consolidated~~ financial condition and results of our operations ~~for the three and six months ended June 30, 2022 and 2021~~ should be read in conjunction with the ~~unaudited~~ condensed consolidated financial statements and ~~the~~related notes ~~to those statements that are~~ included elsewhere in this ~~report. Our~~report and in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on June 13, 2022. In addition to historical consolidated financial information, this discussion ~~includes~~contains forward-looking statements ~~based upon current expectations~~ that involve risks and ~~uncertainties, such as our plans, objectives, expectations and intentions. Actual~~uncertainties. Our actual results ~~and the timing of events~~ could differ materially from those ~~anticipated~~discussed below. Factors that could cause or contribute to these differences include, but are not limited to, those identified below, and those discussed 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~~“Item 1A. Risk ~~Factors in~~Factors” of our Annual Report on Form 10-K for the year ended December 31, 2021, ~~as filed~~and in any subsequent filing we make with the ~~Securities and Exchange Commission on 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 and six months ended June 30, 2022 and 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, 2021 is derived from our audited consolidated financial statements appearing in the 2021 Form 10-K as filed with the SEC on June 13, 2022.

~~Executive Overview of Second Quarter 2022 Results~~
Our key user metrics and financial results for the second quarter of 2022 are more fully discussed and described herein and should be read in context with the disclosure on this page. The second quarter of 2022 results are as follows:
~~User metrics:~~
● Quarterly ad impressions delivered were approximately 1.2 billion for the three months ended June 30, 2022 and approximately 2.2 billion for the six months ended June 30, 2022; this compares to approximately 0.9 billion for the three months ended June 30, 2021 and approximately 2.0 billion for the six months ended June 30, 2021.
~~Second quarter 2022 financial results:~~
● Advertising revenue increased 135% in the three months ended June 30, 2022 from the same period of 2021. Advertising revenue increased 90% in the six months ended June 30, 2022 from the same period of 2021.
● ~~Gross profit increased 194% in the three months ended June 30, 2022 from the same period of 2021. Gross profit increased 130% in the six months ended June 30, 2022 from the same period of 2021.~~
● Selling, general and administrative expenses decreased 28% in the three months ended June 30, 2022 from the same period of 2021. Selling, general and administrative expenses decreased 19% in the six months ended June 30, 2022 from the same period of 2021.
● Included within the expenses for the three months ended June 30, 2022 are $389,739 of non-cash amortization of the intangible assets, and $30,119 of stock based compensation. Included within the expenses for the six months ended June 30, 2022 are $786,006 of non-cash amortization of the intangible assets and $59,035 of stock based compensation.
● ~~Net cash used in operating activities was ($2,565,605) for the first six months of 2022 as compared to ($2,059,030) for the six months of 2021.~~
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Business Overview

Bright Mountain Media, Inc. (the “Company” or “Bright Mountain” or “We”), is ~~an end-to-end~~a holding Company which focuses on digital media and advertising ~~services platform, efficiently connecting~~services. The Company is engaged in content creation and technology development that helps brands connect with, and market to, targeted ~~consumer demographics.~~audiences in high quality environments using a variety of formats to reach customers.
Digital Media
Our digital publishing business focuses on developing content that attracts an audience and monetizes that audience through advertising. The current portfolio of owned and operated websites is focused on moms, parenting, families, and more broadly, women. The portfolio includes popular websites including Mom.com, Cafemom.com, LittleThings.com, and MamasLatinas.com. This demographic is highly sought after by brands and their advertising agencies.
Advertising Servicing
Our advertising technology business focuses on targeted ads to audiences on owned and operated sites as well as third party publishers in a cost-effective manner through the deployment of proprietary technologies. Through acquisitions and organic software development, we have consolidated and plan to further condense key elements of the ~~removal of middlemen in the~~prevailing digital 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 20 ownedsupply chain by eliminating industry “middlemen” and/or ~~managed websites.~~costly redundancy of services via our ad exchange. Our goal 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 delivery of digital advertisements using an array of audience targeting tools and advertising formats (display, audio, video, CTV, in-app). Programmatic advertising relies on artificial intelligence powered software programs that leverage data and proprietary algorithms to match the optimal selection of an ad with bid prices offered by advertisers, while direct sales involve traditional insertion order-based, pre-selected sales between an ad buyer and an advertising sales executive.
Key Factor Affecting Our Performance
Seasonal Fluctuations. Typically advertising technology companies report a material portion of their revenues during the fourth calendar quarter as a result of holiday related ad spend. Our experience since transitioning to focus solely on advertising has been consistent with this trend. Because of seasonal fluctuations, there can be no assurance that the results of any particular quarter will be indicative of results for the full year or for future years or quarters.
Limited Number of Customers. During the nine months ended September 30, 2022, one customer represented 33.4% of revenue, there was no such concentration for the same period in 2021. The loss of this customers could have a material adverse impact on our results of operations in future periods.
Key Operating and Financial Metrics

We ~~generate~~monitor the following key financial and operational metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. The following is our analysis for the three and nine months ended September 30, 2022, and 2021, (in thousands):
Three Months Ended Nine Months Ended
September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021

Revenue $ 5,244 $ 3,805 $ 14,420 $ 8,638
Net loss $ (1,918 ) $ (2,889 ) $ (5,222 ) $ (9,087 )
Adjusted EBITDA (1) $ (509 ) $ (490 ) $ (542 ) $ (4,636 )
(1) For a reconciliation of net loss to Adjusted EBITDA see “EBITDA and Adjusted EBITDA”, below.
29
Revenue
The Company generates revenue through sales of advertising services which generate revenue from advertisements ~~(ad impressions)~~ placed on ~~our~~the Company’s owned and managed sites, as well as from advertisements ~~we place~~placed on partner websites, for which ~~we earn~~the Company earns a share of the revenue. WeAdditionally, we also generate advertising services revenue from facilitating the real-time buying and selling of advertisements at scale between networks of buyers, ~~often called~~known as DSPs (Demand Side Platforms) and sellers ~~often called~~known as, 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’ 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 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.~~
32
~~Results of operations~~
~~Revenues, Cost of~~ Revenue ~~Gross Profit Margins, selling, general and administrative expenses, and other income (expense)~~
For the Three Months Ended June 30, For the Six Months Ended June 30,
2022 2021 Change % Change 2022 2021 Change
%
Change

