Bright Mountain Media (BMTM) Q1 2026: loss, heavy debt and going-concern risk
Rhea-AI Filing Summary
Bright Mountain Media, Inc. reported first-quarter 2026 revenue of $13.96 million, slightly below the $14.19 million a year earlier. Cost of revenue fell modestly, keeping gross margin roughly flat at $4.31 million.
Operating performance improved, shifting from a $0.25 million operating loss in the prior-year quarter to $1.74 million income from operations, helped by lower general and administrative expenses. However, high interest expense on the Centre Lane senior secured credit facility of $3.10 million drove a net loss of $1.30 million, narrower than the prior-year $3.23 million loss.
Liquidity remains strained. At March 31, 2026, the company held $594,000 in cash and $1.86 million in restricted cash, with a working capital deficit of about $96.2 million and $88.16 million outstanding on the Centre Lane facility, largely current. Management discloses “substantial doubt” about the ability to continue as a going concern and is exploring debt restructuring, additional borrowings and equity financing. During the quarter, a Ladenburg dispute was settled for $950,000, producing an approximate $1.1 million net gain.
Positive
- None.
Negative
- Substantial doubt about going concern: Working capital deficit of about $96.2 million, limited cash of $594,000, and disclosure that current resources are not expected to fund 12 months of operations.
- High, near-term debt burden: $88.16 million outstanding under the Centre Lane senior secured credit facility, with $86.76 million classified as current and quarterly interest expense of $3.10 million pressuring earnings and liquidity.
Insights
Improved operations but heavy related-party debt and going-concern risk dominate.
Bright Mountain Media generated $13.96M in Q1 2026 revenue with income from operations of $1.74M, a notable turnaround from an operating loss a year earlier. This shows underlying businesses can produce positive operating results after cost reductions.
The capital structure is highly stressed. The Centre Lane senior secured credit facility totals $88.16M outstanding, with $86.76M classified as current at March 31, 2026. Interest expense of $3.10M in the quarter exceeded operating income, keeping net results negative.
Management reports a working capital deficit near $96.2M and explicitly states “substantial doubt” about the ability to continue as a going concern. A $950,000 Ladenburg settlement funded from restricted cash generated a reported $1.1M net gain, but long-term viability depends on successful debt refinancing, restructuring, or equity raises under the December 2026 maturity profile.
Key Figures
Key Terms
going concern financial
restricted cash financial
Term Secured Overnight Financing Rate financial
paid-in-kind interest financial
goodwill impairment financial
deferred revenue financial
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
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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
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ___________ to ___________
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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.
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).
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 |
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Accelerated filer |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No
As of May 7, 2026, there were
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
TABLE OF CONTENTS
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PART I - FINANCIAL INFORMATION |
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Item 1. |
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Unaudited Consolidated Financial Statements: |
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Consolidated Balance Sheets as of March 31, 2026 (unaudited) and December 31, 2025 |
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Unaudited Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2026 and 2025 |
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Unaudited Consolidated Statements of Changes in Stockholders’ Deficit for the three months ended March 31, 2026 and 2025 |
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Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025 |
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Notes to Consolidated Financial Statements |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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Quantitative and Qualitative Disclosure About Market Risk |
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Item 4. |
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Controls and Procedures |
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PART II - OTHER INFORMATION |
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Item 1. |
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Legal Proceedings |
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Item 1A. |
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Risk Factors |
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Item 2. |
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Unregistered Sales of Equity Securities and Use of Proceeds |
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Item 3. |
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Default Upon Senior Securities |
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Mine Safety Disclosures |
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Other Information |
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Item 6. |
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Exhibits |
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Signatures |
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This report includes forward-looking statements that relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “likely,” “aim,” “will,” “would,” “could,” and similar expressions or phrases identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and future events and financial trends that we believe may affect our financial condition, results of operation, business strategy and financial needs. Forward-looking statements include, but are not limited to, statements about:
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Table of Contents
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, 2025 and our other filings with the U.S. Securities and Exchange Commission in their entirety. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. These forward-looking statements speak only as of the date of this report, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business.
OTHER PERTINENT INFORMATION
Unless specifically set forth to the contrary, when used in this report the terms “Bright Mountain,” the “Company,” “we,” “us," “our” and similar terms refer to Bright Mountain Media, Inc., a Florida corporation, and its subsidiaries. In addition, when used in this report, “first quarter of 2026” refers to the three months ended March 31, 2026, “first quarter of 2025” refers to the three months ended March 31, 2025, and “2025” refers to the year ended December 31, 2025. The information on, or that can be accessed through, our website at www.brightmountainmedia.com is not incorporated by reference in, or considered part of, this Quarterly Report on Form 10-Q.
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Table of Contents
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
BRIGHT MOUNTAIN MEDIA, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share figures)
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March 31, 2026 |
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December 31, 2025* |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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Restricted cash |
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Accounts receivable, net |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Intangible assets, net |
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Goodwill |
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Operating lease right-of-use assets, net |
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Other long-term assets |
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Total assets |
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$ |
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Liabilities and Stockholders' Deficit |
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Current liabilities: |
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Accounts payable and accrued expenses |
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$ |
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$ |
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Other current liabilities |
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Interest payable - Centre Lane Senior Secured Credit Facility |
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Deferred revenue |
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Note payable - Centre Lane Senior Secured Credit Facility - related party (current) |
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Total current liabilities |
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Other long-term liabilities |
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Operating lease liabilities |
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Total liabilities |
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Stockholders' deficit: |
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Convertible preferred stock, par value $ |
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Common stock, par value $ |
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Treasury stock at cost, |
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Additional paid-in capital |
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Accumulated deficit |
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Accumulated other comprehensive income |
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Total stockholders' deficit |
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Total liabilities and stockholders' deficit |
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$ |
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$ |
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* Derived from audited consolidated financial statements.
See accompanying notes to unaudited consolidated financial statements.
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Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(unaudited)
(in thousands, except share and per share figures)
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Three Months Ended |
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March 31, 2026 |
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March 31, 2025 |
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Revenue |
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$ |
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$ |
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Cost of revenue |
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Gross margin |
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General and administrative expenses |
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Income (loss) from operations |
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Financing and other expense: |
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Other income |
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Interest expense - Centre Lane Senior Secured Credit Facility - related party |
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Other interest expense |
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Total financing and other expense, net |
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Net loss before income tax |
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Income tax provision |
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Net loss |
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Foreign currency translation |
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Comprehensive loss |
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Net loss per common share: |
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Basic |
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Diluted |
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Weighted-average shares outstanding: |
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Basic |
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Diluted |
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See accompanying notes to unaudited consolidated financial statements.
6
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC
CONSOLIDATED STATEMENTS OF CHANGE IN STOCKHOLDERS’ DEFICIT
(unaudited)
(in thousands, except share figures)
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Common Stock |
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Treasury Stock |
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Additional Paid-in |
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Accumulated |
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Accumulated Other Comprehensive |
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Total Stockholders' |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Deficit |
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Income |
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Deficit |
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Balance at December 31, 2024* |
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Net loss |
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- |
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- |
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- |
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- |
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Common stock issued for options exercised |
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- |
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- |
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Treasury stock |
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- |
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Stock-based compensation |
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Adjustment from foreign currency translation, net |
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Balance at March 31, 2025 |
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$ |
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Balance at December 31, 2025* |
* |
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$ |
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Net loss |
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Common stock issued to Centre Lane Partners |
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- |
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- |
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Stock-based compensation |
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Balance at March 31, 2026 |
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$ |
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*Derived from audited consolidated financial statements.
See accompanying notes to unaudited consolidated financial statements.
7
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
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For the Three Months Ended |
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March 31, 2026 |
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March 31, 2025 |
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Cash flows from operating activities: |
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Net loss |
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Adjustments to reconcile net loss to net cash used in operating activities |
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Depreciation expense |
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Interest paid-in-kind on Centre Lane Senior Secured Credit Facility - related party |
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Amortization of operating lease right-of-use assets |
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Amortization of debt discount |
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Amortization of intangible assets |
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Stock-based compensation |
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Common stock issued to Centre Lane Partners for debt modification |
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Provison for credit losses |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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Prepaid expenses and other assets |
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Operating lease liabilities |
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Accounts payable and accrued expenses |
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Other liabilities |
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Interest payable - Centre Lane Senior Secured Credit Facility - related party |
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Deferred revenue |
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Net cash used in operating activities |
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Cash flows from investing activities: |
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Purchase of property and equipment |
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Net cash used in investing activities |
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Cash flows from financing activities: |
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Proceeds from stock option exercises |
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Principal payments on finance lease obligations |
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Repayment of principal on Centre Lane Senior Secured Credit Facility - related party |
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Net cash used in financing activities |
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Effect of foreign exchange rates on cash |
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Net decrease in cash, cash equivalents, and restricted cash |
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Cash, cash equivalents, and restricted cash at the beginning of the period |
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|
|
|
|
||
Cash, cash equivalents, and restricted cash at the end of the period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Restricted cash |
|
|
|
|
|
|
||
Total cash, cash equivalents, and restricted cash |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
||
Cash paid for interest |
|
|
|
|
|
|
||
Interest paid-in-kind on Centre Lane Senior Secured Credit Facility - related party |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Supplemental disclosure of non-cash investing and financing activities: |
|
|
|
|
|
|
||
Common stock issued to Centre Lane Partners for debt modification |
|
|
|
|
|
|
||
See accompanying notes to unaudited consolidated financial statements.
