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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 For the quarterly period ended
June 30,
2025
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
I.R.S. Employer
Incorporation or Organization
Identification No.
6400 Congress Avenue
,
Suite 2050
,
Boca Raton
,
FL
33487
Address of Principal Executive Offices
Zip Code
561
-
998-2440
Registrant’s Telephone Number, Including Area Code
Not applicable
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
None
None
None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes
☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes
☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☐
Accelerated filer
☐
Non-accelerated filer
☒
Smaller reporting company
☒
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
☒
As of August 1, 2025 there were
175,965,052
shares of the registrant's common stock outstanding.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This report includes forward-looking statements that relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “likely,” “aim,” “will,” “would,” “could,” and similar expressions or phrases identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and future events and financial trends that we believe may affect our financial condition, results of operation, business strategy and financial needs. Forward-looking statements include, but are not limited to, statements about:
•
our dependence upon sales of equity securities and borrowings under our credit facility to fund operating capital;
•
our ability to refinance, extend or repay our substantial indebtedness owed to Centre Lane;
•
our ability to detect advertising fraud;
•
the continued appeal of internet advertising;
•
our ability to manage and expand our relationships with publishers;
•
our dependence on revenues from a limited number of customers;
•
the impact of seasonal fluctuations on our revenues;
•
our ability to revise and improve the business plan of our legacy businesses to meet the needs of a broader range of customers;
•
acquisitions of new businesses and our ability to integrate those businesses into our operations;
•
online security breaches;
•
failure to effectively promote our brand and attract advertisers;
•
our ability to predict the impact of future pandemics or outbreaks of disease;
•
our ability to protect our content;
•
our ability to protect our intellectual property rights;
•
the success of our technology development efforts;
•
our ability to obtain or maintain key website addresses;
•
the rejection of digital advertising by consumers, through opt-in, opt-out or ad-blocking technologies or other means;
•
restrictions on the use of third-party cookies, mobile device identifiers or other tracking technologies;
•
our dependence on certain third-party service providers;
•
liability related to content which appears on our websites;
•
cybersecurity risk associated with cyber attack or data breach;
•
dependence on executive officers and certain key employees and consultants;
regulatory risks and compliance with privacy laws;
•
risks associated with potential litigation;
•
limitations from our secured indebtedness;
•
substantial doubts about our ability to continue as a going concern;
•
ongoing material weaknesses in our disclosure controls and internal control over financial reporting;
•
the limited public market for our common stock;
•
additional competition resulting from our business expansion strategy;
•
possible problems with our network infrastructure;
•
adverse impacts to our working capital as a result of the amount of cash dividends and outstanding interest we owe and/or pay affiliates;
•
dilution to existing shareholders upon the exercise of outstanding options and warrants;
•
provisions of our charter and Florida law which may have anti-takeover effects;
•
concentration of our stock ownership and control; and
•
our ability to issue additional shares of preferred stock in the future.
Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements and readers should carefully review this report, our Annual Report on Form 10-K for the year ended December 31, 2024 and our other filings with the U.S. Securities and Exchange Commission in their entirety. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. These forward-looking statements speak only as of the date of this report, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business.
OTHER PERTINENT INFORMATION
Unless specifically set forth to the contrary, when used in this report the terms “Bright Mountain,” the “Company,” “we,” “us," “our” and similar terms refer to Bright Mountain Media, Inc., a Florida corporation, and its subsidiaries. In addition, when used in this report, “second quarter of 2025” refers to the three and six months ended June 30, 2025, “second quarter of 2024” refers to the three and six months ended June 30, 2024, and “2024” refers to the year ended December 31, 2024. The information on, or that can be accessed through, our website at www.brightmountainmedia.com is not incorporated by reference in, or considered part of, this Quarterly Report on Form 10-Q.
(in thousands, except share and per share figures)
June 30, 2025
December 31, 2024 *
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$
1,678
$
2,546
Restricted cash
1,861
1,861
Accounts receivable, net
14,050
15,033
Prepaid expenses and other current assets
1,222
859
Total current assets
18,811
20,299
Property and equipment, net
90
69
Intangible assets, net
12,436
13,406
Goodwill
7,785
7,785
Operating lease right-of-use assets
215
253
Other long-term assets
159
158
Total assets
$
39,496
$
41,970
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable and accrued expenses
$
22,311
$
22,667
Other current liabilities
2,522
4,401
Interest payable - Centre Lane senior secured credit facility - related party
-
21
Deferred revenue
6,594
2,883
Note payable - Centre Lane senior secured credit facility - related party (current)
4,673
3,808
Total current liabilities
36,100
33,780
Other long-term liabilities
91
169
Note payable - Centre Lane senior secured credit facility - related party (long-term)
73,781
71,043
Finance lease liabilities
7
20
Operating lease liabilities
140
185
Total liabilities
110,119
105,197
Stockholders' deficit:
Convertible preferred stock, par value $
0.01
,
20,000,000
shares authorized,
no
shares issued or outstanding at June 30, 2025 and December 31, 2024, respectively
-
-
Common stock, par value $
0.01
,
324,000,000
shares authorized,
177,515,227
and
177,464,827
issued, and
175,965,052
and
176,114,652
outstanding at June 30, 2025 and December 31, 2024, respectively
1,776
1,775
Treasury stock at cost,
1,550,175
and
1,350,175
shares at June 30, 2025 and December 31, 2024, respectively
(
220
)
(
220
)
Additional paid-in capital
101,870
101,798
Accumulated deficit
(
174,169
)
(
166,857
)
Accumulated other comprehensive income
120
277
Total stockholders' deficit
$
(
70,623
)
$
(
63,227
)
Total liabilities and stockholders' deficit
$
39,496
$
41,970
* Derived from audited consolidated financial statements.
See accompanying notes to unaudited consolidated financial statements.
Bright Mountain Media, Inc. (together with its wholly-owned subsidiaries, the “Company,” “Bright Mountain” or “we”) is an end-to-end digital media and advertising services company that efficiently connects brands with targeted consumer demographics. We focus on digital publishing, advertising technology, consumer insights, creative services, and media services.
Digital Publishing
Our digital publishing division focuses on developing content that attracts an audience and monetizes that audience through advertising. The current portfolio of owned and operated websites is focused on moms, parenting, families, and more broadly, women. The portfolio consists of popular websites including Mom.com, Cafemom.com, LittleThings.com, and MamasLatinas.com. This demographic is highly sought after by brands and their advertising agencies. We use internal and external technologies to constantly improve the effectiveness and efficiency of the content we create. Our publishing division monetizes its audiences through both direct and programmatic advertising sales.
Advertising Technology
Our advertising technology division focuses on delivering targeted ads to audiences on owned and operated sites as well as third-party publishers in a cost-effective manner through the deployment of proprietary technologies.
By developing our own proprietary technology stack, we are able to pass along efficiencies to both the demand and supply side of the ecosystem.
Our goal is to enable and support a streamlined, end-to-end advertising model that addresses both demand (buy side) and publisher supply (sell side) programmatic sales and delivery of digital advertisements using an array of audience targeting tools and advertising formats (display, audio, video, CTV, in-app). Programmatic advertising relies on software programs that leverage data and proprietary algorithms to match the optimal selection of an ad with a bid price offered by advertisers.
Consumer Insights
Our consumer insights division focuses on providing primary and secondary research and competitive intelligence to address customers' strategic issues. We provide cutting-edge and dynamic research, offering clients a comprehensive perspective on their consumers. This insight extends to strategic guidance on the optimal timing and channels to effectively connect with target audiences. Our cutting-edge approach combines advanced data analytics, artificial intelligence, and comprehensive market research, to uncover actionable insights that drive informed decision-making.
Creative Services
Our creative services division transforms data into award-winning campaigns. We are uniquely able to leverage insights teams with highly strategic media planning and buying teams to ensure brands not only position their advertising precisely, but also yield impactful business results. Our goal is to combine data-driven decisions with creativity fueled by a deep understanding of modern culture.
Media Services
Our media services division focuses on advertisers and agencies by providing access to premium inventory, leveraging data to optimize programmatic campaigns. Our aim is to empower clients to access the most sought-after advertising spaces across diverse platforms tailored to their specific needs and preferences. Our data-driven approach aims to ensure that ad placements are not only well-targeted, but also continuously optimized for maximum efficiency and return on investment ("ROI"). Our commitment to combining premium inventory access with data-driven programmatic campaign optimization makes us a valuable partner in the success of our clients' advertising and marketing endeavors.
the selling of advertisements placed on our owned and managed sites and on partner websites where we earn a share of the revenue;
•
fees for facilitating the seamless, real-time exchange of advertisements on a large scale, bridging networks of buyers (referred to as "DSPs") and networks of sellers (referred to as "SSPs");
•
serving advertisers through providing access to premium resources and leveraging data to optimize programmatic campaigns, where revenue is derived from the planning and execution of creative and media marketing campaigns;
•
providing primary and secondary research, competitive intelligence, and expert insights to address customers' strategic issues, where revenue is primarily derived from providing a single integrated service for such research; and
•
provision of creative and media services to advertisers.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Basis of Presentation
The unaudited consolidated financial statements include the accounts of the Company and all of its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited consolidated financial statements for the three and six months ended June 30, 2025 and 2024, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in accordance with rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all the information and disclosures required by GAAP for complete consolidated financial statements. In the opinion of management, such unaudited consolidated financial statements include all adjustments (consisting of normal recurring accruals) necessary for the fair presentation of the consolidated financial position and the consolidated results of operations. The consolidated results of operations for periods presented are not necessarily indicative of the results to be expected for the full year or any future periods. The consolidated balance sheet information as of December 31, 2024, was derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024
. The interim consolidated financial statements should be read in conjunction with that report.
Going Concern and Liquidity
Historically, the Company has incurred losses, which have resulted in an accumulated deficit of approximately
$
174.2
million
as of June 30, 2025. Cash flows provided by (used in) operating activities were
$
1.2
million
and
$(
385,000
)
for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, the Company had approximately a
$
17.3
million
working capital deficit, inclusive of
$
1.7
million
in cash and cash equivalents and
$
1.9
million
in restricted cash.
The Company’s ability to continue as a going concern is dependent upon its ability to meet its liquidity needs through a combination of factors. The Company is currently exploring several strategic alternatives, including restructuring or refinancing its debt, or seeking additional debt, including borrowing under the Centre Lane Senior Secured Credit Facility, or raising equity capital. The ability to access the capital markets depends, in part, upon the volume and market price of the Company's stock, which cannot be assured. Other measures include reducing or delaying certain business activities, and reducing general and administrative expenses, including a reduction in headcount. The ultimate success of these plans is not guaranteed.
The Company's current cash and working capital, as of the filing of this Quarterly Report on Form 10-Q, is not expected to be sufficient to fund its anticipated level of operations over the next twelve months. As a result, such matters create a substantial doubt regarding the Company’s ability to meet its financial obligations and continue as a going concern.
The accompanying unaudited consolidated financial statements are prepared on a going concern basis and do not include any adjustments that might result from uncertainty about the Company’s ability to continue as a going concern.
The Company considers all highly liquid investments with a maturity of three months or less, when acquired, to be cash equivalents. The Company maintains its cash with various commercial banks in the United States, and other foreign countries in which the Company operates.
As of June 30, 2025 and December 31, 2024
, the Company exceeded the federally insured limit of $
250,000
for interest and non-interest-bearing accounts. The Company held a cash balance with a single financial institution in excess of the Federal Deposit Insurance Corporation ("FDIC") insured limit in the amount
of
$
1.4
million
as of June 30, 2025, and
$
2.3
million
as of December 31, 2024.
As of June 30, 2025 and December 31, 2024
, the Company did not exceed the insurance limit of $
29,000
for its international bank accounts.
Any loss incurred or a lack of access to such funds could have a significant adverse effect on the Company's financial condition, results of operations, and cash flows.
At June 30, 2025, and December 31, 2024, the Company had
$
1.7
million
and
$
2.5
million
, respectively, in cash and cash equivalents.
Restricted Cash
The Company considers cash to be restricted when withdrawal or general use is legally restricted. The Company reports restricted cash as a separate line item in the consolidated balance sheets. At June 30, 2025 and December 31, 2024, the Company had
$
1.9
million
in restricted cash for both periods, which is designated specifically for settlement of a legal judgment. See Note 16, Commitments and Contingencies, to the unaudited consolidated financial statements.
Off-balance Sheet Arrangements
There were no off-balance sheet arrangements as of June 30, 2025 and December 31, 2024
.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments, and assumptions are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of our consolidated financial statements as well as reported amounts of revenue and expenses during the periods presented. Our consolidated financial statements would be affected to the extent there are material differences between these estimates and actual results.
Significant estimates included in the accompanying consolidated financial statements include, valuation of goodwill and intangible assets, allowance for current expected credit losses, percentage of completion for revenue recognition, estimates of amortization period for intangible assets, estimates of depreciation period for property and equipment, discount rates used in the valuation of right-of-use assets and lease liabilities, litigation reserves, the valuation of equity-based transactions, valuation of the Centre Lane Senior Secured Facility carrying value regarding debt modification or extinguishment, and the valuation allowance on deferred tax assets. While these estimates are based on our best knowledge of current events and actions that may affect us in the future, actual results may differ materially from these estimates.