Advertising revenues $ 5,716,779 $ 2,433,415 $ 3,283,364 135 % $ 9,175,943 $ 4,833,135 $ 4,342,808 90 %
Total cost of revenue $ 2,899,290 $ 1,476,108 $ 1,423,182 96 % $ 4,589,905 $ 2,842,951 $ 1,746,954 61 %
Gross Profit $ 2,817,489 $ 957,307 $ 1,860,182 194 % $ 4,586,038 $ 1,990,184 $ 2,595,854 130 %
Gross profit margin as a percentage of advertising revenues 49.3 % 39.3 % 50.0 % 41.2 %
~~Advertising revenue for~~increased 38% in the three months ended ~~June~~September 30, 2022, was 135% higher than the comparable period in 2021. The main reason for the increase was higher programmatic revenue at our BMLLC business in a combination of adding new clients and increased use of its proprietary RTB platform complemented by higher Direct campaign revenue at our Wild Sky business period over period.
Advertising revenue for the six months ended June 30, 2022 was 90% higher than the comparable period in 2021. The main reason for the increase was higher programmatic revenue at our BMLLC business in a combination of adding new clients and increased use of its proprietary RTB platform complemented by higher Direct campaign revenue at our Wild Sky business period over period.
We incur costs of sales associated with the advertising revenue. These costs include revenue share payments to media providers and website publishers. Our gross profit margin percentage increased 1000 basis points (49.3% versus 39.3%) for the three months ended June 30, 2022 compared to the comparable prior period. Our gross profit margin percentage increased 880 basis points (50.0% versus 41.2%) for the six months ended June 30, 2022 compared to the comparable prior period. This increase is mainly due to higher margins in our programmatic business due to the increased use of our proprietary RTB exchange platform which eliminates the use of third parties and the increase of new clients with improved margins and increased Direct campaign revenues that also have higher gross margins.
~~Selling, General and Administrative Expenses~~
For the Three Months Ended June 30, For the Six Months Ended June 30,
2022 2021 $ Change % Change 2022 2021 $ Change
%
Change

Selling, general and administrative expense $ 3,443,199 $ 4,749,835 $ (1,306,636 ) (28 )% $ 7,330,558 $ 9,024,269 $ (1,693,711 ) (19 )%
Selling, general and administrative expense as a percentage of total revenue 60 % 195 % 80 % 187 %
~~Selling, general and administrative costs decreased approximately $1,306,636, or (28%) for the three months ended June 30, 2022~~when compared to the same period in 2021. ~~Selling, general and administrative costs decreased approximately $1,693,711, or (19%) for~~Revenue increased 67% in the ~~six~~nine months ended ~~June~~September 30, 2022. These decreases are mainly due to reduced costs related to reductions in headcount throughout our operations period over period and lower professional fees, specifically audit, tax and valuation work, period over period.
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 staff to its accounting department to improve controls over its accounting and reporting processes. As the Company expands the size of the accounting department, its use of consultants is expected to decrease.
~~Other income (expense), net~~
For the Three Months Ended June 30, For the Six Months Ended June 30,
2022 2021 $ Change
%
Change
2022 2021 $ Change
%
Change

Other income (expense), net $ (561,808 ) $ (696,783 ) $ 134,975 19 % $ (559,855 ) $ 835,499 $ (1,395,354 ) (167 )%
~~Other income (expense) increased approximately $134,975, or 19% for the three months ended June 30,~~ 2022, when compared to the same period in ~~2021, mainly due to PPP loan forgiveness by $295,600 during~~2021. See below for a detailed analysis of revenue for the three and nine months ended ~~June~~September 30, 2022.
Non-GAAP Financial Measure
EBITDA and Adjusted EBITDA

~~Other~~To provide investors with additional information regarding our financial results, we have disclosed EBITDA, which is a non-GAAP financial measure that we calculate as net income ~~decreased approximately $1,395,354,~~before interest, taxes, depreciation and amortization and Adjusted EBITDA, which represents EBITDA adjusted for certain unusual or ~~(167%) for~~infrequent items (such as changes in the ~~six months ended June 30, 2022 compared to the same period in 2021, mainly due to reduced PPP loan forgiveness by $569,555~~fair value of financial instruments and ~~increased interest expense – related party.~~warrants).
33
~~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;
● Non-restructuring severance expenses
● Nonrecurring professional fees;
● acquisition-related items consisting of amortization expense and impairment expense;
● interest; and
● amortization on debt discount.

30
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. As a result, you should not consider these in isolation or as a substitute for analysis of our results as reported under GAAP, including net loss, which we consider to be the most directly comparable GAAP financial measure. Some of these limitations are:
● although depreciation is a non-cash charge, the assets being depreciated may have to be replaced in the future, and neither EBITDA nor Adjusted EBITDA reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
● EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs; and
● EBITDA and Adjusted EBITDA do not reflect tax payments that may represent a reduction in cash available.

~~The following is an unaudited~~A reconciliation of net loss before taxes to ~~adjusted net loss~~non-GAAP EBITDA and Adjusted EBITDA ~~for the periods presented:~~is as follows (in thousands):

For the Three Months Ended June 30,

For the Six Months Ended June 30,
For the Three Months Ended September 30, For the Nine Months Ended September 30,
2022 2021 2022 2021 2022 2021 2022 2021

Net loss before tax $ (1,187,518 ) $ (4,489,311 ) $ (3,304,375 ) $ (6,198,586 )
plus:
Stock compensation expense 30,115 128,342 175,780 298,390
Net loss before tax plus: $ (1,918 ) $ (2,889 ) $ (5,222 ) $ (9,087 )
Depreciation expense 8,468 16,487 11,853 34,534 12 12 24 46
Amortization expense 389,741 396,267 786,007 792,533 387 396 1,173 1,189
Amortization of debt discount 314 238 923 384
Other interest expense 11 3 17 343
Interest expense - Centre Lane Senior Secured Credit Facility and Convertible Promissory Notes- related party 433 520 1,555 945
EBITDA (761 ) (1,720 ) (1,530 ) (6,180 )
Stock compensation expense 38 100 214 399
Nonrecurring professional fees 164,465 115,409 307,749 160,409 350 903 657 1,063
Amortization on debt discount 333,177 141,992 613,155 145,444
Bad debt (recovery) (49,076 ) (147,166 ) 222,279 (141,070 )
Bad debt expense (recovery) (136 ) 223 87 82
Non-restructuring severance expense 29,313 - 29,313 - - 4 30 -
Interest expense, net 722 75,211 735 336,206
Interest expense – related party 562,568 393,772 1,122,007 429,060
Adjusted EBITDA $ 281,975 $ (3,368,997 ) $ (35,497 ) $ (4,143,080 ) $ (509 ) $ (490 ) $ (542 ) $ (4,636 )

For the three and ~~six~~nine months ended ~~June~~September 30, 2022, and 2021, to disclose an adjusted EBITDA that accurately represents actual operations, we have excluded the PPP loan forgiveness from the calculation.

31
Results of Operations
The following is our analysis of the results of operations for the periods indicated below. This analysis should be read in conjunction with our financial statements, including the related notes to the financial statements.
Three Months Ended September 30, 2022, Compared to Three Months Ended September 30, 2021
Net loss from operations for the quarter ended September 30, 2022, was $2.0 million as compared to a net loss of $2.9 million for the same period last year. The following is our analysis for the period.
For the Three Months Ended September 30,
2022 2021 Change % Change

Revenue $ 5,244 $ 3,805 $ 1,439 38 % Increase
Cost of revenue 3,098 1,708 1,390 81 % Increase
Gross margin 2,146 2,097 49 2 % Increase
General and administrative expense 3,323 4,635 (1,312 ) (28 )% Decrease
Loss from operations (1,177 ) (2,538 ) 1,361 54 % Decrease
Financing expense (income) (741 ) (351 ) (390 ) (111 )% Increase
Provision (benefit) for income taxes - - - -
Net loss $ (1,918 ) $ (2,889 ) $ 971 34 % Decrease

