What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-02-23 compared with 2021-02-19 · 345 added, 662 removed, 412 unchanged (71% of the section changed)

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Financial Statements

Report of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm (PCAOB ID 173 )

Consolidated Balance Sheets as of December 31, 2020 and 2021

Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31,

2019 and 2020

Consolidated Statements of Equity for the Years Ended December

31, 2019 and 2020

Consolidated Statements of Cash Flows for the Years Ended December

31, 2019 and 2020

Consolidated Statements of Comprehensive Loss for the Years Ended December 31, 2020 and 2021

Consolidated Statements of Equity for the Years Ended December 31, 2020 and 2021

Consolidated Statements of Cash Flows for the Years Ended December 31, 2020 and 2021

Notes to Consolidated Financial Statements

Consolidated Financial Statement Schedule—Valuation and Qualifying Accounts

Independent Member Crowe Global

Report of Independent Registered Public Accounting Firm

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We have audited the accompanying consolidated balance sheets of Beasley Broadcast Group, Inc.

(the Company) as of December 31, 2020 and 2019,

the related consolidated statements of comprehensive income (loss), equity, and cash flows for each of the two years in the period ended December 31, 2020, 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, 2020 and 2019, and the results of its operations

and its cash flows for each of the two years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

(the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of comprehensive loss, 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, 2021 and 2020, 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 Companys management.

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

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

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 Companys internal control over financial

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.

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.

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.

also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of 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 Matters

The critical audit matters

communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to

the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are

not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the 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 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 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 Companys consolidated FCC licenses balance was $508.6 million as of

December 31, 2020.

During the year ended December 31, 2020, the Company recorded impairment on FCC licenses of $6.8 million.

Management performs an annual impairment test during the fourth quarter of each year which includes a

qualitative assessment as to whether it is more likely than not that an FCC license is impaired.

This qualitative assessment requires significant judgment when considering the events and circumstances that may affect the estimated fair value of the

FCC licenses.

If there are changes in market conditions, events, or other circumstances that occur during the interim periods that indicate the carrying value of its FCC licenses may be impaired, management determines whether an interim test is

As disclosed in Note 5 to the consolidated financial statements, the Company’s consolidated FCC licenses balance was $508.4 million as of December 31, 2021.

Management performs an annual impairment test during the fourth quarter of each year which includes a qualitative assessment as to whether it is more likely than not that an FCC license is impaired.

In addition, management prepares a qualitative assessment at each quarter end throughout the year.

This qualitative assessment requires significant judgment when considering the events and circumstances that may affect the estimated fair value of the FCC licenses.

During the fourth quarter of 2021, management elected to bypass the qualitative assessment and perform a quantitative assessment for all reporting units.

FCC licenses are assessed for recoverability 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

the Greenfield method, which is a form of the income approach, assuming a start-up scenario in which the only assets held by an investor are FCC licenses.

Managements cash flow projections for its FCC

licenses included significant judgments and assumptions relating to the market share and profit margin of an average station within a market based upon market size and station type, the forecasted growth rate of each radio market (including

long-term growth rate), 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 managements estimates, judgments and assumptions, significant audit effort due to complexity in the aggregation and evaluation of significant amounts of data and the use of

valuation specialists.

Fair value is estimated by management using the Greenfield method, which is a form of the income approach, assuming a start-up

scenario in which the only assets held by an investor are FCC licenses.

Management’s cash flow projections for its FCC licenses included significant judgments and assumptions relating to the market share and profit margin of an average station within a market based upon market size and station type, the forecasted growth rate of each radio market (including long-term growth rate), 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:

Evaluated managements judgements in their assessment of identifying changes in market conditions, events

or other changes in circumstances that indicate an impairment of FCC licenses may be present;

Tested the completeness, accuracy, appropriateness of aggregation and relevance of underlying data used in the

valuation model based on the Greenfield method;

Evaluated the significant assumptions used by management, including normalized market share and profit margin

of an average station within a market based upon market size and station type, the forecasted growth rate of each radio market (including long-term growth rate), 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;

Utilized valuation specialists to assist in evaluating the appropriateness of valuation model used, evaluating

certain assumptions applied in the valuation model, and recalculations of the discounted cash flow schedules.

Goodwill Impairment Test

Boston and Philadelphia Radio Reporting Units

As described in Note 6 to the consolidated financial statements, the Companys consolidated

goodwill balance was $28.6 million as of December 31, 2020.

Management conducts an impairment test on an annual basis.

If actual market conditions are less favorable than those projected by the industry or management, or if events occur,

or circumstances change during the interim periods that indicate the carrying value of its goodwill may be impaired, management may be required to conduct an interim test.

Potential impairment is identified by comparing the fair value of each

reporting unit to its carrying value.

As a result of the impairment test performed on the radio market clusters during the first quarter of 2020, the Company determined that the estimated fair value of each market cluster exceeded the carrying

amount by at least five percent at each market cluster as of March 31, 2020.

Management performed a qualitative assessment and did not identify any triggering events for impairment during subsequent quarters of 2020.

As a result, the Company

did not perform a quantitative test for goodwill during the subsequent quarters of 2020.

Management estimates the fair value of its radio reporting units using a discounted cash flow model.

Managements cash flow projections for its radio

reporting units includes significant judgments and assumptions relating to projected operating profit margin (including revenue and expense growth rates) and the discount rate.

We considered auditing the impairment of goodwill for the Companys Boston and Philadelphia radio

reporting units to be a critical audit matter because it involved a high degree of subjectivity in evaluating managements estimates and judgments, significant audit effort in performing procedures and evaluating evidence related to

managements cash flow projections, including significant assumptions related to projected operating profit margin (including revenue and expense growth rates) and the discount rate.

Our audit procedures related to impairment of goodwill for Boston and Philadelphia radio reporting units included the following:

Evaluated managements judgements in their assessment of identifying changes in market conditions, events

or other changes in circumstances that indicate an impairment of goodwill may be present;

Evaluated managements model for determining the fair value of its radio reporting units;

Tested the completeness, accuracy, and relevance of underlying data used in the discounted cash flow model;

Evaluated the significant assumptions used by management, including projected operating profit margin

(including revenue and expense growth rates) 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;

Utilized valuation specialists to assist in evaluating the appropriateness of the discount rate.

Evaluated management’s judgements in their assessment of identifying changes in market conditions, events or other changes in circumstances that indicate an impairment of FCC licenses may be present.

Tested the completeness, accuracy, appropriateness of aggregation and relevance of underlying data used in the valuation model based on the Greenfield method.

Evaluated the appropriateness of valuation model used, evaluating certain assumptions applied in the valuation model, and recalculations of the discounted cash flow schedules.

Evaluated the significant assumptions used by management, including normalized market share and profit margin of an average station within a market based upon market size and station type, the forecasted growth rate of each radio market (including long-term growth rate), 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.

Utilized valuation specialists to assist in evaluating certain assumptions applied in the valuation model.

/s/ Crowe LLP

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Fort Lauderdale, Florida

February 19, 2021

BEASLEY BROADCAST GROUP, INC.