8
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 1 – DESCRIPTION OF BUSINESS AND DEVELOPMENTS
Organization and Nature of Operations
Bright Mountain Media, Inc. (together with its wholly-owned subsidiaries, the “Company,” “Bright Mountain” or “we”) is an end-to-end digital media and advertising services company that efficiently connects brands with targeted consumer demographics. We focus on digital publishing, advertising technology, consumer insights, creative services, and media services.
Digital Publishing
Our digital publishing division focuses on developing content that attracts an audience and monetizes that audience through advertising. The current portfolio of owned and operated websites is focused on moms, parenting, families, and more broadly, women. The portfolio consists of popular websites including Mom.com, Cafemom.com, LittleThings.com, and MamasLatinas.com. This demographic is highly sought after by brands and their advertising agencies. We use internal and external technologies to constantly improve the effectiveness and efficiency of the content we create. Our publishing division monetizes its audiences through both direct and programmatic advertising sales.
Advertising Technology
Our advertising technology division focuses on delivering targeted ads to audiences on owned and operated sites as well as third-party publishers in a cost-effective manner through the deployment of proprietary technologies. By developing our own proprietary technology stack, we are able to pass along efficiencies to both the demand and supply side of the ecosystem. Our goal is to enable and support a streamlined, end-to-end advertising model that addresses both demand (buy side) and publisher supply (sell side) programmatic sales and delivery of digital advertisements using an array of audience targeting tools and advertising formats (display, audio, video, CTV, in-app). Programmatic advertising relies on software programs that leverage data and proprietary algorithms to match the optimal selection of an ad with a bid price offered by advertisers.
Consumer Insights
Our consumer insights division focuses on providing primary and secondary research and competitive intelligence to address customers' strategic issues. We provide cutting-edge and dynamic research, offering clients a comprehensive perspective on their consumers. This insight extends to strategic guidance on the optimal timing and channels to effectively connect with target audiences. Our cutting-edge approach combines advanced data analytics, artificial intelligence, and comprehensive market research, to uncover actionable insights that drive informed decision-making.
Creative Services
Our creative services division transforms data into award-winning campaigns. We are uniquely able to leverage insights teams with highly strategic media planning and buying teams to ensure brands not only position their advertising precisely, but also yield impactful business results. Our goal is to combine data-driven decisions with creativity fueled by a deep understanding of modern culture.
Media Services
Our media services division focuses on advertisers and agencies by providing access to premium inventory, leveraging data to optimize programmatic campaigns. Our aim is to empower clients to access the most sought-after advertising spaces across diverse platforms tailored to their specific needs and preferences. Our data-driven approach aims to ensure that ad placements are not only well-targeted, but also continuously optimized for maximum efficiency and return on investment ("ROI"). Our commitment to combining premium inventory access with data-driven programmatic campaign optimization makes us a valuable partner in the success of our clients' advertising and marketing endeavors.
9
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
The Company generates revenue through:
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation and Basis of Presentation
The unaudited consolidated financial statements include the accounts of the Company and all of its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited consolidated financial statements for the three months ended March 31, 2026 and 2025, 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, 2025, 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, 2025. 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 $
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.
10
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of three months or less, when acquired, to be cash equivalents. The Company maintains its cash with various commercial banks in the United States, and other foreign countries in which the Company operates.
As of March 31, 2026 and December 31, 2025, the Company exceeded the federally insured limit of $
As of March 31, 2026 and December 31, 2025, the Company did not exceed the insurance limit of $
Any loss incurred or a lack of access to such funds could have a significant adverse effect on the Company's financial condition, results of operations, and cash flows.
At March 31, 2026 and December 31, 2025, the Company had $
Restricted Cash
The Company considers cash to be restricted when withdrawal or general use is legally restricted. The Company reports restricted cash as a separate line item in the consolidated balance sheets. At March 31, 2026 and December 31, 2025, the Company had $
Off-balance Sheet Arrangements
There are no off-balance sheet arrangements as of March 31, 2026 and December 31, 2025.
Segment Reporting
11
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
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 Credit 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.
Concentrations of Credit Risk
Financial instruments that potentially subject us to concentration of credit risk consist principally of cash, cash equivalents, restricted cash, and accounts receivable. We place our cash, cash equivalents, and restricted cash with high credit-quality financial institutions. Such deposits may be in excess of federally insured limits. In addition, the Company maintains various bank accounts in Thailand and Israel, with some level of insurance. We perform periodic evaluations of the relative credit standing of financial institutions. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company's financial condition, results of operations, and cash flows.
12
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
We perform credit evaluations of our customers’ financial condition and require no collateral from our customers. We maintain an allowance for current expected credit losses based upon the expected collectability of accounts receivable balances.
The following tables provide information about concentrations that exceed 10% of revenue and accounts receivable for the period:
|
|
Three Months Ended |
|
|||||
|
|
|
|
|
|
|
||
|
|
March 31, 2026 |
|
|
March 31, 2025 |
|
||
Revenue Concentration |
|
|
|
|
|
|
||
Customers exceeding 10% of revenue |
|
|
|
|
|
|
||
Percentage of revenue: |
|
|
|
|
|
|
||
Customer 1 |
|
|
% |
|
* |
|
||
Customer 2 |
|
|
% |
|
|
% |
||
Customer 3 |
|
|
% |
|
* |
|
||
Total percentage of revenue |
|
|
% |
|
|
% |
||
* Represents a customer revenue balance less than the 10% threshold.
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||
Accounts Receivable Concentration |
|
|
|
|
|
|
||
Customers exceeding 10% of accounts receivable |
|
|
|
|
|
|
||
Percentage of accounts receivable: |
|
|
|
|
|
|
||
Customer 1 |
|
|
% |
|
|
% |
||
Customer 2 |
|
|
% |
|
|
% |
||
Total percentage of accounts receivable |
|
|
% |
|
|
% |
||
* Represents a customer accounts receivable balance less than the 10% threshold.
Effective Accounting Pronouncements Adopted
In July 2025, the Financial Accounting Standards Board ("FASB") issued , Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. This standard provides a practical expedient when applying the current expected credit loss model to certain receivables and contract assets. The Company uses a loss-rate methodology to estimate expected credit losses for accounts receivable. Under this approach, the Company estimates expected credit losses on a pooled basis using historical loss experience, adjusted for current conditions and reasonable and supportable forecasts. The guidance became effective for the Company on January 1, 2026, and was to be applied on a prospective basis. The
13
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU No. 2024-03, Income Statement Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, the FASB further amended in January 2025. 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 after December 15, 2026 (i.e., fiscal years beginning January 1, 2027, for calendar-year filers), 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.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles - Goodwill and Other Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The new guidance refines the accounting for costs related to internal-use software, including changes to capitalization criteria and disclosure requirements. This guidance will be effective for annual periods beginning after December 15, 2026 (i.e., fiscal years beginning after January 1, 2027, for calendar-year filers), and for interim periods thereafter. The new standard may be applied prospectively, retrospectively, or using a modified transition approach. We are evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU No. 2025-10, Accounting for Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, to establish authoritative guidance on the recognition, measurement, and presentation of government grants received by business entities. The new standard will be effective for annual periods beginning with the year ending December 31, 2028, and for interim periods beginning January 1, 2029, though early adoption is permitted. Upon adoption, the guidance can be applied using a modified prospective, modified retrospective, or under a retrospective approach. We are evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which clarifies interim disclosure requirements and introduces a principle requiring disclosure of material events occurring since the last annual reporting period. The new standard will be effective for interim reporting periods beginning on January 1, 2028. The guidance may be applied on a prospective or retrospective basis, and early adoption is permitted. We are evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.
In January 2026, the FASB issued ASU 2025-12, Codification Improvements, which includes amendments to address technical corrections, clarifications, and other minor improvements to the ASC. The amendments are effective for annual periods beginning after December 15, 2026, and early adoption is permitted. We are evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.