Gross margin % 41 % 55 % (14 )% (26 )% Decrease
Revenue
Revenue for the three months ended September 30, 2022, increased $1.4 million or 38% when compared to the same period in 2021. The increase was largely attributable to Ad Services, which increased 168%. This growth has been driven by our ability to leverage our digital media assets to attract top advertisers, which in turn has allowed us to onboard direct premium publishers, especially in the CTV market. This led to an increase in volume, as well as rates and overall revenue.
Approximately 93% of the Company’s revenue was generated from our digital media customers within the United States of America (“US”) with 7% generated from our business in Israel, compared to 89% in the US and 11% in Israel for the same period in 2021.
Cost of Revenue
Costs of revenue increased $1.4 million or 81% for the three months ended September 30, 2022, compared to the same period in 2021. These costs include revenue share payments to media providers and website publishers. The increase was largely attributable to revenue share payments which increased $1.2 million. The Company started expanding its usage of ad exchange on third party’s site which is also associated with the increase noted in revenue as discussed above.
Gross Margin
Our gross margin increased $49,000 or 2% when compared to the same period for 2021, which is consistent with the increase noted in revenue and cost of revenue.
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General and Administrative Expenses
For the Three Months Ended September 30,
2022 2021 Change % Change

Personnel cost $ 1,663 $ 1,978 $ (315 ) (16 )% Decrease
Depreciation and amortization expense 399 408 (9 ) (2 )% Decrease
Legal expense 53 92 (39 ) (42 )% Decrease
Professional fees 827 1,248 (421 ) (34 )% Decrease
Insurance 146 136 10 7 % Increase
Other 235 773 (538 ) (70 )% Decrease
Total $ 3,323 $ 4,635 $ (1,312 ) (28 )% Decrease

Gross margin as a percentage of general and administrative expense 65 % 45 % 19 % 43 % Increase
General and administrative expenses decreased $1.3 million, or 28% for the three months ended September 30, 2022, compared to the same period in 2021. The reduction is due to a combination of factors as discussed below.
Professional Fees
Professional fees decreased $421,000 or 34%, when compared to the same period for 2021. The amount for 2021 was higher due to cost incurred for audit and consultant fees which represented 63% of professional fees compared to 90% for 2021. This expense was in connection with the Company’s restatement of its financial results for the period January 1, 2019, to December 31, 2021.
Personnel Cost
Personnel cost decreased $315,000 or 16% when compared to the same period for 2021. This change is mainly driven by a reduction in head count of 21 employees or 26%. Total employees at September 30, 2022, was 59 compared to 80 at September 30, 2021.
Legal Expense
Legal expense is a combination of legal fees and litigation settlement amounts. During the period, the Company incurred cost of $350,000 in legal fees offset by a credit of $297,000 in litigation settlement, resulting in a net decrease of $39,000 or 42% compared to the same period in 2021. The credit in litigation settlement is mainly attributable to reversal of previous accrual related to the Slutzky & Winshman and Synacor litigation as discussed in Note 16, Commitment and Contingencies.
Financing expense (income)
For the Three Months Ended September 30,
2022 2021 Change % Change

Interest expense $ 759 $ 761 $ (2 ) - % Decrease
Gain of forgiveness of PPP loan - (465 ) (465 ) (100 )% Decrease
Other expense (income) (18 ) 55 73 133 % Decrease
Total financing expense (income) $ 741 $ 351 $ 390 111 % Increase
33
Financing cost increased $390,000, or 111% for the three months ended September 30, 2022, compared to the same period for 2021. This increase was largely attributable to $465,000 in the Paycheck Protection Program loan forgiveness during the three months ended September 30, 2021, which offset the overall finance cost.
Nine Months Ended September 30, 2022, Compared to Nine Months Ended September 30, 2021
Net loss from operations for the quarter ended September 30, 2022, was $5.2 million as compared to a net loss of $9.1 million for the same period last year. The following is our analysis for the period.
For the Nine Months Ended September 30,
2022 2021 Change % Change

Revenue $ 14,420 $ 8,638 $ 5,782 67 % Increase
Cost of revenue 7,726 4,568 3,158 69 % Increase
Gross margin 6,694 4,070 2,624 64 % Increase
General and administrative expense 10,616 13,643 (3,027 ) (22 )% Decrease
Loss from operations (3,922 ) (9,573 ) 5,651 59 % Decrease
Financing expense (income) (1,300 ) 486 (1,786 ) (368 )% Decrease
Provision (benefit) for income taxes - - - -
Net loss $ (5,222 ) $ (9,087 ) $ 3,865 43 % Decrease

Gross margin % 46 % 47 % (1 )% (1 )% Decrease
Revenue
Revenue for the nine months ended September 30, 2022, increased $5.8 million or 67% compared to the same period for 2021. The increase was largely attributable to Ad Services which increased $8.0 million or 185%. This growth has been driven by our ability to leverage our digital media assets to attract top advertisers, which in turn has allowed us to onboard direct premium publishers, especially in the CTV market. This led to an increase in volume, as well as rates and overall revenue.
Approximately 93% of the Company’s revenue was generated from our digital media customers in the US and 7% was generated from our business in Israel, compared to 87% in the US and 13% in Israel for the same period in 2021.
Cost of Revenue
Costs of revenue increased $3.2 million or 69% for the nine months ended September 30, 2022, compared to the same period for 2021. These costs include revenue share payments to media providers and website publishers. The increase was largely attributable to revenue share payments which increased $2.9 million. The Company started expanding its usage of ad exchange on third party’s site which is also associated with the increase noted in revenue as discussed above.
34

Gross Margin
Our gross margin increased $2.6 million or 64% when compared to the same period for 2021, which is consistent with the increase noted in revenue and cost of revenue.
General and Administrative Expenses
For the Nine Months Ended September 30,
2022 2021 Change % Change

Personnel cost $ 4,955 $ 6,750 $ (1,795 ) (27 )% Decrease
Depreciation and amortization expense 1,197 1,235 (38 ) (3 )% Decrease
Legal fees 365 405 (40 ) (10 )% Decrease
Professional Fees 2,243 2,983 (740 ) (25 )% Decrease
Insurance 450 440 10 2 % Increase
Other 1,406 1,830 (424 ) (23 )% Decrease
Total $ 10,616 $ 13,643 $ (3,027 ) (22 )% Decrease

Gross margin as a percentage of general and administrative expense 63 % 30 % 33 % 111 % Increase
General and administrative expenses decreased $3.0 million or 22% for the nine months ended September 30, 2022, compared to the same period in 2021. The reduction is due to a combination of factors as discussed below.
Professional Fees
Professional fees decreased $740,000 or 25% when compared to the same period for 2021. The amount for 2021 was higher due to cost incurred for audit and consultant fees which represented 68% of professional fees compared to 87% for 2022. This expense was in connection with the Company’s restatement of its financial results for the period January 1, 2019, to December 31, 2021.
Personnel Cost
Personnel cost decreased $1.8 million or 27% when compared to the same period for 2021. This change is mainly driven by a reduction in head count of 21 employees or 26%. Total employees at September 30, 2022 was 59 compared to 80 at September 30, 2021.
Legal Expense
Legal expense is a combination of legal fees and litigation settlement amounts. During the nine months ended September 30, 3022, the Company incurred cost of $662,000 in legal fees offset by a credit of $297,000 in litigation settlement, resulting in a net decrease of $40,000 or 10%. The credit in litigation settlement is mainly attributable to reversal of a previous accrual related to the Slutzky & Winshman and Synacor litigation, as discussed in Note 16, Commitment and Contingencies.
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Financing expense (income)
For the Nine Months Ended September 30,
2022 2021 Change % Change