Foreign Currency
We translate the consolidated financial statements of our foreign subsidiaries, which have a functional currency in the respective country’s local currency, to U.S. dollars using month-end exchange rates for assets and liabilities and actual exchange rates for revenue, cost and expenses on the date of the transaction. Translation gains and losses as a result of consolidation are included in accumulated other comprehensive income. Transaction gains and losses are included within general and administrative expenses on the consolidated statements of operations and comprehensive loss.
Financial instruments that potentially subject us to concentration of credit risk consist principally of cash, cash equivalents, restricted cash, and accounts receivable. We place our cash, cash equivalents, and restricted cash with high credit-quality financial institutions. Such deposits may be in excess of federally insured limits. In addition, the Company maintains various bank accounts in Thailand and Israel, with some level of insurance. We perform periodic evaluations of the relative credit standing of financial institutions. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company's financial condition, results of operations, and cash flows.
We perform credit evaluations of our customers’ financial condition and require no collateral from our customers. We maintain an allowance for current expected credit losses based upon the expected collectability of accounts receivable balances.
The following tables provide information about concentrations that exceed 10% of revenue and accounts receivable for the period:
Three Months Ended
Six Months Ended
June 30, 2025
June 30, 2024
June 30, 2025
June 30, 2024
Revenue Concentration
Customers exceeding 10% of revenue
2
1
1
1
Percentage of revenue:
Customer 1
15.9
%
13.6
%
15.6
%
14.2
%
Customer 2
10.6
%
*
*
*
Total percentage of revenue
26.5
%
13.6
%
15.6
%
14.2
%
* Represents a customer revenue balance less than the 10% threshold.
June 30, 2025
December 31, 2024
Accounts Receivable Concentration
Customers exceeding 10% of accounts receivable
2
3
Percentage of accounts receivable:
Customer 1
17.1
%
*
Customer 2
10.6
%
13.5
%
Customer 3
*
11.1
%
Customer 4
*
10.4
%
Total percentage of accounts receivable
27.7
%
35.0
%
* Represents a customer accounts receivable balance less than the 10% threshold.
Effective Accounting Pronouncements Adopted
In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2020-06,
Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and
Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40).
This ASU simplifies the accounting for certain financial instruments with characteristics of
liabilities and equity. The FASB reduced the number of accounting models for convertible debt and convertible preferred stock instruments and made certain disclosure amendments to improve the information provided to users. The
new standard was effective
January 1, 2024 (early adoption was permitted, but not earlier than January 1, 2021). This standard did
no
t have an impact on our consolidated financial statements for the period ended
June 30, 2025.
For 2024 annual reporting, we
adopted
ASU No. 2023-07,
Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures
. This new standard requires an enhanced disclosure of significant segment expenses on an annual and interim basis, effective for fiscal years beginning after December 15, 2024. The adoption of ASU 2023-07 did
no
t have a significant impact on our consolidated financial statements for the period ended
June 30, 2025.
In December 2023, the FASB issued ASU No. 2023-09,
Income Taxes (Topic 740): Improvements to Income Tax Disclosures
, which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. The
adoption
of ASU 2023-09 did
no
t have a significant impact on our consolidated financial statements for the period ended
June 30, 2025.
Accounting Pronouncements Not Yet Adopted
In November 2024, and as amended in January 2025, the FASB issued ASU No. 2024-03,
Income Statement Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses
. The new guidance requires disaggregated information about certain income statement expense line items on an annual and interim basis. This guidance will be effective for annual periods beginning in the year ending December 31, 2027 and for interim periods thereafter. The new standard permits early adoption and can be applied prospectively or retrospectively. We are evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.
NOTE 3 – ACCOUNTS RECEIVABLE
Accounts receivable, net, consisted of the following:
June 30, 2025
December 31, 2024
(in thousands)
Accounts receivable
$
10,049
$
12,460
Unbilled receivables (1)
4,195
2,698
14,244
15,158
Less: allowance for current expected credit losses
(
194
)
(
125
)
Accounts receivable, net
$
14,050
$
15,033
(1) -
Unbilled receivables represent amounts for services rendered at the end of the period pending generation of invoice to the customer.
Accounts receivable, net, at January 1, 2024 was $
14.7
million.
Expected credit losses (recoveries) were approximately
$
68,000
and
$
23,000
for the three months ended June 30, 2025 and 2024, respectively, and
$
79,000
and
$(
14,000
)
for the six months ended June 30, 2025 and 2024
, respectively. These amounts are included in general and administrative expenses in the consolidated statements of operations and comprehensive loss.
NOTE 4 – PREPAID EXPENSES AND OTHER ASSETS
Prepaid expenses and other assets consisted of the following:
June 30, 2025
December 31, 2024
(in thousands)
Prepaid insurance (1)
$
129
$
358
Prepaid software
86
93
Deposits
159
158
Subscriptions
310
213
Other current assets (2)
697
195
Total prepaid costs and other assets
1,381
1,017
Less: other long-term assets
(
159
)
(
158
)
Prepaid expenses and other current assets
$
1,222
$
859
(1) -
Includes approximat
ely $
94,000
and $
291,000
which is being paid over a period of time and is included in accounts payable at
June 30, 2025 and December 31, 2024
, respectively.
(2) -
Includes approximately $
624,000
and $
121,000
which is being pa
id over a period of time and is included in accounts payable at June 30, 2025 and December 31, 2024
, respectively.
Property and equipment, net, consisted of the following:
Useful Life
June 30, 2025
December 31, 2024
(in thousands)
Computer equipment
3
$
97
$
76
Computer software
3
234
206
331
282
Less: accumulated depreciation
(
241
)
(
213
)
Property and equipment, net
$
90
$
69
Depreciation and amortization expense for the three months ended June 30, 2025 and 2024, was
$
15,000
and
$
35,000,
res
pectively, and
$
28,000
and
$
75,000
for the six months ended June 30, 2025 and 2024
, respectively. The amounts are included in general and administrative expenses in the consolidated statements of operations and comprehensive loss.
NOTE 6 – INTANGIBLE ASSETS, NET
Website acquisitions, net, consisted of the following:
June 30, 2025
December 31, 2024
(in thousands)
Website acquisition assets
$
1,125
$
1,125
Add: website development costs
96
96
1,221
1,221
Less: accumulated amortization
(
1,137
)
(
1,127
)
Website acquisition assets, net
$
84
$
94
Other intangible assets, net, consisted of the following:
June 30, 2025
December 31, 2024
Useful
Life
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
(in thousands)
Trade name
2
-
10
$
8,381
$
(
4,108
)
$
4,273
$
8,381
$
(
3,795
)
$
4,586
IP/technology
10
5,821
(
2,773
)
3,048
5,821
(
2,575
)
3,246
Customer relationships
5
-
10
13,380
(
8,349
)
5,031
13,380
(
7,900
)
5,480
Non-compete agreements
3
-
5
402
(
402
)
-
402
(
402
)
-
Other intangible assets, net
$
27,984
$
(
15,632
)
$
12,352
$
27,984
$
(
14,672
)
$
13,312
June 30, 2025
December 31, 2024
(in thousands)
Website
$
84
$
94
Other intangible assets
12,352
13,312
Intangible assets, net
$
12,436
$
13,406
Amortization expense for the three months ended June 30, 2025 and 2024 was approximately
$
485,000
and
$
481,000
respectively, and
$
970,000
and
$
962,000
for the six months ended June 30, 2025 and 2024, respectively.
As of
June 30, 2025, expected remaining amortization expense of intangible assets and website acquisition by fiscal year is as follows:
Remainder of 2025
$
894
2026
1,788
2027
1,788
2028
1,788
2029
1,785
Thereafter
4,393
Total expected amortization expense
$
12,436
NOTE 7 – GOODWILL
The following table represents the allocation of goodwill as of
June 30, 2025, and December 31, 2024:
Owned & Operated
Ad Network
Insights
Total
(in thousands)
December 31, 2024
$
2,865
$
4,013
$
907
$
7,785
Additions
-
-
-
-
Impairment
-
-
-
-
June 30, 2025
$
2,865
$
4,013
$
907
$
7,785
We allocate goodwill to reporting units based on the expected benefit and synergies with our current reporting units. The Company categorizes goodwill into
three
reporting units: "Owned & Operated", "Ad Network", and "Insights".
Goodwill is tested for impairment at least annually and if triggering events are noted prior to the annual assessment. Impairment is deemed to occur when the carrying value of the goodwill associated with the reporting unit exceeds the implied value of the goodwill associated with the reporting unit.
During the year ended December 31, 2024
, an impairment assessment was performed on goodwill for the Ad Network, Owned & Operated and Insights reporting units. The assessment used a qualitative assessment, including consideration of the economic, industry and market conditions in addition to the overall financial performance of the Company and these assets. Our qualitative assessment concluded that it was more likely than not that the estimated fair value of the Ad Network, Owned & Operated and Insights reporting units exceeds their carrying amounts. Since the assets are considered recoverable,
no
impairment charge was recognized for the year ended
December 31, 2024.
There was
no
triggering event or impairment for the
six months ended June 30, 2025
.
NOTE 8 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consisted of the following:
June 30, 2025
December 31, 2024
(in thousands)
Accounts payable (1)
$
14,173
$
14,428
Accrued wages, commissions, and bonus
565
527
Publisher cost
1,810
2,811
Professional fees
583
1,138
Subcontractor
4,714
3,438
Other
466
325
Total accounts payable and accrued expenses
$
22,311
$
22,667
(1) -
Accounts payable includes $
5.4
million and $
5.2
million at
June 30, 2025 and December 31, 2024
, respectively, for Slutzky & Winshman Ltd. and Mediahouse Inc., whose operations were terminated during the year ended December 31, 2023.
Other current liabilities consisted of the following:
June 30, 2025
December 31, 2024
(in thousands)
Current portion of long-term lease
$
111
$
101
Dividend payable
691
691
Project advance expense (1)
(
316
)
1,546
Litigation reserves
2,119
2,224
Other current liabilities
8
8
Total other liabilities
2,613
4,570
Less: other long-term liabilities
(
91
)
(
169
)
Other current liabilities
$
2,522
$
4,401
(1) -
Represents amounts advanced by customers to cover third-party expenses specifically related to their project. These expenses are offset against the advance and are not part of the Company's statement of operations and comprehensive loss.
NOTE 10 – CENTRE LANE SENIOR SECURED CREDIT FACILITY
Effective June 1, 2020, the Company entered into a membership interest purchase agreement to acquire
100
% of Wild Sky Media, which is now a subsidiary of the Company (the “Purchase Agreement”). To finance the acquisition, the Company obtained a first lien senior loan in the amount of $
16.5
million, comprised of $
15.0
million of initial indebtedness, repayment of Wild Sky's existing accounts receivable factoring facility of approximately $
900,000
, and approximately $
500,000
of expenses, from, and entered into a secured credit facility with, Centre Lane Partners Master Credit Fund II, L.P. (“Centre Lane Partners”).
Additional Draws
As of June 30, 2025, Centre Lane Partners had loaned the Company an additional
$
39.9
million
through Amendments One through Eight (the “Second Out Loans”), Amendments Nine through Sixteen and Nineteen (the “First Out Loans”), and Amendments Seventeen, Twenty-One, and Twenty-Two (the “Third Out Loans”) to provide liquidity to fund operations. The Centre Lane Senior Secured Credit Facility has been determined to qualify as a related party transaction as shares were issued to Centre Lane Partners as part of the transaction. A related party is a party that can exercise significant influence over the Company in making financial and/or operating decisions.
On December 26, 2024, the Company and its subsidiaries entered into the Twenty-First Amendment to the Credit Agreement with Centre Lane Partners for the purpose of securing a bond to stay execution of a judgment in the amount of approximately $
1.7
million that was entered against the Company as a result of certain disclosed litigation (the “Ladenburg litigation”), as the Company intends to appeal the judgment. The Company borrowed an additional $
1.9
million from the Lenders, which funds were used to secure the bond. Amounts drawn pursuant to the Twenty-First Amendment, including all accrued but unpaid principal and interest thereon, will mature and become payable in December 2026. Interest to be paid in cash accrues at a rate of
0
% per annum, and interest to be paid in kind accrues at a rate of
15
% per annum. For further information on this judgment, see
Note 16, Commitments and Contingencies, to the consolidated financial statements.
In connection with the Twenty-First Amendment, and as consideration therefore, the Company agreed to issue a number of shares of the common stock of the Company, par value $
0.01
per share, equal to
2.5
% of the fully diluted pro forma ownership of the Company, or
5,001,991
shares of the common stock, to an affiliate of the Lenders.
As of June 30, 2025, BV Agency, LLC, and Centre Lane Partners owned approximately
15.0
%
and
8.6
%
of the Company’s outstanding common stock, respectively.