NOTE 3 – ACCOUNTS RECEIVABLE
Accounts receivable, net, consisted of the following:
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||
(in thousands) |
|
|
|
|
|
|
||
Accounts receivable |
|
$ |
|
|
$ |
|
||
Unbilled receivables (1) |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Less: allowance for current expected credit losses |
|
|
( |
) |
|
|
( |
) |
Accounts receivable, net |
|
$ |
|
|
$ |
|
||
(1) -
Accounts receivable, net, at January 1, 2025, was $
Expected credit losses were approximately $
14
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 4 – PREPAID EXPENSES AND OTHER ASSETS
Prepaid expenses and other assets consisted of the following:
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||
(in thousands) |
|
|
|
|
|
|
||
Prepaid insurance (1) |
|
$ |
|
|
$ |
|
||
Prepaid software |
|
|
|
|
|
|
||
Deposits |
|
|
|
|
|
|
||
Subscriptions |
|
|
|
|
|
|
||
Other current assets (2) |
|
|
|
|
|
|
||
Total prepaid costs and other assets |
|
|
|
|
|
|
||
Less: other long-term assets |
|
|
( |
) |
|
|
( |
) |
Prepaid expenses and other current assets |
|
$ |
|
|
$ |
|
||
(1) -
(2) -
NOTE 5 – PROPERTY AND EQUIPMENT, NET
Property and equipment, net, consisted of the following:
|
|
Useful Life |
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||
(in thousands) |
|
|
|
|
|
|
|
|
||
Computer equipment |
|
|
$ |
|
|
$ |
|
|||
Computer software |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
||
Less: accumulated depreciation |
|
|
|
|
( |
) |
|
|
( |
) |
Property and equipment, net |
|
|
|
$ |
|
|
$ |
|
||
Depreciation and amortization expense for the three months ended March 31, 2026 and 2025, was $
NOTE 6 – INTANGIBLE ASSETS, NET
Website acquisitions, net, consisted of the following:
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||
(in thousands) |
|
|
|
|
|
|
||
Website acquisition assets |
|
$ |
|
|
$ |
|
||
Less: accumulated amortization |
|
|
( |
) |
|
|
( |
) |
Website acquisition assets, net |
|
$ |
|
|
$ |
|
||
15
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
Other intangible assets, net, consisted of the following:
|
|
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||||||||||||||||||
|
|
Useful Life |
|
Gross Carrying Amount |
|
|
Accumulated Amortization |
|
|
Net Carrying Amount |
|
|
Gross Carrying Amount |
|
|
Accumulated Amortization |
|
|
Net Carrying Amount |
|
||||||
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Trade name |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||||
IP/technology |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||||
Customer relationships |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||||
Non-compete agreements |
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||||
Other intangible assets, net |
|
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||
(in thousands) |
|
|
|
|
|
|
||
Website |
|
$ |
|
|
$ |
|
||
Other intangible assets |
|
|
|
|
|
|
||
Intangible assets, net |
|
$ |
|
|
$ |
|
||
Amortization expense for the three months ended March 31, 2026 and 2025, was approximately $
As of March 31, 2026, expected remaining amortization expense of intangible assets and website acquisition by fiscal year is as follows (in thousands):
Remainder of 2026 |
|
$ |
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total expected amortization expense |
|
$ |
|
NOTE 7 – GOODWILL
The following table represents the allocation of goodwill as of March 31, 2026 and December 31, 2025:
|
|
Owned & Operated |
|
|
Ad Network |
|
|
Insights |
|
|
Total |
|
||||
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
December 31, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Additions |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||
March 31, 2026 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
We allocate goodwill to reporting units based on the expected benefit and synergies with our current reporting units. The Company categorizes goodwill into
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.
16
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
During the year ended December 31, 2025, an impairment assessment was performed on goodwill for the Ad Network, Owned & Operated and Insights reporting units. The assessment used a qualitative assessment which includes consideration of the economic, industry and market conditions in addition to the overall financial performance of the Company and these assets. Our qualitative assessment concluded that it is more likely than not that the estimated fair value of the Owned & Operated reporting unit is less than the carrying value, and the quantitative assessment resulted in the same conclusion. Our qualitative assessments for the Ad Network and Insights reporting units concluded that each reporting unit's fair value was potentially less than its carrying value, but our quantitative assessments did not have such conclusions.
In a quantitative test, the fair value of a reporting unit is determined based on a discounted cash flow analysis and further analyzed using other methods of valuation. A discounted cash flow analysis requires us to make various assumptions, including assumptions about future cash flows, growth rates and discount rates. The assumptions about future cash flows and growth rates are based on our long-term projections. Assumptions used in our impairment testing are consistent with our internal forecasts and operating plans. Our discount rate is based on a market participant debt structure and cost of capital. If the fair value of the reporting unit exceeds its carrying amount, there is no impairment. To the extent the carrying amount exceeds its fair value, an impairment charge of the reporting unit’s goodwill would be necessary. Our quantitative analysis showed that the implied fair value of our goodwill for the Owned & Operated reporting units was less than its carrying value which resulted in an impairment charge of approximately $
There was
NOTE 8 – ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consisted of the following:
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||
(in thousands) |
|
|
|
|
|
|
||
Accounts payable (1) |
|
$ |
|
|
$ |
|
||
Accrued wages, commissions, and bonus |
|
|
|
|
|
|
||
Publisher cost |
|
|
|
|
|
|
||
Professional fees |
|
|
|
|
|
|
||
Subcontractor |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total accounts payable and accrued expenses |
|
$ |
|
|
$ |
|
||
(1) -
NOTE 9 – OTHER CURRENT LIABILITIES
Other current liabilities consisted of the following:
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||
(in thousands) |
|
|
|
|
|
|
||
Current portion of long-term operating and financing leases |
|
$ |
|
|
$ |
|
||
Dividend payable (1) |
|
|
|
|
|
|
||
Project advance expense (2) |
|
|
|
|
|
|
||
Litigation reserves |
|
|
|
|
|
|
||
Other current liabilities |
|
|
|
|
|
|
||
Total other liabilities |
|
|
|
|
|
|
||
Less: other long-term liabilities |
|
|
|
|
|
( |
) |
|
Other current liabilities |
|
$ |
|
|
$ |
|
||
(1) -
(2) -
17
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 10 – CENTRE LANE SENIOR SECURED CREDIT FACILITY
Effective June 1, 2020, the Company entered into a membership interest purchase agreement to acquire
Additional Draws
As of March 31, 2026, Centre Lane Partners had loaned the Company an additional $
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 $
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 $
Optional Prepayment
The Company may, at any time, voluntarily prepay, in whole or in part (with a minimum prepayment of $
18
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
Repayment of Loans
Effective March 31, 2025, the Company, the Lenders, and Centre Lane Partners entered into the Twenty-Second Amendment to the Credit Agreement, pursuant to which the following adjustments were made to the outstanding loans:
Effective September 30, 2025, the Company, the Lenders, and Centre Lane Partners entered into the Twenty-Third Amendment to the Credit Agreement, which applied the following adjustments to loans with outstanding payments due on September 30, 2025, including the following modifications:
Also in connection with the Twenty-Third Amendment, the Company agreed to issue a number of shares of the common stock of the Company, par value $
19
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
Effective December 31, 2025, the Company, the Lenders, and Centre Lane Partners entered into the Twenty-Fourth Amendment to the Credit Agreement, which applied the following adjustments to loans with outstanding payments due on December 31, 2025, including the following modifications:
Also in connection with the Twenty-Fourth Amendment, the Company agreed to issue a number of shares of the common stock of the Company, par value $
Effective March 31, 2026, the Company, the Lenders, and Centre Lane Partners entered into the Twenty-Fifth Amendment to the Credit Agreement, which applied the following adjustments to loans with outstanding payments due on March 31, 2026, including the following modifications:
Also in connection with the Twenty-Fifth Amendment, the Company agreed to issue a number of shares of the common stock of the Company, par value $
For the three months ended March 31, 2026, the Company paid approximately $
As of March 31, 2026, we owed Centre Lane $
The below table summarizes the loan balances at March 31, 2026 and December 31, 2025:
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||
(in thousands) |
|
|
|
|
|
|
||
Note payable - Centre Lane Senior Secured Credit Facility - related party (current) |
|
$ |
|
|
$ |
|
||
Net principal |
|
|
|
|
|
|
||
Add: debt discount |
|
|
|
|
|
|
||
Outstanding principal |
|
$ |
|
|
$ |
|
||
20
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
The below table summarizes the movement in the outstanding principal during the three months ended March 31, 2026 and 2025:
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||
(in thousands) |
|
|
|
|
|
|
||
Opening balance |
|
$ |
|
|
$ |
|
||
Add: |
|
|
|
|
|
|
||
Exit and other fees |
|
|
|
|
|
|
||
Interest capitalized |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Less: |
|
|
|
|
|
|
||
Payments |
|
|
( |
) |
|
|
( |
) |
Outstanding principal |
|
$ |
|
|
$ |
|
||
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 $
Amendments
Commencing April 2021, the Company and certain subsidiaries entered into various amendments to the Amended and Restated Senior Secured Credit Facility. The Credit Agreement was amended a number of times to provide for additional loans used for working capital and acquisitions. In addition, as part of the transaction, there are exit fees (the "Exit Fees"), which are added and capitalized to the principal amount of the original loan. As of March 31, 2026, there were
Consistent with FASB ASC Topic 470, Debt (“ASC 470”), the Company is required to perform an analysis of the change in each amendment to determine whether the change is a modification or an extinguishment of debt. Under a modification, no gain or loss is recorded, and a new effective interest rate is established based on the carrying value of the debt and revised cash flow. If the debt is extinguished, the old debt is derecognized and the new debt is recorded 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.
