Bright Mountain Media, Inc.

Previous wording

Limited Number of Customers. During the three months ended March 31, 2025 and 2024, one customer represented 15.4% and 14.9% of revenue, respectively. The loss of this customer could have a material adverse impact on our results of operations in future periods.

Current wording

Limited Number of Customers. During the six months ended June 30, 2025 one customer represented 15.6% of revenue. During the six months ended June 30, 2024 one customer represented 14.2% of revenue. The loss of this customer could have a material adverse impact on our results of operations in future periods.

Previous wording

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, 2025 and 2024:

Current wording

We monitor the following key financial and operational metrics to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions. The following is our analysis for the three and six months ended June 30, 2025 and 2024:

Previous wording

Cost of revenue increased approximately $607,000, or 7%, for the three months ended March 31, 2025 compared to the same period in 2024. See below for a detailed analysis of cost of revenue for the three months ended March 31, 2025, and 2024.

Current wording

Cost of revenue increased approximately $2.8 million, or 29%, for the three months ended June 30, 2025 compared to the same period in 2024. Cost of revenue increased approximately $3.4 million, or 18%, for the six months ended June 30, 2025, compared to the same period in 2024. See below for a detailed analysis of cost of revenue for the three and six months ended June 30, 2025, and 2024.

Previous wording

General and administrative expenses decreased approximately $720,000, or 14%, for the three months ended March 31, 2025 compared to the same period in 2024. See below for a detailed analysis of general and administrative expenses for the three months ended March 31, 2025 and 2024.

Current wording

General and administrative expenses decreased approximately $1.3 million, or 24%, for the three months ended June 30, 2025 compared to the same period in 2024. General and administrative expenses decreased approximately $2.0 million, or 19%, for the six months ended June 30, 2025, compared to the same period in 2024. See below for a detailed analysis of general and administrative expenses for the three and six months ended June 30, 2025 and 2024.

Previous wording

Net loss for the quarter ended March 31, 2025 was $3.2 million as compared to a net loss of $4.8 million for the same period in 2024. The following is our analysis for the period:

Current wording

Net loss for the quarter ended June 30, 2025 was $4.1 million as compared to a net loss of $5.2 million for the same period in 2024. The following is our analysis for the period:

Previous wording

Our revenue increased $1.7 million, or 14%, for the three months ended March 31, 2025, compared to the same period in 2024. The increase in revenue was largely attributable to our advertising technology division. The Company focuses on digital publishing, advertising technology, consumer insights, creative services, and media services. Changes in revenue generated by each such division are set forth below:

Current wording

Our revenue increased $2.4 million, or 18%, for the three months ended June 30, 2025, compared to the same period in 2024. The increase in revenue was largely attributable to our advertising technology division. The Company focuses on digital publishing, advertising technology, consumer insights, creative services, and media services. Changes in revenue generated by each such division are set forth below:

Previous wording

Advertising technology revenue increased by $1.6 million, or 61%, for the three months ended March 31, 2025, compared to the same period in 2024. Approximately $4.2 million, or 30%, of the Company’s revenue for the three months ended March 31, 2025, was generated from our advertising technology customers compared to $2.6 million, or 21%, for the same period in 2024. This growth was driven by our ability to leverage our resources to attract top advertisers, which in turn has allowed us to onboard premium publishers. This led to an increase in volume, as well as rates and overall revenue.

Current wording

Advertising technology revenue increased by $1.5 million, or 43%, for the three months ended June 30, 2025, compared to the same period in 2024. Approximately $5.1 million, or 33%, of the Company’s revenue for the three months ended June 30, 2025, was generated from our advertising technology customers compared to $3.6 million, or 28%, for the same period in 2024. This growth was driven by our ability to leverage our resources to attract top advertisers, which in turn has allowed us to onboard premium publishers. This led to an increase in volume, as well as rates and overall revenue.

Previous wording

Consumer insights revenue increased by $349,000, or 5%, for the three months ended March 31, 2025, compared to the same period in 2024. Approximately $7.0 million, or 49%, of the Company’s revenue for the three months ended March 31, 2025 was generated from our consumer insights customers compared to $6.7 million, or 54%, for the same period in 2024.