Optional Prepayment
The Company may, at any time, voluntarily prepay, in whole or in part (with a minimum prepayment of $
250,000
) the outstanding principal of the loans, plus any accrued but unpaid interest on the aggregate principal amount of the loans being prepaid. There is
no
prepayment penalty associated with the Centre Lane Senior Secured Credit Facility. However, partial or full prepayments of the Centre Lane Senior Secured Credit Facility is required in the event of certain future capital raises.
Effective March 31, 2025, the Company, the Lenders, and Centre Lane Partners entered into the Twenty-Second Amendment to the Credit Agreement, pursuant to which the following adjustments were made to the outstanding loans:
•
Extending the maturity date of the First Out Loans (which no longer include the Seventeenth Amendment Term Loans and the Twenty-First Amendment Term Loans), Second Out Loans (formerly defined as the "Last Out Loans"), and Third Out Loans (comprised of the Seventeenth Amendment Term Loans and the Twenty-First Amendment Term Loans) from April 20, 2026 to December 20, 2026;
•
Changing the Second Out Loans PIK rate to the Term Secured Overnight Financing Rate ("
SOFR
") plus
3
% and the Second Out Loans cash interest rate to
2
%. At
June 30, 2025
, the
SOFR
floor was
5.00
%
per annum, thus the overall PIK rate on these facilities was
8.00
%
;
•
Changing the First Out Loans cash interest rate to the Term
SOFR
plus
2
%. The overall PIK rate on these facilities was
7.00
%
at June 30, 2025;
•
Changing the Third Out Loans PIK rate to
15
%;
•
Adjusting the amortization of the Second Out Loans such that quarterly installments of
1
% of the aggregate principal amount (after giving effect to capitalized PIK interest) are paid for each quarter in 2025, and quarterly installments of
2
% of the aggregate principal amount (after giving effect to capitalized PIK interest) are paid thereafter until maturity; and
•
Adjusting the amortization of the First Out Loans such that an installment of $
700,000
was paid on March 31, 2025, and quarterly installments of $
575,000
are paid thereafter until maturity.
For the three and six months ended June 30, 2025, the Company paid approximately
$
2.0
million
toward the principal loan balance. For the three and six months ended June 30, 2024
, the Company paid approximately $
879,000
toward the principal loan balance. During the
three and six months ended June 30, 2025, the Company paid approximately
$
532,000
toward outstanding interest payable. During the three and six months ended June 30, 2024
, the Company paid approximately $
139,000
toward outstanding interest payable.
The below table summarizes the loan balances at
June 30, 2025, and December 31, 2024:
June 30, 2025
December 31, 2024
(in thousands)
Note payable - Centre Lane senior secured credit facility - related party (current)
$
4,673
$
3,808
Note payable - Centre Lane senior secured credit facility - related party (net of discount)
The below table summarizes the movement in the outstanding principal during the
six months ended June 30, 2025 and the year ended December 31, 2024:
June 30, 2025
December 31, 2024
(in thousands)
Opening balance
$
78,822
$
70,228
Add:
Draws
-
1,861
Exit and other fees
35
505
Interest capitalized
4,455
9,353
83,312
81,947
Less
Payments
(
2,042
)
(
3,125
)
Outstanding principal
$
81,270
$
78,822
Fees
Under the terms of the Centre Lane Senior Secured Credit Facility, the Company is required to pay Centre Lane Partners a non-refundable annual administration fee equal to $
35,000
for agency services. The Centre Lane Senior Secured Credit Facility provides that this fee shall be, in all respects, fully earned, due and PIK by the Company on the effective date of the Centre Lane Senior Secured Credit Facility, and on each anniversary of the effective date during the term of the agreement by adding and capitalizing the full amount of such fee to the outstanding principal balance of the loans. The accumulated administrative fee since inception of the fa
cility is
$
175,000
and is included in outstanding principal. The administrative fee charged during the three and six months ended June 30, 2025 and 2024
was $
35,000
and $
35,000
, respectively.
Amendments to Centre Lane Senior Secured Credit Facility
Commencing April 2021, the Company and certain subsidiaries entered into various amendments to the Amended and Restated Senior Secured Credit Facility. The Credit Agreement was amended a number of times to provide for additional loans used for working capital and acquisitions. In addition, as part of the transaction, there are exit fees (the "Exit Fees"), which are added and capitalized to the principal amount of the original loan. As of June 30, 2025, there were
22
amendments to the Credit Agreement.
Consistent with FASB Accounting Standards Codification ("ASC") Topic 470,
Debt
(“ASC 470”), the Company is required to perform an analysis of the change in each amendment to determine whether the change is a modification or an extinguishment of debt. Under a modification, no gain or loss is recorded, and a new effective interest rate is established based on the carrying value of the debt and revised cash flow. If the debt is extinguished, the old debt is derecognized and the new debt is recorded at fair value, which becomes the new carrying value. A gain or loss is recorded for the difference between the net carrying value of the original debt and the fair value of the new debt. Additionally, in the event the transaction is with a related party, this gain or loss should be recognized against additional paid-in capital. Interest expense is recorded based on the effective interest rate of the new debt. A debt is considered extinguished if the present value of the new cash flows under the term of the new debt is at least 10% different from the present value of the remaining cash flows under the terms of the old debt.
The below table summarizes the amendments that were executed by the Company from the inception of the facility to
June 30, 2025 (in thousands, except for share data):
Amendment No.
Date
Draw
Repayment Date
Interest Rate
Paid-in-Kind
c
Interest Rate
Cash
d
Agency Fee
Exit Fee
a
Common Stock Issued
Accounting Impact
(in thousands, except share data)
1
4/26/2021
$
-
12/20/2026
8.00
%
2.00
%
$
-
$
-
150,000
Extinguishment
b
2
5/26/2021
1,500
12/20/2026
8.00
%
2.00
%
-
750
3,000,000
Modification
e
3
8/12/2021
500
12/20/2026
8.00
%
2.00
%
-
250
2,000,000
Modification
e
4
8/31/2021
1,100
12/20/2026
8.00
%
2.00
%
-
550
-
Modification
e
5
10/8/2021
725
12/20/2026
8.00
%
2.00
%
-
363
-
Extinguishment
e
6
11/5/2021
800
12/20/2026
8.00
%
2.00
%
-
800
7,500,000
Modification
e
7
12/23/2021
500
12/20/2026
8.00
%
2.00
%
70
500
-
Modification
e
5,125
70
3,213
12,650,000
8
1/26/2022
350
12/20/2026
8.00
%
2.00
%
-
350
-
Modification
e
9
2/11/2022
250
12/20/2026
0.00
%
7.00
%
-
13
-
Modification
f
10
3/11/2022
300
12/20/2026
0.00
%
7.00
%
-
15
-
Modification
f
11
3/25/2022
500
12/20/2026
0.00
%
7.00
%
-
25
-
Modification
f
12
4/15/2022
450
12/20/2026
0.00
%
7.00
%
-
23
-
Modification
f
13
5/10/2022
500
12/20/2026
0.00
%
7.00
%
35
25
-
Modification
f
14
6/10/2022
350
12/20/2026
0.00
%
7.00
%
-
18
-
Modification
f
15
7/8/2022
350
12/20/2026
0.00
%
7.00
%
-
18
-
Modification
f
3,050
35
487
-
16
2/10/2023
1,500
12/20/2026
0.00
%
7.00
%
-
75
-
Modification
f
17
h
4/20/2023
26,316
12/20/2026
15.00
%
0.00
%
35
708
21,401,993
Extinguishment
g
19
7/28/2023
2,000
12/31/2024
0.00
%
7.00
%
-
100
-
Modification
29,816
35
883
21,401,993
20
6/30/2024
-
12/20/2026
15.00
%
0.00
%
35
672
-
Modification
21
h
12/26/2024
1,861
12/20/2026
15.00
%
0.00
%
-
-
5,001,991
Modification
g
1,861
35
672
5,001,991
$
39,852
$
175
$
5,255
39,053,984
a) - Added and capitalized to the principal amount of the original loan and the original loan terms apply.
b) -
The Centre Lane Senior Secured Credit Facility was amended to permit the Company to raise up to $
6.0
million of total cash proceeds from the sale of its preferred stock prior to December 31, 2021, without having to make a mandatory prepayment of the loans. Additionally, the Company may issue up to $
800,000
in dividends from the previous limit of $
500,000
per annum.
c) - New rates in effect in connection with Amendment 22.
d) - New rates in effect in connection with Amendment 22.
e) - Second Out Loans.
f) - First Out Loans.
g) - Third Out Loans.
h) -
There was no impact on principal or interest and no fees incurred by the Company as a result of Amendment 18 and Amendment 22, thus they are not included in the above table.
Our debt financing arrangements, including long-term debt, expose us to counterparty credit risk as they are solely with a single related party lender. We manage this risk by closely monitoring the related party's financial stability and ensuring it maintains a strong credit rating. No other financial institutions are involved in our debt obligations. As of June 30, 2025 and December 31, 2024, the carrying value of the Centre Lane Senior Secured Credit Facility was
$
78.5
million
and
$
74.9
million
, respectively, net of unamortized debt discount of
$
2.8
million
and
$
4.0
million
, respectively. The discount is being amortized over the remaining life of the Centre Lane Senior Secured Credit facility using the effective interest method.
During the three and six months ended June 30, 2025, the Company recorded amortization of debt discount of
$
556,000
and
$
1.2
million
, respectively, on the Centre Lane Senior Secured Credit Facility. Amortization of debt discount for the three and six months ended June 30, 2024, was
$
936,000
and
$
1.6
million
, respectively.
Interest expense for the
three and six months ended June 30, 2025 and 2024, consisted of the following:
Three Months Ended
Six Months Ended
June 30, 2025
June 30, 2024
June 30, 2025
June 30, 2024
(in thousands)
Interest expense
$
2,579
$
2,424
$
4,966
$
4,800
Amortization
556
936
1,189
1,552
Total interest expense
$
3,135
$
3,360
$
6,155
$
6,352
NOTE 11 – 10% CONVERTIBLE PROMISSORY NOTES
On November 30, 2018, the Company issued
10
% convertible promissory notes ("Convertible Notes") in the amount of $
80,000
to our then Chairman of the Board, a related party. The Convertible Notes were unsecured and matured
five years
from issuance and were convertible at the option of the holder into shares of common stock at any time prior to maturity at a conversion price of $
0.40
per share. A beneficial conversion feature existed on the date the Convertible Notes were issued whereby the fair value of the underlying common stock into which the Convertible Notes was convertible was in excess of the face value of the Convertible Notes of $
80,000
.
The outstanding principal and interest of the Convertible Notes were due and payable in November 2023, and on July 1, 2024, the Company repaid the outstanding principal of $
80,000
and outstanding interest of $
43,000
on the Convertible Notes due to its former Chairman of the Board.
NOTE 12 – LEASES
The Company accounts for its operating lease under FASB ASC Topic 842,
Leases
(“ASC 842”), which requires lessees to recognize on the balance sheet at lease commencement, the lease assets and the related lease liabilities for the rights and obligations created by operating and finance leases with lease terms of more than 12 months.
Operating Lease
The Company leases its corporate offices in Boca Raton, Florida under a long-term non-cancellable lease agreement. An addendum to the lease dated June 14, 2022, set a lease renewal term of
five years
beginning upon completion of improvements to the office space by the landlord, which were completed on September 12, 2022. The annual base rent as of the beginning of this renewal term is approximately $
143,000
, with a provision for a
3
% increase on each anniversary of the rent commencement date. The Company has the option to renew the lease for one additional
five-year
term.
At June 30, 2025 and December 31, 2024, the operating lease right-of-use asset was
$
215,000
and
$
253,000
, respectively, and is included under assets on the consolidated balance sheets.
At June 30, 2025 and December 31, 2024, the operating lease right-of-use liability was
$
215,000
and
$
252,000,
respectively, including the current portion of
$
87,000
and
$
79,000
, respectively, and is included under liabilities on the consolidated balance sheets.
Over the lease term, the Company is required to amortize the operating lease asset and record interest expense on the lease liability created at lease commencement. Operating lease expense was approximately
$
46,000
and
$
39,000
for the three months ended June 30, 2025 and 2024, respectively. Operating lease expense was approximately
$
91,000
and
$
79,000
for the six months ended June 30, 2025 and 2024, respectively.
The Company’s non-lease components are primarily related to property maintenance and other operating services, which vary based on future outcomes and are recognized in rent expense when incurred and not included in the measurement of the lease liability.
Operating Lease Subleases
On April 14, 2024 and July 1, 2024, the Company entered into
two
sublease agreements for its Boca Raton corporate office suites. The subleases will continue for the remaining term on the initial lease agreement of
three years
with no option to extend. The aggregate minimum annual rental income under the subleases is approximately $
137,000
with
3
% escalations per annum. The Company retained the ability to use the address as its corporate office.
At June 30, 2025 and December 31, 2024, the operating lease subleases right-of-use liability was
$
12,000
, and is included as an offset to right-of-use assets within other non-current liabilities on the consolidated balance sheet.