Interest expense $ 2,494 $ 1,672 $ 822 49 % Increase
Gain of forgiveness of PPP loan (1,137 ) (2,172 ) 1,035 (48 )% Decrease
Other expense (income) (57 ) 14 (71 ) (507 )% Decrease
Total financing expense (income) $ 1,300 $ (486 ) $ 1,786 (368 %) Increase
Financing cost increased $1.8 million or 368% for the nine months ended September 30, 2022, compared to the same period for 2021. This increase was largely attributable to $822,000 increase in interest expense related to the Credit Facility which showed higher principal and fees due to the Credit Facility amendments during the nine months ended September 30, 2022. This increase was offset by a reduction in the Paycheck Protection Program loan forgiveness amount which was $1.1 million compared to $2.2 million for the same period for 2021, resulting in a higher expense for 2022.
Liquidity and ~~capital resources~~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 (deficit) at ~~June~~September 30, 2022 as compared to December 31, 2021.

June 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021
Total current assets $ 4,689,370 $ 5,257,577 $ 5,085 $ 5,257
Total current liabilities 17,497,981 23,069,784 17,824 23,070
Net working deficit $ (12,808,611 ) $ (17,812,207 )
Net working capital deficit $ (12,739 ) $ (17,813 )

As of September 30, 2022, we ~~continue our efforts to grow our business, we expect that our monthly~~had a cash ~~operating overhead will continue to increase as we add personnel, although~~balance of $412,000 compared with a cash balance of $781,000 at ~~a lesser rate, and we are not able at this time to quantify the amount of this expected increase.~~December 31, 2021. During 2021, we implemented policies and procedures around cash collections to prevent the aging of accounts receivables ~~that we experienced~~which continues in ~~2020.~~2022. Cash collection efforts have been successful, and we feel that we have appropriately reserved for uncollectible amounts at ~~June~~September 30, 2022.

During ~~February and March 2021,~~ the Company received two loans with proceeds totaling $1,137,140 (the “PPP Loans”) under the second 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 (“SBA”). The Second Bright Mountain and Second Wild Sky PPP Loans are evidenced by promissory notes (the “Promissory Notes”) with Regions Bank and Holcomb Bank, respectively, and have a two-year term and bear interest at a rate of 1.0% per annum. Monthly principal and interest payments are deferred for sixnine 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 recipients can apply for and be granted forgiveness for all or a portion of loans granted under the PPP. On March 23, 2022 and June 15, 2022, the Company obtained PPP forgiveness for the second tranches of the loans totaling $1,137,140.
~~During January through June~~ended September 30, 2022, the Company received ~~$2.7~~$3.1 million in debt financing from Centre Lane Partners. The use of the funds was for general working capital needs. During May 26, 2021, through 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
~~The accompanying condensed consolidated financial statements have been prepared on~~Historically, the Company has incurred losses, which has resulted in an accumulated deficit of approximately $111.4 million as of September 30, 2022. Cash flows used in operating activities were $3.1 million and $4.7 million for the nine months ended September 30, 2022, and 2021, respectively. As of September 30, 2022, the Company had approximately a ~~going concern basis, which contemplates the realization~~$12.7 million in working capital deficit, inclusive of ~~assets~~$412,000 in cash and ~~the satisfaction of liabilities in the normal course of business.~~ cash equivalents to cover overhead expenses.
The ~~Company’s management has evaluated whether there is substantial doubt about the~~ Company’s ability to continue as a going concern is dependent on its ability to meet its liquidity needs through a combination of factors including but not limited to, cash and ~~has determined that substantial doubt existed~~cash equivalents, working capital, the ongoing increase in revenue through increased sales and strategic capital raises. The ultimate success of these plans is not guaranteed.
In considering our forecast for the next twelve months and the current cash and working capital as of the ~~date~~filing of ~~the end of the period covered by~~ this ~~report. This determination was based on the following factors: (i) the Company used cash of approximately $2.6 million in operations for the six months ended June 30, 2022; (ii)~~Form 10Q, such matters create a substantial doubt regarding the Company’s ~~available cash as of the date of this filing will not be sufficient~~ability to fund its anticipated level of operations for the next 12 months; (iii) the Company will require additional financing for the fiscal year ending December 31, 2022 to continue at its expected level of operations;meet our financial needs 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 and for one year from the issuance of these condensed consolidated financial statements.~~concern.

The report of our independent registered public accounting firm on our audited consolidated financial statements at December 31, 2021 and 2020 and for the years then ended 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 to manage our working capital deficit, or to manage our cash versus liabilities, or 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 six months ended June 30, 2022, we raised $2,700,000 of 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.
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The accompanying condensed consolidated financial statements are prepared on a going concern basis and do not include any adjustments that might result from uncertainty about the Company’s ability to continue as a going concern.
Summary of ~~cash flows~~Cash Flows

For the six months ended June 30,

2022 2021
Net cash used in operating activities $ (2,565,605 ) $ (2,059,030 )
Net cash used in investing activities $ (3,824 ) $ (5,337 )
Net cash provided by financing activities $ 2,205,297 $ 2,423,840
The following table summarizes our cash flows from operating, investing and financing activities for the nine months period ended September 30, 2022, and 2021 (in thousands):

Nine Months Ended September 30,
2022 2021
Statement of Cash Flows Data:
Total cash (used in) provided by:
Operating activities $ (3,091 ) $ (4,708 )
Investing activities - (3 )
Financing activities 2,722 4,253
Decrease in cash and cash equivalents $ (369 ) $ (458 )
Operating Activities
For the nine months ended September 30, 2022, cash used in operating activities was $3.1 million. The primary factors affecting our operating cash flows during the period were our net loss of $5.2 million, adjusted for non-cash charges of $1.2 million for depreciation and amortization of our property, equipment and intangible assets, $923,000 of amortization of debt discount, $97,000 of stock-based compensation expense, $117,000 of stock compensation for Oceanside shares, $87,000 for the provision of bad debt, $1.1 million from the gain on forgiveness of PPP loan and a $842,000 net change in operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities were a $661,000 increase in other liabilities and a $1.3 million increase in accrued interest, offset by a $1.0 million decrease in accounts payable, a $166,000 decrease in deferred revenue, and a $387,000 increase in accounts receivable.
For the nine months ended September 30, 2021, cash used in operating activities was $4.7 million. The primary factors affecting our operating cash flows during the period were our net loss of $9.1 million, adjusted for non-cash charges of $1.2 million for depreciation and amortization of our property, equipment and intangible assets, $384,000 of amortization of debt discount, $180,000 of stock-based compensation expense, $607,000 of stock compensation for Oceanside shares, $82,000 for the provision of bad debt, $2.2 million from the gain on forgiveness of PPP loan and a $4.3 million net change in operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities were a $2.8 million decrease in accounts receivable, a $636,000 decrease in prepaid expenses and other current assets, a $463,000 increase in deferred revenues, and a $945,000 increase in accrued interest, offset by a $171,000 decrease in accounts payable and a $340,000 decrease in other liabilities.
Investing Activities
Cash used in investing activities of $0 and $3,000 for the nine months ended September 30, 2022, and 2021, respectively, was due entirely to the purchase of property and equipment.
Financing Activities
During the ~~six~~nine months ended ~~June~~September 30, 2022, the Company raised ~~$2,700,000 of debt financing which was used primarily to fund our working capital. We used cash primarily to fund our net loss of $3,304,375.~~
~~During the six months ended June 30, 2021, the Company raised $1,500,000~~$3.1 million of debt financing which was used primarily to fund our working capital.