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Property and equipment, net

Operating lease

right-of-use assets

Finance lease

right-of-use assets

Operating lease right-of-use

Finance lease right-of-use

Other intangibles, net

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Current liabilities:

Current installments of long-term debt

Accounts payable

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150,000,000 shares authorized;

15,805,432 issued and

11,312,251 outstanding in 2019;

15,930,765 issued and 12,677,074 outstanding in 2020;

16,249,312 issued and 12,696,857 outstanding in 2021

Class B common stock, $ 0.001 par value;

75,000,000 shares authorized;

16,662,743 issued and

outstanding in 2019 and 2020

Additional paid-in capital

16,662,743 issued and outstanding in 2020 and 2021

Additional paid-in

Treasury stock, Class A common stock;

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Retained earnings

Accumulated other comprehensive income

Accumulated other comprehensive loss

Total stockholders’ equity

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BEASLEY BROADCAST GROUP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

Operating expenses:

Operating expenses (including stock-based compensation of $359,657 in 2019 and $333,012 in 2020

and excluding depreciation and amortization shown separately below)

Operating expenses (including stock-based compensation of $ 333,012 in 2020 and $ 317,938 in 2021 and excluding depreciation and amortization shown separately below)

Corporate expenses (including stock-based compensation of $ 417,658 in 2020 and $ 1,065,518 in 2021)

Transaction expenses

Depreciation and amortization

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Gain on dispositions

Other operating (income) expenses, net

Other operating income, net

Total operating expenses

Operating income (loss)

Non-operating income (expense):

Non-operating

income (expense):

Interest expense

Loss on modification of long-term debt

Other income (expense), net

Income (loss) before income taxes

Income tax expense (benefit)

Income (loss) before equity in earnings of unconsolidated affiliates

Loss on extinguishment of long-term debt

Gain on forgiveness of long-term debt

Other income, net

Loss before income taxes

Income tax benefit

Loss before equity in earnings of unconsolidated affiliates

Equity in earnings of unconsolidated affiliates, net of tax

Net income (loss)

Earnings attributable to noncontrolling interest

Net income (loss) attributable to BBGI stockholders

Net loss attributable to BBGI stockholders

Other comprehensive loss:

Unrecognized actuarial losses on postretirement plans (net of income tax benefit of $188,505 in

2019 and $355,662 in 2020)

Comprehensive income (loss)

Net income (loss) attributable to BBGI stockholders per Class A and B common share:

Unrecognized actuarial gain (loss)

on postretirement plan (net of income tax benefit of $ 355,662 in 2020 and income tax expense of $ 140,151 in 2021)

Comprehensive loss

Net loss attributable to BBGI stockholders per Class A and B common share:

Basic and diluted

Dividends declared per common share

Weighted average shares outstanding:

Basic and diluted

See accompanying notes to consolidated financial statements

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CONSOLIDATED STATEMENTS OF EQUITY

Treasury Stock

Comprehensive

Treasury Stock

Noncontrolling

Income (Loss)

Balances as of January 1, 2020

Change in accounting principle

Issuance of common stock

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Other comprehensive loss

Noncontrolling interest created in consolidation

Balances as of December 31, 2020

Issuance of common stock

Stock-based compensation

Acquisition of noncontrolling interest

Adjustment from related party acquisition

Purchase of treasury stock

Cash dividends, $0.05 per common share

Other comprehensive loss

Noncontrolling interest created in consolidation

Other comprehensive gain

Elimination of noncontrolling interest

Balances as of December 31, 2021

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Cash flows from operating activities:

Net income (loss)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Stock-based compensation

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Impairment losses

interest expense

Gain on dispositions

Other operating gain

Non-cash interest expense

Amortization of loan fees

Loss on modification of long-term debt

Loss on extinguishment of long-term debt

Gain on forgiveness of long-term debt

Deferred income taxes

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Other operating activities

Net cash provided by operating activities

Net cash provided by (used in) operating activities

Cash flows from investing activities:

Payments for acquisitions

Capital expenditures

Proceeds from dispositions

Proceeds from life insurance

Payments for investments

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Payments on debt

Payments of debt issuance costs

( 268,500,000

Payment of debt issuance costs

Reduction of finance lease liabilities

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Purchase of treasury stock

Net cash provided by (used in) financing activities

Net cash provided by financing activities

Net increase in cash and cash equivalents

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Cash paid for income taxes

Supplement disclosure of non-cash investing and financing

Class A common stock issued from treasury for debt repayment

Dividends declared but unpaid

Class A common stock issued for acquisition

Class A common stock issued for investment

Media advertising exchanged for investment

Note issued to seller for acquisition

Liability assumed from seller for acquisition

Supplemental disclosure of non-cash

investing and financing activities:

Acquisition of noncontrolling interest

Extinguishment of trade sales payable

Class A common stock returned to treasury stock

Class A common stock issued for debt repayment

See accompanying notes to consolidated financial statements

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Beasley Broadcast Group, Inc.

(the Company or BBGI) is a multi-platform media company operating one reportable business

segment whose primary business is operating radio stations throughout the United States.

(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 radio

stations in the following radio markets:

Atlanta, GA, 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, Tampa-Saint Petersburg,

FL, West Palm Beach-Boca Raton, FL, and Wilmington, DE.

The Company owns and operates radio stations in the following radio markets:

The Company also now operates an esports segment, however, it does not exceed the thresholds for separate disclosure.

In March 2020, coronavirus disease 2019 (COVID-19) was recognized as a pandemic by the

World Health Organization.

The COVID-19 pandemic has resulted in a widespread health crisis that has adversely affected businesses, economies, and financial markets worldwide, and has caused significant

volatility in U.S.

pandemic has resulted in a widespread health crisis that has adversely affected businesses, economies, and financial markets worldwide, and has caused significant volatility in U.S.

and international debt and equity markets.

The Company has been impacted by deteriorating general economic conditions, which have caused a downturn in the advertising industry.

The decreased demand for advertising has negatively

impacted its net revenue, and many advertisers have reduced or ceased advertising spend due to the COVID-19 pandemic and its related economic impact.

Specifically, the Company observed a rapid increase in

cancellations and a reduction of new sales beginning midway through the month of March 2020.

The cancellations were broad-based but more severe in industries that were severely impacted by the COVID-19

Advertising sales began to recover near the end of the second quarter of 2020 and continued to recover during the remainder of 2020.

The Company is actively monitoring the COVID-19 pandemic.

this disruption is currently expected to be temporary, there is considerable uncertainty around the duration.

Thus, it is impossible to predict the total impact that it will have on the Company.

If public and private entities continue to implement

restrictive measures, the material adverse effect on the Companys results of operations, financial condition and cash flows could persist.

Beginning in March 2020, the Company implemented certain expense control initiatives, such as reductions in compensation for management and

other employees, reductions in planned capital expenditures, negotiated vendor pricing reductions, furloughs and headcount reductions for certain employees and suspensions of new employee hiring and travel and entertainment expenses.

initiatives continued reducing the Companys expenses throughout the remainder of 2020 and the Company expects expense reductions to continue into 2021.

The board of directors also suspended future quarterly dividend payments until it is

determined that resumption of dividend payments is in the best interest of the Companys stockholders.

The COVID-19 pandemic continues to create significant uncertainty and disruption in the global economy and financial markets.

It is reasonably possible that these uncertainties could materially impact the Companys

significant accounting estimates related to, but not limited to, allowance for doubtful accounts, impairment of FCC licenses and goodwill, and determination of

right-of-use assets.

As a result, many of the Companys estimates and assumptions require increased judgment and carry a higher degree of variability and

In 2020, the Company was impacted by deteriorating general economic conditions resulting from the COVID-19

pandemic that caused a downturn in the advertising industry.

The decreased demand for advertising materially negatively impacted the Company results of operations, liquidity and financial condition.

In 2021, the Company benefited from a general economic recovery from the COVID-19

pandemic however the continuing impact of subsequent COVID-19

variants may result in general economic conditions deteriorating again in the future.

Beginning in March 2020, the Company implemented certain expense control initiatives, such as reductions in compensation for management and other employees, reductions in planned capital expenditures, negotiated vendor pricing reductions, furloughs and headcount reductions for certain employees and suspensions of new employee hiring and travel and entertainment expenses.

These initiatives continued reducing the Company’s expenses throughout the remainder of 2020 and, to a lesser extent, during 2021, and the Company expects expense reductions to continue into 2022.

The Company’s board of directors also suspended future quarterly dividend payments until it is determined that resumption of dividend payments is in the best interest of the Company’s stockholders.

The extent to which the COVID-19

pandemic will continue to impact the Company’s business and financial results going forward will be dependent on future developments which are uncertain and unpredictable.