21
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
The below table summarizes the amendments that were executed by the Company from the inception of the facility to March 31, 2026 (in thousands, except for share data):
Amendment No. |
|
Date |
|
Draw |
|
|
Repayment Date |
|
Interest Rate |
|
(1 |
) |
Interest Rate |
|
(1 |
) |
Amendment Fee |
|
|
(2 |
) |
Common Stock Issued |
|
|
Accounting Impact |
|
|||
(in thousands, except share data) |
|||||||||||||||||||||||||||||
1 |
|
|
$ |
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
(3) |
|||||||||||
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) |
|||||||||||
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) |
|||||||||||
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) |
|||||||||||
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) |
|||||||||||
6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) |
|||||||||||
7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) |
|||||||||||
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) |
|||||||||||
9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) |
|||||||||||
10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) |
|||||||||||
11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) |
|||||||||||
12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) |
|||||||||||
13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) |
|||||||||||
14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) |
|||||||||||
15 |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
(4) |
||||||||||
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
16 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) |
|||||||||||
17 |
(6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) |
|||||||||||
19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) |
|||||||||||
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7) |
|||||||||||
21 |
(6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5) |
|||||||||||
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7) |
|||||||||||
24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7) |
|||||||||||
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
25 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(7) |
|||||||||||
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
||||||
|
|
|
|
$ |
|
|
|
|
|
|
|
|
|
|
$ |
|
|
|
|
|
|
|
|
||||||
(1) - New rates in effect in connection with Amendment Twenty-Two.
(2) - Added and capitalized to the principal amount of the original loan.
(3) - Second Out Loans.
(4) - First Out Loans.
(5) - Third Out Loans.
(6) - There was no impact on principal or interest and no fees incurred by the Company under Amendments Eighteen and Twenty-Two, thus they are excluded from the table.
(7) - There were
Our debt financing arrangements, including long-term debt, expose us to counterparty credit risk as they are solely with a single related party lender. We manage this risk by closely monitoring the related party's financial stability and ensuring it maintains a strong credit rating. No other financial institutions are involved in our debt obligations. As of March 31, 2026 and December 31, 2025, the carrying value of the Centre Lane Senior Secured Credit Facility was $
During the three months ended March 31, 2026, the Company recorded amortization of debt discount of $
22
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
Interest expense for the three months ended March 31, 2026 and 2025 consisted of the following:
|
|
Three Months Ended |
|
|||||
|
|
|
|
|
|
|
||
|
|
March 31, 2026 |
|
|
March 31, 2025 |
|
||
(in thousands) |
|
|
|
|
|
|
||
Interest expense |
|
$ |
|
|
$ |
|
||
Amortization |
|
|
|
|
|
|
||
Total interest expense |
|
$ |
|
|
$ |
|
||
NOTE 11 – 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
At March 31, 2026 and December 31, 2025, the operating lease right-of-use asset was $
At March 31, 2026 and December 31, 2025, the operating lease right-of-use liability was $
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 $
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
At March 31, 2026 and December 31, 2025, the operating lease subleases right-of-use liability was $
Operating lease sublease income was approximately $
23
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
Finance Lease
On October 1, 2023, the Company entered into a lease agreement for computer equipment with a lease term of
At March 31, 2026 and December 31, 2025, the finance lease asset was $
At March 31, 2026 and December 31, 2025, the finance lease liability was $
Finance lease expense for the three months ended March 31, 2026, was $
As of March 31, 2026 and December 31, 2025, the right-of-use asset and lease liability for the operating and finance lease are summarized as follows (in thousands):
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||
(in thousands) |
|
|
|
|
|
|
||
Assets: |
|
|
|
|
|
|
||
Total operating lease right-of-use asset |
|
$ |
|
|
$ |
|
||
(1) |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Liabilities: |
|
|
|
|
|
|
||
|
$ |
|
|
$ |
|
|||
Operating sublease liability, net of current portion |
|
|
|
|
|
|
||
|
|
|
|
|
|
|||
Total operating lease liability |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
|
$ |
|
|
$ |
|
|||
Finance lease liability, net of current portion |
|
|
|
|
|
|
||
Total finance lease liability |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Weighted-average remaining lease term (in years): |
|
|
|
|
|
|
||
Operating lease |
|
|
|
|
|
|
||
Finance lease |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Weighted-average discount rate: |
|
|
|
|
|
|
||
Operating lease |
|
|
% |
|
|
% |
||
Finance lease |
|
|
% |
|
|
% |
||
(1) - Finance lease represents computer software, see Note 5, Property and Equipment, Net, to the consolidated financial statements.
24
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 12 – REVENUE RECOGNITION
The following table represents our revenue disaggregated by type:
|
|
Three Months Ended |
|
|||||
|
|
|
|
|
|
|
||
|
|
March 31, 2026 |
|
|
March 31, 2025 |
|
||
(in thousands) |
|
|
|
|
|
|
||
Digital publishing |
|
$ |
|
|
$ |
|
||
Advertising technology |
|
|
|
|
|
|
||
Consumer insights |
|
|
|
|
|
|
||
Creative services |
|
|
|
|
|
|
||
Media services |
|
|
|
|
|
|
||
Total revenue |
|
$ |
|
|
$ |
|
||
Geographic Information
Revenue by geography is based on the country of the Company’s contracting entity. Total United States revenue was approximately
As of March 31, 2026 and December 31, 2025, approximately
Deferred Revenue
The movement in deferred revenue during the three months ended March 31, 2026 and the year ended December 31, 2025, comprised the following:
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||
(in thousands) |
|
|
|
|
|
|
||
Deferred revenue at the start of the period |
|
$ |
|
|
$ |
|
||
Amounts invoiced during the period |
|
|
|
|
|
|
||
Less: revenue recognized during the period |
|
|
( |
) |
|
|
( |
) |
Deferred revenue at the end of the period |
|
$ |
|
|
$ |
|
||
25
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 13 – 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 “2022 Stock Option Plan”). The 2022 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 2022 Stock Option Plan is to provide an incentive to attract and retain directors, officers, consultants, advisors and employees whose services are considered valuable, to encourage a sense of proprietorship and to stimulate an active interest of such persons into our development and financial success. The 2022 Stock Option Plan has a term of
Options
As of March 31, 2026, options to purchase
Compensation expense recorded in connection with the 2022 Stock Option Plan was $
The following table presents the activity of the Company’s outstanding common stock options for the three months ended March 31, 2026:
|
|
Number of Options |
|
|
Weighted-Average Exercise Price |
|
|
Weighted-Average Remaining Contractual Term |
|
|
Aggregate Intrinsic Value |
|
||||
Common stock options: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance outstanding at December 31, 2025 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Granted |
|
|
|
|
$ |
|
|
|
- |
|
|
$ |
|
|||
Exercised |
|
|
|
|
$ |
|
|
|
- |
|
|
$ |
|
|||
Forfeited |
|
|
( |
) |
|
$ |
|
|
|
- |
|
|
$ |
|
||
Expired |
|
|
( |
) |
|
$ |
|
|
|
- |
|
|
$ |
|
||
Balance outstanding at March 31, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Exercisable at March 31, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Unvested at March 31, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
During the three months ended March 31, 2026,
As of March 31, 2026, there were total unrecognized compensation costs related to non-vested share-based compensation arrangements of $
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.
26
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
The following table provides the weighted-average assumptions used in determining the fair value of the stock option awards for the three months ended March 31, 2026 and 2025:
|
|
March 31, 2026 |
|
|
March 31, 2025 |
|
||
|
|
|
|
|
|
|
||
Expected life (years) |
|
|
|
|
||||
Expected volatility |
|
|
% |
|
|
% |
||
Risk-free interest rate |
|
|
% |
|
|
% |
||
Dividend yield |
|
|
% |
|
|
% |
||
Expected forfeiture rate |
|
|
% |
|
|
% |
||
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 companies' historical volatility, as the Company's common stock is quoted in the over-the-counter market on the OTCID 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.
NOTE 14 – FAIR VALUE MEASUREMENTS
The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities).
The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:
Level 1: Valuation is based on unadjusted quoted prices in active markets for identical assets and liabilities that are accessible at the reporting date. Because valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.
Level 2: Valuation is determined from pricing inputs that are other than quoted prices in active markets that are either directly or indirectly observable as of the reporting date. Observable inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and interest rates and yield curves that are observable at commonly quoted intervals.
Level 3: Valuation is based on inputs that are both significant to the fair value measurement and unobservable. Level 3 inputs includes situations where there is little, if any, market activity for the financial instrument. The inputs into the determination of fair value generally require significant management judgment or estimation.
Fair Value Considerations
Financial instruments recognized in the consolidated balance sheets consist of cash, cash equivalents, restricted cash, accounts receivable, other liabilities and accounts payable. The Company believes that the carrying value of its current financial instruments approximates their fair value due to the short-term nature of these instruments. The carrying value of the Centre Lane Senior Secured Credit Facility approximates the fair value due to their nature and level of risk.