During the nine months ended September 30, 2021, the Company raised $3.1 million of debt financing which was used primarily to fund our working capital.
37
~~Critical accounting policies~~Contractual Obligations and Commitments
The Company leases its corporate offices under a long-term non-cancellable operating lease agreement that expired on October 31, 2021. On June 14, 2022, the Company signed a second lease addendum (“Second Addendum”) to the lease with a lease term for five years beginning upon completion of improvements to the office space by the Landlord, which was completed on September 12, 2022. The annual base rent is $96,000, with a provision for a 3% increase on each anniversary of the rent commencement date. The Company has the option to renew the lease for one additional five-year term. See Note 16, Commitment and Contingencies for details regarding the Company’s lease.
There were no other material changes in our contractual obligations and commitments from those disclosed above and in the Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on June 13, 2022.
Off-Balance Sheet Arrangements

As of September 30, 2022, there were no off-balance sheet arrangements between us and any other entity that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to shareholders.
Critical Accounting Policies and Estimates
Our condensed consolidated financial statements are prepared in accordance with GAAP. The preparation of these condensed consolidated financial statements ~~in conformity with GAAP~~ requires ~~management~~us to make estimates and assumptions that affect the reported ~~amount~~amounts of assets, liabilities, revenue, expenses and ~~liabilities,~~related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the ~~disclosure of contingent assets~~circumstances. Our actual results could differ from these estimates.
We believe that the assumptions and ~~liabilities~~estimates associated with revenue recognition, accounts receivable allowances, income taxes, equity-based compensation, intangibles and goodwill valuation have the ~~reported amounts of revenue and expenses during the reported periods. The more~~greatest potential impact on our consolidated financial statements. Therefore, we consider these to be our critical accounting ~~estimates include estimates related to revenue recognition~~policies and ~~accounts receivable allowances. We also have other key~~estimates. For further information on all of our significant accounting policies, ~~which involve~~see the ~~use of estimates, judgments and assumptions that are significant to understanding our results, which are described in Note 3 to our unaudited~~Company’s audited condensed consolidated financial statements ~~appearing elsewhere~~and accompanying notes included in ~~this report.~~the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the SEC on June 13, 2022,

Recent accounting pronouncements

~~The recent~~Recent accounting ~~standards that have been issued or proposed by~~pronouncements are detailed in the ~~FASB or other standards-setting bodies as described~~“Summary of Significant Accounting Policies” in Note ~~3 appearing earlier in this report that do not require adoption until a future date are not expected~~2 to ~~have a material impact on the~~our unaudited condensed consolidated financial ~~statements upon adoption.~~
~~All other newly issued accounting pronouncements, but not yet effective, have been deemed either immaterial or not applicable.~~
statements.
~~ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.~~Smaller Reporting Company Status

~~Not applicable for~~We are a “smaller reporting company” as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as the market value of our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.

~~ITEM 4. CONTROLS AND PROCEDURES.~~Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We have operations within the United States and limited operations with customers located in Israel and vendors in Thailand, and we are exposed to market risks in the ordinary course of our business, including the effects of interest rate changes, inflation and exchange rate charges. Information relating to quantitative and qualitative disclosures about these market risks is set forth below.
Interest Rate Risk

We consider all highly liquid investments with an original maturity of three months or less to be cash and cash equivalents. Other exposure to interest rate risk relates to our Senior Secured Credit Facility which did not have an unusual impact on our business for the nine months ended September 30, 2022.
Inflation Rate Risk
We do not believe that inflation has had a material effect on our business, financial condition, or results of operations. We continue to monitor the impact of inflation in order to minimize its effects through pricing strategies, productivity improvements and cost reductions. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition, and results of operations.
38
Foreign Currency Exchange Rate Risk
The Company has operations in Israel and Thailand and reports financial results in US dollars. As a result, there is a foreign currency exchange rate translation risk; however, these risks are limited to operating expenses and not significant to our overall operations. The exchange rate risk to our financial statements is immaterial.
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.

36
Based on ~~his~~our evaluation as of the end of the period covered by this report, ~~our Chief Financial Officer~~management has concluded that our disclosure controls and procedures were not effective such that the information relating to our ~~company,~~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, 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~~increase our headcount of accounting and administrative staff ~~allowing improved~~to improve our internal ~~control~~controls over financial reporting.

Changes in Internal Control over Financial Reporting. We continue to strategically plan changes in our internal control over financial reporting through this fiscal quarter, Q2Q3 2022.

PART II -– OTHER INFORMATION

~~ITEM~~Item 1. ~~LEGAL PROCEEDINGS.~~Legal Proceedings.

~~None, except as previously disclosed.~~For a description of developments to legal proceedings during the nine months ended September 30, 2022, see “Litigation” under Note 16, “Commitments and Contingencies” to our consolidated financial statements.

~~ITEM~~Item 1A. ~~RISK FACTORS.~~Risk factors.

We incorporate by reference the risk factors disclosed in Part I, Item 1A of our 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~~Item 2. ~~UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.~~Unregistered Sales of Equity Securities and Use of Proceeds.
~~During the period from January 1, 2022 through June 30, 2022, Bright Mountain Media, Inc. did not sell any equity securities.~~
~~ITEM 3. DEFAULTS UPON SENIOR SECURITIES.~~

None.

~~ITEM~~Item 3. Defaults Upon Senior Securities.
None.
39
Item 4. ~~MINE SAFETY DISCLOSURES.~~Mine Safety Disclosures.

None.

~~ITEM~~Item 5. ~~OTHER INFORMATION.~~Other Information.

None.
37
~~ITEM~~Item 6. ~~EXHIBITS.~~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~~Certification by the Chief Financial Officer pursuant to Section 302 and Section 906 of ~~Principal~~the Sarbanes-Oxley Act of 2002 Filed
32.2 Section 1350 Certification by the Chief Executive Officer pursuant to Section 302 and ~~principal financial and accounting officer~~Section 906 of the Sarbanes-Oxley Act of 2002 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)

3840

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.

