Item 4. Controls and Procedures
Item 4. Controls and Procedures
As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rule 13a-15 of the Securities Exchange Act of 1934. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective as of March 31, 2025, due to the material weakness in internal control over financial reporting described in our Form 10-K for the period ending December 31, 2024 and below. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives.
At December 31, 2024, management determined that the Company had the following material weakness in its internal control over financial reporting:
Ineffective Controls over Broadcast Revenue Reconciliations – a lack of effectively designed and implemented monitoring controls over recorded broadcast revenue combined with a lack of segregation of duties within the Traffic Management system that did not restrict or monitor users’ access privileges commensurate with their assigned authority and responsibility.
Ineffective Controls over Digital Revenue Reconciliations – a lack of effectively designed and implemented monitoring controls over recorded digital revenue, including procedures over the retention of documentation to ensure existence, completeness and accuracy of data used to support accounts related to revenue and accounts receivable in the financial statement close process.
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These ineffective controls, individually or in the aggregate, could result in misstatements of accounts or disclosures that would result in a material misstatement of the interim or annual Consolidated Financial Statements that would not be prevented or detected.
Plans for Remediation of Material Weakness
Management is actively engaged in the implementation of remediation plans to address the controls contributing to the material weakness. Our remediation plans are outlined in our 2024 Annual Report on Form 10-K. We believe those measures will effectively remediate the control deficiencies, but management is assessing the need for any additional steps to remediate the underlying causes that give rise to this material weakness. The material weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. There is no assurance that additional remediation steps will not be necessary. Accordingly, the material weakness in our internal control over financial reporting has not been fully remediated as of March 31, 2025.
Notwithstanding the identified material weakness, our management believes the Condensed Consolidated Financial Statements included in this Form 10-Q fairly present, in all material respects, our results of operations and cash flows for the period ended March 31, 2025 and our financial condition as of such date, in accordance with U.S. GAAP.
Changes in Internal Control Over Financial Reporting
Except as set forth above, there were no changes in our internal controls over financial reporting during the fiscal period ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, the Company may be involved in various legal proceedings that are incidental to the Company’s business. In management’s opinion, the Company is not a party to any current legal proceedings that are material to its financial condition, either individually or in the aggregate.
Item 1A. Risk Factors
There have been no material changes to the risk factors previously disclosed in response to Part 1, “Item 1A. Risk Factors,” of our annual report on Form 10-K for the year ended December 31, 2024.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.