BEASLEY BROADCAST GROUP INC 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA BEASLEY BROADCAST GROUP, INC. INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Financial Statements Report of Independent Registered Public Accounting Firm (PCAOB ID 173 ) 35 Consolidated Balance Sheets as of December 31, 2023 and 2024 37 Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2023 and 2024 38 Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 2023 and 2024 39 Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2024 40 Notes to Consolidated Financial Statements 41 Consolidated Financial Statement Schedule—Valuation and Qualifying Accounts 60 34 Table of Contents Crowe LLP Independent Member Crowe Global Report of Independent Registered Public Accounting Firm Shareholders and the Board of Directors of Beasley Broadcast Group, Inc. Naples, Florida Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Beasley Broadcast Group, Inc. (the "Company") as of December 31, 2023 and 2024, the related consolidated statements of comprehensive loss, stockholders’ equity, and cash flows for the years then ended and the related notes and consolidated financial statement schedule (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2024, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. FCC Licenses Impairment Assessment – Radio Reporting Units As disclosed in Note 5 to the consolidated financial statements, the Company’s consolidated FCC licenses balance was $392.3 million as of December 31, 2024. The Company performed the annual quantitative impairment test for its FCC licenses in all markets during the fourth quarter of 2024 and did not record any impairment losses related to the FCC licenses 35 Table of Contents Crowe LLP Independent Member Crowe Global in each of its reporting units during the year ended December 31, 2024. Management performs an annual impairment test during the fourth quarter of each year, or more frequently when it is determined that events and circumstances indicate that it is more likely than not that FCC licenses are impaired, which includes a qualitative assessment. FCC licenses are assessed for impairment at the market cluster level. Potential impairment is identified by comparing the fair value of a market’s FCC licenses to its carrying value. Fair value is estimated by management using an income approach. Management’s cash flow projections for its FCC licenses included significant judgments and assumptions relating to revenue growth rates, the market share at maturity and operating income margins at maturity of an average station within a market based upon market size, and station type and the discount rate. We considered auditing the impairment of FCC licenses to be a critical audit matter because it involved a high degree of subjectivity in evaluating management’s estimates, judgments, and assumptions, as well as significant audit effort due to complexity in the aggregation and evaluation of significant amounts of data and the use of valuation specialists. Our audit procedures related to impairment of FCC licenses included the following: a. Evaluated management’s judgments in their assessment of changes in market conditions or events, or other changes in circumstances that indicate an impairment of FCC licenses may be present. b. Tested the reliability, appropriateness of aggregation, and relevance of underlying data used in the valuation model. c. Evaluated the appropriateness of valuation model used and the application of certain assumptions in the valuation model, and recalculated the discounted cash flow schedules. d. Evaluated the significant assumptions used by management, including revenue growth rates, the market share at maturity and operating income margins at maturity of an average station within a market based upon market size and station type, and the discount rate. This involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance in the market being evaluated, (ii) the consistency with external market and industry data, and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit. e. Utilized valuation specialists to assist in evaluating certain assumptions applied in the valuation model. /s/ Crowe LLP We have served as the Company’s auditor since 2006. Los Angeles, California March 26, 2025 36 Table of Contents BEASLEY BROADCAST GROUP, INC. CONSOLIDATED BA LANCE SHEETS December 31, December 31, 2023 2024 ASSETS Current assets: Cash and cash equivalents $ 26,733,921 $ 13,772,720 Accounts receivable, less allowance for credit losses of $ 1,752,058 in 2023 and $ 1,698,285 in 2024 53,424,196 51,551,945 Prepaid expenses 4,338,503 3,139,678 Other current assets 2,150,163 825,794 Total current assets 86,646,783 69,290,137 Property and equipment, net 51,474,754 47,000,978 Operating lease right-of-use assets 34,767,126 33,233,714 FCC licenses 393,006,900 392,259,831 Goodwill 922,000 — Other intangibles, net 2,722,408 2,082,098 Other assets 4,727,967 5,340,067 Total assets $ 574,267,938 $ 549,206,825 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 14,299,048 $ 21,037,797 Operating lease liabilities 8,082,981 8,688,874 Other current liabilities 25,913,827 23,260,496 Total current liabilities 48,295,856 52,987,167 Due to related parties 55,019 24,307 Long-term debt 264,203,010 247,117,717 Operating lease liabilities 33,440,246 31,402,424 Deferred tax liabilities 71,894,915 63,747,937 Other long-term liabilities 7,400,257 6,707,566 Total liabilities 425,289,303 401,987,118 Commitments and contingencies Stockholders' equity: Preferred stock, $ 0.001 par value; 10,000,000 shares authorized; none issued — — Class A Common Stock, $ 0.001 par value; 150,000,000 shares authorized; 869,569 issued and 682,697 outstanding in 2023; 1,152,366 issued and 957,876 outstanding in 2024(1) 17,389 18,173 Class B Common Stock, $ 0.001 par value; 75,000,000 shares authorized; 833,137 issued and outstanding in 2023 and 2024(1) 16,662 16,662 Additional paid-in capital 152,794,353 156,595,835 Treasury stock, Class A Common Stock; 186,872 shares in 2023; 194,490 shares in 2024(1) ( 29,239,179 ) ( 29,337,880 ) Retained earnings 25,042,926 19,155,668 Accumulated other comprehensive income 346,484 771,249 Total stockholders' equity 148,978,635 147,219,707 Total liabilities and stockholders' equity $ 574,267,938 $ 549,206,825 (1) The shares of Class A and Class B Common Stock have been retroactively adjusted to reflect the 1-for-20 Reverse Stock Split that occurred on September 23, 2024. See Not e 21 fo r additional information. See accompanying notes to consolidated financial statements 37 Table of Contents BEASLEY BROADCAST GROUP, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS Year Ended Year Ended December 31, December 31, 2023 2024 Net revenue $ 247,109,258 $ 240,291,611 Operating expenses: Operating expenses (including stock-based compensation of $ 66,382 in 2023 and $ 52,145 in 2024 and excluding depreciation and amortization shown separately below) 208,247,221 201,768,757 Corporate expenses (including stock-based compensation of $ 779,993 in 2023 and $ 841,147 in 2024) 18,246,731 17,272,696 Depreciation and amortization 8,809,343 7,236,060 FCC licenses impairment losses 89,214,665 — Goodwill impairment losses 10,582,360 922,000 Extinguishment of franchise fee ( 6,000,000 ) — Total operating expenses 329,100,320 227,199,513 Operating income (loss) ( 81,991,062 ) 13,092,098 Non-operating income (expense): Interest expense ( 26,607,920 ) ( 21,233,027 ) Debt issuance expenses — ( 5,982,414 ) Gain on sale of investment — 6,026,776 Gain on repurchases of long-term debt 7,807,875 — Other income, net 1,532,131 799,558 Loss before income taxes ( 99,258,976 ) ( 7,297,009 ) Income tax benefit ( 24,287,366 ) ( 1,344,961 ) Loss before equity in earnings of unconsolidated affiliates ( 74,971,610 ) ( 5,952,048 ) Equity in earnings of unconsolidated affiliates, net of tax ( 148,528 ) 64,790 Net loss ( 75,120,138 ) ( 5,887,258 ) Other comprehensive gain (loss): Unrecognized actuarial gain (loss) on postretirement plan (net of income tax benefit of $ 52,260 in 2023 and income tax expense of $ 142,846 in 2024) ( 152,827 ) 424,765 Comprehensive loss $ ( 75,272,965 ) $ ( 5,462,493 ) Net loss per Class A and B common share(1): Basic and diluted $ ( 50.26 ) $ ( 3.73 ) Weighted average shares outstanding(1): Basic and diluted 1,494,686 1,579,744 (1) The shares of Class A and Class B Common Stock have been retroactively adjusted to reflect the 1-for-20 Reverse Stock Split that occurred on September 23, 2024. See N ote 21 for additional information. See accompanying notes to consolidated financial statements 38 Table of Contents BEASLEY BROADCAST GROUP, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Common Stock Accumulated Additional Other Total Class A Class B Paid-In Treasury Stock Retained Comprehensive Stockholders' Shares (1) Amount Shares (1) Amount Capital Shares (1) Amount Earnings (Loss) Income Equity Balances as of January 1, 2023 838,161 $ 16,761 833,137 $ 16,662 $ 151,948,310 ( 182,478 ) $ ( 29,155,300 ) $ 100,163,064 $ 499,311 $ 223,488,808 Stock-based compensation 31,408 628 — — 845,747 — — — — 846,375 Adjustment from related party acquisition — — — — 296 — — — — 296 Purchase of treasury stock — — — — — ( 4,394 ) ( 83,879 ) — — ( 83,879 ) Net loss — — — — — — — ( 75,120,138 ) — ( 75,120,138 ) Other comprehensive loss — — — — — — — — ( 152,827 ) ( 152,827 ) Balances as of December 31, 2023 869,569 17,389 833,137 16,662 152,794,353 ( 186,872 ) ( 29,239,179 ) 25,042,926 346,484 148,978,635 Issuance of common stock 236,247 236 — — 2,907,968 — — — — 2,908,204 Stock-based compensation 46,550 548 — — 892,744 — — — — 893,292 Adjustment from related party acquisition — — — — 770 — — — — 770 Purchase of treasury stock — — — — — ( 7,618 ) ( 98,701 ) — — ( 98,701 ) Net loss — — — — — — — ( 5,887,258 ) — ( 5,887,258 ) Other comprehensive gain — — — — — — — — 424,765 424,765 Balances as of December 31, 2024 1,152,366 $ 18,173 833,137 $ 16,662 $ 156,595,835 ( 194,490 ) $ ( 29,337,880 ) $ 19,155,668 $ 771,249 $ 147,219,707 (1) The shares of Class A and Class B Common Stock have been retroactively adjusted to reflect the 1-for-20 Reverse Stock Split that occurred on September 23, 2024. See Note 21 for additional information. See accompanying notes to consolidated financial statements 39 Table of Contents BEASLEY BROADCAST GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended Year Ended December 31, December 31, 2023 2024 Cash flows from operating activities: Net loss $ ( 75,120,138 ) $ ( 5,887,258 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation 846,375 893,292 Provision for credit losses 1,642,545 899,669 Depreciation and amortization 8,809,343 7,236,060 FCC licenses impairment losses 89,214,665 — FCC licenses termination losses — 630,086 Goodwill impairment losses 10,582,360 922,000 Gain on dispositions — ( 799,377 ) Gain on sale of investment — ( 6,026,776 ) Extinguishment of franchise fee ( 6,000,000 ) — Amortization of premium and debt issuance costs 1,447,528 ( 704,298 ) Gain on repurchases of long-term debt ( 7,807,875 ) — Deferred income taxes ( 25,918,433 ) ( 8,464,890 ) Equity in earnings of unconsolidated affiliates 148,528 ( 64,790 ) Change in operating assets and liabilities: Accounts receivable 1,616,785 972,582 Prepaid expenses 739,728 1,198,825 Other assets 2,995,740 361,407 Accounts payable ( 5,045,573 ) 6,738,749 Other liabilities ( 4,048,647 ) ( 2,530,716 ) Other operating activities 1,218,520 913,650 Net cash used in operating activities ( 4,678,549 ) ( 3,711,785 ) Cash flows from investing activities: Capital expenditures ( 4,189,554 ) ( 3,013,668 ) Proceeds from dispositions 11,060,000 1,308,968 Proceeds from sale of investment — 6,026,776 Net cash provided by investing activities 6,870,446 4,322,076 Cash flows from financing activities: Issuance of debt, net of issuance costs — 29,999,000 Repurchases of long-term debt ( 14,908,750 ) ( 42,500,000 ) Payment of debt issuance expenses — ( 1,671,791 ) Issuance of common stock — 700,000 Purchase of treasury stock ( 83,879 ) ( 98,701 ) Net cash used in financing activities ( 14,992,629 ) ( 13,571,492 ) Net decrease in cash and cash equivalents ( 12,800,732 ) ( 12,961,201 ) Cash and cash equivalents at beginning of period 39,534,653 26,733,921 Cash and cash equivalents at end of period $ 26,733,921 $ 13,772,720 Cash paid for interest $ 25,224,653 $ 27,246,716 Cash paid for income taxes $ 1,402,784 $ 2,911,875 See accompanying notes to consolidated financial statements 40 Table of Contents BEASLEY BROADCAST GROUP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) Nature of Business Beasley Broadcast Group, Inc. (the “Company” or “BBGI”) is a multi-platform media company, operating two reportable business segments, whose primary business is operating radio stations throughout the United States. The Company offers local and national advertisers integrated marketing solutions across audio, digital and event platforms. The Company owns and operates stations in the following markets: Augusta, GA, Boston, MA, Charlotte, NC, Detroit, MI, Fayetteville, NC, Fort Myers-Naples, FL, Las Vegas, NV, Middlesex, NJ, Monmouth, NJ, Morristown, NJ, Philadelphia, PA, and Tampa-Saint Petersburg, FL. (2) Summary of Significant Accounting Policies Principles of Consolidation The financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of the Company and its wholly owned subsidiaries, including OutlawsXP, Inc. (“Outlaws”). All significant inter-company transactions and balances have been eliminated. Use of Estimates Preparing financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the period. Such estimates include: (i) the amount of allowance for credit losses; (ii) future cash flows used for testing recoverability of property and equipment; (iii) fair values used for testing Federal Communications Commission ("FCC") licenses, goodwill and other intangibles for impairment; (iv) estimates used to determine the incremental borrowing rate to record lease liabilities and related right-of-use assets (v) the realization of deferred tax assets; and (vi) actuarial assumptions related to the Supplemental Employee Retirement Plan ("SERP"). Actual results and outcomes may differ from management’s estimates and assumptions. C ash and Cash Equivalents All short-term investments with an original maturity of three months or less are considered to be cash equivalents. Accounts Receivable Accounts receivable consist primarily of uncollected amounts due from advertisers for the sale of advertising airtime. The amounts are net of advertising agency commissions and an allowance for credit losses. The allowance for credit losses reflects management’s estimate of expected losses in accounts receivable from local advertisers and national agencies. Management determines the allowance based on historical information, relative improvements or deteriorations in the age of the accounts receivable and changes in current economic conditions and reasonable and supportable forecasts of future economic conditions. Interest is not accrued on accounts receivable. The changes in allowance for credit losses on accounts receivable are as follows: December 31, 2023 2024 Beginning balance $ 1,876,751 $ 1,752,058 Provision for credit losses 1,642,545 899,669 Deductions ( 1,767,238 ) ( 953,442 ) Ending balance $ 1,752,058 $ 1,698,285 41 Table of Contents Property and Equipment Property and equipment is recorded at fair value in a business combination or otherwise at cost and depreciated using the straight-line method over the estimated useful life of the asset. If an event or change in circumstances were to indicate that the carrying amount of property and equipment is not recoverable, the carrying amount will be reduced to the estimated fair value. Repairs and maintenance are charged to expense as incurred. FCC Licenses FCC licenses, including translator licenses, are generally granted for renewable terms of eight years . Renewal costs are generally minor and expensed as incurred. Licenses are tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the Company’s licenses might be impaired. The Company assesses qualitative factors to determine whether it is more likely than not that its licenses are impaired. If the Company determines it is more likely than not that its licenses are impaired, then the Company is required to perform the quantitative impairment test. The quantitative impairment test compares the fair value of the Company’s licenses with their carrying amounts. If the carrying amounts of the licenses exceed their fair value, an impairment loss is recognized in an amount equal to that excess. For the purpose of testing its licenses for impairment, the Company combines its licenses into reporting units based on its market clusters. See Note 5 for changes in the carrying amount of FCC licenses for the years ended December 31, 2023 and 2024 . The weighted-average period before the next renewal of the Company’s FCC licenses is 4.0 years. Goodwill Goodwill is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the Company’s goodwill might be impaired. The Company assesses qualitative factors to determine whether it is necessary to perform a quantitative assessment for each reporting unit. If the quantitative assessment is necessary, the Company will determine the fair value of each reporting unit. If the fair value of any reporting unit is less than the carrying amount, the Company will recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The loss recognized will not exceed the total amount of goodwill allocated to the reporting unit. For the purpose of testing its goodwill for impairment, the Company has identified its market clusters, digital, and esports as its reporting units. See Note 6 for changes in the carrying amount of goodwill for the years ended December 31, 2023 and 2024 . Other Intangibles Other intangibles include advertiser relationships with finite lives that are amortized over their respective estimated useful lives. If an event or change in circumstances were to indicate that the carrying amount of any other intangibles is not recoverable, the carrying amount will be reduced to the estimated fair value. Other intangibles also includes brands with indefinite lives that are tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the Company’s brands might be impaired. For the purpose of testing its other intangibles for impairment, the Company has identified its market clusters, digital, and esports as its reporting units. See Note 7 for changes in the carrying amount of other intangibles for the years ended December 31, 2023 and 2024 . Investments Other assets include an investment in Quu, Inc. (“Quu”). The Company is considered to have the ability to exercise significant influence over the operating and financial policies of Quu. Therefore, the investment in Quu is accounted for using the equity method. The Company will recognize its share of the earnings of Quu in the periods for which it is reported. Any loss in value of the investment that is other than a temporary decline will be recognized. Other assets also include a noncontrolling interest in AUDIOis, which does not have a readily determinable fair value, and therefore, is recorded at cost less impairment. The Company evaluates the investments on a quarterly basis to identify impairment. When the evaluation indicates that an impairment exists, the Company will estimate the fair value of the investment and recognize an impairment loss equal to the difference between the fair value and the carrying amount of the investment. The carrying amount of the investment in QUU was $ 1.8 million and $ 1.9 million as of December 31, 2023 and 2024 , respectively. 42 Table of Contents Debt Issuance Costs and Debt Premiums or Discount Debt issuance costs and debt premiums or discounts are capitalized and amortized over the life of the related debt as interest expense on a straight-line basis, which approximates the effective interest method. Unamortized debt issuance costs and debt premiums or discounts are reported as a direct deduction from or increase to the carrying amount of the related debt. Leases The Company determines whether a contract is or contains a lease at inception. The term for each lease agreement begins on the commencement date and includes the noncancelable period specified in the agreement together with: (1) the periods covered by options to extend the lease if the Company is reasonably certain to exercise that option, (2) the periods covered by an option to terminate if the Company is reasonably certain not to exercise that option and (3) the period covered by an option to extend (or not terminate) if controlled by the lessor. The lease liabilities and the related right-of use assets are calculated based on the present value of the lease payments using (1) the rate implicit in the lease or (2) the lessee’s incremental borrowing rate (“IBR”). IBR is defined as the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Supplemental Employee Retirement Plan The costs and liabilities of the SERP are determined using actuarial valuations. An actuarial valuation involves making various assumptions that include the discount rate and mortality rates. The discount rate is based on matching the cash flows of the SERP to the FTSE Pension Discount Curve. The mortality assumptions are based on the mortality tables and mortality improvement scales that are selected based on the most recent study of the Society of Actuaries. The SERP is frozen so future employment does not change the benefit amounts. Actual results will differ from results which are estimated based on assumptions. Treasury Stock Treasury stock is accounted for using the cost method whereby the entire cost of the acquired stock is recorded as treasury stock. Stock-Based Compensation The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The cost is recognized in earnings over the period during which an employee is required to provide service. No compensation cost is recognized for equity instruments for which employees do not render the requisite services. Income Taxes The Company recorded income taxes under the liability method. Deferred tax assets and liabilities are recognized for all temporary differences between tax and financial reporting bases of the Company’s assets and liabilities using enacted tax rates applicable to the periods in which the differences are expected to affect taxable income. Tax benefits from an uncertain tax position are only recognized if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate resolution. Interest and penalties related to unrecognized tax benefits are recorded as incurred as a component of income tax expense. Comprehensive Loss Comprehensive loss consists of net loss and other gains and losses affecting equity that, under accounting principles generally accepted in the United States of America, are excluded from net loss, including unrecognized net actuarial gains and losses related to the SERP. Loss per Share Basic net loss per share is computed by dividing net loss attributable to common stockholders of the Company by the weighted average number of common shares outstanding for the period. Common shares outstanding include shares of both Class A and Class B Common Stock, which have equal rights and privileges except with respect to voting. Diluted net loss per share reflects the potential dilution that could occur if restricted stock units or other contracts to issue common stock were exercised or converted into common 43 Table of Contents stock and were not anti-dilutive. When reporting a net loss, the effect of restrictive stock units is excluded under the treasury stock method as the addition of shares would be anti-dilutive. Concentrations of Risk Certain cash deposits with financial institutions may, at times, exceed FDIC insurance limits. The stations located in Boston, MA, Detroit, MI, and Philadelphia, PA collectively contributed 58 % of the Company’s net revenue in 2024 . The stations located in Boston, MA, Detroit, MI, and Philadelphia, PA collectively contributed 58 % of the Company’s net revenue in 2023 . Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk. Inputs may be observable or unobservable. Observable inputs are based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s own assumptions based on the best information available in the circumstances. The fair value hierarchy prioritizes the inputs used to measure fair value into three broad levels. The three levels of the fair value hierarchy are defined as follows: Level 1 – Inputs are quoted prices in active markets for identical assets or liabilities as of the reporting date. Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, as of the reporting date. Level 3 – Unobservable inputs for the asset or liability that reflect management’s own assumptions about the assumptions that market participants would use in pricing the asset or liability as of the reporting date. Sports Programming Costs Sports programming rights for a specified season are amortized on a straight-line basis over the season. Other payments are expensed when the additional contract elements, such as post-season games, are broadcast. Segments The Company currently operates two operating and reportable segments (Audio and Digital). The Company also operated an esports segment from January 1, 2023 to December 13, 2023. The identification of segments is consistent with how the segments report to and are managed by the Company’s Chief Executive Officer (the Company’s Chief Operating Decision Maker). Operating results are reported to the Chief Operating Decision Maker on a statement of operations, which includes net revenue, operating expenses, impairment losses, gains and losses on dispositions and depreciation and amortization. Corporate expenses include general and administrative expenses and certain other income and expense items not allocated to the operating segments. Recent Accounting Pronouncements In November 2024, the Financial Accounting Standards Board ("FASB") issued guidance that requires entities to disclose, in the notes to financial statements, specified information about certain costs and expenses including the amounts of (a) purchases of inventory; (b) employee compensation; (c) depreciation; (d) intangible asset amortization; and (e) depreciation, depletion, and amortization recognized as part of oil- and gas-producing activities (or other amounts of depletion expense) included in each relevant expense caption, as well as a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. Additionally, entities will need to disclose the total amount of selling expenses and, in annual reporting periods, an entity’s definition of selling expenses. The amendments are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently in the process of reviewing the new guidance. In December 2023, the FASB issued guidance, which requires additional disclosures primarily related to the Company's income tax rate reconciliation and income taxes paid. The guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied prospectively. The Company is currently in the process of reviewing the new guidance. 44 Table of Contents In November 2023, the FASB issued guidance which requires additional disclosures for the Company's reportable segments, primarily related to significant segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within the fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied retrospectively to all prior periods presented in the financial statements. The Company adopted the guidance in the fourth quarter of 2024, and the adoption did not have a material impact on the Company’s consolidated financial statements. (3) Dispositions On December 13, 2 023, the Company completed the termination of its esports operations. The Company received a $ 6.0 million termination payment from the esports league in the fourth quarter of 2023. The Company no longer has esports operations after completion of the termination. However, management determined that the termination did not represent a strategic shift that would have significant effect on the Company's operations and financial results; therefore, the esports operations have not been reported as discontinued operations. The Company recorded a loss on termina tion of $ 0.3 million d uring the fourth quarter of 2023. The loss on termination is summarized as follows: Termination payment $ 6,000,000 Goodwill (see Note 6) ( 1,761,100 ) Other intangibles (see Note 7) ( 4,529,447 ) Loss on termination $ ( 290,547 ) In addition, the remaining $ 6.0 million franchise fee payable to the esports league was forgiven by the esports league and is reported in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2023. On October 5, 2023, the Company completed the sale of substantially all of the assets used in the operation of WJBR-FM in Wilmington, DE to a third party for $ 5.0 million in cash. During the second quarter of 2023, due to the potential sale of these assets, the Company recorded and impairment loss of $ 10.0 million related to the FCC license. The Company no longer has operations in the Wilmington, DE market after completion of the disposition. However, management determined that the disposition did not represent a strategic shift that would have significant effect on the Company's operations and financial results; therefore, the operations in the Wilmington, DE market have not been reported as discontinued operations. The Company recorded a gain on disposition of approximately $ 18,000 during the fourth quarter of 2023. On September 11, 2023, the Company completed the sale of substantially all of the assets used in the operations of WWWE-AM in Atlanta, GA to a third party for $ 250,000 in cash. (4) Property and Equipment Property and equipment is comprised of the following: December 31, Estimated useful lives 2023 2024 (years) Land $ 13,322,390 $ 13,110,390 — Buildings and improvements 37,255,078 37,353,496 15 - 30 Broadcast equipment 34,781,546 36,077,763 5 - 15 Transportation equipment 2,265,706 1,996,366 5 Office equipment 9,629,737 10,067,711 5 - 10 Construction in progress 430,175 995,744 — 97,684,632 99,601,470 Less accumulated depreciation and amortization ( 46,209,878 ) ( 52,600,492 ) $ 51,474,754 $ 47,000,978 45 Table of Contents On October 28, 2024, the Company completed the sale of a building in Belmar, NJ to a third party for $ 1.2 million in cash. The Company recorded a gain on disposition of $ 0.8 million during the fourth quarter of 2024. The Company recorded depreciation expense of $ 7.8 million and $ 7.0 million for the years ended December 31, 2023 and 2024 , respectively. (5) FCC Licenses Changes in the carrying amount of FCC licenses for the years ended December 31, 2023 and 2024 are as follows: Balance as of January 1, 2023 $ 487,249,798 Dispositions (see Note 3) ( 5,028,233 ) Impairment losses (see below and also Note 3) ( 89,214,665 ) Balance as of December 31, 2023 393,006,900 License terminations ( 747,069 ) Balance as of December 31, 2024 $ 392,259,831 FCC licenses are tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the FCC licenses might be impaired. The Company assesses qualitative factors to determine whether it is more likely than not that its FCC licenses are impaired. If the Company determines it is more likely than not that its FCC licenses are impaired, then the Company is required to perform the quantitative impairment test. The quantitative impairment test compares the fair value of the FCC licenses with the carrying amounts of such licenses. If the carrying amounts of the FCC licenses exceed the fair value, an impairment loss is recognized in an amount equal to that excess. For the purpose of testing FCC licenses for impairment, the Company combines its licenses into reporting units based on its market clusters. The FCC license valuations are Level 3 non-recurring fair value measurements. The Company performed the annual quantitative impairment test for its FCC licenses in all markets during the fourth quarter of 2024 and did no t record any impairment losses related to the FCC licenses in each of its reporting units. The fair values of the FCC licenses were estimated using an income approach. The income approach is based upon discounted cash flow analyses for the next ten years incorporating variables such as projected audio market revenues, projected growth rate for audio market revenues, projected audio market revenue shares, projected audio station operating income margins, and a discount rate appropriate for the audio industry. The key assumptions used in the discounted cash flow analyses are as follows: Revenue growth rates ( 10.7 )% - 6.1 % Market revenue shares at maturity 0.4 % - 45.4 % Operating income margins at maturity 19.7 % - 28.6 % Discount rate 9.0 % On December 25, 2024 , the 12-month silent period for WAEC-AM in Atlanta, GA expired, and the FCC license was terminated. The termination resulted in a loss of $ 0.3 million. On December 20, 2024 , the 12-month silent period for WCHZ-FM in Augusta, GA expired, and the FCC license was terminated. The termination resulted in a loss of $ 0.3 million. Due to an increase in interest rates in the U.S. economy and a decrease in projected revenues, the Company tested its FCC licenses for impairment during the third quarter of 2023. As a result of the quantitative impairment test performed as of September 30, 2023, the Company recorded impairment losses of $ 78.2 million related to the FCC licenses in each of its market clusters. The impairment losses were primarily due to an increase in the discount rate due to certain risks associated with the U.S. economy and a decrease in the projected revenues in each market cluster used in the discounted cash flow analyses to estimate the fair value of the Company's FCC licenses. The key assumptions used in the discounted cash flow analyses are as follows: Revenue growth rates ( 1.2 )% - 1.8 % Market revenue shares at maturity 0.4 % - 44.7 % Operating income margins at maturity 19.7 % - 30.4 % Discount rate 10.0 % The Company performed the annual quantitative impairment test for its FCC licenses in all markets during the fourth quarter of 2023. As a result of the quantitative impairment test performed as of November 30, 2023, the Company recorded impairment losses of $ 1.0 million related to the FCC licenses in its Augusta, GA, Fort Myers-Naples, FL, and Middlesex-Monmouth-Morristown, NJ 46 Table of Contents market clusters. The impairment losses were primarily due to a decrease in projected revenue in these markets. The fair values of the FCC licenses were estimated using an income approach. The key assumptions used in the discounted cash flow analyses are as follows: Revenue growth rates ( 16.5 )% - 24.4 % Market revenue shares at maturity 0.4 % - 45.5 % Operating income margins at maturity 19.7 % - 29.9 % Discount rate 10.0 % (6) Goodwill Changes in the carrying amount of goodwill for the years ended December 31, 2023 and 2024 are as follows: Balance as of January 1, 2023 $ 13,265,460 Disposition (see Note 3) ( 1,761,100 ) Impairment losses ( 10,582,360 ) Balance as of December 31, 2023 922,000 Impairment loss ( 922,000 ) Balance as of December 31, 2024 $ — Goodwill is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the Company’s goodwill might be impaired. The Company assesses qualitative factors to determine whether it is necessary to perform a quantitative assessment for each reporting unit. If the quantitative assessment is necessary, the Company will determine the fair value of each reporting unit. If the fair value of any reporting unit is less than the carrying amount, the Company will recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. The loss recognized will not exceed the total amount of goodwill allocated to the reporting unit. For the purpose of testing goodwill for impairment, the Company has identified its audio market clusters and esports as its reporting units. The goodwill valuations are Level 3 non-recurring fair value measurements. Due to an increase in interest rates in the U.S. economy and a decrease in projected revenues, the Company tested its goodwill for impairment during the third quarter of 2023. As a result of the quantitative impairment test performed as of September 30, 2023, the Company recorded an impairment loss of $ 10.6 million related to the goodwill in its Philadelphia, PA market cluster. The impairment loss was primarily due to an increase in the discount rate due to certain risks associated with the U.S. economy and a decrease in the projected revenues used in the discounted cash flow analysis to estimate the fair value of our goodwill. The fair value of the goodwill in the Philadelphia, PA market cluster was estimated using an income approach. The income approach is based upon discounted cash flow analyses for the next ten years incorporating variables such as projected audio market revenues, projected growth rate for audio market revenues, projected audio market revenue shares, projected audio station operating income margins, and a discount rate appropriate for the audio industry. The key assumptions used in the discounted cash flow analyses are as follows: Revenue growth rates ( 9.3 )% - 1.4 % Operating income margin 27.9 % Discount rate 10.0 % (7) Other Intangibles Other intangibles as of December 31, 2024 are comprised of the following: Asset Accumulated amortization Net asset Amortization period (years) Advertiser relationships $ 2,029,000 $ ( 1,091,389 ) $ 937,611 6 - 11 Brands with indefinite lives 1,115,663 — 1,115,663 Other intangibles with indefinite lives 28,824 — 28,824 $ 3,173,487 $ ( 1,091,389 ) $ 2,082,098 47 Table of Contents Other intangibles as of December 31, 2023 are comprised of the following: Asset Accumulated amortization Net asset Amortization period (years) Advertiser relationships $ 2,029,000 $ ( 864,129 ) $ 1,164,871 6 - 11 Trade name 510,000 ( 96,950 ) 413,050 8 Brands with indefinite lives 1,115,663 — 1,115,663 Other intangibles with indefinite lives 28,824 — 28,824 $ 3,683,487 $ ( 961,079 ) $ 2,722,408 If an event or change in circumstances were to indicate that the carrying amount of any other intangibles is not recoverable, the carrying amount will be reduced to the estimated fair value. For the purpose of testing its other intangibles for impairment, the Company has identified its market clusters, digital, and esports as its reporting units. The Company recorded amortization expense of $ 1.0 milli on and $ 0.3 million for the years ended December 31, 2023 and 2024, respectively. Estimated future amortization expense related to intangible assets subject to amortization for the next five years and thereafter is as follows: 2025 $ 227,260 2026 227,260 2027 227,260 2028 178,206 2029 77,625 Total $ 937,611 (8) Other Current Liabilities Other current liabilities are comprised of the following: December 31, 2023 2024 Accrued interest $ 10,100,833 $ 4,791,442 Accrued payroll expenses 4,906,900 4,119,979 Deferred revenue 4,835,984 3,794,481 Accrued digital expenses 3,284,767 1,802,318 Accrued income taxes — 3,587,059 Other accrued expenses 2,785,343 5,165,217 $ 25,913,827 $ 23,260,496 (9) Long-Term Debt Long-term debt is comprised of the following: December 31, December 31, 2023 2024 8.625 % secured notes due February 1, 2026 $ 267,000,000 $ 4,295,000 11.000 % senior secured first lien notes due August 1, 2028 — 30,899,000 9.200 % senior secured second lien notes due August 1, 2028 — 184,922,000 Unamortized premium and debt issuance costs ( 2,796,990 ) 27,001,717 $ 264,203,010 $ 247,117,717 48 Table of Contents On February 2, 2021, the Comp any issued $ 300.0 million aggregate principal amount of 8.625 % senior secured notes due on February 1, 2026 (the “Existing Notes”) under an indenture dated February 2, 2021 (the “Existing Notes Indenture”). Interest on the Existing Notes accrues at the rate of 8.625 % per annum and is payable semiannually in arrears on February 1 and August 1 of each year. The Existing Notes are secured on a first-lien priority basis by substantially all assets of the Company and its majority owned subsidiaries and are guaranteed jointly and severally by the Company and its majority owned subsidiaries. The Company used the net proceeds from the Notes, to refinance in full our previously outstanding credit facility, to repay a previously outstanding promissory note and loan from George Beasley and to pay related accrued interest, fees and expenses. Prior to February 1, 2025, the Company will be subject to certain premiums, as defined in the Existing Notes Indenture, for optional or mandatory (upon certain contingent events) redemption of some or all of the N otes. In the fourth quarter of 2023, the Company repurchased $ 20.0 million aggregate principal amount of the Existing Notes for an aggregate price equal to 65 % of the principal amount and recorded an aggregate gain of $ 6.8 million as a result of the repurchases. In the second quarter of 2023, the Company repurchased $ 3.0 million principal amount of the Existing Notes for a price equal to 66 % of the principal amount and recorded a gain of $ 1.0 million as a result of the repurchase. On October 8, 2024 (the “Settlement Date”), Beasley Mezzanine Holdings, LLC (the “Issuer”), a wholly owned subsidiary of the Company, and certain other of the Company’s subsidiaries, completed: (i) the exchange (the “Exchange Offer”) of $ 194.7 million aggregate principal amount of the Existing Notes (representing 72.9 % of the aggregate principal amount outstanding of the Existing Notes) for ( a) $ 184.9 millio n aggregate principal amount of the Issuer’s newly issued 9.200 % Senior Secured Second Lien Notes due August 1, 2028 (the “Exchange Notes”) at an exchange ratio of 95.0 % of the aggregate principal amount of the Existing Notes tendered for exchange, (b) 179,383 shares of Class A Common Stock of the Company, based upon pro rata ownership of the Exchange Notes issued by the Issuer, and (c) certain cash payments aggregating approximately $ 1.7 million; (ii) the purchas e of $ 68.0 m illion aggregate principal amount of the Existing Notes at a purchase price of 62.5 % plus accrued and unpaid interest (such offer, the “Tender Offer”); and (iii) the issuance by the Issue r of $ 30.9 million aggregate principal amount of 11.000 % Senior Secured First Lien notes due 2028 (the “New Notes,” and such offering, the “New Notes Offer”) to holders of Existing Notes or their designees who participated in the Exchange Offer, including to certain backstop commitment parties who committed to purchase the New Notes not otherwise subscribed for. The Company received requisite consents from holders of Existing Notes to (a) adopt certain amendments (the “Proposed Amendments”) to the Existing Notes Indenture and the related security documents and (b) execute a supplemental indenture (the “Supplemental Indenture”) to the Existing Notes Indenture and each relevant ancillary document effecting the Proposed Amendments. The Company used the proceeds from the New Notes Offer of $ 30.0 million to f und, in part, the purchase of Existing Notes tendered in the Tender Offer. On the Settlement Date, the Issuer entered into (i) a new indenture (the “New Notes Indenture”) governing its New Notes, which are fully and unconditionally secured by substantially all of the assets, other than certain excluded property, of the Issuer and the guarantors (the “Collateral”) on a senior secured first-priority lien basis, subject to certain exceptions, limitations and permitted liens and (ii) a new indenture (the “Exchange Notes Indenture”) governing its Exchange Notes, which are fully and unconditionally secured by liens on the Collateral on a senior secured second-priority lien basis, subject to certain exceptions, limitations and permitted liens, in each case with the guarantors thereto and Wilmington Trust, National Association, as trustee and collateral agent, with respect to both the Exchange Notes Indenture and New Notes Indenture. The New Notes Indenture and the Exchange Notes Indenture contain restrictive covenants that limit the ability of the Company and its subsidiaries to, among other things, incur additional indebtedness, guarantee indebtedness or issue disqualified stock or, in the case of such subsidiaries, preferred stock; pay dividends on, repurchase or make distributions in respect of our capital stock or make other restricted payments; make certain investments or acquisitions; sell, transfer or otherwise convey certain assets; create liens; enter into agreements restricting certain subsidiaries’ ability to pay dividends or make other intercompany transfers; consolidate, merge, sell or otherwise dispose of all or substantially all of its assets; enter into transactions with affiliates; prepay certain kinds of indebtedness; and issue or sell stock of its subsidiaries. Due to the combination of the insufficiency of the Company’s then current project cash flows to service the debt to maturity absent a refinancing, broader challenges faced by all companies in the radio broadcasting industry, and the concessions granted by the holders of the Existing Notes (as described above), the carrying amount of the debt was first reduced by the fair value of the shares of Class A Common Stock of the Company issued to holders of the Existing Notes who participated in the Exchange Offer of $ 2.2 million. As the aggregate undiscounted future principal and interest payments under the Exchange Notes and New Notes were greater than the resulting net carrying amount of the Existing Notes at the time of the debt restructuring, the carrying amount of the debt was not further adjusted and a new effective interest rate was calculated as the discount rate that equates the present value of the future cash payments specified by the new terms with the carrying amount of the debt. The Company capitalized $ 2.6 million in fees paid to the lenders in connection with the debt restructuring, consisting of certain cash payments made to holders of Existing Notes who participated in the Exchange Offer and a 3.0 % participation premium paid to the holders of Existing Notes who participated in the New Notes Offer. The Company incurred $ 6.0 million in debt restructuring costs, primarily consisting of legal fees, financial advisory services, and other professional expenses directly related to the debt restructuring, which were expensed . 49 Table of Contents (10) Leases The Company leases office space, towers and office equipment. Discount rates are based on the Company’s incremental borrowing rate due to the rate implicit in the leases being not readily determinable. The Company used the current borrowing rate on its credit facility, adjusted for the effects of collateralization, to determine the various rates it would pay to finance similar transactions over similar time periods. The following table summarizes lease information: Year ended December 31, 2023 2024 Lease cost Operating lease cost $ 11,565,713 $ 11,452,668 Short-term lease cost 30,620 20,760 Total lease cost $ 11,596,333 $ 11,473,428 Other information Operating cash flows from operating leases $ 12,182,522 $ 12,015,198 Right-of-use assets obtained in exchange for new operating lease liabilities 4,561,161 6,685,102 December 31, 2024 Weighted-average remaining lease term – operating leases 6.5 Weighted-average discount rate – operating leases 9.3 % As of December 31, 2024, future minimum payments for operating leases for the next five years and thereafter are summarized as follows: 2025 $ 12,009,458 2026 9,651,059 2027 8,186,052 2028 6,687,386 2029 4,264,289 Thereafter 14,348,935 Total lease payments 55,147,179 Less imputed interest ( 15,055,881 ) Present value of lease liabilities $ 40,091,298 (11) Employee Benefit Plans Defined Contribution Plan The Company has a defined contribution plan that conforms to Section 401(k) of the Internal Revenue Code. Under this plan, employees may contribute a minimum of 1 % of their compensation (no maximum) to the Plan. However, the Internal Revenue Code limited contributions to $ 22,500 and $ 23,000 (or $ 30,000 and $ 30,500 if aged 50 years or older) in 2023 and 2024 , respectively. No employer matching contributions were made to the defined contribution plan in 2023 and 2024. Supplemental Employee Retirement Plan The benefit obligations related to the frozen SERP of $ 8.0 million and $ 7.3 million are reported in other long-term liabilities, of which $ 0.6 million was reclassified to other current liabilities, in the consolidated balance sheets as of December 31, 2023 and 2024 . The Company contributed $ 0.5 million to the SERP in both 2023 and 2024. 50 Table of Contents The SERP is summarized as follows: Year ended December 31, 2023 2024 Change in Projected Benefit Obligation Benefit obligation at beginning of year $ 7,958,072 $ 8,006,835 Interest cost 379,126 355,194 Actuarial (gain) loss 205,087 ( 567,611 ) Benefits paid ( 535,450 ) ( 483,159 ) Benefit obligation at end of year $ 8,006,835 $ 7,311,259 Change in Plan Assets Fair value of plan assets at beginning of year $ — $ — Employer contribution 535,450 483,159 Benefits paid ( 535,450 ) ( 483,159 ) Fair value of plan assets at end of year $ — $ — Funded status $ ( 8,006,835 ) $ ( 7,311,259 ) Unrecognized net actuarial loss ( 464,163 ) ( 1,031,774 ) Cumulative employer contributions in excess of the net periodic pension cost $ ( 8,470,998 ) $ ( 8,343,033 ) Amounts Recognized in the Statement of Financial Position Current liabilities $ ( 606,578 ) $ ( 603,693 ) Noncurrent liabilities ( 7,400,257 ) ( 6,707,566 ) Net amount recognized $ ( 8,006,835 ) $ ( 7,311,259 ) Amounts Recognized in Accumulated Other Comprehensive Income Net actuarial (gain) loss $ ( 464,163 ) $ ( 1,031,774 ) Total (before tax effects) $ ( 464,163 ) $ ( 1,031,774 ) Information for Pension Plans about Benefit Obligation and Plan Assets Projected benefit obligation $ 8,006,835 $ 7,311,259 Accumulated benefit obligation $ 8,006,835 $ 7,311,259 Weighted-Average Assumptions for Disclosure Discount rate 4.70 % 5.35 % Mortality table Pri-2012 WC Pri-2012 WC Mortality improvement scale MP-2021 MP-2021 Net Periodic Benefit Cost Interest cost $ 379,126 $ 355,194 Recognized net actuarial (gain) loss — — Net periodic benefit cost $ 379,126 $ 355,194 Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income Net actuarial (gain) loss $ 205,087 $ ( 567,611 ) Recognized net actuarial (gain) loss — — Total recognized in other comprehensive income (before tax effects) $ 205,087 $ ( 567,611 ) Total recognized in net cost and other comprehensive income (before tax effects) $ 584,213 $ ( 212,417 ) 51 Table of Contents Amounts Expected to be Recognized in Net Periodic Cost in the Coming Year (Gain) loss recognition $ — $ ( 65,932 ) Prior service cost recognition $ — $ — Net initial obligation (asset) recognition $ — $ — Weighted-average assumptions used to determine Net Periodic Benefit Cost Discount rate 4.90 % 4.70 % Corridor 10.00 % 10.00 % Average future working lifetime 4.52 5.06 Mortality table Pri-2012 WC Pri-2012 WC Mortality improvement scale MP-2021 MP-2021 Estimated Future Benefit Payments 2025 $ 603,693 2026 $ 605,604 2027 $ 599,487 2028 $ 601,274 2029 $ 599,632 2030-2034 $ 2,875,243 Contributions Estimated contributions for 2025 $ 603,693 (12) Stockholders’ Equity The Company has two classes of common stock: Class A common stock and Class B common stock. In the election of directors, the holders of Class A common stock are entitled by class vote, exclusive of other stockholders, to elect two of the Company’s directors, with each Class A share being entitled to one vote. In the election of the other six directors and all other matters submitted to the stockholders for a vote, the holders of Class A shares and Class B shares shall vote as a single class, with each Class A share being entitled to one vote and each Class B share entitled to ten votes. From time to time, the Company repurchases sufficient shares of its common stock to fund withholding taxes in connection with the vesting of restricted stock units. The Compa ny paid $ 0.1 million to repurchase 7,618 shares in 2024. The board of directors has suspended future quarterly dividend payments until it is determined that resumption of dividend payments is in the best interest of the Company’s stockholders. In addition, the Indenture governing the Notes limits the ability of the Company to pay dividends. (13) Revenue Revenue is comprised of the following: Year ended December 31, 2023 2024 Audio $ 199,481,868 $ 193,561,279 Digital 45,417,296 46,730,332 Other 2,210,094 — $ 247,109,258 $ 240,291,611 The Company recognizes revenue when it satisfies a performance obligation under a contract with an advertiser. The transaction price is allocated to performance obligations based on executed contracts which represent relative standalone selling prices. Payment is generally due within 30 days, although certain advertisers are required to pay in advance. Revenues are reported at the amount the Company expects to be entitled to receive under the contract. The Company has elected to use the practical expedient to expense sales commissions as incurred. Payments received from advertisers before the performance obligation is satisfied are recorded as deferred revenue in the balance sheet. Substantially all deferred revenue is recognized within twelve months of the payment date. 52 Table of Contents December 31, December 31, 2023 2024 Deferred revenue $ 4,835,984 $ 3,794,481 Audio revenue includes revenue from the sale or trade of aired commercial spots to advertisers directly or through national, regional or local advertising agencies. Each commercial spot is considered a performance obligation. Revenue is recognized when the commercial spots have aired. Trade sales are recorded at the estimated fair value of the goods or services received. If commercial spots are aired before the goods or services are received, then a trade sales receivable is recorded. If goods or services are received before the commercial spots are aired, then a trade sales payable is recorded. Other revenue includes revenue from concerts, promotional events, talent fees and other miscellaneous items. Such revenue is generally recognized when the concert, promotional event, or talent services are completed. December 31, December 31, 2023 2024 Trade sales receivable $ 1,417,692 $ 1,001,270 Trade sales payable 481,471 479,613 Year ended December 31, 2023 2024 Trade sales revenue $ 5,963,305 $ 5,711,675 Digital revenue includes revenue from the sale of streamed commercial spots, station-owned assets and third-party products. Each streamed commercial spot, station-owned asset and third-party product is considered a performance obligation. Revenue is recognized when the commercial spots have streamed. Station-owned assets are generally scheduled over a period of time and revenue is recognized over time as the digital items are used for advertising content, except for streamed commercial spots. Third-party products are generally scheduled over a period of time with an impression target each month. Revenue from the sale of third-party products is recognized over time as the digital items are used for advertising content and impression targets are met each month. The Company assesses each digital order to determine if the Company is operating as the principal or an agent. The Company currently operates as the principal for digital revenue. (14) Stock-Based Compensation As a result of the Reverse Stock Split effected on September 23, 2024, consistent with the terms of the 2007 Plan and outstanding awards granted under the 2007 Plan, the total number of shares of Class A Common Stock issuable upon exercise, vesting or settlement of such awards and the total number of shares of Class A Common Stock remaining available for future awards under the 2007 Plan, as well as any share-based limits in the 2007 Plan, were proportionately reduced, and any fractional shares resulting therefrom were rounded down to the nearest whole share. Furthermore, the exercise prices of any outstanding options under the 2007 Plan were proportionately increased based on the Reverse Stock Split ratio, and the resulting exercise prices were rounded up to the nearest whole cent. All share and share-related information presented in the condensed consolidated financial statements, for all periods presented, has been retroactively adjusted to reflect the Reverse Stock Split. The 2007 Equity Incentive Award Plan (the “2007 Plan”) permits the Company to issue up to 375,000 shares of Class A common stock. The 2007 Plan allows for eligible employees, directors and certain consultants of the Company to receive restricted stock units, shares of restricted stock, stock options or other stock-based awards. The restricted stock units that have been granted under the 2007 Plan generally vest over one to five years of service. A summary of restricted stock unit activity is presented below: 53 Table of Contents Units Weighted-Average Grant-Date Fair Value Unvested as of January 1, 2023 54,241 $ 37.40 Granted 23,776 16.00 Vested ( 31,408 ) 32.00 Forfeited ( 7,942 ) 20.40 Unvested as of December 31, 2023 38,667 30.80 Granted 92,625 12.14 Vested ( 46,551 ) 19.75 Forfeited ( 8,526 ) 20.42 Unvested as of December 31, 2024 76,215 $ 15.00 As of December 31, 2024 , there was $ 0.9 million of total unrecognized compensation cost for restricted stock units granted under the 2007 Plan. That cost is expected to be recognized over a weighted-average period of 2.6 years. (15) Income Taxes Income tax benefit is as follows: Year ended December 31, 2023 2024 Current: Federal $ 1,498,219 $ 6,205,464 State 132,848 914,465 1,631,067 7,119,929 Deferred: Federal ( 20,442,502 ) ( 6,646,568 ) State ( 5,475,931 ) ( 1,818,322 ) ( 25,918,433 ) ( 8,464,890 ) $ ( 24,287,366 ) $ ( 1,344,961 ) Income tax benefit differs from the amounts that would result from applying the federal statutory rate of 21 % to the Company’s loss before taxes as follows: Year ended December 31, 2023 2024 Expected tax benefit $ ( 20,844,385 ) $ ( 1,532,372 ) State income taxes, net of federal benefit ( 4,320,644 ) ( 310,137 ) Tax rate adjustments ( 112,968 ) ( 258,484 ) Change in valuation allowance ( 3,742 ) ( 296,180 ) Non-deductible items 728,641 560,477 Other 265,732 491,735 $ ( 24,287,366 ) $ ( 1,344,961 ) 54 Table of Contents Temporary differences that give rise to the components of deferred tax assets and liabilities are as follows: December 31, 2023 2024 Deferred tax assets: Allowance for credit losses $ 444,198 $ 428,820 Other assets 1,515,891 2,316,033 Deferred interest — 5,979,713 Operating lease liabilities 876,923 859,075 Other long-term liabilities 2,029,965 1,846,108 Stock-based compensation 116,052 100,499 Interest expense limitation 14,663,404 16,373,283 Net operating losses 1,100,232 253,754 Subtotal 20,746,665 28,157,285 Valuation allowance ( 296,180 ) — Total 20,450,485 28,157,285 Deferred tax liabilities: Prepaid expenses ( 167,592 ) ( 183,912 ) Property and equipment ( 5,309,534 ) ( 4,320,397 ) Intangibles ( 86,868,274 ) ( 87,400,913 ) Total ( 92,345,400 ) ( 91,905,222 ) Net deferred tax liabilities $ ( 71,894,915 ) $ ( 63,747,937 ) On October 8, 2024, the Company completed a debt modification (see Note 9) that resulted in a cancelation of indebtedness income for tax purposes in 2024, which is amortized over the life of the debt for book purposes, resulting in a new deferred tax asset. As of December 31, 2024 , the Company has state net operating losses of $ 3.8 million. The valuation allowance as of December 31, 2023 related to unrealized losses on investments that were sold in 2024. As of December 31, 2023 and 2024 , the Company does not have any material unrecognized tax benefits and accordingly, has not recorded any interest or penalties related to unrecognized tax benefits. The Company and its subsidiaries file a consolidated federal income tax return and various state returns. These returns remain subject to examination by taxing authorities for all years after 2020. (16) Loss Per Share Net loss per share calculation information is as follows: Year ended December 31, 2023 2024 Net loss $ ( 75,120,138 ) $ ( 5,887,258 ) Weighted-average shares outstanding: Basic 1,494,686 1,579,744 Effect of dilutive restricted stock units — — Diluted 1,494,686 1,579,744 Net loss per Class A and Class B common share – basic and diluted (1) $ ( 50.26 ) $ ( 3.73 ) (1) Weighted-average shares outstanding used in the computation of basic and diluted Net loss attributable to BBGI stockholders per Class A and Class B common share have been retroactively adjusted to reflect the 1-for-20 Reverse Stock Split that occurred on September 23, 2024. See No te 21 for ad ditional information. The Company excluded the effect of restrictive stock units under the treasury stock method when reporting a net loss as the addition of shares was anti-dilutive. The number of shares excluded w as 4,290 and 17,451 for the years ended December 31, 2023 and 2024 , respectively. 55 Table of Contents (17) Related Party Transactions The Company leases certain office space and towers from related parties as described below. As a result, the Company has recorded operating lease right-of-use assets of $ 4.6 million and $ 3.7 million for the years ended December 31, 2023 and 2024 , respectively and operating lease liabilities of $ 4.9 million and $ 3.8 million for the years ended December 31, 2023 and 2024. The operating lease right-of-use assets and operating lease liabilities for the related party leases are reported in the accompanying consolidated balance sheets for the years ended December 31, 2023 and 2024. Beasley Broadcasting Management, LLC The Company leases its principal executive offices in Naples, FL from Beasley Broadcasting Management, LLC, which is held by a trust for the benefit of Caroline Beasley, Bruce G. Beasley, Brian E. Beasley and other members of the Beasley family. The lease agreement expires on December 31, 2031 . Rental expense was $ 0.3 million for each of the years ended December 31, 2023 and 2024. Beasley Family Properties, LLC The Company leases office space for its stations in Fort Myers, FL from Beasley Family Properties, LLC, which is held by a trust for the benefit of Caroline Beasley, Bruce G. Beasley, Brian E. Beasley, and other members of the Beasley family. The lease agreement expires on August 31, 2029 . Rental expense was $ 0.2 million for each of the years ended December 31, 2023 and 2024. Beasley Family Towers, LLC The Company leased towers for 19 stations in various markets from Beasley Family Towers, LLC (“BFT”), which is partially held by a trust for the benefit of Caroline Beasley, Bruce G. Beasley, Brian E. Beasley and other members of the Beasley family and partially owned directly by Caroline Beasley, Bruce G. Beasley, Brian E. Beasley and other members of the Beasley family. During the fourth quarter of 2023, BFT sold 18 of the towers to an unrelated third party. As a result, the leases are no longer considered related party transactions. During the second quarter of 2024, the remaining lease agreement was terminated. Rental expense was $ 0.8 million and approximately $ 16,000 for the years ended December 31, 2023 and 2024, respectively . The Company leases office space for its stations in Fayetteville, NC from BFT. The lease agreement expires on August 31, 2030 . Rental expense was $ 0.1 million for each of the years ended December 31, 2023 and 2024. On October 8, 2024, the Company entered into a common stock purchase agreement for the issuance and sale of 56,864 shares of Class A Common Stock of the Company to Beasley Family Towers, LLC at an offering price of approximately $ 12.31 per share, for gross proceeds of $ 700,000 . The Company used the net proceeds to fund a portion of the cash payment made to the exchanging holders in the Exchange Offer, and for other corporate purposes. On December 25, 2024, the 12-month silent period for WAEC-AM in Atlanta, GA expired and the FCC license was terminated. The Company sold the remaining transmitter equipment to Beasley Family Towers, LLC for $ 0.1 million. GGB Augusta, LLC The Company leases land for its