~~August 12,~~November 14, 2022 By: /s/ Matthew Drinkwater

Matthew Drinkwater,
Chief Executive Officer, Principal Executive Officer

By: /s/ ~~Edward A. Cabanas~~Miriam Martinez

~~Edward A. Cabanas,~~
Miriam Martinez,
Chief Financial Officer, Principal Financial and Accounting Officer

3941


	June 30,			December 31,
	2022			2021
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	417,188		$	781,320
Accounts receivable, net of allowance for doubtful accounts of $718,318 and $495,396, at June 30, 2022 and December 31, 2021, respectively		3,490,699			3,550,126
Note receivable, net		15,476			21,415
Prepaid expenses and other current assets		766,007			904,716
Total current assets		4,689,370			5,257,577

Property and equipment, net		53,943			65,122
Website acquisition assets, net		3,200			4,000
Intangible assets, net		5,279,329			6,064,535
Goodwill		19,645,468			19,645,468
Prepaid services/consulting agreements – long term		104,939			284,825
Right-of-use asset		687,310			–
Other assets		237,181			242,686
Total assets	$	30,700,740		$	31,564,213
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities
Accounts payable	$	8,521,440		$	8,459,561
Accrued expenses		2,837,279			3,764,665
Accrued interest to related party		1,727,262			640,255
Premium finance loan payable		85,711			334,284
Deferred revenues		623,629			1,162,425
Long term debt, current portion		–			1,387,140
Long term debt to related parties, current portion, net		3,632,192			7,316,402
Other current liabilities		70,468			5,052

Total current liabilities		17,497,981			23,069,784

Long term debt to related parties, net		22,186,784			15,217,569
Operating lease liability		691,340			–
Total liabilities		40,376,105			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 June 30, 2022 and December 31, 2021		–			–
Series B-1, 6,000,000 shares designated, 0 shares issued and outstanding at June 30, 2022 and December 31, 2021		–			–
Series E, 2,500,000 shares designated, 125,000 shares issued and outstanding at June 30, 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 June 30, 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 June 30, 2022 and December 31, 2021, respectively		1,499,846			1,498,103
Treasury stock, at cost; 825,175 shares at June 30, 2022 and December 31, 2021		(219,837	)		(219,837	)
Additional paid-in capital		98,462,565			98,128,948
Accumulated deficit		(109,448,440	)		(106,144,065	)
Accumulated other comprehensive income		29,251			12,461
Total shareholders’ deficit		(9,675,365	)		(6,723,140	)
Total liabilities and shareholders’ deficit	$	30,700,740		$	31,564,213

	September 30,			December 31, ^*
	2022			2021*
	(unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	412		$	781
Accounts receivable, net		3,904			3,550
Prepaid expenses and other current assets		769			926
Total Current Assets		5,085			5,257

Property and equipment, net		37			65
Intangible assets, net		4,896			6,069
Goodwill		19,645			19,645
Operating lease right-of-use asset		381			—
Other assets		240			528
Total Assets	$	30,284		$	31,564
LIABILITIES AND SHAREHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued expenses	$	9,968		$	10,967
Other liabilities		2,144			1,598
Interest payable – 10% Convertible Promissory Notes– related party		29			23
Interest payable – Centre Lane Senior Secured Credit Facility – related party		1,855			617
Deferred revenues		996			1,162
PPP Loan		—			1,137
Note payable – BMLLC acquisition debt		—			250
Note payable – Centre Lane Senior Secured Credit Facility – related party (current portion)		2,832			7,316
Total Current Liabilities		17,824			23,070

Note payable – Centre Lane Senior Secured Credit Facility – net of discount, related party		23,582			15,164
Note Payable – 10% Convertible Promissory Notes, net of discount, related party		64			54
Operating lease liability		333			—
Total liabilities		41,803			38,288

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, no shares issued or outstanding at September 30, 2022 and December 31, 2021		—			—
Series B-1, 6,000,000 shares designated, no shares issued or outstanding at September 30, 2022 and December 31, 2021		—			—
Series E, 2,500,000 shares designated, 125,000 shares issued and outstanding at September 30, 2022 and December 31, 2021; liquidation preference of $0.40 per share		1			1
Series F, 4,344,017 shares designated, no shares issued or outstanding at September 30, 2022 and December 31, 2021		—			—
Convertible 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 September 30, 2022 and December 31, 2021, respectively		1,500			1,498
Treasury stock, at cost; 825,175 shares at September 30, 2022 and December 31, 2021		(220	)		(220	)
Additional paid-in capital		98,500			98,129
Accumulated deficit		(111,366	)		(106,144	)
Accumulated other comprehensive income		66			12
Total shareholders’ deficit		(11,519	)		(6,724	)
Total liabilities and shareholders’ deficit	$	30,284		$	31,564


	Three Months Ended						Six Months Ended
	June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021

Revenues
Advertising	$	5,716,779		$	2,433,415		$	9,175,943		$	4,833,135

Cost of revenue
Advertising		2,899,290			1,476,108			4,589,905			2,842,951
Gross profit		2,817,489			957,307			4,586,038			1,990,184

Selling, general and administrative expenses		3,443,199			4,749,835			7,330,558			9,024,269

Loss from operations		(625,710	)		(3,792,528	)		(2,744,520	)		(7,034,085	)

Other income (expense)
Gain on forgiveness of PPP loan		295,600			-			1,137,140			1,706,735
Other income (expense)		39,059			(82,357	)		38,902			39,473
Interest expense		(722	)		(75,211	)		(735	)		(336,206	)
Interest expense - related party		(895,745	)		(539,215	)		(1,735,162	)		(574,503	)
Total other income (expense)		(561,808	)		(696,783	)		(559,855	)		835,499

Net loss before tax		(1,187,518	)		(4,489,311	)		(3,304,375	)		(6,198,586	)
								��
Income tax expense		–			–			–			–

Net loss		(1,187,518	)		(4,489,311	)		(3,304,375	)		(6,198,586	)

Preferred stock dividends
Series A, Series E, and Series F preferred stock		(1,247	)		(89,958	)		(2,480	)		(178,936	)

Net loss attributable to common shareholders	$	(1,188,765	)	$	(4,579,269	)	$	(3,306,855	)	$	(6,377,522	)

Other comprehensive income (loss)	$	16,709		$	(82,324	)	$	16,790		$	(113,613	)

Comprehensive loss	$	(1,172,056	)	$	(4,661,593	)	$	(3,290,065	)	$	(6,491,135	)

Basic and diluted net loss per share	$	(0.01	)	$	(0.04	)	$	(0.02	)	$	(0.05	)
Weighted average shares outstanding - basic and diluted		149,159,461			120,353,074			149,130,579			119,652,844


	Three Months Ended						Nine Months Ended
	September 30, 2022			September 30, 2021			September 30, 2022			September 30, 2021

Revenue	$	5,244		$	3,805		$	14,420		$	8,638
Cost of revenue		3,098			1,708			7,726			4,568
Gross margin		2,146			2,097			6,694			4,070
General and administrative expenses		3,323			4,635			10,616			13,643
Loss from operations		(1,177	)		(2,538	)		(3,922	)		(9,573	)
Financing income (expense)
Gain on forgiveness of PPP loan		—			465			1,137			2,172
Other income (expense)		18			(54	)		58			(15	)
Interest expense - Centre Lane Senior Secured Credit Facility- related party		(744	)		(755	)		(2,468	)		(1,318	)
Interest expense - Convertible Promissory notes - related party		(6	)		(6	)		(17	)		(17	)
Other interest expense		(9	)		(1	)		(10	)		(336	)
Total financing income (expense)		(741	)		(351	)		(1,300	)		486
Net loss before income tax		(1,918	)		(2,889	)		(5,222	)		(9,087	)
Income tax provision (benefit)		—			—			—			—
Net loss		(1,918	)		(2,889	)		(5,222	)		(9,087	)

