URBAN ONE, INC. [UONE] Filings

10-Q 1 uone-20240930.htm 10-Q uone-20240930

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

Commission File No. 0-25969

URBAN ONE, INC.

(Exact name of registrant as specified in its charter)


Delaware			52-1166660
(State or other jurisdiction of			(I.R.S. Employer
incorporation or organization)			Identification No.)

1010 Wayne Avenue,

14th Floor

Silver Spring, Maryland 20910

(Address of principal executive offices)

(301) 429-3200

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

Trading Symbol(s)

Name of each exchange on which registered:

Class A Common Stock

UONE

NASDAQ Stock Market

Class D Common Stock

UONEK

NASDAQ Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or 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	o	Accelerated filer	x
Non-accelerated filer	o	Smaller reporting company	x
		Emerging growth company	o

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. o

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act. Yes o No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class						Outstanding at November 6, 2024
Class A Common Stock, $.001 Par Value						8,180,479
Class B Common Stock, $.001 Par Value						2,861,843
Class C Common Stock, $.001 Par Value						2,045,016
Class D Common Stock, $.001 Par Value						34,817,980

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	PART I. FINANCIAL INFORMATION	Page
Item 1.	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited)	4
	Condensed Consolidated Statements of Comprehensive (Loss) Income for the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited)	5
	Condensed Consolidated Balance Sheets as of Sep tember 30, 2024 (Unaudited) and December 31, 2023	6
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited)	7
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023 (Unaudited)	11
	Notes to the Condensed Consolidated Financial Statements (Unaudited)	12
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	61
Item 4.	Controls and Procedures	61

	PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	63
Item 1A.	Risk Factors	63
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	64
Item 3.	Defaults Upon Senior Securities	64
Item 4.	Mine Safety Disclosures	64
Item 5.	Other Information	65
Item 6.	Exhibits	65
SIGNATURE		66

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CERTAIN DEFINITIONS

Unless otherwise noted, throughout this report, the terms “Urban One,” the “Company,” “we,” “our” and “us” refer to Urban One, Inc. together with its subsidiaries.

Cautionary Note Regarding Forward-Looking Statements

Our disclosure and analysis in this quarterly report on Form 10-Q concerning our operations, cash flows and financial position, contain forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements do not relay historical facts, but rather reflect our current expectations concerning future operations, results, and events. All statements other than statements of historical fact are “forward-looking statements” including any projections of earnings, revenues or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new activities, services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements often contain words such as “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “likely,” “may,” “estimates” and variations of such words or similar expressions. You can also identify a forward-looking statement in that such statements discuss matters in a way that anticipates operations, results or events that have not already occurred but rather will or may occur in future periods. We cannot guarantee that we will achieve any forward-looking plans, intentions, results, operations, or expectations. Because these statements apply to future events, they are subject to risks and uncertainties, some of which are beyond our control and could cause actual results to differ materially from those forecasted or anticipated in the forward-looking statements. These risks, uncertainties and factors include (in no particular order), but are not limited to:

•recession, economic volatility, financial market unpredictability and fluctuations in the United States and other world economies that may affect our business and financial condition, and the business and financial conditions of our advertisers;

•our degree of leverage, certain cash commitments related thereto, and potential inability to finance strategic transactions given fluctuations in market conditions;

•fluctuations in the local economies of the markets in which we operate (particularly our largest markets, Atlanta; Baltimore; Charlotte; Dallas; Houston; Indianapolis; and Washington, DC) or fluctuations within individual business sectors experiencing a downturn even in the absence of a broader recession could negatively impact our ability to meet our cash needs;

•increased costs due to inflation or any changes in music royalty fees;

•risks associated with the implementation and execution of our business diversification strategy, including our strategic actions with respect to expansion into gaming;

•risks associated with our investments or potential investment in gaming businesses;

•regulation by the Federal Communications Commission ("FCC") relative to maintaining our broadcasting licenses, enacting media ownership rules and enforcing of indecency rules;

•changes in our key personnel and on-air talent;

•increases in competition for and in the costs of our programming and content, including on-air talent and content production or acquisitions availability/costs;

•financial losses that may be incurred due to impairment charges against our broadcasting licenses, goodwill, and other intangible assets;

•increased competition for advertising revenues with other radio stations, broadcast and cable television, newspapers and magazines, outdoor advertising, direct mail, internet radio, satellite radio, smart phones, tablets, and other wireless media, the internet, social media, and other forms of advertising;

