Newsmax Inc.

Part I - Financial Information

Item 1. Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE AND REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31,

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

FOR THE THREE MONTHS ENDED MARCH 31,

Notes to Condensed Consolidated Financial Statements

(unaudited)

NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete annual financial statements. In the opinion of the Company’s management, all adjustments considered necessary for a fair presentation have been reflected in these unaudited condensed consolidated financial statements.

Operating results for the three months ended March 31, 2026 are not indicative of the results that may be expected for the fiscal year ending December 31, 2026. The balance sheet at December 31, 2025 has been derived from the audited financial statements at that date, but does not include all the information and footnotes required by U.S. GAAP for complete financial statements.

The accompanying unaudited condensed consolidated financial statements should be read together with the annual audited consolidated financial statements and related notes for the fiscal year ended December 31, 2025.

There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Newsmax Inc. and its wholly owned subsidiaries Newsmax Media Inc, Medix Health, LLC (“Medix”), Crown Atlantic Insurance, LLC (“Crown”), Newsmax Broadcasting, LLC (“Broadcasting”), Humanix Publishing, LLC (“Humanix”), ROI Media Strategies (“ROI”), Newsmax Radio LLC (“Radio”) and Newsmax Markets, LLC. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates and assumptions made by management are used for, but not limited to, the allowance for credit losses, carrying value of other assets, and realizability of deferred income taxes.

Revenue Recognition

In accordance with Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers,” the Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the Company expects to be entitled in exchange for those goods are services. The Company records taxes collected from customers and remitted to governmental authorities on a net basis.

Service Revenue

Service revenue is primarily derived from the Company’s original news and lifestyle content, using a mixed-revenue multi-platform model that derives income from linear and over the top ("OTT") news channels, digital, licensing, websites, proprietary database, publishing and video subscription services. The Company uses original news, syndicated services and editorial content to draw consumers to its media outlets in order to sell advertising, license fees and video, print and online information services. The Company earns revenue through contractual allocations of fees based on impressions received or subscriber counts.

Service revenue is comprised of the following for the three months ended:

Advertising

Advertising revenue is derived from the sale of advertising on the Company’s cable television, email database, magazine and related publications, and website. Revenue related to the sale of advertising in the broadcasting segment is recognized at the time the commercials are aired. Revenue related to the Company's digital segment is recognized when display or other digital advertisement records are placed on various digital media. Revenue related to magazine and related publications is recognized when the ad is displayed in the printed document. Each advertisement is determined to be a distinct performance obligation that is satisfied at the point in time when such advertisements are published or aired. Advertising contracts, which are generally short-term, are billed monthly for the services provided during the month, with payments due shortly thereafter. Cash payments received prior to services rendered are recorded as deferred revenue, which is then recognized as revenue when the advertising time or space is provided.

The Company enters into agreements with OTT distribution platforms to distribute the Company’s news channel. Pursuant to certain distribution agreements, advertising revenues are earned based on an allocation of the fee determined by the number of impressions received. These contracts represent a single performance obligation recognized over the contract period. Revenue is recognized upon delivery of the content over the course of an over-the-top distribution agreement term based on time elapsed, as this best depicts the simultaneous consumption and delivery of the services. The Company bills OTT customers monthly over the contract term. The Company has an unconditional right to receive payment of the amount billed, generally within 30 days from the invoice date. The invoiced amount to be received is recorded in accounts receivable on the condensed consolidated balance sheets.

Subscription

The Company sells magazines to consumers through subscriptions. Each subscription is determined to be a distinct performance obligation that is satisfied over the term of the contract, normally one (1) to five (5) years. Subscription payments received from customers in advance of the publication are recorded as deferred revenue and recognized as revenue on a straight line basis over the contract term.

Newsmax+ provides the Company’s content directly to consumers either monthly or annually. Monthly subscriptions are recognized as revenue in the month it was earned. Annual subscriptions are recorded as deferred revenue and recognized as revenue ratably over the term.

Deferred subscription revenue balances along with the corresponding revenue recognized from the preceding three-month period:

Deferred subscription revenue recognized in revenue for the three months ended March 31, 2026 was $4.8 million, and for the three months ended March 31, 2025 was $3.6 million.