Accordingly, it is reasonably possible that these uncertainties could materially impact the Company’s significant accounting estimates related to, but not limited to, allowance for doubtful accounts, impairment of Federal Communications Commission (“FCC”) licenses and goodwill, and determination of right-of-use

As a result, many of the Company’s estimates and assumptions require increased judgment and carry a higher degree of variability and volatility.

The Company’s estimates may change as new events occur and additional information emerges, and such changes are recognized or disclosed in its consolidated financial statements.

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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 and its investments in OutlawsXP, Inc.

(Outlaws) and Renegades Holdings, Inc.

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.

As of December 31, 2020, the Company held an approximately

economic interest in Outlaws and an approximately

economic interest in Renegades Holdings, Inc.

(“Renegades”).

The Company holds an approximately 90% economic

interest in Outlaws and an approximately 51% economic interest in Renegades.

Net assets and results of operations for Outlaws and Renegades as of and for the years ended December 31, 2019 and 2020 are not significant.

All significant

inter-company transactions and balances have been eliminated.

On March 12, 2021, the Company entered into an agreement to exchange its ownership interest in Renegades for the interest held by Renegades in Outlaws.

As a result of the exchange, Outlaws became a wholly owned subsidiary of the Company, and the Company no longer holds an economic interest in Renegades.

Renegades were included in the financial statements of the Company up to the date of the exchange transaction.

Net assets and results of operations for Outlaws and Renegades as of and for the years ended December 31, 2020 and 2021 were not significant.

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 doubtful accounts;

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 doubtful accounts;

(ii) future cash flows used for testing recoverability of property and equipment;

(iii) fair values used for testing FCC licenses and goodwill 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 SERP.

(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 SERP.

Actual results and outcomes may differ from management’s estimates and assumptions.

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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 doubtful accounts.

The amounts are net of advertising agency commissions and an allowance for doubtful accounts.

The allowance for doubtful accounts reflects management’s estimate of probable losses in accounts receivable.

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.

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.

Interest is not accrued on accounts receivable.

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.

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.

maintenance are charged to expense as incurred.

Repairs and maintenance are charged to expense as incurred.

FCC licenses, including translator licenses, are generally granted for renewable terms of eight years .

Renewal costs are generally minor and

expensed as incurred.

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.

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 Companys licenses with their carrying amounts.

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 radio market clusters.

For the purpose of testing its licenses for impairment, the Company combines its licenses into reporting units based on its radio market clusters.

See Note 5 for changes in the carrying amount of FCC licenses for the years ended December 31, 2020 and 2021.

weighted-average period before the next renewal of the Companys FCC licenses is 4.4 years.

Goodwill is tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the Companys

goodwill might be impaired.

The weighted-average period before the next renewal of the Company’s FCC licenses is 4.2 years.

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 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.

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 radio market clusters and the Outlaws as its reporting units.

Note 6 for changes in the carrying amount of goodwill for the years ended December 31, 2019 and 2020.

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 radio market clusters and esports as its reporting units.

Other Intangibles

Other intangibles include advertiser relationships, franchise rights and sponsorship base, which are amortized over their respective estimated

useful lives and brands and other intangibles with indefinite lives which are not amortized.

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 include advertiser relationships and franchise rights, which are amortized over their respective estimated useful lives and brands and other intangibles with indefinite lives which are not amortized.

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 assets include an investment in Quu, Inc.

The Company is considered to have the ability to exercise significant

influence over the operating and financial policies of 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.

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

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.

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 $ 2.1 million and 2.0 million as of December 31, 2020 and 2021, respectively.

Debt Issuance Costs

Debt issuance costs 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.

Debt issuance costs 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 are reported as a direct deduction from the carrying amount of the related debt.

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) periods covered by an option to terminate if the Company is reasonably certain not to exercise that option and (3) 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 lessees 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.

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 Supplemental Employee Retirement Plan (“SERP”) are determined using actuarial valuations.

actuarial valuation involves making various assumptions that include the discount rate and mortality rates.

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 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.

Actual results will differ from results which are estimated based on assumptions.

Treasury Stock

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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 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.

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 Companys 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.

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 Income (Loss)

Comprehensive income (loss) consists of net income (loss) and other gains and losses affecting equity that, under accounting principles

generally accepted in the United States of America, are excluded from net income (loss) including unrecognized net actuarial gains (losses) related to the SERP.

Earnings (Loss) per Share

Basic net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders of the Company by the weighted

average number of common shares outstanding for the period.

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 income (loss)

per share reflect the potential dilution that could occur if stock options, restricted stock or other contracts to issue common stock were exercised or converted into common stock and were not anti-dilutive.

When reporting a net loss, the effect of

restrictive stock units and restricted stock is excluded under the treasury stock method as the addition of shares would be anti-dilutive.

Diluted net loss per share reflects the potential dilution that could occur if stock options, restricted stock or other contracts to issue common stock were exercised or converted into common stock and were not anti-dilutive.

When reporting a net loss, the effect of restrictive stock units and restricted stock 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 radio stations located in Boston, MA, Detroit, MI, Philadelphia, PA and Tampa-Saint Petersburg, FL collectively contributed 66.3% of the

Companys net revenue in 2020.

The radio stations located in Boston, MA, Philadelphia, PA and Tampa-Saint Petersburg, FL collectively contributed 60.7% of the Companys net revenue in 2019.

The radio stations located in Boston, MA, Detroit, MI and Philadelphia, PA collectively contributed 59.2 % of the Company’s net revenue in 2021.

The radio stations located in Boston, MA, Detroit, MI, Philadelphia, PA and Tampa-Saint Petersburg, FL collectively contributed 66.3 % of the Company’s net revenue in 2020.

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.

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.

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 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:

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 managements own assumptions about the assumptions that

market participants would use in pricing the asset or liability as of the reporting date.

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.

Recent Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (FASB) issued guidance to increase transparency and comparability among

organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements.

A lessee should recognize in the statement of financial position a liability to make lease payments (the

lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term.

There continues to be a differentiation between finance

leases and operating leases, however lease assets and lease liabilities arising from operating leases should now be recognized in the statement of financial position.

New disclosures are required to meet the objective of enabling users of financial

statements to assess the amount, timing, and uncertainty of cash flows arising from leases.

In 2018 and 2019, the FASB issued several updates to address certain practical expedients, codification improvements, and targeted improvements to the

original guidance.

On January 1, 2019, the Company adopted the new guidance retrospectively, at the beginning of the period of adoption, through a cumulative-effect adjustment.

On January 1, 2019, the Company recorded a lease liability of

$43.1 million and right-of-use assets of $38.8 million.

The Company recorded a cumulative effect of initially applying the new standard of $0.9 million on

the opening balance of retained earnings.

The comparative information has not been restated and continues to be reported under the accounting guidance in effect for that period.

Other payments are expensed when the additional contract elements, such as post-season games, are broadcast.

The Company currently operates three operating segments (Audio, Digital, esports) and two reportable segments (Audio, Digital).

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.

Acquisitions and Dispositions

On January 28, 2022, the Company entered into an agreement to sell substantially all of the assets used in the operations of WWNN-AM

in Boca Raton, FL to a third party for $ 1.25 million in cash.

The sale, which is subject to approval by the FCC and other customary closing conditions, is expected to close during the second or third quarter of 2022.

If the sale is completed, the Company will recognize a loss on disposition of approximately $ 1.5 million.

On December 31, 2020, the Company completed the sale of certain land in Charlotte, NC to a third party for $ 4.65 million.

of the sale, the Company recorded a gain of $4.4 million in the fourth quarter of 2020.

On December 23, 2019, the Company

completed the sale of certain land in Las Vegas, NV to a third party for $13.5 million.

As a result of the sale, the Company recorded a gain of $ 4.4 million in the fourth quarter of 2020.