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•the impact of our acquisitions, dispositions, and similar transactions, as well as consolidation in industries in which we and our advertisers operate;

•developments and/or changes in laws and regulations, such as the California Consumer Privacy Act or other similar federal or state regulations through legislative action and revised rules and standards;

•disruptions to our technology network including computer systems and software, whether by human-caused or other disruptions of our operating systems, structures, or equipment, including as we further develop alternative work arrangements, as well as natural events such as pandemic, severe weather, fires, floods, and earthquakes;

•material weaknesses identified in our internal control over financial reporting which, if not remediated, could result in material misstatements in our condensed consolidated financial statements;

•failure to meet the continued listing standards of NASDAQ Stock Market (“NASDAQ”), which could cause our common stock to be delisted, and which could have a material adverse effect on the liquidity and market price of our common stock and expose the Company to litigation; and

•other factors mentioned in our filings with the Securities and Exchange Commission (“SEC”) including the factors discussed in detail in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023 (“Form 10-K”) filed on June 7, 2024.

You should not place undue reliance on these forward-looking statements, which reflect our views based only on information currently available to us as of the date of this report. We undertake no obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.

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URBAN ONE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023

NET REVENUES	$	110,393	$	117,825	$	332,547	$	357,346
OPERATING EXPENSES:
Programming and technical, including stock-based compensation of $9, $10, $23, and $80, respectively	33,920		33,913		99,849		100,384
Selling, general and administrative, including stock-based compensation of $181, $210, $500, and $523, respectively	41,293		40,352		131,641		127,157
Corporate selling, general and administrative, including stock-based compensation of $962, $1,998, $3,092, and $7,213, respectively	13,316		12,416		41,125		37,546
Depreciation and amortization	1,238		1,808		6,081		6,291
Impairment of goodwill, intangible assets, and long-lived assets	46,823		85,448		127,581		124,304
Total operating expenses	136,590		173,937		406,277		395,682
Operating loss	(26,197)		(56,112)		(73,730)		(38,336)
INTEREST INCOME	1,088		2,256		4,863		4,488
INTEREST EXPENSE	11,649		13,983		37,051		42,023
GAIN ON RETIREMENT OF DEBT	3,472		—		18,771		2,356
OTHER INCOME, NET	74		75		974		96,535
(Loss) income from consolidated operations before income taxes	(33,212)		(67,764)		(86,173)		23,020
(BENEFIT FROM) PROVISION FOR INCOME TAXES	(1,814)		(16,778)		(17,824)		5,259
NET (LOSS) INCOME CONSOLIDATED OPERATIONS	(31,398)		(50,986)		(68,349)		17,761
LOSS FROM UNCONSOLIDATED JOINT VENTURE	—		(2,728)		(411)		(2,728)
NET (LOSS) INCOME	(31,398)		(53,714)		(68,760)		15,033
NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS	400		697		976		2,000
NET (LOSS) INCOME TO COMMON STOCKHOLDERS	$	(31,798)	$	(54,411)	$	(69,736)	$	13,033

NET (LOSS) INCOME TO COMMON STOCKHOLDERS (per share)
Basic	$	(0.68)	$	(1.14)	$	(1.43)	$	0.27
Diluted	$	(0.68)	$	(1.14)	$	(1.43)	$	0.26

WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic	47,105,290		47,722,263		48,614,438		47,592,010
Diluted	47,105,290		47,722,263		48,614,438		50,358,881

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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URBAN ONE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(In thousands)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023

NET (LOSS) INCOME	$	(31,398)	$	(53,714)	$	(68,760)	$	15,033
Reclassification adjustment for realized gain on available-for-sale securities included in net income	—		—		—		(96,826)
Income tax provision related to reclassification for realized gain	—		—		—		23,599
OTHER COMPREHENSIVE , NET OF TAX	—		—		—		(73,227)
COMPREHENSIVE LOSS	$	(31,398)	$	(53,714)	$	(68,760)	$	(58,194)
LESS: COMPREHENSIVE INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS	400		697		976		2,000
COMPREHENSIVE LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(31,798)	$	(54,411)	$	(69,736)	$	(60,194)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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URBAN ONE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)