Operating lease sublease income was approximately
$
34,000
and
$
17,000
for the three months ended June 30, 2025 and 2024, respectively. Operating lease sublease income was approximately
$
68,000
and
$
17,000
for the six months ended June 30, 2025 and 2024, respectively.
Finance Lease
On October 1, 2023, the Company entered into a lease agreement for computer equipment with a lease term of
three years
.
At June 30, 2025 and December 31, 2024, finance lease asset was
$
31,000
and
$
42,000
, respectively, and is included under assets on the consolidated balance sheets.
At June 30, 2025 and December 31, 2024, finance lease liability was
$
31,000
and
$
42,000
, respectively, including the current portion of
$
24,000
and
$
22,000
, respectively, and is included under liabilities on the consolidated balance sheets.
Finance lease expense for the three months ended June 30, 2025 was
$
7,300
, inclusive of interest of
$
1,900
and amortization of
$
5,400
, and
$
14,500
for the six months ended June 30, 2025, inclusive of interest of
$
4,000
and amortization of
$
10,500
. Finance lease expense for the three months ended June 30, 2024 was
$
7,000
, inclusive of interest of
$
3,000
and amortization of
$
4,000
, and $
14,500
for the
six months ended June 30, 2024
, inclusive of interest of $
6,000
and amortization of $
8,500
.
As of
June 30, 2025 and December 31, 2024, the asset and lease liability for the operating and finance lease are summarized as follows (in thousands):
June 30, 2025
December 31, 2024
(in thousands)
Assets:
Total operating lease right-of-use asset
$
215
$
253
Total finance lease asset (1)
$
31
$
42
Liabilities:
Operating lease liability, current
$
87
$
79
Operating sublease liability, net of current portion
12
12
Operating lease liability, net of current portion
128
173
Total operating lease liability
$
227
$
264
Finance lease liability, current
$
24
$
22
Finance lease liability, net of current portion
7
20
Total finance lease liability
$
31
$
42
Weighted-average remaining lease term (in years):
Operating lease
2.25
2.75
Finance lease
1.25
1.75
Weighted-average discount rate:
Operating lease
14.39
%
14.39
%
Finance lease
21.12
%
21.12
%
(1) - Finance lease represents computer software, see Note 5, Property and Equipment, Net, to the Company's consolidated financial statements.
The following table represents our revenue disaggregated by type:
Three Months Ended
Six Months Ended
June 30, 2025
June 30, 2024
June 30, 2025
June 30, 2024
(in thousands)
Revenue:
Digital publishing
$
359
$
516
$
942
$
950
Advertising technology
5,115
3,587
9,347
6,212
Consumer insights
7,332
6,677
14,371
13,367
Creative services
1,733
1,657
3,228
3,715
Media services
869
566
1,710
1,206
Total revenue
$
15,408
$
13,003
$
29,598
$
25,450
Geographic Information
Revenue by geography is based on the country of the Company’s contracting entity. Total United States revenue was approximately
100
% of total revenue for the
three months ended June 30, 2025 and 2024 and the six months ended June 30, 2025 and 2024, respectively.
As of June 30, 2025, and December 31, 2024
, approximately
100
% of our long-lived assets, including websites and other intangible assets used in revenue generation, were attributable to operations in the United States.
Deferred Revenue
The movement in deferred revenue during the
six months ended June 30, 2025 and the year ended December 31, 2024 comprised the following:
June 30, 2025
December 31, 2024
(in thousands)
Deferred revenue at the start of the period
$
2,883
$
4,569
Amounts invoiced during the period
33,309
40,529
Less: revenue recognized during the period
(
29,598
)
(
42,215
)
Deferred revenue at the end of the period
$
6,594
$
2,883
NOTE 14 – STOCK-BASED COMPENSATION
On April 14, 2022, the Board of Directors of the Company and the Compensation Committee of the Board of Directors adopted and approved the 2022 Bright Mountain Media Stock Option Plan (the “Stock Option Plan”). The Stock Option Plan provides for the grant of awards to eligible employees, directors and consultants in the form of stock options. The purpose of the Stock Option Plan is to provide an incentive to attract and retain directors, officers, consultants, advisors and employees whose services are considered valuable, to encourage a sense of proprietorship and to stimulate an active interest of such persons in our development and financial success. The Stock Option Plan has a term of
10
years and authorizes the issuance of up to
22,500,000
shares of the Company’s common stock. As of
June 30, 2025
,
12,123,017
s
hares were remaining under the Stock Option Plan for future issuance.
Options
As of June 30, 2025, options to purchase
10,376,983
shares of common stock were outstanding, in the aggregate, under the Company's 2013 Stock Option Plan, 2015 Stock Option Plan, 2019 Stock Option Plan, and the Stock Option Plan at a weighted-average exercise price of
$
0.10
per share. No further grants can be made under any of the Company's stock option plans other than the Stock Option Plan.
Compensation expense recorded in connection with the Stock Option Plan was
$
34,000
and
$
70,000
for the three months ended June 30, 2025 and 2024, respectively, and
$
71,000
and
$
135,000
for the six months ended June 30, 2025 and 2024, respectively. These amounts have been recognized as a component of general and administrative expenses in the accompanying consolidated financial statements.
The following table presents the activity of the Company’s outstanding common stock options for the
six months ended June 30, 2025:
Number of Options
Weighted Average Exercise Price
Weighted Average Remaining Contractual Term
Aggregate Intrinsic Value
Common stock options:
Balance outstanding at December 31, 2024
10,459,033
$
0.10
8.0
$
79
Granted
400,000
$
0.04
-
$
2
Exercised
(
50,400
)
$
-
-
$
-
Forfeited
(
357,900
)
$
0.08
-
$
-
Expired
(
73,750
)
$
0.26
-
$
-
Balance outstanding at June 30, 2025
10,376,983
$
0.10
7.5
$
95
Exercisable at June 30, 2025
4,852,994
$
0.13
6.8
$
72
Unvested at June 30, 2025
5,523,989
$
0.08
8.1
$
23
During the six months ended June 30, 2025,
400,000
options were issued.
No
options were issued during the same period of
2024.
As of June 30, 2025, there were total unrecognized compensation costs related to non-vested share-based compensation arrangements of
$
145,000
to be recognized through July 2027.
The Company estimates the fair value of share-based compensation utilizing the Black-Scholes option pricing model, which is dependent upon several variables such as the expected option term, expected volatility of our stock price over the expected option term, expected risk-free interest rate over the expected option term, expected dividend yield rate over the expected option term, and an estimate of expected forfeiture rates.
The following table provides the weighted-average assumptions used in determining the fair value of the stock option awards for the
six months ended June 30, 2025 and 2024:
June 30, 2025
June 30, 2024
Expected life (years)
5.50
yrs
0
yrs
Expected volatility
449
%
0.00
%
Risk-free interest rate
4.40
%
0.00
%
Dividend yield
0.00
%
0.00
%
Expected forfeiture rate
0.00
%
0.00
%
The expected life is computed using the simplified method, which is the average of the vesting term and the contractual term. The expected volatility is based on an average of similar public company's historical volatility, as the Company's common stock is quoted in the over-the-counter market on the OTCQB Tier of the OTC Markets, Inc. The risk-free interest rate is based on the U.S. Treasury yields with terms equivalent to the expected term of the related option at the time of the grant.
Dividend yield is based on historical trends. While the Company believes these estimates are reasonable, the compensation expense recorded would increase if the expected life was increased, a higher expected volatility was used, or if the expected dividend yield increased. The Company has elected to account for forfeitures as they occur.
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).
The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
Level 1:
Valuation is based on unadjusted quoted prices in active markets for identical assets and liabilities that are accessible at the reporting date.
Because valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.
Level 2
: Valuation is determined from pricing inputs that are other than quoted prices in active markets that are either directly or indirectly observable
as of the reporting date. Observable inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and interest rates and yield curves that are observable at commonly quoted intervals.
Level 3
: Valuation is based on inputs that are both significant to the fair value measurement and unobservable. Level 3 inputs includes situations
where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value generally require significant management judgment or estimation.
Fair Value Considerations
Financial instruments recognized in the consolidated balance sheets consist of cash, cash equivalents, restricted cash, accounts receivable, other liabilities and accounts payable. The Company believes that the carrying value of its current financial instruments approximates their fair value due to the short-term nature of these instruments. The carrying value of the Centre Lane Senior Secured Credit Facility approximates the fair value due to their nature and level of risk.
Assets Measured at Fair Value on a Non-recurring Basis
The Company has certain non-financial assets that are measured at fair value on a non-recurring basis when there is an indicator of impairment, and they are recorded at fair value only when impairment is recognized. These assets include goodwill and intangible assets, net.
The below table shows the quantitative information for assets measured at fair value on a non-recurring basis:
Quantitative Information about Level 3 Fair Value Measurements
Fair Value
Valuation Technique
Unobservable Input
Rate
(Weighted-Average Cost of Capital)
(in thousands)
Goodwill
$
7,785
Discounted cash flow
Discount rate
19.84
%
Intangible assets, net
$
12,352
Discounted cash flow
Discount rate
19.84
%
Goodwill and Intangibles Assets
Goodwill and intangible assets are tested for impairment at least annually, and if triggering events are noted prior to the annual assessment. Impairment is deemed to occur when the carrying value associated with the reporting unit exceeds the implied value associated with the reporting unit. We estimated the fair value of our reporting units utilizing an income approach (discounted cash flow method), which incorporated significant unobservable Level 3 inputs.
During the year ended December 31, 2024
, an impairment assessment was performed on goodwill for the Ad Network, Owned & Operating and Insights reporting units. The assessment used a qualitative assessment, including consideration of the economic, industry and market conditions in addition to the overall financial performance of the Company and these assets. Our qualitative assessment concluded that it was more likely than not that the estimated fair value of the Ad Network, Owned & Operating and Insights reporting units exceeds its carrying amount. Since the assets are considered recoverable,
no
impairment charge was recognized for the year ended
December 31, 2024.
There was
no
triggering event or impairment for the
six months ended June 30, 2025.
Centre Lane Senior Secured Credit Facility
The Company is required to perform an analysis of the change in each amendment to the Centre Lane Senior Secured Credit Facility to determine whether the change is a modification or an extinguishment of debt. Under a modification, no gain or loss is recorded, and a new effective interest rate is established based on the carrying value of the debt and revised cash flow. If the debt is extinguished, the old debt is derecognized and the new debt is recorded at fair value, which becomes the new carrying value.
The Company utilizes a third-party valuation company to calculate the present value of the cash flows under the terms of each new amendment and determines if it was substantially different by at least
10
% from the present value of the remaining cash flow of the original debt instrument. Amendment Twenty-Two was considered a modification. For further information on modifications and extinguishments, see the amendments table within
Note 10, Centre Lane Senior Secured Credit Facility, to the consolidated financial statements.
NOTE 16 – COMMITMENTS AND CONTINGENCIES
Litigation
In accordance with applicable accounting guidance, the Company establishes an accrued liability for litigation and regulatory matters when those matters present loss contingencies that are both probable and estimable. In such cases, there may be exposure to loss in excess of any amounts accrued. When a loss contingency is not both probable and estimable, the Company does not establish an accrued liability. As a litigation or regulatory matter develops, the Company, in conjunction with any outside counsel handling the matter, evaluates on an ongoing basis whether such matter presents a loss contingency that is probable and estimable. If, at the time of evaluation, the loss contingency related to a litigation or regulatory matter is not both probable and estimable, the matter will continue to be monitored for further developments that would make such loss contingency both probable and estimable. When a loss contingency related to a litigation or regulatory matter is deemed to be both probable and estimable, the Company will establish an accrued liability with respect to such loss contingency and record a corresponding amount of litigation-related expense. The Company will then continue to monitor the matter for further developments that could affect the amount of any such accrued liability.
Ladenburg
On July 11, 2023, Ladenburg Thalmann & Co. Inc. (“Ladenburg”) filed an action against the Company for breach of contract in the United States District Court for the Southern District of Florida (the “District Court”), Case No. 9:23-cv-81019-AMC. Ladenburg alleges that it entered into an Investment Banking Agreement (the “Agreement”) with the Company on September 1, 2020. According to Ladenburg, that Agreement provided that Ladenburg would be the exclusive investment advisor and banker for the Company. Ladenburg alleges that the Agreement entitles them to a fee for any financing transactions (debt financing or merger and acquisition transactions) that the Company engages in during the term of the contract. In April 2023, the Company informed Ladenburg of the impending acquisition of Big Village Insights, Inc. and Big Village Agency, LLC (together, the "Big Village Acquisition"). Ladenburg now seeks $
1.5
million, plus interest, costs and attorneys’ fees and expenses as a result of that acquisition and debt financing, claiming that it is entitled to a fee. The Company disputes the allegations and disputes that Ladenburg is entitled to receive any fee since it did not perform any work pertaining to such acquisition. On November 27, 2024, the District Court entered a judgment in favor of Ladenburg and against the Company granting damages of $
1.7
million to Ladenburg. On December 26, 2024, the Company filed a motion with the District Court requesting that the District Court reconsider its judgment. This motion was denied on January 30, 2025. On May 9, 2025, the Company appealed to the United States Court of Appeals for the Eleventh Circuit. Ladenburg filed a response on July 9, 2025. The Company has until August 29, 2025 to reply to the response. Upon our response, the matter will be fully briefed for the appellate court. The outcome of this matter is not determinable as of the date of issuance of these consolidated financial statements.