On December 2, 2019, the Company completed the sale of certain land in Boca Raton, FL to a third party for $7.1 million.

of the sale, the Company recorded a gain of $6.5 million in the fourth quarter of 2019.

On November 13, 2019, the Company

created a new entity called OutlawsXP, Inc.

(Outlaws) and holds 80% of the equity of Outlaws.

The remaining equity was acquired by Renegades Holdings, Inc.

in which the Company holds approximately 51% of the outstanding shares (see Note

On November 14, 2019, Outlaws acquired an esports team, the Houston Outlaws, from Immortals, LLC that competes in the Overwatch League and domestic and international tournaments.

The acquisition was accounted for as a

business acquisition and included franchise rights and other intangibles (see Note 7).

The acquisition also included goodwill (see Note 6).

The acquisition of the team was financed with cash from

operations and a promissory note to the seller (the Promissory Note).

On June 30, 2020, the Company entered into an amendment to the Promissory Note that replaced all previous agreements related to consideration and represents the

final amount due to the seller (see Note 10).

Outlaws also assumed a $10.0 million franchise fee payable that will be paid to the esports league over time.

The franchise fee payable was legally reduced to $6.0 million by the esports league

in December 2020 and the resulting $4.0 million gain is reported in other operating (income) expenses, net in the accompanying consolidated statement of comprehensive income (loss).

The Company incurred transaction costs of $0.4 million.

The acquisition broadened and diversified the Companys revenue base.

The current portion of the franchise fee payable is reported in other current liabilities, and the noncurrent portion is reported in other long-term liabilities in the

accompanying consolidated balance sheets.

The results of operations are reported in the accompanying consolidated statements of comprehensive income (loss).

The fair value of the franchise rights was estimated using an income approach.

The income approach measures the expected economic benefits the

franchise rights will provide and discounts these future benefits using a discounted cash flow model.

The discounted cash flow model incorporates variables such as revenue, revenue growth rates, operating expense projections, and a discount rate.

The discounted cash flow projection period of ten years was determined to be an appropriate time horizon for the analyses.

If different assumptions or estimates had been used in the income approach, the fair value of the franchise rights could have

been materially different.

If actual results are different from assumptions or estimates used in the discounted cash flow analyses, the Company may incur impairment losses in the future and they may be material.

Goodwill was equal to the amount the

purchase price exceeded the values allocated to the identifiable intangible assets.

The amount allocated to goodwill is deductible for tax purposes.

The fair value of the Promissory Note and the assumed franchise fee payable approximate the carrying

value of each item as of the acquisition date.

On October 25, 2019, the Company completed the sale of a radio tower in Tampa, FL and

a radio tower in New Jersey to a third party for $2.4 million.

As a result of the sales, the Company recorded a gain of $2.0 million in the fourth quarter of 2019.

On August 31, 2019, the Company completed the acquisition of substantially all of the assets used to operate WDMK-FM in Detroit from Urban One, Inc.

for $13.5 million in cash.

The purchase price was partially financed with $10.0 million in borrowings under the Companys revolving credit facility and

partially funded with $3.5 million of cash from operations.

The acquisition broadened and diversified the Companys local radio broadcasting platform and revenue base in the Detroit radio market.

The acquisition was accounted for as an

asset acquisition.

The Company incurred transaction costs of $0.3 million which were capitalized as a component of the assets acquired.

The assets acquired are summarized as follows:

Property and Equipment

Other intangibles

On March 28, 2019, the Company completed the sale of certain land and improvements in Augusta, GA to a

third party for $0.5 million.

As a result of the sale, the Company recorded a gain of $0.4 million in the first quarter of 2019.

On March 15, 2019, the Company agreed to cancel a broadband radio service license in Chattanooga, TN in exchange for a fee of

$3.3 million received from Clearwire Spectrum Holdings LLC (Clearwire).

The Company had previously leased the channels under the broadband radio service license to Clearwire under an agreement that ended on March 15, 2019.

result of the license cancelation, the Company recorded a gain of $3.1 million in the first quarter of 2019.

Property and Equipment

Property and equipment is comprised of the following:

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Less accumulated depreciation and amortization

The Company recorded depreciation expense of $6.9 million and $7.4 million for the

years ended December 31, 2019 and 2020, respectively.

The Company recorded depreciation expense of $ 7.4 million and $ 8.0 million for the years ended December 31, 2020 and 2021, respectively.

Changes in the carrying amount of FCC licenses for the years ended December 31, 2020 and 2021 are as follows:

Balance as of January 1, 2020

Asset acquisition (see Note 3)

Impairment losses

Balance as of December 31, 2020

Impairment losses

Balance as of December 31, 2021

Licenses are tested for impairment on an annual basis, or more frequently if events or changes in

circumstances indicate that the Companys 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 a quantitative impairment test.

The quantitative impairment test compares the fair value of the Companys 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 radio market

Due to the impact of the COVID-19 pandemic on the U.S.

economy, the Company tested its

FCC licenses for impairment during the first quarter of 2020.

As a result of the quantitative impairment test, the Company recorded impairment losses of $6.8 million related to the FCC licenses in its Atlanta, GA, Las Vegas, NV,

Middlesex-Monmouth-Morristown, NJ, West Palm Beach-Boca Raton, FL, and Wilmington, DE radio market clusters.

The impairment losses were primarily due to a decrease in projected revenue in these markets due to the impact of the COVID-19 pandemic and an increase in the discount rate used in the discounted cash flow analyses to estimate the fair value of the FCC licenses due to certain risks specifically associated with the Company and the

radio broadcasting industry.

The Company performed its annual impairment test for its FCC licenses as of November 30, 2021 and did no t record

any impairment losses related to the FCC licenses in each of its reporting units.

On February 3, 2021, the Company completed the sale of WHSR-AM

in West Palm Beach-Boca Raton, FL to a third party for $ 0.4 million.

The sale included an FCC translator license with a carrying amount of $ 0.1 million.

Due to the impact of the COVID-19

pandemic on the U.S.

economy, the Company tested its FCC licenses for impairment during the first quarter of 2020.

As a result of the quantitative impairment test, the Company recorded impairment losses of $ 6.8 million related to the FCC licenses in its Atlanta, GA, Las Vegas, NV, Middlesex-Monmouth-Morristown, NJ, West Palm Beach-Boca Raton, FL, and Wilmington, DE radio market clusters.

The impairment losses were primarily due to a decrease in projected revenue in these markets due to the impact of the COVID-19

pandemic and an increase in the discount rate used in the discounted cash flow analyses to estimate the fair value of the FCC licenses due to certain risks specifically associated with the Company and the radio broadcasting industry.

The fair values were estimated using an income approach.

The income approach is based upon discounted cash flow analyses incorporating variables such as projected radio market revenues, projected growth rate for radio

market revenues, projected radio market revenue shares, projected radio station operating income margins, and a discount rate appropriate for the radio broadcasting industry.

The key assumptions used in the discounted cash flow analyses are as

The income approach is based upon discounted cash flow analyses incorporating variables, such as projected radio market revenues, projected growth rate for radio market revenues, projected radio market revenue shares, projected radio station operating income margins, and a discount rate appropriate for the radio broadcasting industry.

The key assumptions used in the discounted cash flow analyses are as follows:

Revenue growth rates

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Market revenue shares at maturity

Operating income margins at maturity

0.6 % - 39.0 %

Discount rate

The Company did not identify any triggering events for impairment during the second quarter of 2020.

The Company elected to perform the quantitative impairment test for its FCC licenses in all markets during the third quarter of 2020.

result of the quantitative impairment test performed as of September 30, 2020, the Company recorded no impairment losses related to its FCC licenses in any of its reporting units.

The fair values were estimated using the income approach.

key assumptions used in the discounted cash flow analyses are as follows:

Revenue growth rates

Market revenue shares at maturity

Operating income margins at maturity

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Discount rate

The Company did not identify any triggering events for impairment during the fourth quarter of 2020.