	As of
	September 30, 2024		December 31, 2023
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	115,006	$	233,090
Restricted cash	483		480
Trade accounts receivable, net of allowance for expected credit losses of $6,198 and $8,638, respectively	118,774		133,194
Prepaid expenses	7,065		9,504
Current portion of content assets	40,313		29,748
Other current assets	10,172		15,950
Total current assets	291,813		421,966
CONTENT ASSETS, NET	89,623		82,448
PROPERTY AND EQUIPMENT, NET	28,044		28,661
GOODWILL	216,599		216,599
RIGHT OF USE ASSETS, NET	33,590		31,649
RADIO BROADCASTING LICENSES	257,029		375,296
OTHER INTANGIBLE ASSETS, NET	36,148		49,104

OTHER ASSETS	9,757		5,450
Total assets	$	962,603	$	1,211,173
LIABILITIES, REDEEMABLE NON-CONTROLLING INTERESTS AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	15,694	$	20,000
Accrued interest	7,450		22,342
Accrued compensation and related benefits	8,841		14,420
Current portion of content payables	20,175		22,389
Current portion of lease liabilities	8,781		10,648
Other current liabilities	39,212		42,831
Total current liabilities	100,153		132,630
LONG-TERM DEBT, net of original issue discount and issuance costs	593,918		716,246
CONTENT PAYABLES, net of current portion	7,614		3,402
LONG-TERM LEASE LIABILITIES	25,765		22,377
OTHER LONG-TERM LIABILITIES	16,639		24,995
DEFERRED TAX LIABILITIES, NET	3,114		20,938
Total liabilities	747,203		920,588

COMMITMENTS AND CONTINGENCIES (NOTE 18)
REDEEMABLE NON-CONTROLLING INTERESTS	10,636		16,520

STOCKHOLDERS’ EQUITY:
Convertible preferred stock, $.001 par value, 1,000,000 shares authorized; no shares outstanding at September 30, 2024 and December 31, 2023	—		—
Common stock — Class A, $.001 par value, 30,000,000 shares authorized; 8,389,372 and 9,853,672 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively	8		10
Common stock — Class B, $.001 par value, 150,000,000 shares authorized; 2,861,843 and 2,861,843 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively	3		3
Common stock — Class C, $.001 par value, 150,000,000 shares authorized; 2,045,016 and 2,045,016 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively	2		2
Common stock — Class D, $.001 par value, 150,000,000 shares authorized; 34,873,386 and 34,116,485 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively	35		34
Additional paid-in capital	1,007,823		1,007,387
Accumulated deficit	(803,107)		(733,371)
Total stockholders’ equity	204,764		274,065
Total liabilities, redeemable non-controlling interests, and stockholders’ equity	$	962,603	$	1,211,173

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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URBAN ONE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)


	Convertible Preferred Stock		Common Stock Class A		Common Stock Class B		Common Stock Class C		Common Stock Class D		Accumulated Other Comprehensive Income		Additional Paid-In Capital		Accumulated Deficit		Total Stockholders’ Equity
BALANCE, as of December 31, 2023	$	—	$	10	$	3	$	2	$	34	$	—	$	1,007,387	$	(733,371)	$	274,065
Net income attributable to Urban One	—		—		—		—		—		—		—		7,493		7,493
Stock-based compensation expense	—		—		—		—		—		—		1,384		—		1,384
Repurchase of 396,052 shares of Class D common stock	—		—		—		—		—		—		(1,386)		—		(1,386)
Vesting of stock-based payment awards upon grant	—		—		—		—		1		—		4,649		—		4,650
Adjustment of redeemable non-controlling interests to estimated redemption value	—		—		—		—		—		—		(1,004)		—		(1,004)
BALANCE, as of March 31, 2024	$	—	$	10	$	3	$	2	$	35	$	—	$	1,011,030	$	(725,878)	$	285,202
Net loss attributable to Urban One	—		—		—		—		—		—		—		(45,431)		(45,431)
Stock-based compensation expense	—		—		—		—		—		—		1,079		—		1,079
Repurchase of 449,277 shares of Class A common stock	—		(1)		—		—		—		—		(923)		—		(924)
Repurchase of 113,283 shares of Class D common stock	—		—		—		—		—		—		(178)		—		(178)
Adjustment of redeemable non-controlling interests to estimated redemption value	—		—		—		—		—		—		(373)		—		(373)
BALANCE, as of June 30, 2024	$	—	$	9	$	3	$	2	$	35	$	—	$	1,010,635	$	(771,309)	$	239,375