Other litigation is defined as smaller claims or litigation that are neither individually nor collectively material. It does not include lawsuits that relate to collections.
The Company is party to various other legal proceedings that arise in the ordinary course of business, separate from normal course accounts receivable collections matters. Due to the inherent difficulty of predicting the outcome of these other legal proceedings, the Company cannot predict the eventual outcome of these matters, and it is reasonably possible that some of them could be resolved unfavorably to the Company. As a result, it is possible that the Company’s results of operations or cash flows in a particular fiscal period could be materially affected by an unfavorable resolution of pending litigation or contingencies. The outcome is not determinable as of the issuance of these consolidated financial statements.
NOTE 17 – STOCKHOLDERS’ DEFICIT
Preferred Stock
The Company has authorized
20,000,000
shares of preferred stock with a par value of $
0.01
(the “Preferred Stock”), issuable in such series and with such designations, rights and preferences as the board of directors may determine. The Company’s board of directors has designated six series of preferred stock, consisting of:
1.
10% Series A Convertible Preferred Stock;
2.
10% Series B Convertible Preferred Stock;
3.
10% Series C Convertible Preferred Stock;
4.
10% Series D Convertible Preferred Stock;
5.
10% Series E Convertible Preferred Stock; and
6.
10% Series F Convertible Preferred Stock.
The designations, rights and preferences of the Series F-1, Series F-2 and Series F-3 are identical, other than the dividend rate, liquidation preference and date of automatic conversion into shares of our common stock.
Additional terms of the designations, rights and preferences of the Series F-1, Series F-2 and Series F-3 include:
•
the shares have no voting rights, except as may be provided under Florida law;
•
the shares pay cash dividends subject to the provisions of Florida law at the dividend rates set forth above, payable monthly in arrears;
•
the shares are convertible at any time at the option of the holder into shares of our common stock on a 1:1 basis. The conversion ratio is proportionally adjusted in the event of stock splits, recapitalization or similar corporate events. Any shares not previously converted will automatically convert into shares of our common stock on the dates set forth above;
•
the shares rank junior to the
10
% Series A Convertible Preferred Stock and our
10
% Series E Convertible Preferred Stock;
•
in the event of a liquidation or winding up of the Company, the shares have a liquidation preference of $
0.50
per share for the Series F-1, $
0.50
per share for the Series F-2 and $
0.40
per share for the Series F-3; and
Other designations, rights and preferences of each series of preferred stock are identical, including:
•
shares do not have voting rights, except as may be permitted under Florida law;
•
shares are convertible into our common stock at the holder’s option on a
one
for one basis;
•
shares are entitled to a liquidation preference equal to a return of the capital invested; and
•
each share will automatically convert into shares of common sto
ck
five years
from the date of issuance or upon a change in control.
Both the voluntary and automatic conversion formulas are subject to proportional adjustment in the event of stock splits, stock dividends and similar corporate events.
There were
no
shares of preferred stock issued or outstanding at
June 30, 2025, and December 31, 2024.
At June 30, 2025 and December 31, 2024, there was an accrued unpaid preference dividend of
$
691,000
. This amount is payable to the Company's former Chairman, Mr. Kip Speyer, and is included under other current liabilities in the consolidated balance sheets.
Common Stock
Shares of Common Stock under the Stock Option Plan
On April 14, 2022, the Board and the Compensation Committee of the Board adopted and approved the 2022 Stock Option Plan. The 2022 Stock Option Plan has a term of
10
years and authorizes the issuance of up to
22,500,000
shares of the Company’s common stock. As of
June 30, 2025,
12,123,017
shares were remaining under the 2022 Stock Option Plan for future issuance.
Issue of Common Stock
During the
three and six months ended June 30, 2025, the Company issued shares of our common stock as follows (in thousands, except share data):
Three Months Ended
Six Months Ended
June 30, 2025
June 30, 2025
Shares (#)
Value
Shares (#)
Value
Common stock issued for options exercised
-
$
-
50,400
$
2
Shares of common stock issued, net
-
$
-
50,400
$
2
During the three and six months ended June 30, 2024, the Company issued shares of our common stock as follows (in thousands, except share data):
During the six months ended June 30, 2025
,
one
shareholder relinquished
200,000
shares of the Company's common stock, which were acquired by the Company at
no
cost to the Company. A total of
1,550,175
shares of the Company's common stock, with a value of
$
220,000
, are being held as Treasury Stock by the Company.
Warrants
At June 30, 2025 and December 31, 2024, we had
4,431,200
and
10,573,700
c
ommon stock warrants outstanding to purchase shares of our common stock, respectively, with exercise prices ranging between $
0.75
and $
1.00
per share.
Of the
4,431,200
common stock warrants outstanding at June 30, 2025,
4,256,200
will expire in 2025, and
175,000
will expire in 2030.
Approximately
1,025,000
common stock warrants expired during the
three and six months ended June 30, 2025, and
1,579,000
common stock warrants expired during the
three and six months ended June 30, 2024.
A summary of the Company’s warrants outstanding as of
June 30, 2025 and December 31, 2024, is presented below.
June 30, 2025
Exercise Price
Number Outstanding
Gross Cash Proceeds
(if exercised)
$
0.75
4,256,200
$
3,192
$
1.00
175,000
$
175
4,431,200
$
3,367
December 31, 2024
Exercise Price
Number Outstanding
Gross Cash Proceeds
(if exercised)
$
0.75
10,398,700
$
7,799
$
1.00
175,000
$
175
10,573,700
$
7,974
NOTE 18 – LOSS PER SHARE
As of June 30, 2025 and 2024, there were
177,515,227
and
172,445,836
shares of common stock issued, respectively, and
175,965,052
and
171,095,661
shares of common stock outstanding, respectively. Outstanding shares as of
June 30, 2025 and 2024, have been adjusted to reflect
1,550,175
and
1,350,175
treasury shares, respectively.
Basic net loss per share is computed by dividing the net earnings attributable to common shareholders by the weighted-average number of common shares outstanding during the period.
Diluted loss per share is computed by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding, increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued. Conversion or exercise of the potential common shares is not reflected in diluted earnings per share unless the effect is dilutive. The dilutive effect, if any, of outstanding common share equivalents is reflected in diluted earnings per share by application of the treasury stock method, and if-converted method, as applicable.
The following tables reconcile actual basic and diluted earnings per share for the
three and six months ended June 30, 2025 and 2024.
Three Months Ended
Six Months Ended
June 30, 2025
June 30, 2024
June 30, 2025
June 30, 2024
(in thousands, except per share data)
Numerator:
Net loss
$
(
4,081
)
$
(
5,208
)
$
(
7,312
)
$
(
9,974
)
Denominator:
Weighted-average common shares outstanding:
Basic
175,965,052
171,095,661
175,969,993
171,155,364
Diluted
175,965,052
171,095,661
175,969,993
171,155,364
Net loss per common share
Basic
$
(
0.02
)
$
(
0.03
)
$
(
0.04
)
$
(
0.06
)
Diluted
$
(
0.02
)
$
(
0.03
)
$
(
0.04
)
$
(
0.06
)
The anti-dilutive securities excluded from the weighted-average shares used to calculate the diluted net loss per common share for the
three and six months ended June 30, 2025 and 2024 were as follows:
June 30, 2025
June 30, 2024
Shares unvested and subject to exercise of stock options
10,376,983
10,226,360
Shares subject to exercise of warrants
4,431,200
18,896,316
NOTE 19 – RELATED PARTIES
Centre Lane Partners
Centre Lane Partners has provided, and continues to provide, funding to assist the Company with its liquidity needs through the Centre Lane Senior Secured Credit Facility.
In connection with the Seventeenth Amendment, on April 20, 2023, the Company issued
21,401,993
shares of common stock of the Company to BV Agency, LLC, an entity beneficially owned by Centre Lane Partners. In connection with the Twenty-First Amendment, on December 26, 2024, the Company issued an additional
5,001,991
shares of common stock of the Company to BV Agency, LLC, an entity beneficially owned by Centre Lane Partners.
BV Agency, LLC, and Centre Lane Partners own approximately
15.0
%
and
8.6
%
of the Company’s outstanding common stock, respectively.
SEC rules define a related party as including (i) any director or executive officer of the Company, or any immediate family member thereof, (ii) any director nominee, or any immediate family member thereof, and (iii) a 5% or greater shareholder of the Company, or any immediate family member thereof. As a result, BV Agency, LLC, and Centre Lane Partners together are considered to be related parties of the Company. Through June 30, 2025, the Company has entered into
22
amendments to the Credit Agreement between itself and Centre Lane Partners.
The total related party debt owed to Centre Lane Partners was
$
81.3
million
and
$
78.8
million
as of June 30, 2025 and December 31, 2024, respectively. See Note 10, Centre Lane Senior Secured Credit Facility, to the Company’s consolidated financial statements for details on this facility.
Preferred Stock
At June 30, 2025 and December 31, 2024, there was an accrued unpaid preference dividend of
$
691,000
. This amount is payable to the Company's former Chairman, Mr. Kip Speyer.
The Company recorded a tax provision of $
0
for the
three and six months ended June 30, 2025 and 2024, due in large part to its expected tax losses for the period and maintained a full valuation allowance against its net deferred tax assets.
At June 30, 2025 and December 31, 2024
, the Company had
no
unrecognized tax benefits or accrued interest and penalties recorded.
No
interest and penalties were recognized during the
three and six months ended June 30, 2025 and 2024.
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law. The OBBBA introduces changes to U.S. tax policy, trade regulations, and federal spending priorities, including provisions such as the permanent extension of certain expiring provisions of the 2017 Tax Cuts and Jobs Act. We do not anticipate the OBBBA to have a significant impact to our consolidated financial statements, and will continue to evaluate the impact as more guidance becomes available.
Item 2. Management’s Discussion and Analysis of Financial Con
dition and Results of Operations.
The following discussion and analysis of our financial condition and results of our operations should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this report and in our Annual Report on Form 10-K for the year ended December 31, 2024. In addition to historical consolidated financial information, this discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those discussed below. Factors that could cause or contribute to these differences include, but are not limited to, those identified below, and in the section "Cautionary Statement Regarding Forward-Looking Information", those discussed in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2024, and those discussed in any subsequent filing we make with the SEC.
Business Overview
Organization and Nature of Operations
Bright Mountain Media, Inc. (together with its wholly-owned subsidiaries, the “Company,” “Bright Mountain” or “we”) is an end-to-end marketing services company that helps brands with the right audiences, at the right time, with the right message, both effectively and efficiently by removing the middlemen in the marketing workflow. Our end-to-end offerings combine consumer insights with creative services, media services, and advertising technology to deliver solutions to improve audience fidelity for brands. We focus on digital publishing, advertising technology, consumer insights, creative services, and media services.
Digital Publishing
Our digital publishing division focuses on developing content that attracts an audience and monetizes that audience through advertising. The current portfolio of owned and operated websites is focused on moms, parenting, families, and more broadly, women. The portfolio consists of popular websites including Mom.com, Cafemom.com, LittleThings.com, and MamasLatinas.com. This demographic is highly sought after by brands and their advertising agencies. We use internal and external technologies to constantly improve the effectiveness and efficiency of the content we create. Our publishing division monetizes its audiences through both direct and programmatic advertising sales.
Advertising Technology
Our advertising technology division focuses on delivering targeted ads to audiences on owned and operated sites as well as third-party publishers in a cost-effective manner through the deployment of proprietary technologies.
By developing our own proprietary technology stack, we are able to pass along
efficiencies to both the demand and supply side of the ecosystem.
Our goal is to enable and support a streamlined, end-to-end advertising model that
addresses both demand (buy side) and publisher supply (sell side) programmatic sales and delivery of digital advertisements using an array of audience targeting tools and advertising formats (display, audio, video, CTV, and in-app). Programmatic advertising relies on software programs that leverage data and proprietary algorithms to match the optimal selection of an ad with a bid price offered by advertisers.
Consumer Insights
Our consumer insights division focuses on providing primary and secondary research, competitive intelligence, and expert insight to address customers' strategic issues. We provide cutting-edge and dynamic research, offering clients a comprehensive perspective on their consumers. This insight extends to strategic guidance on the optimal timing and channels to effectively connect with target audiences. Our cutting-edge approach combines advanced data analytics and comprehensive market research, to uncover actionable insights that drive informed decision-making.
Creative Services
Our creative services division transforms data into award-winning campaigns. We are uniquely able to leverage insights teams with highly strategic media planning and buying teams to ensure brands not only position their advertising precisely, but also yield impactful business results. Our goal is to combine data-driven decisions with creativity fueled by a deep understanding of modern culture.