Current wording

Consumer insights revenue increased by $655,000, or 10%, for the three months ended June 30, 2025, compared to the same period in 2024. Approximately $7.3 million, or 48%, of the Company’s revenue for the three months ended June 30, 2025 was generated from our consumer insights customers compared to $6.7 million, or 51%, for the same period in 2024. This growth was driven by an increase in contract value for certain larger tier revenue customers.

Previous wording

Cost of revenue increased $607,000, or 7%, for the three months ended March 31, 2025, compared to the same period for 2024. This increase is due to the factors discussed below:

Current wording

Cost of revenue increased $2.8 million, or 29%, for the three months ended June 30, 2025, compared to the same period for 2024. This increase is due to the factors discussed below:

Previous wording

Direct salaries and labor cost decreased $117,000, or 6%, for the three months ended March 31, 2025, when compared to the same period in 2024. Approximately $1.8 million, or 18%, of the Company's cost of revenue for the three months ended March 31, 2025, was a result of direct salaries and labor cost compared to $1.9 million, or 21% for the same period in 2024. These costs represent salary and labor cost of employees that work directly on customer projects for our consumer insights, creative services, and media services divisions.

Current wording

Direct salaries and labor cost decreased $282,000, or 13%, for the three months ended June 30, 2025, when compared to the same period in 2024. Approximately $1.9 million, or 15%, of the Company's cost of revenue for the three months ended June 30, 2025, was a result of direct salaries and labor cost compared to $2.1 million, or 22% for the same period in 2024. This decrease is related to our continued efforts to decrease headcount. These costs represent salary and labor cost of employees that work directly on customer projects for our consumer insights, creative services, and media services divisions.

Previous wording

Publisher cost was $3.0 million, which represents 31% of overall cost of revenue, and $1.8 million, or 19%, of overall cost of revenue, for the three months ended March 31, 2025 and 2024, respectively. We experienced an increase of $1.2 million, or 68%, for the three months ended March 31, 2025, compared to the same period in 2024. This increase is consistent with the increase noted in revenue for our advertising technology division. These costs represent payments to media providers and website publishers.

Current wording

Publisher cost was $3.7 million, which represents 30% of overall cost of revenue, and $2.3 million, or 24%, of overall cost of revenue, for the three months ended June 30, 2025 and 2024, respectively. We experienced an increase of $1.4 million, or 61%, for the three months ended June 30, 2025, compared to the same period in 2024. This increase is consistent with the increase noted in revenue for our advertising technology division. These costs represent payments to media providers and website publishers.

Previous wording

General and administrative expenses decreased by $720,000, or 14%, for the three months ended March 31, 2025, compared to the same period in 2024. The decrease is due to a combination of factors as discussed below.

Current wording

General and administrative expenses decreased by $1.3 million, or 24%, for the three months ended June 30, 2025, compared to the same period in 2024. The decrease is due to a combination of factors as discussed below.

Previous wording

Personnel cost decreased by approximately $664,000, or 27%, for the three months ended March 31, 2025, compared to the same period in 2024. This change is mainly driven by a decrease in the Company's head count by a net change of 51 employees. The Company employee's headcount was 116 and 167 at March 31, 2025 and 2024, respectively.

Current wording

Personnel cost decreased by approximately $565,000, or 24%, for the three months ended June 30, 2025, compared to the same period in 2024. This change was mainly driven by a decrease in the Company's head count by a net change of 35 employees. The Company employee's headcount was 115 and 150 at June 30, 2025 and 2024, respectively.

Previous wording

Data processing decreased by $110,000, or 27%, for the three months ended March 31, 2025, compared to the same period in 2024. This reduction is due largely to the reclassification of certain components of data processing costs from data processing to website expenses.

Current wording

Data processing decreased by $155,000, or 52%, for the three months ended June 30, 2025, compared to the same period in 2024. This reduction was due largely to the reclassification of certain components of data processing costs from data processing to website expenses.

Previous wording

Financing and other expense, net increased by $320,000, or 12%, for the three months ended March 31, 2025, compared to the same period in 2024.

Current wording

Financing and other expense, net decreased by $222,000, or 7%, for the three months ended June 30, 2025, compared to the same period in 2024.