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Net loss attributable to Urban One	—		—		—		—		—		—		—		(31,798)		(31,798)
Stock-based compensation expense	—		(1)		—		—		—		—		1,152		—		1,151
Repurchase of 1,015,023 shares of Class A common stock	—		—		—		—		—		—		(2,041)		—		(2,041)
Repurchase of 586,989 shares of Class D common stock	—		—		—		—		—		—		(788)		—		(788)
Vesting of stock-based payment awards upon grant	—		—		—		—		—		—		30		—		30
Adjustment of redeemable non-controlling interests to estimated redemption value	—		—		—		—		—		—		(1,165)		—		(1,165)
BALANCE, as of September 30, 2024	$	—	$	8	$	3	$	2	$	35	$	—	$	1,007,823	$	(803,107)	$	204,764

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URBAN ONE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)


	Convertible Preferred Stock		Common Stock Class A		Common Stock Class B		Common Stock Class C		Common Stock Class D		Accumulated Other Comprehensive Income		Additional Paid-In Capital		Accumulated Deficit		Total Stockholders’ Equity
BALANCE, as of December 31, 2022	$	—	$	10	$	3	$	2	$	34	$	73,227	$	993,484	$	(736,010)	$	330,750
Cumulative effect of accounting change	—		—		—		—		—		—		—		589		589
BALANCE, as of January 1, 2023	$	—	$	10	$	3	$	2	$	34	$	73,227	$	993,484	$	(735,421)	$	331,339
Net loss attributable to Urban One	—		—		—		—		—		—		—		(2,922)		(2,922)
Stock-based compensation expense	—		—		—		—		—		—		2,558		—		2,558
Repurchase of 256,442 shares of Class D common stock	—		—		—		—		—		—		(1,324)		—		(1,324)
Vesting of stock-based payment awards upon grant	—		—		—		—		—		—		3,234		—		3,234
Adjustment of redeemable non-controlling interests to estimated redemption value	—		—		—		—		—		—		(1,308)		—		(1,308)
BALANCE, as of March 31, 2023	$	—	$	10	$	3	$	2	$	34	$	73,227	$	996,644	$	(738,343)	$	331,577
Net income attributable to Urban One	—		—		—		—		—		—		—		70,366		70,366
Stock-based compensation expense	—		—		—		—		—		—		1,305		—		1,305
Repurchase of 18,459 shares of Class D common stock	—		—		—		—		—		—		(111)		—		(111)
Sale of MGM investment	—		—		—		—		—		(73,227)		—		—		(73,227)
Adjustment of redeemable non-controlling interests to estimated redemption value	—		—		—		—		—		—		1,621		—		1,621

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BALANCE, as of June 30, 2023	$	—	$	10	$	3	$	2	$	34	$	—	$	999,459	$	(667,977)	$	331,531
Net loss attributable to Urban One	—		—		—		—		—		—		—		(54,411)		(54,411)
Stock-based compensation expense	—		—		—		—		—		—		1,006		—		1,006
Repurchase of 38,371 shares of Class D common stock	—		—		—		—		—		—		(195)		—		(195)
Adjustment of redeemable non-controlling interests to estimated redemption value	—		—		—		—		—		—		776		—		776
BALANCE, as of September 30, 2023	$	—	$	10	$	3	$	2	$	34	$	—	$	1,001,046	$	(722,388)	$	278,707

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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URBAN ONE, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)


	Nine Months Ended September 30,
	2024		2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(68,760)	$	15,033
Adjustments to reconcile net (loss) income to net cash from operating activities:

Depreciation and amortization	6,081		6,291
Amortization of debt financing costs	1,394		1,463
Amortization of launch assets	3,735		3,735
Amortization of content assets	34,869		36,601
Deferred income taxes	(17,824)		4,051
Amortization of right of use assets	8,053		6,597
Impairment of goodwill, intangible assets, and long-lived assets	127,581		124,304
Stock-based compensation expense	3,615		7,816
Gain on retirement of debt	(18,771)		(2,356)

Realized gain on available for sale debt securities	—		(96,826)
Non-cash fair value adjustment of Employment Agreement Award	(7,307)		(2,663)
Other	(606)		3,510
Effect of change in operating assets and liabilities, net of assets acquired:
Trade accounts receivable, net	14,730		10,145
Prepaid expenses and other current assets	4,905		727
Other assets	(5,153)		1,764
Content assets and payables	(50,611)		(36,790)
Accounts payable	(4,071)		(45)
Accrued interest	(14,908)		(14,146)
Accrued compensation and related benefits	(5,579)		(9,385)
Other liabilities	(7,763)		(16,524)
Launch support	(1,750)		—
Net cash flows provided by operating activities	1,860		43,302
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment	(5,672)		(6,578)
Restricted cash derecognized in deconsolidation of joint venture	—		(26,000)
Proceeds from sale of joint venture interest	—		6,563