On December 31, 2020, the Company completed the sale of certain land in Charlotte, NC to a third party for $ 4.65 million.

result of the sale, the Company no longer utilizes one FCC license in that market.

As a result of the sale, the Company no longer utilizes one FCC license in that market.

Therefore, the carrying amount of $ 2.2 million was recorded in impairment losses during the fourth quarter of 2020.

The Company performed its annual impairment test for its FCC licenses in 2019 as of

November 30, 2019.

As a result of the impairment test, the Company recorded impairment losses of $12.4 million related to the FCC licenses in its Atlanta, GA and West Palm Beach-Boca Raton, FL radio market clusters for the year ended

December 31, 2019.

The impairment losses were primarily due to a reduced share of projected revenue in these markets.

The Company believed the impairment losses were indicative of trends in the industry and are not unique to the Company or its

The fair value of the FCC license in Atlanta, GA and in West Palm Beach-Boca Raton, FL radio market clusters was estimated using the income approach.

The key assumptions used in the discounted cash flow analyses are as follows:

Revenue growth rates

Market revenue shares at maturity

Operating income margins at maturity

27.5% - 29.8%

Discount rate

There were no changes in the carrying amount of goodwill for the year ended December 31, 2020.

Changes in the carrying amount of goodwill

for the year ended December 31, 2019 are as follows:

Balance as of January 1, 2019

Business acquisition (see Note 3)

Balance as of December 31, 2019

Other Intangibles

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Franchise rights

Sponsorship base

Other intangibles with indefinite lives

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Advertiser relationships

Assembled workforce

Franchise rights

Sponsorship base

Sports program rights

Other intangibles with indefinite lives

The Company recorded amortization expense of $0.5 million and $3.5 million for the years ended

December 31, 2019 and 2020, respectively.

The Company recorded amortization expense of $ 3.5 million and $ 3.2 million for the years ended December 31, 2020 and 2021, respectively.

Estimated future amortization expense related to intangible assets subject to amortization for the next five years and thereafter is as follows:

On August 22, 2019, the Company contributed an additional $1.5 million in cash to Quu in exchange for an additional 10,000,000

The Company also received a warrant to acquire 16,949,306 shares of Quu common stock that terminates on August 22, 2029.

As a result of the additional investment, the Company holds approximately 35% of the outstanding shares of Quu.

August 22, 2019, the Company adjusted the initial investment to fair value and recognized a loss of $0.1 million.

The Companys share of earnings from Quu is reported in equity in earnings of unconsolidated affiliates, net of tax in

the accompanying consolidated statements of comprehensive income (loss) for the years ended December 31, 2019 and 2020.

The carrying amount of the investment in Quu was $2.2 million and $2.1 million as of December 31, 2019 and

2020, respectively.

On March 1, 2019, the Company (i) issued 235,296 shares of Class A common stock with a fair value of

$1.0 million, (ii) agreed to provide $1.0 million of media advertising over a three year period, and (iii) contributed $2.5 million in cash for an aggregate investment of $4.5 million in Renegades, an esports

organization, in exchange for 3,750,000 shares.

On March 1, 2019, the Company (i) issued 235,296 shares of Class A common stock with a fair value of $ 1.0 million, (ii) agreed to provide $ 1.0 million of media advertising over a three year period, and (iii) contributed $ 2.5 million in cash for an aggregate investment of $ 4.5 million in Renegades, an esports organization, in exchange for 3,750,000 shares.

The Company acquired an additional 416,666 shares in the third quarter of 2019 for $ 0.5 million in cash.

As of December 31, 2019, the Company held approximately 45% of the outstanding shares

of Renegades and the carrying amount of the investment in Renegades is $5.7 million.

In January 2020, the Company acquired an additional 833,334 shares for an aggregate of $ 1.0 million in cash.

As a result of the additional investment in

January 2020, the Company obtained control of Renegades and consolidated the accounts of Renegades in the accompanying financial statements as of and for the year ended December 31, 2020.

As a result of the additional investment in January 2020, the Company obtained control of Renegades and consolidated the accounts of Renegades in the accompanying financial statements as of and for the year ended December 31, 2020.

On March 12, 2021, the Company entered into an agreement to exchange its ownership interest in Renegades for the interest held by Renegades in Outlaws.

As a result of the exchange, Outlaws is now a wholly owned subsidiary of the Company, and the Company no longer holds an economic interest in Renegades.

Therefore, the accounts of Renegades are no longer consolidated in the Company’s financial statements subsequent to the date of the exchange.

Also, as a result of the exchange, the Company recorded a loss of approximately $ 3,000 attributable to the difference between the estimated fair value of the economic interest held by Renegades in Outlaws and the carrying amount of the Company’s ownership interest in Renegades in the first quarter of 2021.

The Company used a discounted cash flow model with annual revenue growth rates ranging from 5 % to 57 %, operating margins ranging from ( 27 )% to 67 %, and a discount rate of 13.5 % to determine the loss.

Other Current Liabilities

Other current liabilities are comprised of the following:

Accrued interest

Accrued payroll expenses

Deferred revenue

Income taxes payable

Trade sales payable

Franchise fee payable

Dividends payable

Income taxes payable

Other accrued expenses

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Long-term debt is comprised of the following:

Secured notes

Credit facility - term loan

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Less unamortized debt issuance costs

Less current installments

On February 2, 2021, the Company issued $300.0 million aggregate principal amount of 8.625% senior

secured notes due on February 1, 2026 (the Notes) under an indenture dated February 2, 2021 (the Indenture).

Interest on the 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, commencing on August 1, 2021.

The 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 the credit facility and the Amended Promissory Note and to repay the loan from Mr.

George Beasley (see Note 18) and

related accrued interest, fees and expenses.

The Indenture contains 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;

On February 2, 2021, the Company issued $ 300.0 million aggregate principal amount of 8.625 % senior secured notes due on February 1, 2026 (the “Notes”) under an indenture dated February 2, 2021 (the “Indenture”).

Interest on the 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 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 repay the credit facility, the promissory note, and a loan from George Beasley (see Note 1 7

) and to pay related accrued interest, fees and expenses.

pay dividends on, repurchase or make distributions in respect of our capital stock or make other restricted payments;

make certain investments or acquisitions;

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create liens;

enter into agreements restricting

certain subsidiaries ability to pay dividends or make other intercompany transfers;

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;

prepay certain kinds of indebtedness;

and issue or sell stock of its subsidiaries.

Current installments of long-term debt have been updated as of December 31, 2020 to reflect the subsequent refinancing of long-term debt.

As of December 31, 2019, the credit facility consisted of a term loan facility with a remaining balance of $239.0 million and a

revolving credit facility with an outstanding balance of $11.0 million and a maximum commitment of $20.0 million.

The term loan facility and revolving credit facility carried interest, based on LIBOR, at 5.8% as of December 31, 2019.

On June 30, 2020, the Company entered into the Amendment with certain of its lenders.

The Amendment amended and modified the credit

agreement to, among other things, (i) increase the interest rate applicable to the term loans and revolving credit facility by 25 basis points per annum, (ii) add fees of 300 basis points payable on December 31, 2021 and 150 basis

points payable on December 31, 2022, (provided the credit agreement was not refinanced prior to such time), (iii) impose additional reporting requirements, (iv) revise the Excess Cash Flow prepayment requirement such that when the Total

Leverage Ratio was greater than 4.5x, 75% of Excess Cash Flow must be prepaid, with such prepayment amounts stepping down to 50%, 25% and 0% upon achievement of certain Total Leverage Ratio milestones, and (v) reduce the flexibility to incur

certain additional indebtedness, liens and investments and make certain restricted payments, subject to the achievement of certain leverage-based milestones.

In connection with the Amendment, the Company recorded a loss on modification of long-term

debt of $2.8 million during the second quarter of 2020.