27
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
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 |
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
Goodwill |
|
$ |
|
|
Discounted cash flow |
|
Discount rate |
|
||
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, 2025, an impairment assessment was performed on goodwill for the Ad Network, Owned & Operated and Insights reporting units. The assessment indicated that the carrying value was in excess of its implied fair value, resulting in an impairment charge of approximately $
There was no triggering event or impairment for the three months ended March 31, 2026.
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 calculates the present value of the cash flows under the terms of each new amendment and determines if it was substantially different by at least
28
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 15 – 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. Also 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 the judgment. See Note 10, Centre Lane Senior Secured Credit Facility, to the consolidated financial statements. The Company obtained the bond and a stay of execution of the judgment was granted on February 3, 2025. On May 9, 2025, the Company appealed to the United States Court of Appeals for the Eleventh Circuit Court of Appeals. Ladenburg filed a response on July 9, 2025, and the Company accrued an additional $242,000 to cover fees related to this matter. The Company replied to Ladenburg's response on August 29, 2025. On March 26, 2026, the Company and Ladenburg entered into a binding settlement agreement and mutual release. Pursuant to the settlement agreement, the Company agreed to pay a total settlement amount of $950,000. The settlement amount is expected to be funded from the restricted cash collateral securing the appeal bond. Following payment of the settlement amount and satisfaction of related obligations, any remaining bond funds are expected to be returned to Centre Lane Partners. The Company recorded the effect of the settlement in its consolidated financial statements for the three months ended March 31, 2026. The settlement resulted in a reduction of litigation-related accruals and the recognition of a net gain of approximately $1.1 million reflected within legal fees in general and administrative expenses for the three months ended March 31, 2026.
Other Litigation
Other litigation is defined as smaller claims or litigation that are neither individually nor collectively material. It does not include lawsuits that relate to collections.
The Company is party to various other legal proceedings that arise in the ordinary course of business, separate from normal course accounts receivable collections matters. Due to the inherent difficulty of predicting the outcome of these other legal proceedings, the Company cannot predict the eventual outcome of these matters, and it is reasonably possible that some of them could be resolved unfavorably to the Company. As a result, it is possible that the Company’s results of operations or cash flows in a particular fiscal period could be materially affected by an unfavorable resolution of pending litigation or contingencies. The outcome is not determinable as of the issuance of these consolidated financial statements.
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Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
NOTE 16 – STOCKHOLDERS' DEFICIT
Preferred Stock
The Company has authorized
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:
Other designations, rights and preferences of each series of preferred stock are identical, including:
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
30
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
At March 31, 2026 and December 31, 2025, there was an accrued unpaid preference dividend of $
Common Stock
Shares of Common Stock under the 2022 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
Issue of Common Stock
During the three months ended March 31, 2026, the Company issued shares of our common stock as follows (in thousands, except share data):
|
|
Three Months Ended March 31, 2026 |
|
|||||
|
|
|
|
|
|
|
||
|
|
Shares |
|
|
Value |
|
||
Common stock issued to Centre Lane Partners |
|
|
|
|
$ |
|
||
Shares of common stock issued, net |
|
|
|
|
$ |
|
||
During the three months ended March 31, 2025, the Company issued shares of our common stock as follows (in thousands, except share data):
|
|
Three Months Ended March 31, 2025 |
|
|||||
|
|
|
|
|
|
|
||
|
|
Shares |
|
|
Value |
|
||
Common stock issued for options exercised |
|
|
|
|
$ |
|
||
Shares of common stock issued, net |
|
|
|
|
$ |
|
||
Treasury Stock
A total of
Warrants
At March 31, 2026 and December 31, 2025, we had
31
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
A summary of the Company’s warrants outstanding as of March 31, 2026 and December 31, 2025, is presented below.
March 31, 2026 |
|
|||||||||
|
|
|
|
|
|
|
|
|||
Exercise Price |
|
|
Number Outstanding |
|
|
Gross Cash Proceeds (if exercised, in thousands) |
|
|||
$ |
|
|
|
|
|
$ |
|
|||
$ |
|
|
|
|
|
$ |
|
|||
$ |
|
|
|
|
|
$ |
|
|||
|
|
|
|
|
|
$ |
|
|||
December 31, 2025 |
|
|||||||||
|
|
|
|
|
|
|
|
|||
Exercise Price |
|
|
Number Outstanding |
|
|
Gross Cash Proceeds (if exercised, in thousands) |
|
|||
$ |
|
|
|
|
|
$ |
|
|||
$ |
|
|
|
|
|
$ |
|
|||
$ |
|
|
|
|
|
$ |
|
|||
|
|
|
|
|
|
$ |
|
|||
NOTE 17 – LOSS PER SHARE
As of March 31, 2026 and 2025, there were
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 months ended March 31, 2026 and 2025:
|
|
Three Months Ended |
|
|||||
|
|
|
|
|
|
|
||
|
|
March 31, 2026 |
|
|
March 31, 2025 |
|
||
(in thousands, except per share data) |
|
|
|
|
|
|
||
Numerator: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Denominator: |
|
|
|
|
|
|
||
Weighted-average common shares outstanding: |
|
|
|
|
|
|
||
Basic |
|
|
|
|
|
|
||
Diluted |
|
|
|
|
|
|
||
Net loss per common share |
|
|
|
|
|
|
||
Basic |
|
$ |
( |
) |
|
$ |
( |
) |
Diluted |
|
$ |
( |
) |
|
$ |
( |
) |
32
Table of Contents
BRIGHT MOUNTAIN MEDIA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(Unaudited)
The anti-dilutive securities excluded from the weighted-average shares used to calculate the diluted net loss per common share for the three months ended March 31, 2026 and 2025 were as follows:
|
|
March 31, 2026 |
|
|
March 31, 2025 |
|
||
|
|
|
|
|
|
|
||
Shares unvested and subject to exercise of stock options |
|
|
|
|
|
|
||
Shares subject to exercise of warrants |
|
|
|
|
|
|
||
NOTE 18 – 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 Twenty-First Amendment, on December 26, 2024, the Company issued
BV Agency, LLC, and Centre Lane Partners own approximately
SEC rules define a related party as including (i) any director or executive officer of the Company, or any immediate family member thereof, (ii) any director nominee, or any immediate family member thereof, and (iii) a 5% or greater shareholder of the Company, or any immediate family member thereof. As a result, BV Agency, LLC, and Centre Lane Partners together are considered to be related parties of the Company. Through March 31, 2026, the Company has entered into
The total related party debt owed to Centre Lane Partners was $
Preferred Stock
At March 31, 2026 and December 31, 2025, there was an accrued unpaid preference dividend of $
NOTE 19 – INCOME TAXES
The Company recorded a tax provision of $
At March 31, 2026 and December 31, 2025, the Company had
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.
33
Table of Contents
NOTE 20 – SUBSEQUENT EVENTS
Executive Team Transition
Effective May 1, 2026, the Board of Directors appointed Ari Olgun as Chief Financial Officer to replace Ethan Rudin, who ceased to serve as the Company's Chief Financial Officer effective April 30, 2026. The Company filed a Current Report on Form 8-K on May 6, 2026, providing additional information regarding this transition.
Ladenburg Litigation Settlement
On March 26, 2026, the Company entered into a binding settlement agreement and mutual release with Ladenburg in connection with the litigation described in Note 15, Commitments and Contingencies, to the Company's consolidated financial statements. Pursuant to the settlement agreement, the Company agreed to pay approximately $
34
Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of our operations should be read in conjunction with the consolidated financial statements and related notes included elsewhere in this report and in our Annual Report on Form 10-K for the year ended December 31, 2025. 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, 2025, and those discussed in any subsequent filing we made 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.
35
Table of Contents
Media Services
Our media services division focuses on advertisers and agencies by providing access to premium inventory, and leveraging data to optimize programmatic campaigns. Our aim is to empower clients to access the most sought-after advertising spaces across diverse platforms tailored to their specific needs and preferences. Our data-driven approach ensures that ad placements are not only well-targeted, but also continuously optimized for maximum efficiency and return on investment. Our commitment to combining premium inventory access with data-driven programmatic campaign optimization makes us an indispensable partner in the success of our clients' advertising and marketing endeavors.
The Company generates revenue through:
Key Factors Affecting Our Performance
Seasonal Fluctuations. Typically, advertising technology companies report a material portion of their revenues during the third and fourth calendar quarters as a result of back-to-school and holiday-related advertising spend. We continue to experience this trend in our advertising technology division. Because of seasonal fluctuations, there can be no assurance that the results of any quarter or full year will be indicative of results for future years or quarters.
Limited Number of Customers. During the three months ended March 31, 2026, three customers represented 48.9% of revenue. During the three months ended March 31, 2025, one customer represented 15.4% of revenue. The loss of these customers 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.