Proceeds from sale of available-for-sale debt securities	—		136,826
Proceeds from sale of equity securities	829		—
Cash receipts related to disposition of station	3,750		—
Investment in unconsolidated joint venture	(609)		(3,978)
Acquisition of broadcasting assets	—		(27,500)
Net cash flows (used in) provided by investing activities	(1,702)		79,333
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of ownership interest in Reach Media	(7,603)		—
Repurchase of long-term debt	(104,809)		(22,281)
Repurchase of common stock	(5,288)		(1,630)
Release of secured letters of credit deposit	1,260		—
Payment of dividends to non-controlling interest members of Reach Media	(1,799)		(4,401)
Net cash flows used in financing activities	(118,239)		(28,312)
NET (DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH	(118,081)		94,323
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period	233,570		101,879
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, end of period	$	115,489	$	196,202

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for:
Interest	$	50,389	$	54,707
Income taxes, net of refunds	$	2,341	$	1,645

NON-CASH OPERATING, FINANCING, AND INVESTING ACTIVITIES:
Operating right-of-use assets obtained in exchange for lease obligations	$	9,379	$	5,388
Non-cash content asset additions	$	25,516	$	—
Adjustment of redeemable non-controlling interests to estimated redemption value	$	2,542	$	(1,089)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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URBAN ONE, INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. ORGANIZATION

Urban One, Inc., a Delaware corporation, and its subsidiaries (collectively, “Urban One,” the “Company,” “we,” “our” and/or “us”) is an urban-oriented, multi-media Company that primarily targets African-American and urban consumers. Our core business is our Radio Broadcasting franchise which is the largest Radio Broadcasting operation that primarily targets African-American and urban listeners. As of September 30, 2024, we owned and/or operated 72 independently formatted, revenue producing broadcast stations (including 57 FM or AM stations, 13 HD stations, and the 2 low power television stations we operate), located in 13 of the most populous African-American markets in the United States. While a core source of our revenue has historically been and remains the sale of local and national advertising for broadcast on our radio stations, our strategy is to operate the premier multi-media entertainment and information content platform targeting African-American and urban consumers. Thus, we have diversified our revenue streams by making acquisitions and investments in other complementary media properties. Our diverse media and entertainment interests include TV One, LLC (“TV One”), which operates two cable television networks targeting African-American and urban viewers, TV One and CLEO TV; our 90.0% ownership interest in Reach Media, Inc. (“Reach Media”) which operates the Rickey Smiley Morning Show and our other syndicated programming assets, including the Get Up! Mornings with Erica Campbell Show and the DL Hughley Show; and Interactive One, LLC (“Interactive One”), our wholly owned digital platform serving the African-American community through social content, news, information, and entertainment websites, including its iONE Digital, Cassius and Bossip, HipHopWired and MadameNoire digital platforms and brands. Through our national multi-media operations, we provide advertisers with a unique and powerful delivery mechanism to communicate with African-American and urban audiences.

Our core Radio Broadcasting franchise operates under the brand “Radio One.” We also operate other brands, such as TV One, CLEO TV, Reach Media, iONE Digital, and One Solution, while developing additional branding reflective of our diverse media operations and our targeting of African-American and urban audiences.

As part of our condensed consolidated financial statements, consistent with our financial reporting structure and how the Company currently manages its businesses, we have provided selected financial information on the Company’s four reportable segments: (i) Radio Broadcasting; (ii) Reach Media; (iii) digital; and (iv) cable television. See Note 17 – Segment Information of our condensed consolidated financial statements for further discussion.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (“GAAP”) and under the rules and regulations of the Securities and Exchange Commission ("SEC") for interim financial information. In management’s opinion, the interim financial data presented herein includes all adjustments (which include only normal recurring adjustments) necessary for a fair presentation. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with US GAAP have been omitted pursuant to such rules and regulations.

The accompanying unaudited condensed consolidated financial statements and related financial information should be read in conjunction with the audited condensed consolidated financial statements and the related notes thereto as of and for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K (“Form 10-K”). There have been no significant changes to the Company’s accounting policies as described in Note 3 - Summary of significant accounting policies, in the notes to the condensed consolidated financial statements in Item 8 of Part II of Form 10-K.