Additionally, the Amendment modified the financial covenant to remove the

maximum First Lien Leverage Ratio previously tested quarterly through the fiscal quarter ended March 31, 2020.

In its place, the Amendment added (i) a minimum liquidity covenant of $8.5 million (the Minimum Liquidity

Amount), which was to be tested every other week until the Total Leverage Ratio was less than 5.0x, (ii) a minimum EBITDA (as defined in the credit agreement, as amended by the Amendment) covenant, which was to be tested monthly through

June 30, 2021 and (iii) a maximum First Lien Leverage Ratio covenant, which was to be tested quarterly beginning with the fiscal quarter ending September 30, 2021.

The Amendment also modified the definition of Consolidated EBITDA to

remove certain add-backs with respect to the calculation of Consolidated EBITDA and EBITDA for financial covenants and other similar calculations and reduced the amount of cash that could be netted for the

calculation of the First Lien Leverage Ratio for purposes of testing the First Lien Leverage Ratio financial covenant, when applicable.

As of December 31, 2020, the credit facility consisted of a term loan facility with a remaining balance of $238.0 million and a

revolving credit facility with an outstanding balance of $20.0 million and a maximum commitment of $20.0 million.

As of December 31, 2020, the Company had no available commitments under its revolving credit facility.

Following the

entry into the Amendment as described above, at the Companys option, the credit facility bore interest at either (i) the London Interbank Offered Rate (LIBOR) plus a margin of 4.25% or (ii) the base rate (as defined in

the credit agreement) plus a margin of 3.25%.

The LIBOR interest rate for the term loan was subject to a 1% floor and the base rate was subject to a 2% floor for the term loan facility and a 0% floor for the revolving credit facility.

payments were, for loans based on LIBOR, due at the end of each applicable interest period unless the interest period was longer than three months, in which case they were due at the end of each three-month period.

Interest payments for loans based

on the base rate were due quarterly.

Prior to February 1, 2025, the Company will be subject to certain premiums, as defined in the Indenture, for optional or mandatory (upon certain contingent events) redemption of some or all of the Notes.

In connection with the issuance of the Notes and the repayment of the credit facility, the Company recorded a loss on extinguishment of long-term debt of $ 5.0 million during the first quarter of 2021.

On March 1, 2021, the Company entered into a loan with Synovus Bank for $ 10.0 million pursuant to the Paycheck Protection Program (the “PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

The loan bore interest at a rate of 1.0 % per annum and was scheduled to mature on March 1, 2026.

Principal and interest payments were deferred, with interest accruing, until after the period in which the Company was allowed to apply for loan forgiveness pursuant to the PPP.

In September 2021, the Company submitted an application for forgiveness, and, in November 2021, the loan was forgiven in full.

As of December 31, 2020, the credit facility consisted of a term loan facility with a remaining balance of $ 238.0 million and a revolving credit facility with an outstanding balance of $ 20.0 million and a maximum commitment of $ 20.0 million.

The revolving credit facility carried interest, based on LIBOR, at 4.4 % as of December 31, 2020.

The term loan carried interest, based on LIBOR, at 5.25 % as of December 31, 2020.

The credit facility was

secured by substantially all assets of the Company and its subsidiaries and was guaranteed jointly and severally by the Company and its subsidiaries.

As of December 31, 2020, the maximum amount of undiscounted payments the Company and its

applicable subsidiaries would have been required to make in the event of default was $258.0 million.

As noted above, the credit facility was repaid on February 2, 2021, using a portion of the proceeds from the Notes offering.

Also, as a condition to entering into the Amendment, George Beasley, the Companys Chairman, provided a $5.0 million loan to the

Company that accrued payment-in-kind interest at 6% per annum with no cash payments due until the loans maturity in December 2023.

Beasley and GGB Family

Limited Partnership also each entered into standby letters of credit in combined aggregate face amount of $5.0 million in favor of U.S.

Bank, National Association for the benefit of the Company as a source of backup liquidity in the event that

the Company failed to maintain the Minimum Liquidity Amount.

As noted above, the loan was repaid on February 2, 2021, using a portion of the proceeds from the Notes offering.

On November 14, 2019, the Company acquired a majority interest in an esports team and issued the Promissory Note for $16.5 million

to the seller.

On November 14, 2019, the Company acquired a majority interest in an esports team and issued a promissory note for $ 16.5 million to the seller.

On June 30, 2020, the Company entered into an amendment to the promissory note applicable to the remaining balance.

As amended, the promissory note bore cash-pay

interest at 5 % per annum payable quarterly in arrears and additional payment-in-kind

interest at 10 % per annum.

The promissory note had a remaining balance of $ 5.5 million as of December 31, 2020.

On June 30, 2020, the Company entered into an amendment to the Promissory Note (as amended, the Amended Promissory Note)

applicable to the remaining balance of $10.0 million.

The Amended Promissory Note bore cash-pay interest at 5% per annum payable quarterly in arrears and additional payment-in-kind interest at 10% per annum.

On July 8, 2020, the Company issued an initial stock payment of 1,276,596 shares of Class A common stock at a fixed price of $2.35 per share that reduced

the principal amount of the Amended Promissory Note by $2.25 million.

The shares were issued at $1.99 per share and the $0.3 million difference between the fair value of the shares and the principal reduction was recorded as additional

interest expense.

For subsequent stock issuances, which were scheduled to begin on June 30, 2021, the principal reduction amount would have been the lesser of (i) the value of the stock issued based on

20-day moving average on the day prior to issuance or (ii) the principal reduction amount, which was 50% of the value of the stock based on a fixed price of $2.35 per share.

As noted above,

the Amended Promissory Note was repaid on February 2, 2021, using a portion of the proceeds from the Notes offering.

As noted above, the amended promissory note was repaid on February 2, 2021, using a portion of the proceeds from the Notes offering.

The Company leases office space, radio towers and office equipment.

Discount rates are based on the Companys 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.

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:

2 unchanged sentences

Finance lease cost:

Amortization of

right-of-use asset

Amortization of right-of-use

Interest on lease liability

11 unchanged sentences

Weighted-average discount rate – finance lease

As of December 31, 2020, future minimum payments for operating and finance leases for the next five years

and thereafter are summarized as follows:

As of December 31, 2021, future minimum payments for operating and finance leases for the next five years and thereafter are summarized as follows:

Total lease payments

4 unchanged sentences

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 $19,000 and $19,500 (or $25,000 and $26,000 if aged 50 years or older) in 2019 and 2020, respectively.

matching contributions were made to the defined contribution plan in 2019 and 2020.

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 $ 19,500 (or $ 26,000 if aged 50 years or older) in 2020 and 2021.

No employer matching contributions were made to the defined contribution plan in 2020 and 2021.

Supplemental Employee Retirement Plan

The benefit obligations related to the frozen SERP of $9.7 million and $10.8 million are reported in other long-term liabilities in

the consolidated balance sheets as of December 31, 2019 and 2020, respectively.

The Company contributed $0.4 million and $0.5 million to the SERP in 2019 and 2020, respectively.

The benefit obligations related to the frozen SERP of $ 10.8 million and $ 10.2 million are reported in other long-term liabilities in the consolidated balance sheets as of December 31, 2020 and 2021, respectively.

The Company contributed $ 0.5 million to the SERP in 2020 and 2021.

The SERP is summarized as follows:

3 unchanged sentences

Interest cost

Actuarial loss

Actuarial (gain) loss

Benefits paid

24 unchanged sentences

Interest cost

Recognized net actuarial (gain) loss

Net periodic benefit cost

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive

Net actuarial loss

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income

Net actuarial (gain) loss

Recognized net actuarial (gain) loss

Total recognized in other comprehensive income (before tax effects)

15 unchanged sentences

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 Companys directors, with each Class A share being entitled to one vote.

In the election of the other seven 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

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 and shares of restricted 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 and shares of restricted stock.