36
Table of Contents
Key Operating and Financial Metrics
We monitor the following key financial and operational metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. The following is our analysis for the three months ended March 31, 2026 and 2025:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
(in thousands) |
|
|
|
|
|
|
||
Revenue |
|
$ |
13,963 |
|
|
$ |
14,190 |
|
Cost of revenue |
|
|
9,654 |
|
|
|
9,918 |
|
Gross margin |
|
|
4,309 |
|
|
|
4,272 |
|
General and administrative expenses |
|
|
2,566 |
|
|
|
4,524 |
|
Income (loss) from operations |
|
|
1,743 |
|
|
|
(252 |
) |
Financing and other expense, net |
|
|
(3,043 |
) |
|
|
(2,979 |
) |
Net loss |
|
$ |
(1,300 |
) |
|
$ |
(3,231 |
) |
|
|
|
|
|
|
|
||
Adjusted EBITDA (1) |
|
$ |
2,356 |
|
|
$ |
816 |
|
(1) - For a reconciliation of net loss to Adjusted EBITDA see "Use of Non-GAAP Financial Measures" below.
Revenue
The Company generates revenue through:
Revenue decreased by $227,000, or 2%, for the three months ended March 31, 2026, compared to the same period in 2025. See below for a detailed analysis of revenue for the three months ended March 31, 2026 and 2025.
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 decreased by $264,000, or 3%, for the three months ended March 31, 2026, compared to the same period in 2025. See below for a detailed analysis of cost of revenue for the three months ended March 31, 2026 and 2025.
37
Table of Contents
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 by $2.0 million, or 43%, for the three months ended March 31, 2026, compared to the same period in 2025. See below for a detailed analysis of general and administrative expenses for the three months ended March 31, 2026 and 2025.
Results of Operations
The following is our analysis of the results of operations for the periods indicated below. This analysis should be read in conjunction with the consolidated financial statements and the notes to those statements that are included elsewhere in this Quarterly Report on Form 10-Q.
Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
Net loss for the quarter ended March 31, 2026 was $1.3 million as compared to a net loss of $3.2 million for the same period in 2025. The following is our analysis for the period:
|
|
Three Months Ended March 31, |
|
|
|
|
|
|
|
|||||||
|
|
2026 |
|
|
2025 |
|
|
Change |
|
|||||||
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue |
|
$ |
13,963 |
|
|
$ |
14,190 |
|
|
$ |
(227 |
) |
|
|
-2 |
% |
Cost of revenue |
|
|
9,654 |
|
|
|
9,918 |
|
|
|
(264 |
) |
|
|
-3 |
% |
Gross margin |
|
|
4,309 |
|
|
|
4,272 |
|
|
|
37 |
|
|
|
1 |
% |
General and administrative expenses |
|
|
2,566 |
|
|
|
4,524 |
|
|
|
(1,958 |
) |
|
|
-43 |
% |
Income (loss) from operations |
|
|
1,743 |
|
|
|
(252 |
) |
|
|
1,995 |
|
|
|
-792 |
% |
Financing and other expense, net |
|
|
(3,043 |
) |
|
|
(2,979 |
) |
|
|
(64 |
) |
|
|
2 |
% |
Net loss |
|
$ |
(1,300 |
) |
|
$ |
(3,231 |
) |
|
$ |
1,931 |
|
|
|
-60 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross margin percentage |
|
|
31 |
% |
|
|
30 |
% |
|
|
|
|
|
1 |
% |
|
Revenue
Revenue decreased by $227,000, or 2%, for the three months ended March 31, 2026, compared to the same period in 2025. The Company focuses on digital publishing, advertising technology, consumer insights, creative services, and media services. Changes in revenue generated by each such division are set forth below:
|
|
Three Months Ended March 31, |
|
|
|
|
|
|
|
|||||||
|
|
2026 |
|
|
2025 |
|
|
Change |
|
|||||||
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Digital publishing |
|
$ |
281 |
|
|
$ |
583 |
|
|
$ |
(302 |
) |
|
|
-52 |
% |
Advertising technology |
|
|
6,640 |
|
|
|
4,232 |
|
|
|
2,408 |
|
|
|
57 |
% |
Consumer insights |
|
|
5,045 |
|
|
|
7,039 |
|
|
|
(1,994 |
) |
|
|
-28 |
% |
Creative services |
|
|
1,985 |
|
|
|
1,495 |
|
|
|
490 |
|
|
|
33 |
% |
Media services |
|
|
12 |
|
|
|
841 |
|
|
|
(829 |
) |
|
|
-99 |
% |
Total revenue |
|
$ |
13,963 |
|
|
$ |
14,190 |
|
|
$ |
(227 |
) |
|
|
-2 |
% |
38
Table of Contents
Digital Publishing
Digital publishing revenue decreased by $302,000, or 52%, for the three months ended March 31, 2026, compared to the same period in 2025. Approximately $281,000, or 2%, of the Company’s revenue for the three months ended March 31, 2026, was generated from our digital publishing customers, compared to $583,000, or 4%, for the same period in 2025. This reduction was primarily due to macroeconomic factors, which reduced traffic to our website, coupled with an overall reduction in spending by some customers related to inflationary concerns.
Advertising Technology
Advertising technology revenue increased by $2.4 million, or 57%, for the three months ended March 31, 2026, compared to the same period in 2025. Approximately $6.6 million, or 48%, of the Company’s revenue for the three months ended March 31, 2026, was generated from our advertising technology customers compared to $4.2 million, or 30%, for the same period in 2025. This growth was driven by our ability to leverage our resources to attract top advertisers, which in turn 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 decreased by $2.0 million, or 28%, for the three months ended March 31, 2026, compared to the same period in 2025. Approximately $5.0 million, or 36%, of the Company’s revenue for the three months ended March 31, 2026, was generated from our consumer insights customers compared to $7.0 million, or 49%, for the same period in 2025. This decrease was driven by a decrease in contract value for certain larger tier revenue customers.
Creative Services
Creative services revenue increased by $490,000, or 33%, for the three months ended March 31, 2026, compared to the same period in 2025. Approximately $2.0 million, or 14%, of the Company’s revenue for the three months ended March 31, 2026, was generated from our creative services customers compared to $1.5 million, or 11% for the same period in 2025. This increase was driven by an increase in the number of projects for smaller tier revenue customers.
Media Services
Media services revenue decreased by $829,000, or 99%, for the three months ended March 31, 2026, compared to the same period in 2025. Approximately $12,000, or 0.1%, of the Company’s revenue for the three months ended March 31, 2026, was generated from our media services customers compared to $841,000, or 6%, for the same period in 2025.
Cost of Revenue
|
|
Three Months Ended March 31, |
|
|
|
|
|
|
|
|||||||
|
|
2026 |
|
|
2025 |
|
|
Change |
|
|||||||
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Direct salaries and labor costs |
|
$ |
371 |
|
|
$ |
1,813 |
|
|
$ |
(1,442 |
) |
|
|
-80 |
% |
Direct project costs |
|
|
1,197 |
|
|
|
3,634 |
|
|
|
(2,437 |
) |
|
|
-67 |
% |
Non-direct project costs |
|
|
2,428 |
|
|
|
999 |
|
|
|
1,429 |
|
|
|
143 |
% |
Publisher costs |
|
|
4,887 |
|
|
|
3,025 |
|
|
|
1,862 |
|
|
|
62 |
% |
Content creation |
|
|
142 |
|
|
|
179 |
|
|
|
(37 |
) |
|
|
-21 |
% |
Sales commissions |
|
|
344 |
|
|
|
259 |
|
|
|
85 |
|
|
|
33 |
% |
Other |
|
|
285 |
|
|
|
9 |
|
|
|
276 |
|
|
|
3067 |
% |
Total cost of revenue |
|
$ |
9,654 |
|
|
$ |
9,918 |
|
|
$ |
(264 |
) |
|
|
-3 |
% |
Cost of revenue decreased by $264,000, or 3%, for the three months ended March 31, 2026, compared to the same period in 2025. This decrease was due to the factors discussed below:
Direct Salaries and Labor Cost
Direct salaries and labor cost decreased by $1.4 million, or 80%, for the three months ended March 31, 2026, compared to the same period in 2025. Approximately $371,000, or 4%, of the Company's cost of revenue for the three months ended March 31, 2026, was a result of direct salaries and labor cost compared to $1.8 million or 18%, for the same period in 2025. This decrease was related to our continued efforts to decrease headcount. These costs represent salary and labor cost of employees who work directly on customer projects for our consumer insights, creative services, and media services divisions.
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Table of Contents
Direct Project Cost
Direct project cost decreased by $2.4 million, or 67%, for the three months ended March 31, 2026, compared to the same period in 2025. Approximately $1.2 million, or 12%, of the Company's cost of revenue for the three months ended March 31, 2026, was a result of direct project cost compared to $3.6 million, or 37%, during the same period in 2025. This decrease was related to a decrease in 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 project cost increased by $1.4 million, or 143%, for the three months ended March 31, 2026, compared to the same period in 2025. Approximately $2.4 million, or 25%, of the Company's cost of revenue for the three months ended March 31, 2026, was a result of non-direct project cost compared to $1.0 million, or 10%, for the same period in 2025. This increase is consistent with the increase noted in revenue from our creative services division. 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 increased by $1.9 million, or 62%, for the three months ended March 31, 2026, compared to the same period in 2025. Approximately $4.9 million, or 51%, of the Company's cost of revenue for the three months ended March 31, 2026, was a result of publisher cost compared to $3.0 million, or 31%, for the same period in 2025. This increase is consistent with the increase noted in revenue from our advertising technology division. These costs represent payments to media providers and website publishers.