All amounts presented in these condensed consolidated financial statements are expressed in thousands of U.S. dollars, except share and per share amounts and unless otherwise noted.

The Company's results are subject to seasonal fluctuations and, typically, revenues are lowest in the first calendar quarter of the year. Due to this seasonality, the results for interim periods are not necessarily indicative of results to be expected for the full year. The Company experiences further seasonality in odd versus even years as there tends to be more political activity in even years which can have a positive impact on advertising revenues.

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Principles of Consolidation

The condensed consolidated financial statements include the accounts and operations of Urban One and subsidiaries in which Urban One has a controlling financial interest, which is generally determined when the Company holds a majority voting interest. All intercompany accounts and transactions have been eliminated in consolidation. Non-controlling interests have been recognized where a controlling interest exists, but the Company owns less than 100% of the controlled entity.

The Company is required to include the financial statements of variable interest entities (“VIE”) in its condensed consolidated financial statements. Under the VIE model, the Company consolidates an investment if it has control to direct the activities of the entity and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions. The most significant estimates and assumptions are used in determining: (i) estimates of future cash flows used to evaluate and recognize impairments; (ii) estimates of fair value of Employment Agreement Award (as defined below) and redeemable non-controlling interest in Reach Media; (iii) deferred taxes and related valuation allowance, including uncertain tax positions; (iv) the amortization patterns of content assets; (v) incremental borrowing rate and lease term for the Company's lease arrangements and (vi) estimate allowance for expected credit losses on trade accounts receivable.

These estimates and assumptions may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements. The Company bases these estimates on historical experience, the current economic environment or various other assumptions that are believed to be reasonable under the circumstances. However, economic uncertainty and any disruption in financial markets increase the possibility that actual results may differ from these estimates.

Supplemental Financial Information

The following table presents the components of Other Current Liabilities and Other Long-term Liabilities:


	September 30, 2024		December 31, 2023

	(In thousands)
Other current liabilities
Customer advances and unearned income	$	5,059	$	4,851
Unearned event income	—		4,864
Reserve for audience deficiency	20,136		12,779
Professional fee accrual	3,359		1,658
Operating expense accruals	2,155		5,090
Accrued stock compensation	—		4,650
Employment agreement award (as defined in Note 7)	2,990		3,685
Launch liability	—		1,750
Deferred barter revenue	2,286		1,848
Other	3,227		1,656
Total other current liabilities	$	39,212	$	42,831

Other long-term liabilities
Employment agreement award (as defined in Note 7)	$	10,527	$	19,285
Launch liability	3,500		3,500
Other	2,612		2,210

Total long-term liabilities	$	16,639	$	24,995

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Supplemental Cash Flow Information

The following table provides a reconciliation of cash, cash equivalents and restricted cash as reported within the condensed consolidated balance sheets to “Cash, cash equivalents and restricted cash, end of period” as reported within the condensed consolidated statements of cash flows:


	Nine Months Ended September 30,
	2024		2023

	(In thousands)
Cash and cash equivalents	$	115,006	$	195,723
Restricted cash	483		479
Total cash, cash equivalents, and restricted cash shown in the Condensed Consolidated Statements of Cash Flows	$	115,489	$	196,202

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Allowance for Expected Credit Loss

The Company estimates the allowance for expected credit losses on trade accounts receivable in pools based on the Company’s four reportable segments and historical credit loss information over a defined period adjusted for current conditions and reasonable and supportable forecasts. Large individual receivables for which there is indication of increased credit risk are individually assessed for loss allowances. The Company reports the allowance for expected credit losses for financial assets measured at amortized cost. The allowance for expected credit losses is reviewed periodically by management.

The changes in the allowance for expected credit loss are as follows:


	As of September 30, 2024

	(In thousands)
Balance at Beginning of Period	$	8,638
Charged to Expense, net	(333)
Less: Deductions	(2,107)
Balance at End of Period	$	6,198

3. NET REVENUES

Revenue Recognition

The following tables show the sources of the Company’s net revenues by contract type and segment for the three and nine months ended September 30, 2024 and 2023:


(In thousands)	Radio Broadcasting		Reach Media		Digital		Cable Television		All Other - Corporate/Eliminations		Consolidated
Three Months Ended September 30, 2024

