ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2021

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020

	(In thousands, unaudited)
Net Revenue:
Radio Advertising	$	42,605	$	25,358	$	75,944	$	63,776
Political Advertising		500		361		1,280		2,764
Digital Advertising		15,016		6,104		25,369		12,393
Cable Television Advertising		22,968		18,941		43,670		39,973
Cable Television Affiliate Fees		25,396		24,619		50,883		50,826
Event Revenues & Other		1,108		625		1,887		1,151
Net Revenue (as reported)	$	107,593	$	76,008	$	199,033	$	170,883

Schedule of contract assets (unbilled receivables) and contract liabilities (customer advances and unearned income and unearned event income)


	June 30, 2021		December 31, 2020		June 30, 2020
	(Unaudited)				(Unaudited)
	(In thousands)
Contract assets:
Unbilled receivables	$	8,540	$	5,798	$	3,892

Contract liabilities:
Customer advances and unearned income	$	5,252	$	4,955	$	2,918
Unearned event income		6,118		5,921		10,352

Schedule of calculation of basic and diluted earnings per share from continuing operations

The following table sets forth the calculation of basic and diluted earnings per share from continuing operations (in thousands, except share and per share data):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020

	(Unaudited)
	(In Thousands)
Numerator:
Net income (loss) attributable to common stockholders	$	17,866	$	1,420	$	17,873	$	(21,767)
Denominator:
Denominator for basic net income (loss) per share - weighted average outstanding shares		49,789,892		44,806,219		49,124,056		45,025,471
Effect of dilutive securities:
Stock options and restricted stock		3,991,026		3,348,043		4,062,563		—
Denominator for diluted net income (loss) per share - weighted-average outstanding shares		53,780,918		48,154,262		53,186,619		45,025,471

Net income (loss) attributable to common stockholders per share – basic	$	0.36	$	0.03	$	0.36	$	(0.48)
Net income (loss) attributable to common stockholders per share –diluted	$	0.33	$	0.03	$	0.34	$	(0.48)

Schedule of earning per share by potential common shares

All stock options and restricted stock awards were excluded from the diluted calculation for the six months ended June 30, 2020, as their inclusion would have been anti-dilutive. The following table summarizes the potential common shares excluded from the diluted calculation.


		Six Months Ended June 30,
		2020
		(Unaudited)
		(In thousands)
Stock options		3,849
Restricted stock awards		1,929

Schedule of fair values of our financial assets and liabilities measured at fair value on a recurring basis


	Total		Level 1		Level 2		Level 3

	(Unaudited)
	(In thousands)
As of June 30, 2021
Liabilities subject to fair value measurement:
Contingent consideration (a)	$	—		—		—	$	—
Employment agreement award (b)		27,111		—		—		27,111
Total	$	27,111	$	—	$	—	$	27,111

Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests (c)	$	15,192	$	—	$	—	$	15,192

As of December 31, 2020
Liabilities subject to fair value measurement:
Contingent consideration (a)	$	780		—		—	$	780
Employment agreement award (b)		25,603		—		—		25,603
Total	$	26,383	$	—	$	—	$	26,383

Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests (c)	$	12,701	$	—	$	—	$	12,701

(a)

This balance is measured based on the income approach to valuation in the form of a Monte Carlo simulation. The Monte Carlo simulation method is suited to instances such as this where there is non-diversifiable risk. It is also well-suited to multi-year, path dependent scenarios. Significant inputs to the Monte Carlo method include forecasted net revenues, discount rate and expected volatility. A third-party valuation firm assisted the Company in estimating the contingent consideration.