Affiliate Fee

The Company generates affiliate fee revenue from agreements with MVPDs for cable networks. It is recognized over time as programming is made available to the customer over the term of the agreement using the output method. For contracts with affiliate fees based on the number of the affiliate’s subscribers, revenues are recognized based on the contractual rate multiplied by the estimated number of subscribers each period. Consideration payable to a customer is treated as a cost of sale when distinct. If a distinct service is not received, such costs are recorded as a reduction to revenues. Affiliate fee contracts are generally multi-year contracts billed monthly with payments due shortly thereafter.

Licensing

The Company generates revenue from its content licensing agreements and is recognized over the term our symbolic IP is made available.

Product Revenue

Product sales are derived primarily from the sales of books, audio and video, and dietary supplements and are recognized at the point in time control transfers to the customer, which is when the product is shipped. Allowances are considered for estimated returns and refunds when revenue is recognized. As of March 31, 2026 and December 31, 2025, the refund liability was $0.5 million and $0.4 million, respectively and is classified as a reduction in accounts receivable. The Company records taxes collected from customers and remitted to governmental authorities on a net basis. Product revenue is comprised of the following for the three months ended March 31, 2026 and 2025:

Incremental Costs to Obtain a Contract

Amortization expense is included within sales and marketing on the accompanying condensed consolidated statements of operations. As of March 31, 2026, the Company had $4.9 million of unamortized capitalized costs to obtain a contract, of which $1.0 million is recorded within prepaid expenses and other current assets and $3.9 million is recorded within other assets on our unaudited condensed consolidated balance sheet. During the three months ended March 31, 2026, the Company recorded $0.2 million of amortization of capitalized costs, which is recorded within professional fees on our unaudited condensed consolidated statement of operations and comprehensive loss. During the three months ended March 31, 2025, the Company recorded $39.4 thousand of amortization of capitalized costs, which is recorded within professional fees on our unaudited condensed consolidated statement of operations and comprehensive loss.

Accounts Receivable and Allowance for Credit Losses

Accounts receivable is presented net of an allowance for credit losses of $1.9 million and $1.7 million at March 31, 2026 and December 31, 2025, respectively. The Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses and doubtful accounts. The Company’s allowance for credit losses is estimated based on historical loss rates, current conditions, reasonable economic forecasts that affect collectability, and known credit issues with specific customers. Provisions for (recoveries of) credit losses totaled $0.3 million and $(0.1) million for the three months ended March 31, 2026 and March 31, 2025, respectively.

Funds Held in Escrow

In connection with the settlement agreement reached with Dominion (as defined below in Note 12), the Company established an escrow account to secure the settlement obligations. As of March 31, 2026, the balance of the escrow account totaled $20.0 million. The escrowed funds will be released in one installment of $20.0 million payable on or before January 15, 2027.

The escrow account earns interest at an annual rate of 4.02%. As of March 31, 2026, cumulative interest income of $0.8 million has been earned on the escrow balance. The interest income is recorded as a component of other income in the accompanying condensed consolidated statements of operations and comprehensive loss. The related interest receivable is included in prepaid expenses and other current assets on the accompanying condensed consolidated balance sheet.

Net Loss Per Share

Basic and diluted loss per share is computed as net loss available to common stockholders divided by the weighted average number of shares outstanding for the period. For the three months ended March 31, 2026 and 2025, all dilutive securities have been excluded as their inclusion would have had an antidilutive effect on loss per share. Potentially dilutive common shares include warrants, convertible preferred stock, and stock options.

Recently Adopted Accounting Pronouncements

In January 2026, the Company adopted ASU 2025-05, Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient to measure credit losses on accounts receivable and contract assets. The Company evaluated the impact of adoption on its methodology for estimating credit losses on trade receivables and contract assets and concluded that adoption did not have a material impact on its condensed consolidated financial statements or related disclosures.

Recent Accounting Pronouncements Not Yet Adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires additional disclosures of the nature of expenses included in the income statement. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The amendments in this update are effective for fiscal years beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027 on a prospective basis, with early adoption permitted. The Company is currently evaluating the provisions of the amendments and the impact on its disclosures.