Radio Advertising	$	36,418	$	9,231	$	—	$	—	$	(658)	$	44,991
Political Advertising	2,140		443		964		—		—		3,547
Digital Advertising	—		—		19,434		—		—		19,434
Cable Television Advertising	—		—		—		21,868		—		21,868
Cable Television Affiliate Fees	—		—		—		18,808		—		18,808
Event Revenues & Other	1,158		573		—		14		—		1,745
Net Revenues	$	39,716	$	10,247	$	20,398	$	40,690	$	(658)	$	110,393

Three Months Ended September 30, 2023

Radio Advertising	$	37,851	$	9,589	$	—	$	—	$	(789)	$	46,651
Political Advertising	689		326		86		—		—		1,101
Digital Advertising	—		—		20,269		—		—		20,269
Cable Television Advertising	—		—		—		25,218		—		25,218
Cable Television Affiliate Fees	—		—		—		21,569		—		21,569
Event Revenues & Other	1,612		1,242		1		—		162		3,017
Net Revenues	$	40,152	$	11,157	$	20,356	$	46,787	$	(627)	$	117,825

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(In thousands)	Radio Broadcasting		Reach Media		Digital		Cable Television		All Other - Corporate/Eliminations		Consolidated
Nine Months Ended September 30, 2024

Radio Advertising	$	107,406	$	26,456	$	—	$	—	$	(2,109)	$	131,753
Political Advertising	4,651		942		1,342		—		—		6,935
Digital Advertising	—		—		48,910		—		—		48,910
Cable Television Advertising	—		—		—		69,403		—		69,403
Cable Television Affiliate Fees	—		—		—		58,910		—		58,910
Event Revenues & Other	6,009		10,250		—		99		278		16,636
Net Revenues	$	118,066	$	37,648	$	50,252	$	128,412	$	(1,831)	$	332,547

Nine Months Ended September 30, 2023

Radio Advertising	$	108,270	$	29,202	$	—	$	—	$	(2,923)	$	134,549
Political Advertising	1,298		327		308		—		—		1,933
Digital Advertising	—		—		54,027		—		—		54,027
Cable Television Advertising	—		—		—		81,286		—		81,286
Cable Television Affiliate Fees	—		—		—		67,589		—		67,589
Event Revenues & Other	4,960		12,596		—		20		386		17,962
Net Revenues	$	114,528	$	42,125	$	54,335	$	148,895	$	(2,537)	$	357,346

Contract Assets and Liabilities

Contract assets and contract liabilities that are not separately stated in the Company’s condensed consolidated balance sheets as of September 30, 2024, and December 31, 2023 were as follows:


	September 30, 2024		December 31, 2023

	(In thousands)
Contract assets:
Unbilled receivables	$	9,101	$	5,437
Contract liabilities:
Customer advances and unearned income	$	5,059	$	4,851
Reserve for audience deficiency	20,136		12,779
Unearned event income	241		4,864

Unbilled receivables consist of earned revenue that has not yet been billed. Contract assets are included in trade accounts receivable, net on the condensed consolidated balance sheets. Customer advances and unearned income represent advance payments by customers for future services under contract that are generally incurred in the near term. For advertising sold based on audience guarantees, audience deficiency typically results in an obligation to deliver additional advertising units to the customer, generally within one year of the campaign end date. To the extent that audience guarantees are not met, a reserve for audience deficiency is recorded until such a time that the audience guarantee has been satisfied. Unearned event income represents payments by customers for upcoming events. Contract liabilities are included in other current liabilities on the condensed consolidated balance sheets.

For customer advances and unearned income as of January 1, 2024, approximately $2.8 million was recognized as revenue during the nine months ended September 30, 2024. For the reserve for audience deficiency as of January 1, 2024, approximately $2.2 million was recognized as revenue during the nine months ended September 30, 2024. For unearned event income as of January 1, 2024, approximately $4.9 million was recognized as revenue during the nine months ended September 30, 2024.

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Practical Expedients and Exemptions

The Company generally expenses employee sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within selling, general and administrative expenses on the condensed consolidated statements of operations. Agency and outside sales representative commissions were approximately $9.0 million and $9.8 million for the three months ended September 30, 2024 and 2023, respectively, and approximately $27.7 million and $28.5 million for of the nine months ended September 30, 2024 and 2023, respectively.

The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less, or (ii) contracts for which variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property.