Our media services division focuses on advertisers and agencies by providing access to premium inventory, and leveraging data to optimize programmatic campaigns. Our aim is to empower clients to access the most sought-after advertising spaces across diverse platforms tailored to their specific needs and preferences. Our data-driven approach ensures that ad placements are not only well-targeted, but also continuously optimized for maximum efficiency and return on investment. Our commitment to combining premium inventory access with data-driven programmatic campaign optimization makes us an indispensable partner in the success of our clients' advertising and marketing endeavors.
The Company generates revenue through:
•
the selling of advertisements placed on our owned and managed sites and on partner websites where we earn a share of the revenue;
•
fees for facilitating the seamless, real-time exchange of advertisements on a large scale, bridging networks of buyers (referred to as "DSPs") and networks of sellers (referred to as "SSPs");
•
serving advertisers through providing access to premium resources and leveraging data to optimize programmatic campaigns, where revenue is derived from the planning and execution of creative and media marketing campaigns;
•
providing primary and secondary research, competitive intelligence, and expert insights to address customers' strategic issues, where revenue is primarily derived from providing a single integrated service for such research; and
•
provision of creative and media services to advertisers.
Key Factors Affecting Our Performance
Seasonal Fluctuations
. Typically advertising technology companies report a material portion of their revenues during the third and fourth calendar
quarters as a result of back-to-school and holiday-related advertising spend. We continue to experience this trend in our advertising technology division. Because of seasonal fluctuations, there can be no assurance that the results of any quarter or full year will be indicative of results for future years or quarters.
Limited Number of Customers
. During the six months ended June 30, 2025 one customer represented 15.6% of revenue. During the six months ended June 30, 2024 one customer represented 14.2% of revenue. The loss of this customer could have a material adverse impact on our results of operations in future periods.
Managing Industry Dynamics
. We operate in the rapidly evolving digital advertising industry. Advances in programmatic advertising technologies, and the efficient and automated method of purchasing ads online, has enabled publishers to auction their ad inventory to more buyers simultaneously, in real time. As advertisers stay ahead of evolving trends in consumer engagement with digital media, an expansive opportunity for innovation emerges. Our commitment to understanding customer needs empowers us, and our continuous pursuit of innovation enables swift adaptation to industry shifts. This approach not only facilitates the development of cutting-edge solutions, but also does so in a cost-effective manner.
As regulatory concerns accelerate the impact on existing industry standards, companies are actively seeking new methods to finely tailor their messages to target audiences. Tech companies will be limited in how they monetize personal information for advertising purposes. This trend is exemplified by two imminent developments: (1) the anticipated erosion of Google's third-party cookies and (2) the data security measures integrated into Apple iPhones. Consequently, companies must explore innovative methods to better understand their target audiences and have the tools to effectively engage with them.
We monitor the following key financial and operational metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. The following is our analysis for the three and six months ended June 30, 2025 and 2024:
Three Months Ended June 30,
Six Months Ended June 30,
2025
2024
2025
2024
(in thousands)
Revenue
$
15,408
$
13,003
$
29,598
$
25,450
Cost of revenue
12,371
9,581
22,289
18,892
Gross margin
3,037
3,422
7,309
6,558
General and administrative expenses
4,021
5,310
8,545
10,552
Financing and other expense, net
(3,097
)
(3,320
)
(6,076
)
(5,980
)
Net loss
$
(4,081
)
$
(5,208
)
$
(7,312
)
$
(9,974
)
Adjusted EBITDA (loss)
(1)
$
(218
)
$
(920
)
$
599
$
(2,023
)
(1) For a reconciliation of net loss to Adjusted EBITDA see “Use of Non-GAAP Financial Measures” below.
Revenue
The Company generates revenue through:
•
the selling of advertisements placed on our owned and managed sites and on partner websites where we earn a share of the revenue;
•
fees for facilitating the seamless, real-time exchange of advertisements on a large scale, bridging networks of buyers (referred to as "DSPs") and networks of sellers (referred to as "SSPs");
•
serving advertisers through providing access to premium resources and leveraging data to optimize programmatic campaigns, where revenue is derived from the planning and execution of creative and media marketing campaigns;
•
providing primary and secondary research, competitive intelligence, and expert insights to address customers' strategic issues, where revenue is primarily derived from providing a single integrated service for such research; and
•
provision of creative and media services to advertisers.
Revenue increased $2.4 million, or 18%, for the three months ended June 30, 2025, compared to the same period in 2024. Revenue increased $4.1 million, or 16%, for the six months ended June 30, 2025, compared to the same period in 2024. See below for a detailed analysis of revenue for the three and six months ended June 30, 2025, and 2024.
Cost of Revenue
Cost of revenue includes internal labor and payment to third parties for services performed to drive revenue, which includes the publisher cost paid for ad exchange on third party sites, advertising fees, personnel costs, technology and data related costs, fees paid for content creation, influencers, writers, and sales commission.
Cost of revenue increased approximately $2.8 million, or 29%, for the three months ended June 30, 2025 compared to the same period in 2024. Cost of revenue increased approximately $3.4 million, or 18%, for the six months ended June 30, 2025, compared to the same period in 2024. See below for a detailed analysis of cost of revenue for the three and six months ended June 30, 2025, and 2024.
General and Administrative Expenses
General and administrative expenses consist primarily of (i) personnel and related costs for our executive, finance and accounting, human resources, and, administrative personnel, including salaries, benefits, bonuses, and stock-based compensation; (ii) legal, accounting, and other professional service fees; (iii) other corporate expenses; (iv) information technology costs; and (v) facility costs.
General and administrative expenses decreased approximately $1.3 million, or 24%, for the three months ended June 30, 2025 compared to the same period in 2024. General and administrative expenses decreased approximately $2.0 million, or 19%, for the six months ended June 30, 2025, compared to the same period in 2024. See below for a detailed analysis of general and administrative expenses for the three and six months ended June 30, 2025 and 2024.
Results of Operations
The following is our analysis of the results of operations for the periods indicated below. This analysis should be read in conjunction with the consolidated financial statements and the notes to those statements that are included elsewhere in this Quarterly Report on Form 10-Q.
Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024
Net loss for the quarter ended June 30, 2025 was $4.1 million as compared to a net loss of $5.2 million for the same period in 2024. The following is our analysis for the period:
Three Months Ended June 30,
2025
2024
Change
(in thousands)
Revenue
$
15,408
$
13,003
$
2,405
18
%
Cost of revenue
12,371
9,581
2,790
29
%
Gross margin
3,037
3,422
(385
)
-11
%
General and administrative expenses
4,021
5,310
(1,289
)
-24
%
Loss from operations
(984
)
(1,888
)
904
-48
%
Financing and other expense, net
(3,097
)
(3,320
)
223
-7
%
Net loss
$
(4,081
)
$
(5,208
)
$
1,127
-22
%
Gross margin percentage
20
%
26
%
-6
%
Revenue
Our revenue increased $2.4 million, or 18%, for the three months ended June 30, 2025, compared to the same period in 2024. The increase in revenue was largely attributable to our advertising technology division. The Company focuses on digital publishing, advertising technology, consumer insights, creative services, and media services. Changes in revenue generated by each such division are set forth below:
Three Months Ended June 30,
2025
2024
Change
(in thousands)
Digital publishing
$
359
$
516
$
(157
)
(30
)%
Advertising technology
5,115
3,587
1,528
43
%
Consumer insights
7,332
6,677
655
10
%
Creative services
1,733
1,657
76
5
%
Media services
869
566
303
54
%
$
15,408
$
13,003
$
2,405
18
%
Digital Publishing
Digital publishing revenue decreased by $157,000, or 30%, for the three months ended June 30, 2025, compared to the same period in 2024. Approximately $359,000, or 2%, of the Company’s revenue for the three months ended June 30, 2025, was generated from our digital publishing customers, compared to $516,000, or 4%, for the same period in 2024. This division was significantly impacted by macroeconomic factors, which reduced traffic to our website, coupled with an overall reduction in spending by some customers related to inflationary concerns.
Advertising technology revenue increased by $1.5 million, or 43%, for the three months ended June 30, 2025, compared to the same period in 2024. Approximately $5.1 million, or 33%, of the Company’s revenue for the three months ended June 30, 2025, was generated from our advertising technology customers compared to $3.6 million, or 28%, for the same period in 2024.
This growth was driven by our ability to leverage our resources to attract top
advertisers, which in turn has allowed us to onboard premium publishers. This led to an increase in volume, as well as rates and overall revenue.
Consumer Insights
Consumer insights revenue increased by $655,000, or 10%, for the three months ended June 30, 2025, compared to the same period in 2024. Approximately $7.3 million, or 48%, of the Company’s revenue for the three months ended June 30, 2025 was generated from our consumer insights customers compared to $6.7 million, or 51%, for the same period in 2024. This growth was driven by an increase in contract value for certain larger tier revenue customers.
Creative Services
Creative services revenue increased by $76,000, or 5%, for the three months ended June 30, 2025, compared to the same period in 2024. Approximately $1.7 million, or 11%, of the Company’s revenue for the three months ended June 30, 2025, was generated from our creative services customers compared to $1.7 million, or 13% for the same period in 2024.
Media Services
Media services revenue increased by $303,000, or 54%, for the three months ended June 30, 2025, compared to the same period in 2024. Approximately $869,000, or 6%, of the Company’s revenue for the three months ended June 30, 2025, was generated from our media services customers compared to $566,000, or 4%, for the same period in 2024. This increase was primarily related to the timing of customer needs.
Cost of Revenue
Three Months Ended June 30,
2025
2024
Change
(in thousands)
Direct salaries and labor costs
$
1,864
$
2,146
$
(282
)
(13
)%
Direct project costs
4,911
3,050
1,861
61
%
Non-direct project costs
1,153
1,616
(463
)
(29
)%
Publisher costs
3,700
2,300
1,400
61
%
Content creation
222
160
62
39
%
Sales commissions
316
246
70
28
%
Other
205
63
142
225
%
$
12,371
$
9,581
$
2,790
29
%
Cost of revenue increased $2.8 million, or 29%, for the three months ended June 30, 2025, compared to the same period for 2024. This increase is due to the factors discussed below:
Direct Salaries and Labor Cost
Direct salaries and labor cost decreased $282,000, or 13%, for the three months ended June 30, 2025, when compared to the same period in 2024. Approximately $1.9 million, or 15%, of the Company's cost of revenue for the three months ended June 30, 2025, was a result of direct salaries and labor cost compared to $2.1 million, or 22% for the same period in 2024. This decrease is related to our continued efforts to decrease headcount. These costs represent salary and labor cost of employees that work directly on customer projects for our consumer insights, creative services, and media services divisions.
Direct project cost increased $1.9 million, or 61%, for the three months ended June 30, 2025 when compared to the same period in 2024. Approximately $4.9 million, or 40%, of the Company's cost of revenue for the three months ended June 30, 2025, was a result of direct project cost compared to $3.1 million, or 32%, during the same period in 2024. This increase was consistent with the increase noted in revenue from our media services and consumer insights division. These costs include payments made to third-parties that are directly attributable to the completion of projects that allow for revenue recognition for our consumer insights, creative services, and media services divisions.
Non-Direct Project Cost
Non-direct project cost decreased $463,000, or 29%, for the three months ended June 30, 2025 when compared to the same period in 2024. Approximately $1.2 million, or 9%, of the Company's cost of revenue for the three months ended June 30, 2025, was a result of non-direct project cost compared to $1.6 million, or 17%, for the same period in 2024. This decrease is related to our continued efforts to decrease headcount. These costs represent overall client service costs that are not specifically related to a particular project, but relate to services for our consumer insights, creative services, and media services divisions.
Publisher Cost
Publisher cost was $3.7 million, which represents 30% of overall cost of revenue, and $2.3 million, or 24%, of overall cost of revenue, for the three months ended June 30, 2025 and 2024, respectively. We experienced an increase of $1.4 million, or 61%, for the three months ended June 30, 2025, compared to the same period in 2024. This increase is consistent with the increase noted in revenue for our advertising technology division. These costs represent payments to media providers and website publishers.
Gross Margin
Gross margin was $3.0 million and $3.4 million for the three months ended June 30, 2025 and 2024, respectively. Our gross margin decreased $385,000, or 11%, for the three months ended June 30, 2025, when compared to the same period of 2024. This decline was a result of the increase in cost of revenue. Gross margin as a percentage of revenue decreased to 20% for the three months ended June 30, 2025 compared to 26% for the same period of 2024.
General and Administrative Expenses
Three Months Ended June 30,
2025
2024
Change
(in thousands)
Personnel costs
$
1,820
$
2,385
$
(565
)
(24
)%
Legal fees
202
508
(306
)
(60
)%
Professional fees
824
757
67
9
%
Insurance
131
211
(80
)
(38
)%
Depreciation
15
35
(20
)
(57
)%
Amortization
485
481
4
1
%
Website expenses
148
379
(231
)
(61
)%
Data processing
141
296
(155
)
(52
)%
Other
255
258
(3
)
(1
)%
$
4,021
$
5,310
$
(1,289
)
(24
)%
Gross margin as a percentage of general and administrative expense
76
%
64
%
12
%
General and administrative expenses decreased by $1.3 million, or 24%, for the three months ended June 30, 2025, compared to the same period in 2024. The decrease is due to a combination of factors as discussed below.