Dividends
Common stock deemed dividend		—			(212	)		—			(212	)
Preferred stock dividends		(1	)		(62	)		(3	)		(241	)

Net loss attributable to common shareholders	$	(1,919	)	$	(3,163	)	$	(5,225	)	$	(9,540	)
Foreign currency translation		37			93			54			(21	)
Comprehensive loss	$	(1,882	)	$	(3,070	)	$	(5,171	)	$	(9,561	)

Net loss per common share:
Basic and diluted	$	(0.01	)	$	(0.03	)	$	(0.04	)	$	(0.08	)
Weighted average shares outstanding
Basic and diluted		149,159,461			125,744,703			149,140,312			121,718,466

	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	$	1,498,103		(825,175	)	$	(219,837	)	$	98,128,948		$	(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	$	1,499,846		(825,175	)	$	(219,837	)	$	98,433,693		$	(108,260,922	)	$	12,542	$	(8,533,428	)
Net loss		—		—		—		—		—			—			—			(1,187,518	)		—		(1,187,518	)
Series E preferred stock dividend		—		—		—		—		—			—			(1,247	)		—			—		(1,247	)
Stock option vesting expense		—		—		—		—		—			—			30,119			—			—		30,119
Adjustment from foreign currency translation, net		—		—		—		—		—			—			—			—			16,709		16,709
Balance, June 30, 2022 (unaudited)		125,000	$	1,250		149,984,636	$	1,499,846		(825,175	)	$	(219,837	)	$	98,462,565		$	(109,448,440	)	$	29,251	$	(9,675,365	)


	For the Six Months Ended June 30,
	2022			2021
Cash flows from operating activities:
Net loss	$	(3,304,375	)	$	(6,198,586	)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation		11,853			34,534
Amortization of debt discount		613,155			145,444
Amortization		786,006			792,533
Stock option compensation expense		59,035			141,507
Stock compensation for Oceanside shares		116,744			606,826
Gain on forgiveness of PPP loan		(1,137,140	)		(1,706,735	)
Write off doubtful accounts		-			(239,575	)
Warrant expense for services rendered		-			10,000
Provision for (Recovery of) bad debt		222,279			(141,070	)
Changes in operating assets and liabilities:
Accounts receivable		(146,062	)		4,395,054
Prepaid expenses and other current assets		318,595			352,384
Other assets		5,505			(7,069	)
Right of use asset and lease liability		4,030			(129	)
Accounts payable		67,295			(807,053	)
Accrued expenses		(765,736	)		133,846
Accrued interest – related party		1,122,007			429,059
Deferred revenues		(538,796	)		-
Net cash used in operating activities		(2,565,605	)		(2,059,030	)

Cash flows from investing activities:
Purchase of property and equipment		(3,824	)		(5,337	)
Net cash used in investing activities		(3,824	)		(5,337	)

Cash flows from financing activities:
Payments of premium finance loan payable		(248,573	)		(222,745	)
Proceeds from stock option exercises		-			13,900
Dividend payments		(2,069	)		2,522
Principal payments received (funded) for notes receivable		5,939			(6,977	)
Proceeds from related party debt financing		2,700,000			1,500,000
Repayments of debt		(250,000	)		-
Proceeds from PPP loan		-			1,137,140
Net cash provided by financing activities		2,205,297			2,423,840

Net (decrease) increase in cash and cash equivalents		(364,132	)		359,473
Cash and cash equivalents at the beginning of period		781,320			736,046
Cash and cash equivalents at end of period	$	417,188		$	1,095,519

	2022			2021
	For the Nine Months Ended September 30,
	2022			2021
Cash flows from operating activities:
Net loss	$	(5,222	)	$	(9,087	)
Adjustments to reconcile net loss to net cash used in operations:
Depreciation		24			46
Amortization of debt discount		923			384
Amortization of intangibles		1,173			1,189
Stock based compensation		97			179
Stock compensation for Oceanside shares		117			608
Gain on forgiveness of PPP loan		(1,137	)		(2,172	)
Write off doubtful accounts		—			(293	)
Warrant expense for services rendered		—			10
Provision for bad debt		87			82
Changes in operating assets and liabilities:
Accounts receivable		(387	)		2,807
Prepaid expenses and other current assets		423			636
Accounts payable and accrued expenses		(1,024	)		(171	)
Other liabilities		661			(340	)
Interest payable – Centre Lane Senior Secured Credit Facility, related party		1,334			945
Interest payable – 10% Convertible Promissory note, related party		6			6
Deferred revenue		(166	)		463
Net cash used in operating activities		(3,091	)		(4,708	)

Cash flows from investing activities:
Purchase of property and equipment		—			(3	)
Net cash used in investing activities		—			(3	)

Cash flows from financing activities:
Proceeds from stock option exercises		1			14
Preference dividend payments		(3	)		3
Principal payments received (funded) for notes receivable		20			(1	)
Proceeds from Centre Lane Senior Secured Credit Facility, related party		3,050			3,100
Payment of interest on Centre Lane Credit Facility		(96	)		—
Repayments of BMLLC acquisition debt		(250	)		—
Proceeds from PPP loan		—			1,137
Net cash provided by financing activities		2,722			4,253

Net decrease in cash and cash equivalents		(369	)		(458	)
Cash and cash equivalents at the beginning of period		781			736
Cash and cash equivalents at end of period	$	412		$	278

	●	~~Advertising revenues are generated by website visitors viewing or “clicking” on 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.


	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021

Revenue Concentration
Customers exceeding 10% of revenue		2			1			1			—
% of overall revenue
Customer 1		30.9	%		10.9	%		33.4	%		—	%
Customer 2		10.8	%		—	%		—	%		—	%
Total % of revenue		41.7	%		10.9	%		33.4	%		—	%

	~~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.~~


	September 30, 2022			December 31, 2021
Accounts Receivable Concentration
Customers exceeding 10% of receivable		2			2
% of accounts receivable		46.1	%		25.0	%


	September 30, 2022			December 31, 2021
Accounts Payable Concentration
Vendors exceeding 10% of payable		1			1
% of accounts payable		11.9	%		11.2	%

	Level in Fair	June 30, 2022				December 31, 2021
	Value Hierarchy	Carrying Amount		Fair Value		Carrying Amount		Fair Value

PPP Loan	2	$	-	$	-	$	1,137,140	$	1,137,140
Long-term debt to related parties, gross	3	$	29,616,564	$	29,616,564	$	26,414,064	$	26,414,064
Non-interest bearing BMLLC acquisition debt	2	$	-	$	-	$	250,000	$	250,000

Balance at December 31, 2020	$	16,916,705
Reclassification ⁽¹⁾		(464,800	)
Balance at March 31, 2021	$	16,451,905
Extinguishment ⁽²⁾		(16,451,905	)
Acquisition debt, Wild Sky, related party		17,376,834
Addition: Related party debt ⁽³⁾		2,285,000
Addition: Related part debt ⁽⁴⁾		80,000
Decrease: Related party debt amortization		328,922
Total Debt		19,741,834
Less: debt discount, related party⁽⁵⁾		(3,163,451	)
Less: current portion of long-term debt, related party		(2,729,200	)
Balance at June 30, 2021	$	13,849,183