Previous wording

Digital publishing revenue increased by $149,000, or 34%, for the three months ended March 31, 2025, compared to the same period in 2024. Approximately $583,000, or 4%, of the Company’s revenue for the three months ended March 31, 2025, was generated from our digital publishing customers, compared to $434,000, or 3%, for the same period in 2024. This increase reflects a one-time payment that is non-recurring in nature, and which we received on account of a contract that has ended.

Current wording

Digital publishing revenue decreased by $8,000, or 1%, for the six months ended June 30, 2025, compared to the same period in 2024. Approximately $942,000, or 3%, of the Company’s revenue for the six months ended June 30, 2025 was generated from our digital publishing customers, compared to $950,000, or 4%, for the same period in 2024.

Previous wording

Creative services revenue decreased by $563,000, or 27%, for the three months ended March 31, 2025, compared to the same period in 2024. Approximately $1.5 million, or 11%, of the Company’s revenue for the three months ended March 31, 2025, was generated from our creative services customers compared to $2.1 million, or 17% for the same period in 2024. This decrease was primarily related to a decrease in the number of projects for smaller tier revenue customers.

Current wording

Creative services revenue decreased by $487,000, or 13%, for the six months ended June 30, 2025, compared to the same period in 2024. Approximately $3.2 million, or 11%, of the Company’s revenue for the six months ended June 30, 2025 was generated from our creative services customers compared to $3.7 million, or 15% for the same period in 2024. This decrease was primarily related to a decrease in the number of projects for smaller tier revenue customers.

Previous wording

Media services revenue increased by $200,000, or 31%, for the three months ended March 31, 2025, compared to the same period in 2024. Approximately $841,000, or 6%, of the Company’s revenue for the three months ended March 31, 2025, was generated from our media services customers compared to $641,000, or 5%, for the same period in 2024. This increase was primarily related to the timing of customer needs and the moving of certain projects from year-end 2024 to the first quarter of 2025.

Current wording

Media services revenue increased by $504,000, or 42%, for the six months ended June 30, 2025, compared to the same period in 2024. Approximately $1.7 million, or 6% of the Company’s revenue for the six months ended June 30, 2025 was generated from our media services customers compared to $1.2 million, or 5%, for the same period in 2024. This increase was primarily related to the timing of customer needs and the moving of certain projects from year-end 2024 to the first half of 2025.

Previous wording

Direct project cost increased $485,000, or 15%, for the three months ended March 31, 2025 when compared to the same period in 2024. Approximately $3.6 million, or 37%, of the Company's cost of revenue for the three months ended March 31, 2025, was a result of direct project cost compared to $3.1 million, or 34%, during the same period in 2024. 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.

Current wording

Direct project cost increased $2.3 million, or 38%, for the six months ended June 30, 2025, when compared to the same period in 2024. Approximately $8.5 million, or 38%, of the Company's cost of revenue for the six months ended June 30, 2025 was a result of direct project cost compared to $6.2 million, or 33%, during the same period in 2024. This increase was related to an increase customer contracts. These costs include payments made to third-parties that are directly attributable to the completion of projects that allow for revenue recognition for our consumer insights, creative services, and media services divisions.

Previous wording

Non-direct cost was $1.0 million, or 10%, of the Company's cost of revenue for the three months ended March 31, 2025, compared to $2.1 million, or 22%, for the same period in 2024. These costs represent overall client service costs that are not specifically related to a particular project, but relate to services for our consumer insights, creative services, and media services divisions. The decrease in non-direct project costs is related to the decrease in revenue from our creative services division.

Current wording

Non-direct cost was $2.2 million, or 10%, of the Company's cost of revenue for the six months ended June 30, 2025, compared to $3.7 million, or 20%, for the same period in 2024. These costs represent overall client service costs that are not specifically related to a particular project, but relate to services for our consumer insights, creative services, and media services divisions. The decrease in non-direct project costs is related to the decrease in revenue from our creative services division.

Previous wording

Gross margin was $4.3 million and $3.1 million for the three months ended March 31, 2025 and 2024, respectively. Our gross margin increased $1.1 million, or 36%, for the three months ended March 31, 2025, when compared to the same period of 2024. Gross margin as a percentage of revenue increased to 30% for the three months ended March 31, 2025 compared to 25% for the same period of 2024.

Current wording

Gross margin was $7.3 million and $6.6 million for the six months ended June 30, 2025 and 2024, respectively. Our gross margin increased $724,000, or 11%, for the six months ended June 30, 2025, when compared to the same period of 2024. Gross margin as a percentage of revenue decreased to 25% for the six months ended June 30, 2025, compared to 26% for the same period of 2024 due to the higher cost of revenue.

Previous wording

Non-GAAP results are presented only as a supplement to the financial statements and for use within management's discussion and analysis based on U.S. generally accepted accounting principles ("GAAP"). The non-GAAP financial information is provided to enhance the reader's understanding of the Company's financial performance, but non-GAAP measures should not be considered in isolation or as a substitute for financial measures calculated in accordance with GAAP.

Current wording

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.

Previous wording

As of March 31, 2025, we had a cash balance of $2.2 million and a restricted cash balance of $1.9 million compared with a cash balance of $2.5 million and a restricted cash balance of $1.9 million as of December 31, 2024. The Company’s liquidity needs, and a discussion of how it intends to meet those needs, is discussed below. See –“Going Concern.”

Current wording

As of June 30, 2025, we had a cash balance of $1.7 million and a restricted cash balance of $1.9 million compared with a cash balance of $2.5 million and a restricted cash balance of $1.9 million as of December 31, 2024. The Company’s liquidity needs, and a discussion of how it intends to meet those needs, is discussed below. See – “Going Concern.”

Previous wording

Historically, the Company has incurred losses, which have resulted in an accumulated deficit of approximately $170.1 million as of March 31, 2025. Cash flows (used in) provided by operating activities were $(350,000) and $920,000 for the three months ended March 31, 2025 and 2024, respectively. As of March 31, 2025, the Company had a working capital deficit of approximately $14.8 million, inclusive of $2.2 million in cash and cash equivalents and $1.9 million in restricted cash.

Current wording

Historically, the Company has incurred losses, which have resulted in an accumulated deficit of approximately $174.2 million as of June 30, 2025. Cash flows provided by (used in) operating activities were $1.2 million and $(385,000) for the six months ended June 30, 2025 and 2024, respectively. As of June 30, 2025, the Company had a working capital deficit of approximately $17.3 million, inclusive of $1.7 million in cash and cash equivalents and $1.9 million in restricted cash.

Previous wording

The Company's current cash and working capital, as of the filing of this Quarterly Report on Form 10-Q, is not expected to be sufficient to fund its anticipated level of operations over the next twelve months. As a result, such matters create a substantial doubt regarding the Company’s ability to meet its financial obligations and continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to meet its liquidity needs through a combination of factors. During the next year, we anticipate that we will need approximately $5.6 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.

Current wording

The Company's current cash and working capital, as of the filing of this Quarterly Report on Form 10-Q, is not expected to be sufficient to fund its anticipated level of operations over the next twelve months. As a result, such matters create a substantial doubt regarding the Company’s ability to meet its financial obligations and continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to meet its liquidity needs through a combination of factors. During the next year, we anticipate that we will need approximately $4.8 million to meet our contractual obligations in addition to amounts needed for our working capital needs. The Company is currently exploring several strategic alternatives, including restructuring or refinancing its debt, or seeking additional debt, including borrowing under the Centre Lane Senior Secured Credit Facility, or raising equity capital. The ability to access the capital markets depends, in part, upon the volume and market price of the Company's stock, which cannot be assured. Other measures include reducing or delaying certain business activities, and reducing general and administrative expenses, including a reduction in headcount. The ultimate success of these plans is not guaranteed.

Previous wording

As of March 31, 2025, Centre Lane Partners has loaned the Company $38.9 million through Amendments One through Eight (the "Second Out Loans"), Amendments Nine through Sixteen (the "First Out Loans"), and Amendments Seventeen, Twenty-One, and Twenty-Two (the "Third Out Loans").

Current wording

As of June 30, 2025, Centre Lane Partners has loaned the Company $39.9 million through Amendments One through Eight (the "Second Out Loans"), Amendments Nine through Sixteen (the "First Out Loans"), and Amendments Seventeen, Twenty-One, and Twenty-Two (the "Third Out Loans").