Personnel Cost
Personnel cost decreased by approximately $565,000, or 24%, for the three months ended June 30, 2025, compared to the same period in 2024. This change was mainly driven by a decrease in the Company's head count by a net change of 35 employees. The Company employee's headcount was 115 and 150 at June 30, 2025 and 2024, respectively.
Legal fees decreased by $306,000, or 60%, for the three months ended June 30, 2025, compared to the same period in 2024.
Website Expenses
Website expenses decreased by $231,000, or 61%, for the three months ended June 30, 2025, compared to the same period in 2024. This decrease was related to a reclassification of certain components of software costs from website expenses to cost of revenue.
Data Processing
Data processing decreased by $155,000, or 52%, for the three months ended June 30, 2025, compared to the same period in 2024. This reduction was due largely to the reclassification of certain components of data processing costs from data processing to website expenses.
Financing Expense (Income)
Three Months Ended June 30,
2025
2024
Change
(in thousands)
Interest expense
$
3,141
$
3,372
$
(231
)
(7
)%
Other expense (income)
(44
)
(53
)
9
(17
)%
Total financing and other expense, net
$
3,097
$
3,319
$
(222
)
(7
)%
Financing and other expense, net decreased by $222,000, or 7%, for the three months ended June 30, 2025, compared to the same period in 2024.
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
Net loss for the six months ended June 30, 2025 was $7.3 million as compared to a net loss of $10.0 million for the same period in 2024. The following is our analysis for the period:
Our revenue increased $4.1 million, or 16%, for the six months ended June 30, 2025, compared to the same period in 2024. The increase in revenue was largely attributable to our advertising technology division. The Company focuses on digital publishing, advertising technology, consumer insights, creative services, and media services. Changes in revenue generated by each such division are set forth below:
Six Months Ended June 30,
2025
2024
Change
(in thousands)
Digital publishing
$
942
$
950
$
(8
)
(1
)%
Advertising technology
9,347
6,212
3,135
50
%
Consumer insights
14,371
13,367
1,004
8
%
Creative services
3,228
3,715
(487
)
(13
)%
Media services
1,710
1,206
504
42
%
$
29,598
$
25,450
$
4,148
16
%
Digital Publishing
Digital publishing revenue decreased by $8,000, or 1%, for the six months ended June 30, 2025, compared to the same period in 2024. Approximately $942,000, or 3%, of the Company’s revenue for the six months ended June 30, 2025 was generated from our digital publishing customers, compared to $950,000, or 4%, for the same period in 2024.
Advertising Technology
Advertising technology revenue increased by $3.1 million, or 50%, for the six months ended June 30, 2025, compared to the same period in 2024. Approximately $9.3 million or 32% of the Company’s revenue for the six months ended June 30, 2025 was generated from our advertising technology customers compared to $6.2 million, or 24%, for the same period in 2024.
This growth was driven by our ability to leverage our resources to attract top
advertisers, which in turn has allowed us to onboard premium publishers. This led to an increase in volume, as well as rates and overall revenue.
Consumer Insights
Consumer insights revenue increased by $1.0 million, or 8%, for the six months ended June 30, 2025, compared to the same period in 2024. Approximately $14.4 million, or 49%, of the Company’s revenue for the six months ended June 30, 2025 was generated from our consumer insights customers compared to $13.4 million, or 53%, for the same period in 2024. This growth was driven by an increase in contract value for certain larger tier revenue customers.
Creative Services
Creative services revenue decreased by $487,000, or 13%, for the six months ended June 30, 2025, compared to the same period in 2024. Approximately $3.2 million, or 11%, of the Company’s revenue for the six months ended June 30, 2025 was generated from our creative services customers compared to $3.7 million, or 15% for the same period in 2024. This decrease was primarily related to a decrease in the number of projects for smaller tier revenue customers.
Media Services
Media services revenue increased by $504,000, or 42%, for the six months ended June 30, 2025, compared to the same period in 2024. Approximately $1.7 million, or 6% of the Company’s revenue for the six months ended June 30, 2025 was generated from our media services customers compared to $1.2 million, or 5%, for the same period in 2024. This increase was primarily related to the timing of customer needs and the moving of certain projects from year-end 2024 to the first half of 2025.
Cost of revenue increased $3.4 million, or 18%, for the six months ended June 30, 2025, compared to the same period for 2024. This increase is due to the factors discussed below:
Direct Salaries and Labor Cost
Direct salaries and labor cost decreased $399,000, or 10%, for the six months ended June 30, 2025, when compared to the same period in 2024. Approximately $3.7 million, or 16%, of the Company's cost of revenue for the six months ended June 30, 2025 was a result of direct salaries and labor cost compared to $4.1 million, or 22% for the same period in 2024. This decrease is related to our continued efforts to decrease headcount. These costs represent salary and labor cost of employees that work directly on customer projects for our consumer insights, creative services, and media services divisions.
Direct Project Cost
Direct project cost increased $2.3 million, or 38%, for the six months ended June 30, 2025, when compared to the same period in 2024. Approximately $8.5 million, or 38%, of the Company's cost of revenue for the six months ended June 30, 2025 was a result of direct project cost compared to $6.2 million, or 33%, during the same period in 2024. This increase was related to an increase customer contracts. These costs include payments made to third-parties that are directly attributable to the completion of projects that allow for revenue recognition for our consumer insights, creative services, and media services divisions.
Non-Direct Project Cost
Non-direct cost was $2.2 million, or 10%, of the Company's cost of revenue for the six months ended June 30, 2025, compared to $3.7 million, or 20%, for the same period in 2024. These costs represent overall client service costs that are not specifically related to a particular project, but relate to services for our consumer insights, creative services, and media services divisions. The decrease in non-direct project costs is related to the decrease in revenue from our creative services division.
Publisher Cost
Publisher cost was $6.7 million, which represents 30% of overall cost of revenue, and $4.1 million, or 22%, of overall cost of revenue, for the six months ended June 30, 2025 and 2024, respectively. We experienced an increase of $2.6 million, or 64%, for the six months ended June 30, 2025, compared to the same period in 2024. This increase is consistent with the increase noted in revenue for our advertising technology division. These costs represent payments to media providers and website publishers.
Gross Margin
Gross margin was $7.3 million and $6.6 million for the six months ended June 30, 2025 and 2024, respectively. Our gross margin increased $724,000, or 11%, for the six months ended June 30, 2025, when compared to the same period of 2024. Gross margin as a percentage of revenue decreased to 25% for the six months ended June 30, 2025, compared to 26% for the same period of 2024 due to the higher cost of revenue.
Gross margin as a percentage of general and administrative expense
86
%
62
%
24
%
General and administrative expenses decreased by $2.0 million, or 19%, for the six months ended June 30, 2025, compared to the same period in 2024. The decrease is due to a combination of factors as discussed below.
Personnel Cost
Personnel cost decreased by approximately $1.2 million, or 25%, for the six months ended June 30, 2025, compared to the same period in 2024. This change was mainly driven by a decrease in the Company's head count by a net change of 35 employees. The Company employee's headcount was 115 and 150 at June 30, 2025 and 2024, respectively.
Legal Fees
Legal fees decreased by $133,000, or 17%, for the six months ended June 30, 2025, compared to the same period in 2024.
Website Expenses
Website expenses decreased by $199,000, or 29%, for the six months ended June 30, 2025, compared to the same period in 2024. This decrease was related to a reclassification of certain components of software costs from website expenses to cost of revenue.
Data Processing
Data processing decreased by $265,000, or 37%, for the six months ended June 30, 2025, compared to the same period in 2024. This reduction was due largely to the reclassification of certain components of data processing costs from data processing to website expenses.
Financing Expense (Income)
Six Months Ended June 30,
2025
2024
Change
(in thousands)
Interest expense
$
6,167
$
6,377
$
(210
)
(3
)%
Other expense (income)
(91
)
(397
)
306
(77
)%
Total financing and other expense, net
$
6,076
$
5,980
$
96
2
%
Financing and other expense, net increased by $96,000, or 2%, for the six months ended June 30, 2025, compared to the same period in 2024.
Non-GAAP results are presented only as a supplement to the financial statements and for use within management's discussion and analysis based on accounting principles generally accepted in the United States of America ("GAAP"). The non-GAAP financial information is provided to enhance the reader's understanding of the Company's financial performance, but non-GAAP measures should not be considered in isolation or as a substitute for financial measures calculated in accordance with GAAP.
All of the items included in the reconciliation from net loss before taxes to EBITDA and from EBITDA to Adjusted EBITDA are either (i) non-cash items (e.g., depreciation, amortization of purchased intangibles, stock-based compensation, etc.) or (ii) items that management does not consider to be useful in assessing the Company's ongoing operating performance (e.g., M&A costs, income taxes, gain on sale of investments, loss on disposal of assets, etc.). In the case of the non-cash items, management believes that investors can better assess the Company's operating performance if the measures are presented without such items because, unlike cash expenses, these adjustments do not affect the Company's ability to generate free cash flow or invest in its business.
We use, and we believe investors benefit from the presentation of, EBITDA and Adjusted EBITDA in evaluating our operating performance because it provides us and our investors with an additional tool to compare our operating performance on a consistent basis by removing the impact of certain items that management believes do not directly reflect our core operations. We believe that EBITDA is useful to investors and other external users of our financial statements in evaluating our operating performance because EBITDA is widely used by investors to measure a company's operating performance without regard to items such as interest expense, taxes, and depreciation and amortization, which can vary substantially from company to company depending upon accounting methods and book value of assets, capital structure and the method by which assets were acquired.
Because not all companies use identical calculations, the Company's presentation of non-GAAP financial measures may not be comparable to other similarly titled measures of other companies. However, these measures can still be useful in evaluating the Company's performance against its peer companies because management believes the measures provide users with valuable insight into key components of GAAP financial disclosures.
A reconciliation of net loss before taxes to non-GAAP EBITDA and Adjusted EBITDA is as follows:
Three Months Ended June 30,
Six Months Ended June 30,
2025
2024
2025
2024
(in thousands)
Net loss before tax
$
(4,081
)
$
(5,208
)
$
(7,312
)
$
(9,974
)
Depreciation expense
15
35
28
75
Amortization of intangibles
485
481
970
962
Amortization of debt discount
556
936
1,189
1,552
Other interest expense
6
11
12
21
Interest expense - Centre Lane Senior Secured Credit Facility and Convertible Promissory Notes
2,579
2,426
4,966
4,804
EBITDA
(440
)
(1,319
)
(147
)
(2,560
)
Stock compensation expense
34
70
71
135
Non-recurring professional fees
20
-
261
-
Non-recurring legal fees
111
254
357
309
Non-recurring severance expense
57
75
57
93
Adjusted EBITDA (loss)
$
(218
)
$
(920
)
$
599
$
(2,023
)
Liquidity and Capital Resources
Liquidity is the ability of a company to generate sufficient cash to satisfy its needs for cash. The following table summarizes total current assets, total current liabilities, and net working capital (deficit) as of June 30, 2025, as compared to December 31, 2024.
As of June 30, 2025, we had a cash balance of $1.7 million and a restricted cash balance of $1.9 million compared with a cash balance of $2.5 million and a restricted cash balance of $1.9 million as of December 31, 2024. The Company’s liquidity needs, and a discussion of how it intends to meet those needs, is discussed below. See – “Going Concern.”
Going Concern
Historically, the Company has incurred losses, which have resulted in an accumulated deficit of approximately $174.2 million as of June 30, 2025. Cash flows provided by (used in) operating activities were $1.2 million and $(385,000) for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, the Company had a working capital deficit of approximately $17.3 million, inclusive of $1.7 million in cash and cash equivalents and $1.9 million in restricted cash.
The Company's current cash and working capital, as of the filing of this Quarterly Report on Form 10-Q, is not expected to be sufficient to fund its anticipated level of operations over the next twelve months. As a result, such matters create a substantial doubt regarding the Company’s ability to meet its financial obligations and continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to meet its liquidity needs through a combination of factors. During the next year, we anticipate that we will need approximately $4.8 million to meet our contractual obligations in addition to amounts needed for our working capital needs. The Company is currently exploring several strategic alternatives, including restructuring or refinancing its debt, or seeking additional debt, including borrowing under the Centre Lane Senior Secured Credit Facility, or raising equity capital. The ability to access the capital markets depends, in part, upon the volume and market price of the Company's stock, which cannot be assured. Other measures include reducing or delaying certain business activities, and reducing general and administrative expenses, including a reduction in headcount. The ultimate success of these plans is not guaranteed.
The accompanying unaudited consolidated financial statements are prepared on a going concern basis and do not include any adjustments that might result from uncertainty about the Company’s ability to continue as a going concern.
Financing Arrangement Summary
Centre Lane Senior Secured Credit Facility
On June 5, 2020, the Company and its subsidiaries entered into to the Amended and Restated Senior Secured Credit Facility between themselves, the lenders party thereto and Centre Lane Partners Master Credit Fund II, L.P., as Administrative Agent and Collateral Agent (“Centre Lane Partners”), as amended (the “Credit Agreement”). The Credit Agreement has been amended numerous times to change the terms, including the amounts outstanding, the interest rate, the maturity date and other payment terms.