(b)

Each quarter, pursuant to an employment agreement (the “Employment Agreement”) executed in April 2008, the Chief Executive Officer (“CEO”) is eligible to receive an award (the “Employment Agreement Award”) amount equal to approximately 4% of any proceeds from distributions or other liquidity events in excess of the return of the Company’s aggregate investment in TV One. The Company reviews the factors underlying this award at the end of each quarter including the valuation of TV One (based on the estimated enterprise fair value of TV One as determined by a discounted cash flow analysis). The Company’s obligation to pay the award was triggered after the Company recovered the aggregate amount of capital contributions in TV One, and payment is required only upon actual receipt of distributions of cash or marketable securities or proceeds from a liquidity event with respect to such invested amount. The long-term portion of the award is recorded in other long-term liabilities and the current portion is recorded in other current liabilities in the consolidated balance sheets. The CEO was fully vested in the award upon execution of the Employment Agreement, and the award lapses if the CEO voluntarily leaves the Company or is terminated for cause. A third-party valuation firm assisted the Company in estimating TV One’s fair value using a discounted cash flow analysis. Significant inputs to the discounted cash flow analysis include forecasted operating results, discount rate and a terminal value. In September 2014, the Compensation Committee of the Board of Directors of the Company approved terms for a new employment agreement with the CEO, including a renewal of the Employment Agreement Award upon similar terms as in the prior Employment Agreement.

(c)

The redeemable noncontrolling interest in Reach Media is measured at fair value using a discounted cash flow methodology. A third-party valuation firm assisted the Company in estimating the fair value. Significant inputs to the discounted cash flow analysis include forecasted operating results, discount rate and a terminal value.

Schedule of changes in Level 3 liabilities measured at fair value on a recurring basis


			Employment		Redeemable
	Contingent		Agreement		Noncontrolling
	Consideration		Award		Interests

	(In thousands)

Balance at December 31, 2020	$	780	$	25,603	$	12,701
Net income attributable to noncontrolling interests		—		—		1,066
Distribution		(1,060)		—		—
Change in fair value		280		1,508		1,425
Balance at June 30, 2021	$	—	$	27,111	$	15,192

The amount of total (losses)/income for the period included in earnings attributable to the change in unrealized losses/income relating to assets and liabilities still held at the reporting date	$	(280)	$	(1,508)	$	—

Schedule of significant unobservable input value


			As of		As of
			June 30,		December 31,
		Significant	2021		2020

		Unobservable	Significant Unobservable
Level 3 liabilities	Valuation Technique	Inputs	Input Value
Contingent consideration	Monte Carlo Simulation	Expected volatility	*		29.5	%
Contingent consideration	Monte Carlo Simulation	Discount Rate	*		16.5	%
Employment agreement award	Discounted Cash Flow	Discount Rate	10.5	%	10.5	%
Employment agreement award	Discounted Cash Flow	Long-term Growth Rate	1.0	%	1.0	%
Redeemable noncontrolling interest	Discounted Cash Flow	Discount Rate	11.5	%	11.0	%
Redeemable noncontrolling interest	Discounted Cash Flow	Long-term Growth Rate	1.0	%	1.0	%

*Contingent consideration liability is fully settled as of June 30, 2021.

Schedule of the components of lease expense and the weighted average remaining lease term and the weighted average discount rate

The following table sets forth the components of lease expense and the weighted average remaining lease term and the weighted average discount rate for the Company’s leases:


	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020

	(Unaudited)						(Unaudited)
	(Dollars In thousands)						(Dollars In thousands)
Operating Lease Cost (Cost resulting from lease payments)	$	3,335		$	3,153		$	6,549		$	6,305
Variable Lease Cost (Cost excluded from lease payments)		10			34			20			74
Total Lease Cost	$	3,345		$	3,187		$	6,569		$	6,379

Operating Lease - Operating Cash Flows (Fixed Payments)	$	3,419		$	3,243		$	6,750		$	6,650
Operating Lease - Operating Cash Flows (Liability Reduction)	$	2,248		$	2,045		$	4,422		$	4,182

Weighted Average Lease Term - Operating Leases		5.24	years		5.38	years		5.24	years		5.38	years
Weighted Average Discount Rate - Operating Leases		11.00	%		11.00	%		11.00	%		11.00	%

Schedule of maturities of lease liabilities


For the Year Ended December 31,	(Dollars in thousands)
For the remaining six months ending December 31, 2021	$	6,951
2022		13,606
2023		11,734
2024		10,619
2025		5,872
Thereafter		12,054
Total future lease payments		60,836
Imputed interest		14,911
Total	$	45,925