In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities, which establishes authoritative guidance on the recognition, measurement, presentation, and disclosure of government grants. Under ASU 2025-10, government grants are recognized when it is probable that the entity will both comply with the conditions of the grant and the grant will be received. The ASU provides specific accounting models for grants related to assets and grants related to income, including options to recognize government grants as deferred income or as a reduction of the asset’s cost basis. The ASU also requires enhanced disclosures regarding the nature of government grants, significant terms and conditions, accounting policies applied, and amounts recognized in the financial statements. ASU 2025-10 is effective for fiscal years beginning after December 15, 2028, including interim periods within those fiscal years, with early adoption permitted. The adoption of this pronouncement will not have an impact on the Company.

NOTE 2. FAIR VALUE MEASUREMENTS

The Company accounts for its investments at fair value and classifies these assets within the fair value hierarchy (Level 1, Level 2, or Level 3). Assets and liabilities subject to fair value measurements are:

NOTE 3. PROPERTY AND EQUIPMENT

Major classes of property and equipment are:

Depreciation of property and equipment amounted to $0.6 million and $0.7 million for the three months ended March 31, 2026 and 2025, respectively. Included in property and equipment are finance lease assets of $0.3 million and $0.4 million as of March 31, 2026 and 2025, respectively.

NOTE 4. INVESTMENTS

Investments on the condensed consolidated balance sheets consisted of the following:

Available-for-Sale Securities

The major classes of the Company's available-for-sale debt securities and their respective fair values at March 31, 2026, were:

The maturity distribution based on the contractual terms of the Company's available-for-sale debt securities at March 31, 2026 was:

NOTE 5. LEASES

Operating lease expense is recognized on a straight-line basis over the lease term within operating expenses in the Company’s unaudited condensed consolidated statements of operations and comprehensive loss. Finance lease expense is recognized over the lease term within interest expense and amortization in the Company’s unaudited condensed consolidated statements of operations and comprehensive loss. The Company’s total operating and finance lease expense all relate to lease costs and amounted to $1.3 million and $1.2 million for the three months ended March 31, 2026, and 2025, respectively.

Future minimum lease payments at March 31, 2026 were:

NOTE 6. LINE OF CREDIT

In May 2025 the Company renewed an existing line of credit with an available balance of $1.0 million and a maturity date of January 4, 2026. Upon maturity, the facility automatically converted to a demand note. The Company also established a line of credit in May 2025 with an available balance of $8.0 million and a maturity date of April 26, 2026. Upon maturity, the facility automatically converted to a demand note. Both lines of credit bear interest at the greater of (i) one percent (1.000%) or (ii) the Prime Rate minus seventy five hundredths percent (-0.750%). There wereno borrowings outstanding as of March 31, 2026 and December 31, 2025.

NOTE 7. INCOME TAXES

The Company’s effective income tax rate for the three months ended March 31, 2026 and 2025 was 0% for both periods. This was different than the federal income tax rate of 21% primarily due to the Company operating at a loss with a full valuation allowance.

.

NOTE 8. SEGMENT INFORMATION

The Company hastwo operating segments: (1) Broadcasting and (2) Digital, which also qualify as reportable segments. In accordance with ASC 280, “Segment Reporting,” the operating segments reflect how the chief operating decision maker, which the Company defines as the chief executive officer, assesses the performance of each operating segment and determines the appropriate allocations of resources to each segment. The Company continually reviews the operating segment classifications to align with operational changes in our business and may make changes as necessary. Due to the integrated nature of these operating segments, estimates and judgments are made in allocating certain revenues and expenses.The Company evaluates performance based upon several factors, of which the primary financial measure is Segment Adjusted EBITDA.

Segment Adjusted EBITDA is defined as revenues less cost of revenues and general and administrative expenses and does not include depreciation, interest, net, asset impairment, unrealized gain (loss) on marketable securities, stock-based compensation, other corporate matters, other, net and income tax expense. Other corporate matters represent certain litigation expenses, and related fees, for specific proceedings that the Company has determined are infrequent and unusual in terms of their magnitude. Management believes that Segment Adjusted EBITDA is an appropriate measure for evaluating the operating performance of the Company’s business segments because it is the primary measure used by the Company’s chief operating decision maker to evaluate the performance of and allocate resources to the Company’s business. The Company does not present asset information for our segments as this information is not used to allocate resources.