Gross Margin
Gross margin was $4.3 million and $4.3 million for the three months ended March 31, 2026, and 2025, respectively. Our gross margin remained consistent for the three months ended March 31, 2026, when compared to the same period of 2025. Gross margin as a percentage of revenue increased to 31% for the three months ended March 31, 2026, compared to 30% for the same period of 2025 due to the slight decrease in cost of revenue.
General and Administrative Expenses
|
|
Three Months Ended March 31, |
|
|
|
|
|
|
|
|||||||
|
|
2026 |
|
|
2025 |
|
|
Change |
|
|||||||
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Personnel costs |
|
$ |
1,655 |
|
|
$ |
1,828 |
|
|
$ |
(173 |
) |
|
|
-9 |
% |
Legal fees |
|
|
(1,117 |
) |
|
|
453 |
|
|
|
(1,570 |
) |
|
|
-347 |
% |
Professional fees |
|
|
828 |
|
|
|
764 |
|
|
|
64 |
|
|
|
8 |
% |
Insurance |
|
|
135 |
|
|
|
131 |
|
|
|
4 |
|
|
|
3 |
% |
Depreciation |
|
|
17 |
|
|
|
13 |
|
|
|
4 |
|
|
|
31 |
% |
Amortization |
|
|
445 |
|
|
|
485 |
|
|
|
(40 |
) |
|
|
-8 |
% |
Data processing |
|
|
381 |
|
|
|
633 |
|
|
|
(252 |
) |
|
|
-40 |
% |
Other |
|
|
222 |
|
|
|
217 |
|
|
|
5 |
|
|
|
2 |
% |
Total general and administrative expense |
|
$ |
2,566 |
|
|
$ |
4,524 |
|
|
$ |
(1,958 |
) |
|
|
-43 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross margin as a percentage of general and administrative expense |
|
|
168 |
% |
|
|
94 |
% |
|
|
|
|
|
|
||
General and administrative expenses decreased by $2.0 million, or 43%, for the three months ended March 31, 2026, compared to the same period in 2025. The decrease was due to a combination of factors as discussed below:
Personnel Cost
Personnel cost decreased by $173,000, or 9%, for the three months ended March 31, 2026, compared to the same period in 2025. This change was mainly driven by a decrease in the Company's head count by a net change of 17 employees. The Company's employee headcount was 99 and 116 at March 31, 2026 and 2025, respectively.
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Table of Contents
Legal Fees
Legal fees decreased by $1.6 million, or 347%, for the three months ended March 31, 2026, compared to the same period in 2025. This decrease was due largely to a $1.1 million gain related to a non-recurring settlement of ongoing litigation with Ladenburg. See Note 15, Commitments and Contingencies, to the consolidated financial statements.
Data Processing
Data processing expenses decreased by $252,000, or 40%, for the three months ended March 31, 2026, compared to the same period in 2025. This decrease was related to a reclassification of certain components of software costs from website expenses to cost of revenue.
Financing Expense (Income)
|
|
Three Months Ended March 31, |
|
|
|
|
|
|
|
|||||||
|
|
2026 |
|
|
2025 |
|
|
Change |
|
|||||||
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
$ |
3,105 |
|
|
$ |
3,026 |
|
|
$ |
79 |
|
|
|
3 |
% |
Other expense (income) |
|
|
(62 |
) |
|
|
(47 |
) |
|
|
(15 |
) |
|
|
32 |
% |
Total financing and other expense, net |
|
$ |
3,043 |
|
|
$ |
2,979 |
|
|
$ |
64 |
|
|
|
2 |
% |
Financing and other expense, net, increased by $64,000, or 2%, for the three months ended March 31, 2026, compared to the same period in 2025.
Use of Non-GAAP Financial Measures
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.
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Table of Contents
A reconciliation of net loss before taxes to non-GAAP EBITDA and Adjusted EBITDA is as follows:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
(in thousands) |
|
|
|
|
|
|
||
Net loss before income tax |
|
$ |
(1,300 |
) |
|
$ |
(3,231 |
) |
Depreciation expense |
|
|
17 |
|
|
|
13 |
|
Amortization of intangibles |
|
|
445 |
|
|
|
485 |
|
Amortization of debt discount |
|
|
460 |
|
|
|
633 |
|
Other interest expense |
|
|
4 |
|
|
|
6 |
|
Interest expense - Centre Lane Senior Secured Credit Facility |
|
|
2,641 |
|
|
|
2,387 |
|
EBITDA |
|
|
2,267 |
|
|
|
293 |
|
Stock compensation expense |
|
|
21 |
|
|
|
37 |
|
Non-recurring professional fees |
|
|
- |
|
|
|
241 |
|
Non-recurring legal fees |
|
|
- |
|
|
|
245 |
|
Non-recurring severance expense |
|
|
68 |
|
|
|
- |
|
Adjusted EBITDA |
|
$ |
2,356 |
|
|
$ |
816 |
|
Liquidity and Capital Resources
Liquidity is the ability of a company to generate sufficient cash to satisfy its needs for cash. The following table summarizes total current assets, total current liabilities, and net working capital (deficit) as of March 31, 2026, as compared to December 31, 2025:
|
|
March 31, 2026 |
|
|
December 31, 2025 |
|
||
(in thousands) |
|
|
|
|
|
|
||
Total current assets |
|
$ |
18,899 |
|
|
$ |
20,689 |
|
Total current liabilities |
|
|
115,098 |
|
|
|
116,231 |
|
Net working capital (deficit) |
|
$ |
(96,199 |
) |
|
$ |
(95,542 |
) |
As of March 31, 2026, we had a cash balance of $594,000 and a restricted cash balance of $1.9 million, compared with a cash balance of $1.4 million and a restricted cash balance of $1.9 million as of December 31, 2025. Subsequent decreases in restricted cash associated with the settlement agreement entered into with Ladenburg are discussed further in Note 15, Commitments and Contingencies, and Note 20, Subsequent Events, to the consolidated financial statements. The Company’s liquidity needs, and a discussion of how it intends to meet those needs, is discussed below. See "Going Concern" below.
Going Concern
Historically, the Company has incurred losses, which have resulted in an accumulated deficit of approximately $181.6 million as of March 31, 2026. Cash flows used in operating activities were $196,000 and $350,000 for the three months ended March 31, 2026 and 2025, respectively. As of March 31, 2026, the Company had a working capital deficit of approximately $96.2 million inclusive of $594,000 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, are 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 $88.3 million to meet our contractual obligations in addition to amounts needed for our working capital needs. The Company is currently exploring several strategic alternatives, including restructuring or refinancing its debt, or seeking additional debt, including borrowing under the Centre Lane Senior Secured Credit Facility, or raising equity capital. The ability to access the capital markets depends, in part, upon the volume and market price of the Company's stock, which cannot be assured. Other measures include reducing or delaying certain business activities, and reducing general and administrative expenses, including a reduction in headcount. The ultimate success of these plans is not guaranteed.
The accompanying unaudited consolidated financial statements are prepared on a going concern basis and do not include any adjustments that might result from uncertainty about the Company’s ability to continue as a going concern.
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Table of Contents
Financing Arrangement Summary
Centre Lane Senior Secured Credit Facility
On June 5, 2020, the Company and its subsidiaries entered into the Amended and Restated Senior Secured Credit Facility between themselves, the lenders party thereto and Centre Lane Partners Master Credit Fund II, L.P., as Administrative Agent and Collateral Agent (“Centre Lane Partners”), as amended (the “Credit Agreement”). The Credit Agreement has been amended numerous times to change the terms, including the amounts outstanding, the interest rate, the maturity date and other payment terms.
As of March 31, 2026, in addition to the acquisition financing provided to the Company effective June 1, 2020, 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 and Twenty-One (the “Third Out Loans”) to provide liquidity to fund operations.
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:
Effective September 30, 2025, the Company, the Lenders, and Centre Lane Partners entered into the Twenty-Third Amendment to the Credit Agreement, which applied the following adjustments to loans with outstanding payments due on September 30, 2025, including the following modifications:
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Table of Contents
Effective December 31, 2025, the Company, the Lenders, and Centre Lane Partners entered into the Twenty-Fourth Amendment to the Credit Agreement, which applied the following adjustments to loans with outstanding payments due on December 31, 2025, including the following modifications:
Effective March 31, 2026, the Company, the Lenders, and Centre Lane Partners entered into the Twenty-Fifth Amendment to the Credit Agreement, which applied the following adjustments to loans with outstanding payments due on March 31, 2026, including the following modifications:
As of March 31, 2026, we owed Centre Lane $88.2 million under the Centre Lane Senior Secured Credit Facility. Of this amount, $1.4 million is due on June 30, 2026, $1.4 million is due on September 30, 2026, and the remaining principal balance of $85.4 million is due on December 31, 2026.