As of June 30, 2025, Centre Lane Partners has loaned the Company $39.9 million through Amendments One through Eight (the "Second Out Loans"), Amendments Nine through Sixteen (the "First Out Loans"), and Amendments Seventeen, Twenty-One, and Twenty-Two (the "Third Out Loans").
Effective March 31, 2025, the Company, the Lenders, and Centre Lane Partners entered into the Twenty-Second Amendment to the Credit Agreement, pursuant to which the following adjustments were made to the outstanding loans:
•
Extending the maturity date of the First Out Loans (which no longer include the Seventeenth Amendment Term Loans and the Twenty-First Amendment Term Loans), Second Out Loans (formerly defined as the Last Out Loans), and Third Out Loans (comprised of the Seventeenth Amendment Term Loans and the Twenty-First Amendment Term Loans) from April 20, 2026 to December 20, 2026;
•
Changing the Second Out Loans PIK rate to the Term Secured Overnight Financing Rate (“SOFR”) plus 3% and the Second Out loans cash interest rate to 2%;
•
Changing the First Out Loans cash interest rate to the Term SOFR plus 2%;
•
Changing the Third Out Loans PIK rate to 15%;
•
Adjusting the amortization of the Second Out Loans such that quarterly installments of 1% of the aggregate principal amount (after giving effect to capitalized PIK interest) are paid for each quarter in 2025, and quarterly installments of 2% of the aggregate principal amount (after giving effect to capitalized PIK interest) are paid thereafter until maturity; and
•
Adjusting the amortization of the First Out Loans such that an installment of $700,000 was paid on March 31, 2025, and quarterly installments of $575,000 are paid thereafter until maturity.
The outstanding principal owed to Centre Lane Partners was $81.3 million and $78.8 million as of June 30, 2025 and December 31, 2024, respectively. Of the amount outstanding at June 30, 2025, approximately $4.7 million is due by June 30, 2026. The balance of $76.6 million is due in December 2026.
For a full description of the Centre Lane Senior Secured Credit Facility, see Note 10, Centre Lane Senior Secured Credit Facility, to the consolidated financial statements.
Summary of Cash Flows
The following table summarizes cash flow activities during the six months ended June 30, 2025 and 2024:
Six Months Ended June 30,
(in thousands)
2025
2024
Cash flow provided by (used in) operating activities
$
1,234
$
(385
)
Cash flow used in investing activities
(49
)
(85
)
Cash flow used in financing activities
(2,051
)
(886
)
Net decrease in cash and cash equivalents, net of impact of exchange rates
Our largest source of operating cash is cash collections from customers from revenue. Our primary uses of our operating cash, are for cost of revenue expenses, personnel-related expenditures and other general administrative expenses.
For the six months ended June 30, 2025, cash provided by operating activities was $1.2 million. The primary factors affecting our operating cash flows during the period were our net loss of $7.3 million, adjusted for non-cash charges of $970,000 for amortization of intangible assets, $1.2 million of amortization of debt discount, $4.5 million in interest paid in kind on the Centre Lane Senior Secured Credit Facility, and a $1.7 million net change in operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities were a $3.7 million increase in deferred revenue, a $904,000 decrease in accounts receivable, partially offset by a $2.0 million decrease in other liabilities.
For the six months ended June 30, 2024, cash flow used in operating activities was $385,000. The primary factors affecting our operating cash flows during the period were our net loss of $10.0 million, adjusted for non-cash charges of $962,000 for amortization of intangible assets, $1.6 million of amortization of debt discount, $4.5 million in interest paid in kind on the Centre Lane Senior Secured Credit Facility, $135,000 for stock compensation expense, and a $2.3 million net change in operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities were a $2.6 million decrease in accounts receivable and a $1.2 million increase in deferred revenue. partially offset by a $993,000 decrease in accounts payable, and a $613,000 decrease in other liabilities.
Investing Activities
Cash used in investing activities of $49,000 and $85,000 for the six months ended June 30, 2025 and 2024, respectively, was attributable to $49,000 and $14,000, respectively, for the purchase of property and equipment, and $71,000 for website enhancements during the six months ended June 30, 2024.
Financing Activities
During the six months ended June 30, 2025, the Company used cash of $2.1 million in financing activities, which is largely attributable to the repayment of principal on the Centre Lane Senior Secured Credit Facility of $2.0 million.
During the six months ended June 30, 2024, the Company used cash of $886,000 in financing activities, which is largely attributable to the repayment of principal on the Centre Lane Senior Secured Credit Facility of $879,000.
Contractual Obligations and Commitments
There were no other material changes in our contractual obligations and commitments from those disclosed above in Note 10, Centre Lane Senior Secured Credit Facility, and Note 12, Leases, to the consolidated financial statements, and in the Annual Report on Form 10-K for the year ended December 31, 2024.
Off-Balance Sheet Arrangements
As of June 30, 2025 and December 31, 2024, there were no off-balance sheet arrangements between us and any other entity that have, or are reasonably likely to have, a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to shareholders.
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with GAAP requires management to make certain estimates, judgments, and assumptions. We believe that the estimates, judgments, and assumptions upon which we rely are reasonable based upon information available to us at the time that these estimates, judgments, and assumptions are made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of our unaudited consolidated financial statements as well as reported amounts of revenue and expenses during the periods presented. Our unaudited consolidated financial statements would be affected to the extent there are material differences between these estimates and actual results. In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require management’s judgment in its application. There are also areas in which management’s judgment in selecting any available alternative would not produce a materially different result.
Significant estimates included in the accompanying consolidated financial statements include, valuation of goodwill and intangible assets, allowance for current expected credit losses, the determination of the relative selling prices of our services, percentage of completion for revenue recognition, estimates of amortization period for intangible assets, estimates of depreciation period for property and equipment, discount rates used in the valuation of right-of-use assets and lease liabilities, litigation reserves, the valuation of equity-based transactions, the valuation of the Centre Lane Senior Secured Facility to determine whether a debt modification or extinguishment has occurred, and the valuation allowance on deferred tax assets.
Critical accounting policies are those policies that management believes are very important to the portrayal of our financial position and results of operations, and that require management to make estimates that are difficult, subjective or otherwise complex. For further information on all of our significant accounting policies, see the Company’s audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
Recent Accounting Pronouncements
Recent accounting pronouncements are detailed in the “Summary of Significant Accounting Policies” in Note 2 to our unaudited consolidated financial statements.
Smaller Reporting Company Status
We are a “smaller reporting company” as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We may continue to be a smaller reporting company even though we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as the market value of our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.
Item 3. Quantitative
and Qualitative Disclosures About Market Risk.
As a smaller reporting company as defined in Rule 12b-2 of the Exchange Act, we are not required to include information otherwise required by this Item 3 to Form 10-Q.
Item 4. Controls and Pro
cedures.
Evaluation of Disclosure Controls and Procedures
The purpose of disclosure controls is to provide assurance at a reasonable level that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. The Company’s management, with the participation of the Company’s Chief Executive Officer (its principal executive officer) and Chief Financial Officer (its principal financial officer), have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of June 30, 2025. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that as of June 30, 2025, our disclosure controls and procedures were effective.
Our senior management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers, or persons performing similar functions, and effected by our Board, senior management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We continue to review our internal control over financial reporting and may from time to time make changes aimed at enhancing their effectiveness and to ensure that our systems evolve with our business.
Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in “Internal Control — Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").
As the Company continues to improve its accounting staff and processes, internal controls are at the forefront of our efforts to produce accurate and complete financial statements. The Company has provided standard operating procedures to ensure each process is both functioning and performed correctly. This allows for documented updates and improvements. The implementation of the month end close software also elevated our internal controls and documentation. Management does recognize that without updated systems, the manual processes will allow for possible material weaknesses in the future.
Notwithstanding the significant deficiencies described below, based on the Company's continued improvements in its accounting staff and processes described above, the Company's Chief Executive Officer and Chief Financial Officer evaluated our internal controls and concluded that as of June 30, 2025, they were effective, and that our consolidated financial statements included in this Quarterly Report on Form 10-Q fairly represent, in all material respects, our financial condition and results of operations as of and for the quarter ended June 30, 2025.
Outlined below are the significant deficiencies identified by management, along with the remedial actions planned.
Significant Deficiency
A significant deficiency or a combination of deficiencies in internal control over financial reporting is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the Company’s financial reporting.
The presence of such a deficiency does not mean that a material misstatement has occurred, but it indicates the possibility of such an occurrence in the future.
As the Company continues to update and integrate its accounting and project systems, we have identified deficiencies in our overall internal controls, specifically as identified below:
•
Inadequate controls related to revenue recognition and cost of revenue processes leading to the possibility of the misstatement of material transactions impacting financial statements.
•
Ineffectiveness of the Company’s information technology systems and controls concerning financial information.
•
Inadequate controls related to share cancellation processes leading to the possibility of misstatement of transactions impacting financial statements.
To address these weaknesses, the Company has initiated a remediation plan comprising the following measures:
•
Updating the information technology general controls ("ITGC") risk assessment to ensure reliability, integrity, security, and confidentiality of the Company’s infrastructure and data.
•
Examination of information technology systems to ascertain necessary updates to support the financial reporting process.
•
Implementing the compliance option in Floqast to identify and document key controls. This will create a key control matrix to establish and document controls related to revenue recognition, cost of sales, equity, and other processes to enhance internal controls over financial reporting.
•
In the year ended December 31, 2024, the accounting and finance department improved with the hiring of an experienced operational Controller and Accounting Manager as well as the VP of Finance. These positions complement and collaborate with the existing SEC Reporting Manager. We believe this will strengthen our department as we work towards strong internal controls and provide guidance beyond the finance functions for those we rely on to provide information to support our financial reporting process.
We will continue to monitor and evaluate the effectiveness of our internal controls over financial reporting on an ongoing basis and are committed to taking further action and implementing additional enhancements or improvements, as necessary.
Changes in Internal Control over Financial Reporting
Other than the matters set forth above, there were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the quarter ended June 30, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
From time to time, we may become involved in legal proceedings and claims arising in the ordinary course of business, including but not limited to, disputes in the areas of contracts, data protection, content regulation, intellectual property, consumer protection, e-commerce, marketing, advertising, rights of publicity, health and safety, employment and labor, competition, and taxation. We record a liability when we believe that it is probable that we will incur a loss, and the amount of that loss can be reasonably estimated.
Ladenburg
On July 11, 2023, Ladenburg Thalmann & Co. Inc. (“Ladenburg”) filed an action against the Company for breach of contract in the United States District Court for the Southern District of Florida (the “District Court”), Case No. 9:23-cv-81019-AMC. Ladenburg alleges that it entered into an Investment Banking Agreement (the “Agreement”) with the Company on September 1, 2020. According to Ladenburg, that Agreement provided that Ladenburg would be the exclusive investment advisor and banker for the Company. Ladenburg alleges that the Agreement entitles them to a fee for any financing transactions (debt financing or merger and acquisition transactions) that the Company engages in during the term of the contract. In April 2023, the Company informed Ladenburg of the impending acquisition of Big Village Insights, Inc. and Big Village Agency, LLC (together, the "Big Village Acquisition"). Ladenburg now seeks $1.5 million, plus interest, costs and attorneys’ fees and expenses as a result of that acquisition and debt financing, claiming that it is entitled to a fee. The Company disputes the allegations and disputes that Ladenburg is entitled to receive any fee since it did not perform any work pertaining to such acquisition. On November 27, 2024, the District Court entered a judgment in favor of Ladenburg and against the Company granting damages of $1.7 million to Ladenburg. On December 26, 2024, the Company filed a motion with the District Court requesting that the District Court reconsider its judgment. This motion was denied on January 30, 2025. On May 9, 2025, the Company appealed to the United States Court of Appeals for the Eleventh Circuit. Ladenburg filed a response on July 9, 2025. The Company has until August 29, 2025 to reply to the response. Upon our response, the matter will be fully briefed for the appellate court. The outcome of this matter is not determinable as of the date of issuance of these consolidated financial statements.
Other Litigation
Other litigation is defined as smaller claims or litigation that are neither individually nor collectively material. It does not include lawsuits that relate to collections.
The Company is party to various other legal proceedings that arise in the ordinary course of business, separate from normal course accounts receivable collections matters. Due to the inherent difficulty of predicting the outcome of these 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.
Item 1A. Risk Factors.
For the period ended June 30, 2025, one customer represented 17.1% of our total accounts receivable balance and another customer represented 10.6% of that balance. Inability to collect these amounts could have a material adverse impact on our operations.
Beyond this, there have been no other material changes to the Risk Factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.
Item 2. Unregi
stered Sales of Equity Securities and Use of Proceeds.
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* This certification is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.
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 7, 2025
By:
/s/ Matthew Drinkwater
Matthew Drinkwater,
Interim Chairman of the Board and Chief Executive Officer
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