The following tables set forth the Company’s Revenues and Segment Adjusted EBITDA for the three months ended March 31, 2026 and 2025:

(1) Adjusted cost of sales includes cost of sales less stock-based compensation.

(2) Adjusted general and administrative expenses includes general and administrative expenses less depreciation, stock-based compensation and other corporate matters.

Revenues by Segment by Component

The following tables set forth the Company’s revenues and segment by component for the three months ended March 31, 2026 and 2025:

NOTE 9. COMMITMENTS AND CONTINGENCIES

The Company has commitments under certain firm contractual arrangements (“firm commitments”) to make future payments. These firm commitments secure the future rights to various assets and services to be used in the normal course of operations. The following table summarizes payments due by period for the Company’s material firm commitments for contracts that run through 2028 as of March 31, 2026:

NOTE 10. LEGAL

Legal Matters

On August 15, 2025, Newsmax Media, Inc. and Newsmax Broadcasting, LLC entered into a settlement agreement with Dominion Voting Systems, Inc. and certain of its affiliates (“Dominion”), pursuant to which such parties agreed to resolve the lawsuit among them for a total amount of $67.0 million. The payments will be made inthree installments: (1) $27.0 million paid on August 15, 2025; (2) $20.0 million paid on January 15, 2026; and (3) $20.0 million on or before January 15, 2027. The $20.0 million payable on or before January 15, 2027 is recorded within settlement liability on the unaudited condensed consolidated balance sheet. As of May 14, 2026 the outstanding balance of the settlement is $20 million.

In 2023, the Company entered into a settlement agreement with a commercial counterparty for $41.3 million. As of March 31, 2026, and pursuant to the payment schedule associated with this settlement agreement, the Company has a total of $28.3 million remaining to be paid over time. The fair value of the settlement agreement as of March 31, 2026 and 2025 was $24.0 million and $27.5 million, respectively, which assumes a discount rate of 9.75% and making quarterly payments for 39 and 51 months, respectively. The fair value measurement is disclosed for information purposes and is not reflected in the carrying amount on the unaudited condensed consolidated balance sheet.

The table below represents the estimated timing of payments over the term of the agreements as of March 31, 2026:

NOTE 11. EQUITY

Common Stock A – As of March 31, 2026 and December 31, 2025, the Company was authorized to issue 50,000,000 shares of common stock, with a par value of $0.001 per share.

Common Stock B - As of March 31, 2026 and December 31, 2025, the Company was authorized to issue 940,000,000 shares of common stock, with a par value of $0.001 per share.

Settlement Warrant - On September 26, 2024, the Company granted afive year warrant to purchase 2,000 shares of Series B preferred stock at an exercise price of $5,000 per share in connection with a settlement agreement with Smartmatic. Following the conversion of the underlying Series B preferred stock into Class B common stock in connection with the Company's March 28, 2025 initial public offering, Smartmatic has afive year warrant to purchase 1,333,333 shares of Class B common stock at an exercise price of $7.50 per share. Refer to Note 10. Legal for details of the settlement. The exercise price and the number of shares of the warrants are subject to adjustment for standard anti-dilution provisions. Exercise of the warrant would result in the Company recognizing a $10.0 million increase in gross proceeds. Prior to conversion of the underlying Series B preferred stock into Class B common stock, the settlement warrant did not meet the conditions to be classified in equity, and therefore the Company assessed and confirmed it met the definition of a liability under ASC 815 and ASC 480 and it was recognized on the balance sheet at fair value. Following the conversion of the underlying Series B preferred shares to Class B common shares as a result of the Company's March 28, 2025 offering, the warrant meets the conditions for equity classification. As a result, the warrant has been recorded in equity at its March 28, 2025 fair value of $8.3 million with a final fair value adjustment loss of $1.8 million recorded in other, net on the March 31, 2025 unaudited condensed consolidated statements of operations and comprehensive loss.