For a full description of the Centre Lane Senior Secured Credit Facility, see Note 10, Centre Lane Senior Secured Credit Facility, to the consolidated financial statements.
Summary of Cash Flows
The following table summarizes cash flow activities during the three months ended March 31, 2026 and 2025:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
(in thousands) |
|
|
|
|
|
|
||
Net cash used in operating activities |
|
$ |
(196 |
) |
|
$ |
(350 |
) |
Net cash used in investing activities |
|
|
- |
|
|
|
(10 |
) |
Net cash used in financing activities |
|
|
(581 |
) |
|
|
(4 |
) |
Net decrease in cash and cash equivalents, net of impact of exchange rates |
|
$ |
(777 |
) |
|
$ |
(365 |
) |
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Table of Contents
Operating Activities
Our largest source of operating cash is cash collections from customers from revenue. Our primary uses of our operating cash, are for cost of revenue expenses, personnel-related expenditures and other general administrative expenses.
For the three months ended March 31, 2026, cash used in operating activities was $0.2 million. The primary factors affecting our operating cash flows during the period were our net loss of $1.3 million, adjusted for non-cash charges of $445,000 for amortization of intangible assets, $460,000 of amortization of debt discount, $2.6 million in interest paid-in-kind on the Centre Lane Senior Secured Credit Facility, and a $2.5 million net change in operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities were a $4.5 million decrease in accounts payable and accrued expenses and a $665,000 decrease in other liabilities, partially offset by a $1.6 million increase in deferred revenue and a $839,000 decrease in accounts receivable.
For the three months ended March 31, 2025, cash used in operating activities was $350,000. The primary factors affecting our operating cash flows during the period were our net loss of $3.2 million, adjusted for non-cash charges of $485,000 for amortization of intangible assets, $633,000 of amortization of debt discount, $2.3 million in interest paid in kind on the Centre Lane Senior Secured Credit Facility, and a $585,000 net change in operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities were a $3.9 million decrease in accounts payable and a $543,000 decrease in other liabilities, partially offset by a $3.5 million increase in deferred revenue and a $762,000 decrease in accounts receivable.
Investing Activities
For the three months ended March 31, 2026, cash used in investing activities was $0. For the three months ended March 31, 2025, cash used in investing activities was $10,000, attributable to the purchase of property and equipment.
Financing Activities
For the three months ended March 31, 2026, cash used in financing activities was $581,000, which was primarily attributable to repayments of principal on the Centre Lane Senior Secured Credit Facility.
For the three months ended March 31, 2025, cash used in financing activities was $4,000, which was primarily attributable to principal payments on finance lease obligations.
Contractual Obligations and Commitments
There were no other material changes in our contractual obligations and commitments from those disclosed above in Note 10, Centre Lane Senior Secured Credit Facility, and Note 11, Leases, to the consolidated financial statements, and in the Annual Report on Form 10-K for the year ended December 31, 2025.
Off-Balance Sheet Arrangements
As of March 31, 2026 and December 31, 2025, 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.
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Table of Contents
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, 2025.
Recent Accounting Pronouncements
Recent accounting pronouncements are detailed in the “Summary of Significant Accounting Policies” in Note 2 to our unaudited consolidated financial statements.
Smaller Reporting Company Status
We are a “smaller reporting company” as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We may continue to be a smaller reporting company even though we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as the market value of our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our voting and non-voting common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter.
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Table of Contents
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
As a smaller reporting company as defined in Rule 12b-2 of the Exchange Act, we are not required to include information otherwise required by this Item 3 to Form 10-Q.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
The 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), who is also presently acting as the Company’s interim principal financial officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2026. Based on that evaluation, the Company’s Chief Executive Officer has concluded that as of March 31, 2026, 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, 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 part of this evaluation, we noted that the Company continues to improve its accounting processes, and that management has implemented, and continues to implement, a series of measures designed to strengthen the Company's control environment, risk assessment processes, and control activities. The Company updated its information technology general controls ("ITGC") risk assessment to better evaluate risks affecting the reliability, integrity, security, and confidentiality of the Company's information systems and underlying financial data, and our Chief Executive Officer evaluated our accounting processes as follows:.
First, the Company implemented the compliance model within Floqast to formalize identification, documentation, and monitoring of key internal controls. Through this initiative, management developed a comprehensive key control matrix that documents key controls related to significant financial statement areas, including revenue recognition, cost of sales, equity transactions, and other material account balances and disclosures. This framework enhances management's ability to evaluate internal control design, monitor operating effectiveness, and maintain clear documentation supporting financial reporting controls.
Second, to improve timeliness and consistency of financial reporting, the Company optimized its month-end close process by enhancing cross-departmental coordination, automating key reconciliation and reporting activities, and reducing reliance on manual processes. These improvements have shortened the monthly close timeline and strengthened management review controls over financial results.
Third, the Company implemented a new accounting system, Microsoft Dynamics 365 Business Central ("Business Central"), to enhance the efficiency, accuracy, and integration of financial data across departments. The implementation of this system supports improved segregation of duties, system-based controls, audit trail functionality, and more consistent application of accounting policies, further strengthening internal controls over financial reporting. Management believes these remediation efforts have materially improved the design and execution of the Company's internal control framework. The Company will continue to monitor the effectiveness of these controls and pursue additional enhancements as necessary to ensure a sustainable and effective control environment.
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Based on the Company's continued improvements in its accounting processes described above, the Company's Chief Executive Officer, acting as the Company’s principal executive officer and principal financial officer, evaluated our internal controls and concluded that as of March 31, 2026, they were effective, and that our consolidated financial statements included in this Quarterly Report on Form 10-Q fairly represent, in all material respects, our financial condition and results of operations as of and for the quarter ended March 31, 2026.
Changes in Internal Control over Financial Reporting
Other than the matters set forth above, there were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the quarter ended March 31, 2026 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
Item 1. Legal Proceedings.
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. Also 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 the judgment. See Note 10, Centre Lane Senior Secured Credit Facility, to the consolidated financial statements. The Company obtained the bond and a stay of execution of the judgment was granted on February 3, 2025. On May 9, 2025, the Company appealed to the United States Court of Appeals for the Eleventh Circuit Court of Appeals. Ladenburg filed a response on July 9, 2025, and the Company accrued an additional $242,000 to cover fees related to this matter. The Company replied to Ladenburg's response on August 29, 2025. On March 26, 2026, the Company and Ladenburg entered into a binding settlement agreement and mutual release. Pursuant to the settlement agreement, the Company agreed to pay a total settlement amount of $950,000. The settlement amount is expected to be funded from the restricted cash collateral securing the appeal bond. Following payment of the settlement amount and satisfaction of related obligations, any remaining bond funds are expected to be returned to Centre Lane Partners. The Company recorded the effect of the settlement in its consolidated financial statements for the three months ended March 31, 2026. The settlement resulted in a reduction of litigation-related accruals and the recognition of a net gain of approximately $1.1 million reflected within legal fees in general and administrative expenses for the three months ended March 31, 2026.
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 March 31, 2026, one customer represented 19.8% of our total accounts receivable balance and another customer represented 11.1% 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, 2025.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
In connection with the Twenty-Fifth Amendment to Amended and Restated Senior Secured Credit Agreement by and among the Company, its subsidiaries, Centre Lane Partners Master Credit Fund II, L.P. (“Centre Lane Partners”), and the lenders thereto, and as consideration therefor, the Company agreed to issue 2,922,566 shares of the common stock of the Company, par value $0.01 per share, to Centre Lane Partners. The issuance of these securities was effected without registration in reliance on Section 4(a)(2) of the Securities Act as a sale by the Company not involving a public offering. No underwriters were involved with the issuance of such securities
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
None.
Item 5. Other Information.
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Item 6. Exhibits.
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Incorporated by Reference |
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Filed or Furnished |
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No. |
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Exhibit Description |
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Date Filed |
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Herewith |
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10.1 |
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Twenty-Fifth Amendment to Amended and Restated Senior Secured Credit Agreement, dated March 31, 2026 |
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X |
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X |
10.2 |
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Annex A to the Credit Agreement, dated March 31, 2026 |
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31.1 |
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Certification of the Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) |
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X |
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31.2 |
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Certification of the Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) |
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X |
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32.1* |
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Certification of the Principal Executive Officer pursuant to Section 1350 |
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X |
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32.2* |
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Certification of the Principal Financial Officer pursuant to Section 1350 |
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X |
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101.INS |
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Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
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101.SCH |
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Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents |
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X |
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104. |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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X |
* This certification is being furnished and shall not be deemed “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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BRIGHT MOUNTAIN MEDIA, INC. |
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May 12, 2026 |
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By: |
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/s/ Matthew Drinkwater |
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Matthew Drinkwater, |
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Interim Chairman of the Board and Chief Executive Officer |
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(Principal Executive Officer and Principal Financial Officer) |
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