The Company paid $ 0.2 million to repurchase 63,468 shares in 2021.

The Company paid cash dividends of $5.5 million in 2019 and $2.8 million in 2020.

However, in response to the COVID-19 pandemic, the board of directors suspended future quarterly dividend payments until it is determined that resumption of dividend payments is in the best interest of the Companys stockholders.

addition, the Indenture governing the Notes limits the ability of the Company to pay dividends.

The Company paid cash dividends of $ 2.8 million in 2020.

However, in response to the COVID-19

pandemic, the board of directors 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.

Revenue is comprised of the following:

Year ended December 31,

Commercial advertising

Digital advertising

Other revenue

The Company recognizes revenue when it satisfies a performance obligation under a contract

with an advertiser.

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.

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.

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.

2 unchanged sentences

Losses on receivables

Commercial advertising includes revenue from the sale or trade of aired commercial spots to advertisers

directly or through national, regional or local advertising agencies.

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

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.

Trade sales receivable

2 unchanged sentences

Trade sales revenue

Digital advertising includes revenue from the sale of streamed commercial spots, station-owned assets and

third-party products.

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.

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.

Other revenue includes revenue from esports, concerts, promotional events, talent fees and other miscellaneous items.

Revenue is generally

recognized when the event is completed, as the promotional events are completed, or as the talent services are completed.

Stock-Based Compensation

The Beasley Broadcast Group, Inc.

2007 Equity Incentive Award Plan (the 2007 Plan) permits the Company to issue up to

7.5 million 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

The restricted stock units and restricted stock awards that have been granted under the 2007 Plan generally vest over one to five years of service.

2007 Equity Incentive Award Plan (the “2007 Plan”) permits the Company to issue up to 7.5 million 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:

Weighted-Average

Grant-Date Fair

Unvested as of January 1, 2020

2 unchanged sentences

A summary of restricted stock activity is presented below:

Weighted-Average

Grant-Date Fair

Unvested as of January 1, 2020

1 unchanged sentence

Unvested as of December 31, 2021

As of December 31, 2020, there was $1.2 million of total unrecognized compensation cost for

restricted stock units and shares of restricted stock granted under the 2007 Plan.

As of December 31, 2021, there was $ 1.8 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 2.4 years.

Income tax expense (benefit) is as follows:

Income tax benefit is as follows:

Year ended December 31,

Income tax expense (benefit) differs from the amounts that would result from applying the federal statutory

rate of 21% to the Companys income (loss) before taxes as follows:

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,

Expected tax expense (benefit)

Expected tax benefit

State income taxes, net of federal benefit

1 unchanged sentence

Change in valuation allowance

Non-deductible items

Temporary differences that give rise to the components of deferred tax assets and

liabilities are as follows:

Non-deductible

Temporary differences that give rise to the components of deferred tax assets and liabilities are as follows:

Deferred tax assets:

Allowance for doubtful accounts

Accrued expenses

Operating lease liabilities

Other long-term liabilities

Stock-based compensation

Interest expense limitation

Net operating losses

3 unchanged sentences

Property and equipment

( 122,556,849

( 124,382,072

( 126,693,914

( 128,156,610

Net deferred tax liabilities

As of December 31, 2020, the Company has state net operating losses of $25.2 million, which expire

in various years through 2040.

The CARES Act, among other things, permits federal net operating losses incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding tax years to generate a refund of previously paid income taxes.

The Company intends to carry back federal net operating losses of $24.1 million from 2020 under the CARES Act to recover $5.1 million of federal taxes paid in 2018 and 2019.

As of December 31, 2020, the Company has a current federal

tax liability of $3.1 million and current state liabilities of $0.3 million due from 2019 (see Note 9).

As of December 31,

2019 and 2020, 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.

( 120,913,983

( 115,689,317

As of December 31, 2021, the Company has federal net operating losses of $ 6.9 million and state net operating losses of $ 32.0 million.

The valuation allowance relates to net operating losses and unrealized losses on investments which management has determined, more likely than not, that such losses will not be utilized.

As of December 31, 2020 and 2021, 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 2017.

In the fourth quarter of 2019, the Internal Revenue Service completed an examination of the Companys 2015, 2016 and

2017 federal income tax returns that resulted in no changes to the returns.

Earnings Per Share

Net income (loss) per share calculation information is as follows:

Loss Per Share

Net loss per share calculation information is as follows:

Year ended December 31,

Net income (loss) attributable to BBGI stockholders

Net loss attributable to BBGI stockholders

Weighted-average shares outstanding:

Basic weighted shares outstanding

Effect of dilutive restricted stock units and restricted stock

Net income (loss) per Class A and Class B common share basic

Net income (loss) per Class A and Class B common share diluted

The Company excluded the effect of restrictive stock units and restricted stock under the treasury stock

method as the addition of shares were anti-dilutive when reporting a net loss.

The number of shares excluded were 29,406 for year ended December 31, 2020.

Net loss attributable to BBGI stockholders per Class A and Class B common share – basic and diluted

The Company excluded the effect of restrictive stock units and restricted stock under the treasury stock method when reporting a net loss as the addition of shares was anti-dilutive.

The number of shares excluded was 29,406 and 229,777 for the years ended December 31, 2020 and 2021, respectively.

Related Party Transactions

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.

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 family members of George G.

Rental expense was $0.2 million for each of the years ended December 31, 2019 and 2020.

Beasley and other members of the Beasley family.

The lease agreement expires on May 31, 2023 .

Rental expense was

$ 0.2 million for each of the years ended December 31, 2020 and 2021.

Beasley Family Properties, LLC

On September 30, 2021, the office space leased by the Company from GGB Estero, LLC for its radio stations in Fort Myers, FL was transferred to 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, 2024.

Rental expense was $ 0.1 million for the year ended December 31, 2021.

Beasley Family Towers, LLC

The Company leases towers for two radio stations in Tampa, FL from Beasley Family Towers, LLC (BFT), which is partially held by a

trust for the benefit of Caroline Beasley, Bruce G.

The Company leases towers for 17 radio 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 family members of George G.

Beasley and partially owned directly by Caroline Beasley, Bruce G.

Beasley and other members of the

Beasley family and partially owned directly by Caroline Beasley, Bruce G.

Beasley, Brian E.

Beasley and other family members.

agreements expire on various dates through December 31, 2038.

Beasley and other members of the Beasley family.

The lease agreements expire on various dates through December 31, 2038 .

Rental expense was $ 0.6 million and $ 0.8 million for the years ended December 31, 2020 and 2021, respectively.

The Company leases several towers for one radio station in Boca Raton, FL from BFT.

lease agreement expires on April 30, 2021.

Rental expense was $0.1 million for each of the years ended December 31, 2019 and 2020.

Lease payments are currently offset by the partial recognition of a deferred gain on sale from the sale

of these towers to BFT in 2006, therefore no rental expense was reported for these towers for the years ended December 31, 2019 and 2020.

The Company leases towers for 19 radio stations in various markets from BFT.

As of December 28, 2020, all lease agreements had expired.

Rental expense was $0.4 million for each of the years ended December 31, 2019 and 2020.

The Company leases office space for its radio stations in Fayetteville, NC from BFT.

The lease agreement expires on August 31, 2030 .

Rental expense was $ 22,000 and $ 0.1 million for the years ended December 31, 2020 and 2021, respectively.

GGB Augusta, LLC

The Company leases land for its radio stations in Augusta, GA from GGB Augusta, LLC which is held by a trust for the benefit of Caroline

Beasley, Bruce G.

The Company leases land for its radio 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 family members of George G.

Beasley and other members of the Beasley family.

The lease agreement expires on November 1, 2023 .

Rental expense was approximately $44,000 and $41,000 for the years ended December 31, 2019 and

2020, respectively.

Rental expense was approximately $ 41,000 and $ 45,000 for the years ended December 31, 2020 and 2021, respectively.