Total long term debt to related parties at December 31, 2021	$	22,533,971
Addition: Related party debt ⁽⁶⁾		1,400,000
Decrease: Related party debt amortization ⁽⁷⁾		256,083
Total long term debt to related parties at March 31, 2022	$	24,190,054
Addition: Related party debt ⁽⁶⁾		1,300,000
Decrease: Related party debt amortization ⁽⁷⁾		328,922
Less: current portion of long-term debt, related party		(3,632,192	)
Total long term debt to related parties at June 30, 2022	$	22,186,784

	~~(1)~~	~~Related to reclassification of Bright Mountain PPP loan~~
	~~(2)~~	~~Centre Lane determined to be related party (See note 14) and applying FASB ASC Topic 470,~~ ~~Debt~~ ~~guidance~~
	~~(3)~~	~~Centre Lane debt financing on May 26, 2021~~
	~~(4)~~	~~Note payable to the Company’s Chairman of the Board~~
	~~(5)~~	~~Debt discount for Centre Lane debt and Note payable to the Company’s Chairman of the Board~~
	~~(6)~~	~~Centre Lane debt financing from January 1, 2022 through June 30, 2022~~
	~~(7)~~	~~Debt discount additions and debt discount amortization on related party financings for the three and six months ended June 30, 2022~~

	Estimated Useful Life (Years)	June 30, 2022			December 31, 2021			Estimated Useful Life (Years)		September 30, 2022			December 31, 2021
Furniture and fixtures	3-5	$	40,541		$	38,728			3-5	$	133		$	39
Computer equipment	3		116,948			176,624			3		245			176
Total property and equipment			157,489			215,352
Total											378			215
Less: accumulated depreciation			(103,546	)		(150,230	)				(341	)		(150	)
Total property and equipment, net		$	53,943		$	65,122
Property and equipment, net										$	37		$	65

	June 30, 2022			December 31, 2021
Website acquisition assets	$	1,124,846		$	1,124,846
Less: accumulated amortization		(921,250	)		(920,450	)
Less: cumulative impairment loss		(200,396	)		(200,396	)
Website Acquisition Assets, net	$	3,200		$	4,000

								As of September 30, 2022									As of December 31, 2021
	Useful Lives	June 30, 2022			December 31, 2021			Weighted Average Useful Life (Years)		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Trade name	5 years	$	3,749,600		$	3,749,600			2.0	$	2,759	$	(1,499	)	$	1,260	$	2,759	$	(1,141	)	$	1,618
IP/Technology									7.1		1,983		(863	)		1,120		1,983		(753	)		1,230
Customer relationships	5 years		16,184,000			16,184,000			2.2		6,680		(4,191	)		2,489		6,680		(3,494	)		3,186
IP/Technology	5 years		7,223,000			7,223,000
Non-compete agreements	3-5 years		1,154,500			1,154,500			0.4		402		(378	)		24		402		(371	)		31
Total Intangible Assets		$	28,311,100		$	28,311,100
Less: accumulated amortization			(6,544,842	)		(5,759,636	)
Less: accumulated impairment loss			(16,486,929	)		(16,486,929	)
Intangible assets, net		$	5,279,329		$	6,064,535
Total									3.4	$	11,824	$	(6,931	)	$	4,893	$	11,824	$	(5,759	)	$	6,065

	September 30, 2022		December 31, 2021
Website	$	3	$	4
Other intangibles		4,893		6,065	)
Total intangible, net	$	4,896	$	6,069


Remainder of 2022	$	385
2023		1,542
2024		1,542
2025		780
2026		147
Thereafter		497
Total expected amortization expense	$	4,893

	Owned & Operated		Ad Network		Total		Owned & Operated		Ad Exchange		Total
September 30, 2022							$	9,725	$	9,920	$	19,645
December 31, 2021	$	9,725,559	$	9,919,909	$	19,645,468	$	9,725	$	9,920	$	19,645
June 30, 2022	$	9,725,559	$	9,919,909	$	19,645,468

	June 30, 2022		December 31, 2021
Accrued salaries and benefits	$	986,103	$	1,459,299
Accrued dividends		691,861		691,861
Accrued traffic settlement⁽¹⁾		10,254		10,254
Accrued legal settlement⁽²⁾		216,101		81,101
Accrued legal fees		139,786		182,537
Accrued other professional fees		219,136		592,421
Share issuance liability⁽⁴⁾		27,012		189,067
Accrued warrant penalty⁽³⁾		366,899		366,899
Accrued Value-Added Tax payable		47,545		-
Other accrued expenses		132,582		191,226
Total accrued expenses	$	2,837,279	$	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. See Note 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.~~


	September 30, 2022
Original loan	$	16,417
Add:
Additional draw		8,175
Exit and other fees		3,805
Interest capitalized		1,657
Total		13,637
Less: Payment		(150	)
Outstanding principal	$	29,904

Amendment Number	Amendment Date	Additional Loan $’000		New Repayment Date	New Interest Rate			Exit Fee (B)		Common Stock Issued		Accounting Impact
1(A)	April 26, 2021	$	-	June 30, 2025		10	%	$	-		150,000	Extinguishment
2	May 26, 2021		1,500	June 30, 2025		-	%		750		3,000,000	Modification
3	August 12, 2021		500	June 30, 2025		-	%		250		2,000,000	Modification
4	August 31, 2021		1,100	June 30, 2025		-	%		550		-	Modification
5	October 8, 2021		725	June 30, 2025		-	%		363		-	Extinguishment
6	November 5, 2021		800	June 30, 2025		-	%		800		7,500,000	Modification
7	December 23, 2021		500	June 30, 2025		-	%		500		-	Modification
8	January 26, 2022		350	June 30, 2025		-	%		350		-	Modification
9	February 11, 2022		250	June 30, 2023		12	%		13		-	Modification
10	March 11, 2022		300	June 30, 2023		-	%		15		-	Modification
11	March 25, 2022		500	June 30, 2023		-	%		25		-	Modification
12	April 15, 2022		450	June 30, 2023		-	%		23		-	Modification
13	May 10, 2022		500	June 30, 2023		-	%		25		-	Modification
14	June 10, 2022		350	June 30, 2023		-	%		18		-	Modification
15	July 8, 2022		350	June 30, 2023		-	%		18		-	Modification
		$	8,175					$	3,700		12,650,000

(A)	The Credit Facility 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. Additionally, the Company may issue up to $800,000 in dividends from the previous limit of $500,000 per annum.

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

For the Twelve Months Ending:
2022 (remainder of the year)	$	-
2023		4,527,348
2024		2,416,395
2025		22,672,821
Total	$	29,616,564

	September 30, 2022			December 31, 2021
Deferred revenue at start of the period	$	1,162		$	347
Amounts invoiced during the period		433			1,059
Less: revenue recognized during the period		(599	)		(244	)
Deferred revenue at end of the period	$	996		$	1,162

Common Stock Options	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		5,070,433			0.01		9.6		—
Exercised		(100,000	)		—		—		—
Forfeited		(338,000	)		—		—		—
Expired		(72,000	)		—		—		—
Balance Outstanding, September 30, 2022		5,975,660		$	0.31		7.9	$	—
Exercisable at September 30, 2022		642,864		$	0.75		3.1	$	—
Unvested at September 30, 2022		5,332,796		$	0.04		2.1	$	—