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 10 years and authorizes the issuance of up to 22,500,000 shares of the Company’s common stock. As of March 31, 2026, 11,839,267 shares were remaining under the 2022 Stock Option Plan for future issuance.

Options

As of March 31, 2026, options to purchase 10,660,733 shares of common stock were outstanding, in the aggregate, under the Company's 2013 Stock Option Plan, 2015 Stock Option Plan, 2019 Stock Option Plan, and the 2022 Stock Option Plan at a weighted-average exercise price of $0.09 per share. No further grants can be made under any of the Company's stock option plans other than the 2022 Stock Option Plan.

Compensation expense recorded in connection with the 2022 Stock Option Plan was $21,000 and $37,000 for the three months ended March 31, 2026 and 2025, respectively. These amounts have been recognized as a component of general and administrative expenses in the accompanying consolidated financial statements.

During the three months ended March 31, 2026, 400,000 options were issued. During the three months ended March 31, 2025, 400,000 options were issued.

As of March 31, 2026, there were total unrecognized compensation costs related to non-vested share-based compensation arrangements of $65,000 to be recognized through July 2027.

The Company estimates the fair value of share-based compensation utilizing the Black-Scholes option pricing model, which is dependent upon several variables such as the expected option term, expected volatility of our stock price over the expected option term, expected risk-free interest rate over the expected option term, expected dividend yield rate over the expected option term, and an estimate of expected forfeiture rates.

The 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.