GGB Estero, LLC

The Company leases property for its radio stations in Fort Myers, FL from GGB Estero, LLC which is held by a trust for the benefit of Caroline

Beasley, Bruce G.

The Company leases office space for its radio stations in Fort Myers, FL from GGB Estero, LLC, which is held by a trust for the benefit of Caroline Beasley, Bruce G.

Beasley, Brian E.

Beasley and other family members of George G.

The lease agreement expires on August 31, 2024.

Beasley and other members of the Beasley family.

The office space was transferred to Beasley Family Properties, LLC

on September 30, 2021.

Rental expense was $ 0.2 million for each of the years ended December 31, 2020 and 2021.

GGB Las Vegas, LLC

Company leases property for its radio stations in Las Vegas, NV from GGB Las Vegas, LLC which is controlled by George G.

The Company leases office space for its radio 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, 2023 .

Rental expense was $0.2 million for each of the years ended

December 31, 2019 and 2020.

On March 25, 2011, the Company contributed $250,000 to Digital PowerRadio, LLC (now LN2 DB, LLC) in exchange for 25,000 units or

approximately 20% of the outstanding units.

The Company contributed an additional $62,500 on February 14, 2012, $104,167 on July 31, 2012, $104,167 on April 10, 2013, $104,167 on April 4, 2014, $166,667 on April 3, 2015, and

$166,667 on May 3, 2016.

On February 22, 2017, the Company contributed $150,000 to LN2 DB, LLC in exchange for a note bearing interest at 18% per annum.

On June 18, 2018, the note receivable and accrued interest due from LN2 DB, LLC

totaling $187,618 was converted to additional equity in LN2 DB, LLC and the Company contributed an additional $150,000.

The Company may be called upon to make additional pro rata cash contributions to LN2 DB, LLC in the future.

LN2 DB, LLC is

managed by Fowler Radio Group, LLC which is partially owned by Mark S.

Fowler, an independent director of the Company.

In June 2018, George G.

Beasley, Caroline Beasley, Bruce Beasley, Brian Beasley and other family members also invested in LN2 DB,

LLC under a recapitalization plan.

In January 2020, LN2 DB, LLC completed a study of its patents, which concluded that none of them had any significant remaining market value.

Therefore, LN2 DB, LLC may decide to dissolve itself in the near future.

The Company recorded an impairment loss of $1.3 million for the year ended December 31, 2019.

Rental expense was $ 0.2 million for each of the years ended December 31, 2020 and 2021.

Wintersrun Communications, LLC

The Company sold the tower for one radio station in Charlotte, NC to Wintersrun Communications, LLC, which is partially held by a

trust for the benefit of Caroline Beasley, Bruce G.

The Company sold the tower for one radio station in Charlotte, NC to Wintersrun Communications, LLC, which is partially held by a trust for the benefit of Caroline Beasley, Bruce G.

Beasley, Brian E.

Beasley and other family members of George G.

Beasley and partially owned directly by Bruce G.

Beasley and other members of the Beasley family and partially owned directly by Bruce G.

Beasley and Brian E.

Beasley, for $0.4 million then leased back the tower under

an agreement which expires on December 31, 2025.

The lease met the criteria to be recorded as a finance lease, however, based on the terms of the lease agreement the $0.3 million gain on sale was deferred and will be recognized as the

finance lease right-of-use asset is depreciated.

Beasley, for $ 0.4 million then leased back the tower under an agreement which expires on December 31, 2045 .

The lease met the criteria to be recorded as a finance lease, however, based on the terms of the lease agreement, the $ 0.3 million gain on sale was deferred and will be recognized as the finance lease right-of-use asset is depreciated.

Rental expense was $ 0.1 million for each of the years ended December 31, 2020 and 2021.

The Company leased a tower for one radio station in Augusta, GA from Wintersrun.

The Company leases a tower for one radio station in Augusta, GA from Wintersrun.

The lease agreement expires on October 16, 2025 .

expense was approximately $31,000 for each of the years ended December 31, 2019 and 2020.

George Beasley

As a condition to entering into the Amendment (see Note 10), George Beasley, the Companys Chairman, provided a $5.0 million loan to

the Company that accrued payment-in-kind interest at 6% per annum with no cash payments due until the loans maturity in December 2023.

Beasley and GGB

Family Limited Partnership also each entered into standby letters of credit in combined aggregate face amount of $5.0 million in favor of U.S.

Bank, National Association for the benefit of the Company as a source of backup liquidity that could

have been drawn by U.S.

Bank, National Association in the event that the Company fails to maintain the Minimum Liquidity Amount.

Rental expense was approximately $ 31,000 for each of the years ended December 31, 2020 and 2021.

Loan from George Beasley

In June 2020, George Beasley, the Company’s former Chairman, provided a $ 5.0 million loan to the Company that accrued payment-in-kind interest at 6 % per annum with no cash payments due until the loan’s maturity in December 2023 .

Beasley and GGB Family Limited Partnership also each entered into standby letters of credit in combined aggregate face amount of $ 5.0

million in favor of U.S.

Bank, National Association for the benefit of the Company as a source of backup liquidity that could have been drawn by U.S.

Bank, National Association in the event that the Company failed to maintain a minimum liquidity amount under the then-existing credit facility.

The loan was repaid on February 2, 2021, using a portion of the proceeds from the Notes offering (see Note 9).

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.

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, 2021, future minimum payments for the next five years and thereafter are summarized as follows:

In the normal course of business, the Company is party to various legal matters.

The ultimate disposition of

these matters will not, in managements judgment, have a material adverse effect on the Companys financial position.

The ultimate disposition of these matters will not, in management’s judgment, have a material adverse effect on the Company’s financial position.

Financial Instruments

The carrying amount of the Companys financial instruments including cash and cash equivalents, accounts receivable and accounts payable

approximate fair value due to the short term nature of these financial instruments.

The carrying amount of the Companys long-term

debt, including the term loan, the revolving credit facility, Promissory Note and current installments, as of December 31, 2020 was $263.5 million which approximated fair value based on current market interest rates.

The carrying amount of

the Companys long-term debt as of December 31, 2019 was $263.5 million which approximated fair value based on current market interest rates.

The carrying amount of the Company’s financial instruments including cash and cash equivalents, accounts receivable and accounts payable approximate 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 as of December 31, 2021, was $ 295.9 million.

The Company used Level 2 measurements under the fair value measurement hierarchy to determine the estimated fair value of the Notes.

The carrying amount of the Company’s long-term debt as of December 31, 2020 was $ 263.5 million, which approximated fair value based on current market interest rates.

Segment Information

Effective January 1, 2021, the Company created a digital division that generates revenue primarily from the sale of digital advertising to customers of the Company’s radio stations and other advertisers throughout the United States.

All digital operations are the responsibility of the Company’s Chief Digital Officer, who reports to the Company’s Chief Executive Officer (the Company’s Chief Operating Decision Maker).

As a result, the Company has identified two reportable segments, Audio and Digital.

The Audio segment generates revenue primarily from the sale of commercial advertising to customers of the Company’s radio stations in the following radio markets:

Corporate expenses include general and administrative expenses and certain other income and expense items not allocated to the operating segments.

The identification of segments is consistent with how the segments report to and are managed by the Company’s Chief Operating Decision Maker.

Reportable segment information for the year ended December 31, 2021 is as follows:

Operating expenses

Corporate expenses

Depreciation and amortization

Gain on disposition

Other operating (income) expense, net

Operating income (loss)

Reportable segment information as of December 31, 2021 is as follows:

Capital expenditures

Property and equipment, net

Other intangibles, net

BEASLEY BROADCAST GROUP, INC.

2 unchanged sentences

Years ended December 31, 2020 and 2021

Column A Description

Year ended December 31, 2020:

6 unchanged sentences

Valuation allowance for deferred tax assets

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND

FINANCIAL DISCLOSURE

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data