Previous wording

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 as follows:

Current wording

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:

Previous wording

Adjusting the amortization of the First Out Loans such that an installment of $700,000 is paid on March 31, 2025, and quarterly installments of $575,000 are paid thereafter until maturity.

Current wording

Adjusting the amortization of the First Out Loans such that an installment of $700,000 was paid on March 31, 2025, and quarterly installments of $575,000 are paid thereafter until maturity.

Previous wording

The outstanding principal owed to Centre Lane Partners was $81.1 million and $78.8 million as of March 31, 2025 and December 31, 2024, respectively. Of the amount outstanding at March 31, 2025, approximately $5.3 million is due by March 31, 2026. The balance of $75.8 million is due in December 2026.

Current wording

The outstanding principal owed to Centre Lane Partners was $81.3 million and $78.8 million as of June 30, 2025 and December 31, 2024, respectively. Of the amount outstanding at June 30, 2025, approximately $4.7 million is due by June 30, 2026. The balance of $76.6 million is due in December 2026.

Previous wording

The following table summarizes cash flow activities during the three months ended March 31, 2025 and 2024:

Current wording

The following table summarizes cash flow activities during the six months ended June 30, 2025 and 2024:

Previous wording

For the three months ended March 31, 2024, cash flow provided by operating activities was $920,000. The primary factors affecting our operating cash flows during the period were our net loss of $4.8 million, adjusted for non-cash charges of $481,000 for amortization of intangible assets, $615,000 of amortization of debt discount, $2.2 million in interest paid-in-kind on the Centre Lane Senior Secured Credit Facility, $65,000 for stock option compensation expense, and a $2.3 million net change in operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities were a $2.2 million decrease in accounts receivables partially offset by a $1.7 million decrease in accounts payable and accrued expenses, an increase in prepaid expenses and other current assets of $123,000, a $138,000 increase in interest payable on the Centre Lane Senior Secured Credit Facility, and a $1.7 million increase in deferred revenue.

Current wording

For the six months ended June 30, 2025, cash provided by operating activities was $1.2 million. The primary factors affecting our operating cash flows during the period were our net loss of $7.3 million, adjusted for non-cash charges of $970,000 for amortization of intangible assets, $1.2 million of amortization of debt discount, $4.5 million in interest paid in kind on the Centre Lane Senior Secured Credit Facility, and a $1.7 million net change in operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities were a $3.7 million increase in deferred revenue, a $904,000 decrease in accounts receivable, partially offset by a $2.0 million decrease in other liabilities.

Previous wording

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, $37,000 for stock compensation expense, 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.

Current wording

For the six months ended June 30, 2024, cash flow used in operating activities was $385,000. The primary factors affecting our operating cash flows during the period were our net loss of $10.0 million, adjusted for non-cash charges of $962,000 for amortization of intangible assets, $1.6 million of amortization of debt discount, $4.5 million in interest paid in kind on the Centre Lane Senior Secured Credit Facility, $135,000 for stock compensation expense, and a $2.3 million net change in operating assets and liabilities. The primary drivers of the changes in operating assets and liabilities were a $2.6 million decrease in accounts receivable and a $1.2 million increase in deferred revenue. partially offset by a $993,000 decrease in accounts payable, and a $613,000 decrease in other liabilities.

Previous wording

Cash used in investing activities of $10,000 and $2,000 for the three months ended March 31, 2025 and 2024, respectively, was attributable to the purchase of property and equipment.

Current wording

Cash used in investing activities of $49,000 and $85,000 for the six months ended June 30, 2025 and 2024, respectively, was attributable to $49,000 and $14,000, respectively, for the purchase of property and equipment, and $71,000 for website enhancements during the six months ended June 30, 2024.

Previous wording

During the three months ended March 31, 2025 and 2024, the Company used cash of $4,000 in financing activities, which is attributable to principal payments on finance lease obligations.

Current wording

During the six months ended June 30, 2024, the Company used cash of $886,000 in financing activities, which is largely attributable to the repayment of principal on the Centre Lane Senior Secured Credit Facility of $879,000.

Previous wording

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 Center Lane Senior Secured Facility to determine whether a debt modification or extinguishment has occurred, and the valuation allowance on deferred tax assets.

Current wording

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.