stations in Augusta, GA from GGB Augusta, LLC, which is held by a trust for the benefit of Caroline Beasley, Bruce G. Beasley, Brian E. Beasley and other members of the Beasley family. The lease agreement expires on October 31, 2028 . Rental expense was approximately $ 52,000 and $ 53,000 for the years ended December 31, 2023 and 2024, respectively. GGB Las Vegas, LLC The Company leases office space for its stations in Las Vegas, NV from GGB Las Vegas, LLC, which is controlled by members of the Beasley family. The lease agreement expires on December 31, 2028 . Rental expense was $ 0.2 million for each of the years ended December 31, 2023 and 2024. Wintersrun Communications, LLC The Company leased a tower for one station in Charlotte, NC from Wintersrun Communications, LLC ("Wintersrun"), which is partially held by a trust for the benefit of Caroline Beasley, Bruce G. Beasley, Brian E. Beasley and other members of the Beasley family and partially owned directly by Bruce G. Beasley and Brian E. Beasley. During the fourth quarter of 2023, Wintersrun sold the 56 Table of Contents tower to an unrelated third party. As a result, the lease is no longer considered a related party transaction. Rental expense was $ 0.1 million for the year ended December 31, 2023. The Company leases a tower for one station in Augusta, GA from Wintersrun. The lease agreement expires on October 15, 2025 . Rental expense was approximately $ 31,000 for each of the years ended December 31, 2023 and 2024. Quu, Inc. The Company currently holds an investment in Quu, Inc. ("Quu"), a company that provides the Company with access to an application for digital revenue. Payments to Quu for access to the application were $ 0.4 million and $ 0.5 million for the years ended December 31, 2023 and 2024, respectively. Loan to Interactive Life, Inc. In May 2022, the Company provided a $ 250,000 loan to Interactive Life, Inc. that accrues interest at 8.625 % per annum until the loan’s mat urity in May 2025 . Interacti ve Life, Inc. is controlled by Mr. Joseph Harb. The Company currently holds an investment in Quu, a company that is controlled by Mr. Harb. Repayment of the loan to Interactive Life, Inc. is guaranteed by Mr. Harb with 3,333,334 shares of Class A common stock of Quu, Inc. (18) Commitments and Contingencies The Company has various commitments for rating services and on-air programming including sports broadcast rights for the Boston Bruins, Boston Celtics, and New England Patriots. As of December 31, 2024, future minimum payments for the next five years and thereafter are summarized as follows: 2025 $ 24,860,934 2026 7,928,829 2027 7,166,667 2028 7,418,334 2029 7,275,000 Thereafter 29,600,000 Total $ 84,249,764 In the normal course of business, the Company is party to various legal matters. The ultimate disposition of these matters will not, in management’s judgment, have a material adverse effect on the Company’s financial position. (19) Financial Instruments The carrying amount of the Company’s financial instruments, including cash and cash equivalents, accounts receivable and accounts payable, approximates fair value due to the short-term nature of these financial instruments. The estimated fair value of the Company’s Notes, based on available market information, was $ 173.2 million a nd $ 136.5 m illion as of December 31, 2023 and 2024 , respectively. The Company used Level 2 measurements under the fair value measurement hierarchy to determine the estimated fair value of the Notes. (20) Segment Information The Company currently operates two operating and reportable segments (Audio and Digital). The Company also operated an esports segment from January 1, 2023 to December 13, 2023. The identification of segments is consistent with how the segments report to and are managed by the Company’s Chief Executive Officer (the Company’s Chief Operating Decision Maker). The Audio segment generates revenue primarily from the sale of commercial advertising to customers of the Company’s stations in the following markets: Augusta, GA, Boston, MA, Charlotte, NC, Detroit, MI, Fayetteville, NC, Fort Myers-Naples, FL, Las Vegas, NV, Middlesex, NJ, Monmouth, NJ, Morristown, NJ, Philadelphia, PA, and Tampa-Saint Petersburg, FL. The Digital segment generates revenue primarily from the sale of digital advertising to customers of the Company’s stations and other advertisers throughout the United States. Corporate expenses include general and administrative expenses and certain other income and expense items not 57 Table of Contents allocated to the operating segments. Non-operating corporate items, including interest expense and income taxes, are reported in the accompanying consolidated statements of comprehensive loss. Reportable segment information for the year ended December 31, 2024 is as follows: Audio Digital Corporate Total Net revenue $ 193,561,279 $ 46,730,332 $ — $ 240,291,611 Operating expenses 160,575,045 41,193,712 — 201,768,757 Corporate expenses — — 17,272,696 17,272,696 Depreciation and amortization 6,379,197 173,164 683,699 7,236,060 Impairment losses — 922,000 — 922,000 Operating income (loss) $ 26,607,037 $ 4,441,456 $ ( 17,956,395 ) $ 13,092,098 Audio Digital Corporate Total Capital expenditures $ 2,463,014 $ — $ 550,654 $ 3,013,668 Reportable segment information for the year ended December 31, 2023 is as follows: Audio Digital Other Corporate Total Net revenue $ 199,481,868 $ 45,417,296 $ 2,210,094 $ — $ 247,109,258 Operating expenses 163,608,414 40,844,592 3,794,215 — 208,247,221 Corporate expenses — — — 18,246,731 18,246,731 Depreciation and amortization 7,013,118 188,790 770,029 837,406 8,809,343 Impairment losses 99,797,025 — — — 99,797,025 Extinguishment of franchise fee — — ( 6,000,000 ) — ( 6,000,000 ) Operating income (loss) $ ( 70,936,689 ) $ 4,383,914 $ 3,645,850 $ ( 19,084,137 ) $ ( 81,991,062 ) Audio Digital Other Corporate Total Capital expenditures $ 3,901,609 $ 13,184 $ 25,534 $ 249,227 $ 4,189,554 Reportable segment information as of December 31, 2024 is as follows: Audio Digital Corporate Total Property and equipment, net $ 44,089,751 $ 63,220 $ 2,848,007 $ 47,000,978 FCC licenses 392,259,831 — — 392,259,831 Other intangibles, net 1,574,817 327,618 179,663 2,082,098 Reportable segment information as of December 31, 2023 is as follows: Audio Digital Other Corporate Total Property and equipment, net $ 48,324,618 $ 95,003 $ 74,081 $ 2,981,052 $ 51,474,754 FCC licenses 393,006,900 — — — 393,006,900 Goodwill — 922,000 — — 922,000 Other intangibles, net 1,707,909 834,836 — 179,663 2,722,408 (21) Reverse Stock Split On September 23, 2024, the Company effected the Reverse Stock Split. As a result of the Reverse Stock Split, every 20 shares of the Company’s Class A Common Stock issued and outstanding were automatically converted into one share of Class A Common Stock, and every 20 shares of the Company’s Class B Common Stock issued and outstanding were automatically converted into one share of Class B Common Stock. No fractional shares of Class A Common Stock or Class B Common Stock were issued in connection with the Reverse Stock Split. Holders of Class A Common Stock or Class B Common Stock received cash in lieu of fractional shares. The Reverse Stock Split had no effect on the par value of the Company’s Class A Common Stock or Class B Common Stock, which remained $ 0.001 per share, and had no effect on the number of authorized shares of the Company’s Class A 58 Table of Contents Common Stock or Class B Common Stock. Following the Reverse Stock Split, the Class A Common Stock continued to be traded on the Nasdaq Capital Market under the symbol “BBGI” on a split-adjusted basis beginning on September 24, 2024. In addition, consistent with the terms of the 2007 Plan and outstanding awards granted under the 2007 Plan, the total number of shares of Class A Common Stock issuable upon exercise, vesting or settlement of such awards and the total number of shares of Class A Common Stock remaining available for future awards under the 2007 Plan, as well as any share-based limits in the 2007 Plan, were proportionately reduced, and any fractional shares resulting therefrom were rounded down to the nearest whole share. Furthermore, the exercise prices of any outstanding options under the 2007 Plan were proportionately increased based on the Reverse Stock Split ratio, and the resulting exercise prices were rounded up to the nearest whole cent. All share and share-related information presented in the condensed consolidated financial statements, for all periods presented, has been retroactively adjusted to reflect the decreased number of shares resulting from the Reverse Stock Split. 59 Table of Contents BEASLEY BROADCAST GROUP, INC. CONSOLIDATED FINANCIAL STATEMENT SCHEDULE VALUATION AND QUALIFYING ACCOUNTS Years ended December 31, 2023 and 2024 Description Balance at Beginning of Period Charged to Costs and Expenses Deductions Balance at End of Period Year ended December 31, 2023: Valuation allowance for deferred tax assets 299,922 — 3,742 296,180 Year ended December 31, 2024: Valuation allowance for deferred tax assets 296,180 — 296,180 — 60 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.