4. LAUNCH ASSETS

The cable television segment has entered into certain affiliate agreements requiring various payments for launch support. Launch support assets are used to initiate carriage under affiliation agreements and are amortized over the term of the respective contracts. The weighted-average amortization period for launch support and the remaining weighted-average amortization period for launch support as of September 30, 2024 and December 31, 2023 is as follows:


(In years)	September 30, 2024	December 31, 2023

Weighted-average amortization period	8.1	8.1
Remaining weighted-average amortization period	2.2	2.9

Launch support asset amortization for the three and nine months ended September 30, 2024 and 2023.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
	(In thousands)				(In thousands)
Launch support asset amortization	$	1,245	$	1,245	$	3,735	$	3,735

Launch assets are included in other intangible assets on the condensed consolidated balance sheets, except for the portion of the unamortized balance that is expected to be amortized within one year which is included in other current assets. Amortization is recorded as a reduction in revenue.

5. ADVERTISING AND PROMOTIONS

The Company expenses advertising and promotional costs as incurred. Total advertising and promotional expenses were approximately $4.7 million and $6.0 million for the three months ended September 30, 2024 and 2023, respectively, and approximately $19.5 million and $21.8 million for the nine months ended September 30, 2024 and 2023, respectively.

6. EARNINGS PER SHARE

Basic and diluted earnings per share (“EPS”) attributable to common stockholders is presented in conformity with the two-class method required for participating securities: Class A, Class B, Class C and Class D common stock. The rights of the holders of Class A, Class B, Class C and Class D common stock are identical, except with respect to voting, conversion, and transfer rights.

The undistributed earnings or losses are allocated based on the contractual participation rights of Class A, Class B, Class C and Class D common shares as if the earnings or losses for the year have been distributed. As the liquidation and dividend rights are identical, the undistributed earnings or losses are allocated on a proportionate basis, and as such, diluted and basic earnings per share is the same for each class of common stock under the two-class method.

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The following table sets forth the calculation of basic and diluted earnings per share from continuing operations:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
	(In thousands, except per share data)
Numerator:
Net (loss) income attributable to Class A, Class B, Class C and Class D stockholders	$	(31,798)	$	(54,411)	$	(69,736)	$	13,033
Denominator:
Weighted-average outstanding shares	47,105,290		47,722,263		48,614,438		47,592,010
Effect of dilutive securities:
Stock options and restricted stock	—		—		—		2,766,871
Weighted-average outstanding shares	47,105,290		47,722,263		48,614,438		50,358,881

EPS attributable to Class A, Class B, Class C and Class D stockholders per share – basic	$	(0.68)	$	(1.14)	$	(1.43)	$	0.27
EPS attributable to Class A, Class B, Class C and Class D stockholders per share – diluted	$	(0.68)	$	(1.14)	$	(1.43)	$	0.26

For the three and nine months ended September 30, 2024, there were approximately 6.6 million and 5.6 million potentially dilutive securities, respectively, that were not included in the computation of diluted EPS, because to do so would have been antidilutive for the periods presented. For the three and nine months ended September 30, 2023, there were 2.5 million potentially antidilutive securities excluded from the computation of diluted EPS.

7. FAIR VALUE MEASUREMENTS

The Company reports financial and non-financial assets and liabilities measured at fair value on a recurring and non-recurring basis under the provisions of ASC 820, “Fair Value Measurement” (“ASC 820”) which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:

Level 1: Inputs are unadjusted quoted prices in active markets for identical assets and liabilities that can be accessed at the measurement date.

Level 2: Observable inputs other than those included in Level 1 (i.e., quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets).

Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value instrument.

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As of September 30, 2024 and December 31, 2023, the fair values of the Company’s financial assets and liabilities measured at fair value on a recurring basis are categorized as follows:


	Total		Level 1		Level 2		Level 3

	(In thousands)
As of September 30, 2024
Liabilities subject to fair value measurement:
Employment Agreement Award(a)	$	13,517	$	—	$	—	$	13,517

Mezzanine equity subject to fair value measurement:
Redeemable non-controlling interests(b)	$	10,636	$	—	$	—	$	10,636

Assets subject to fair value measurement:
Cash equivalents - money market funds (c)	$	81,187	$	81,187	$	—	$	—



As of December 31, 2023
Liabilities subject to fair value measurement:
Employment Agreement Award(a)	$	22,970	$	—	$	—	$	22,970

Mezzanine equity subject to fair value measurement:
Redeemable non-controlling interests(b)	$	16,520	$	—	$	—	$	16,520

Assets subject to fair value measurement:
Cash equivalents-money market funds(c)	$	193,769	$	193,769	$	—	$	—

URBAN ONE, INC. [UONE] Filings

URBAN ONE, INC. [UONEK] Filings