Agent Warrants - The Company agreed to issue athree-year warrant to the placement agent associated with the Private Placement of shares of the Company's Series B convertible preferred Stock. The number of shares under the warrant is equal to 2% of the total shares raised under the private placement with an exercise price of $5,000 per share. Following the conversion of the underlying Series B preferred stock into Class B common stock in connection with the Company's March 28, 2025 initial public offering, the exercise price is $7.50 per share. The warrant holder has the option to elect net share settlement. The effective date of the warrant is the date of the final close of the private placement offering. The Company determined that the award was non-employee share-based compensation that does not meet the criteria for liability classification. As a result, the warrant was classified in equity in the Company's unaudited condensed consolidated balance sheets as of March 31, 2025.

Standby Equity Purchase Agreement - On April 4, 2025, the Company entered into a $1.2 billion Standby Equity Purchase Agreement (“SEPA”) with Yorkville pursuant to which the Company has the right to direct Yorkville during the 24 month term of the agreement to purchase common stock subject to certain limitations and conditions set forth in the SEPA. There were no purchases of common stock during the three months ended March 31, 2026.

As consideration under the SEPA, the Company paid to Yorkville (i) a structuring fee in the amount of $25,000 and (ii) a commitment fee of $500,000 of shares of common stock equal to the commitment fee divided by the daily VWAP of the common shares during the trading day immediately prior to the effective date of the SEPA. The structuring fee and commitment fee were expensed in full immediately following the consummation of the SEPA and recorded within the professional fees line item in the unaudited condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2025.

NOTE 12. EQUITY-BASED COMPENSATION

On March 28, 2025, the Board adopted the Company's 2025 Omnibus Equity Incentive Plan (the “2025 Incentive Plan”) and it was approved by the Company's shareholders on March 24, 2025 (the “Effective Date”). Under the 2025 Incentive Plan,6,500,000 shares of Class B Common Stock are initially available for grant. The Company's administrator may grant incentive stock options (“ISOs”), non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards to participants to acquire shares of common stock under the 2025 Incentive Plan. The 2025 Incentive Plan is administered by the Board. On March 28, 2025, the Company granted stock options to employees and certain service providers to purchase an aggregate of 3,382,000 shares of common stock at an exercise price of $10.00 per share, which was the fair market value on the grant date. These options allow for early exercise after 90 days, vest over 1.5 years, and expire 10 years from the grant date.

As of March 31, 2026, the Company’s total compensation cost, not yet recognized, related to non-vested equity awards held by the Company’s employees under the 2025 Incentive Plan was $6.5 million and is expected to be recognized over a weighted average period of 0.5 years. The Company’s equity-based awards are settled in Class B Common Stock. As of March 31, 2026, the Company had 3.1 million shares of Class B common stock reserved for future issuance as equity-based compensation.

The following table summarizes the activities for the Company's stock options for the three months ended March 31, 2026:

The following table shows summary information for outstanding options and options that are exercisable (including 408,511 vested options and 2,673,010 options which are early exercisable) as of March 31, 2026:

The equity-based compensation expense was recorded in the unaudited condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2026 and 2025:

NOTE 13. LOSS PER SHARE

The holders of the Company's Class A and Class B common stock have identical liquidation and dividend rights but different voting rights. Accordingly, the Company presents the loss per share for Class A and Class B common stock together. Basic loss per share is computed by dividing net loss by the weighted-average number of shares of the Company's Class A and Class B common stock outstanding. Loss per share for Class B common stock is not presented separately as under the two-class method Class A and Class B loss per share is not meaningfully different.

The following table illustrates the reconciliation of the basic and diluted loss per share computations for the three months ended March 31, 2026 and 2025:

1 Includes 39.2 million and 39.2 million shares of Class A common stock and 89.2 million and 88.9 million shares of Class B common stock, for the three months ended March 31, 2026 and 2025, respectively.

The following outstanding potentially dilutive shares were excluded from the computation of diluted net loss per share attributable to common stock for the periods presented because the impact of including them would have been anti-dilutive for the three months ended March 31, 2026 and 2025: