ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2021

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following chart shows our net revenue (and sources) for the years ended December 31, 2021 and 2020:


	Year Ended December 31,
	2021		2020

Net Revenue:
Radio Advertising	$	165,244	$	137,849
Political Advertising		3,494		22,484
Digital Advertising		59,812		34,131
Cable Television Advertising		95,589		79,732
Cable Television Affiliate Fees		102,380		99,489
Event Revenues & Other		14,943		2,652
Net Revenue (as reported)	$	441,462	$	376,337

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

Contract assets (unbilled receivables) and contract liabilities (customer advances and unearned income, reserve for audience deficiency and unearned event income) that are not separately stated in our consolidated balance sheets at December 31, 2021 and 2020 were as follows:


	December 31, 2021		December 31, 2020

	(In thousands)
Contract assets:
Unbilled receivables	$	10,735	$	5,798

Contract liabilities:
Customer advances and unearned income	$	7,494	$	4,955
Reserve for audience deficiency		6,020		3,544
Unearned event income		—		5,921

Schedule of gross value and accumulated amortization of the launch assets

The gross value and accumulated amortization of the launch assets is as follows:


	As of December 31,
	2021		2020

	(In thousands)
Launch assets	$	9,021	$	9,021
Less: Accumulated amortization		(4,724)		(3,124)
Launch assets, net	$	4,297	$	5,897

Schedule of future estimated launch support amortization expense

Future estimated launch support amortization expense or revenue reduction related to launch assets for years 2022 through 2026 is as follows:


	(In thousands)
2022	$	1,424
2023	$	1,424
2024	$	936
2025	$	358
2026	$	155

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):


	Year Ended December 31,
	2021		2020

	(Unaudited)
	(In Thousands)
Numerator:
Net income (loss) attributable to common stockholders	$	38,352	$	(8,113)
Denominator:
Denominator for basic net income (loss) per share - weighted average outstanding shares		50,163,600		45,041,467
Effect of dilutive securities:
Stock options and restricted stock		3,973,041		—
Denominator for diluted net income (loss) per share - weighted-average outstanding shares		54,136,641		45,041,467

Net income (loss) attributable to common stockholders per share – basic	$	0.76	$	(0.18)
Net income (loss) attributable to common stockholders per share –diluted	$	0.71	$	(0.18)

Schedule of earning per share by potential common shares


				Year Ended
				December 31, 2020
				(In thousands)
Stock options				4,019
Restricted stock awards				1,879

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

As of December 31, 2021, and December 31, 2020, respectively, the fair values of our financial assets and liabilities measured at fair value on a recurring basis are categorized as follows:


	Total		Level 1		Level 2		Level 3

	(In thousands)
As of December 31, 2021
Liabilities subject to fair value measurement:
Employment agreement award (a)	$	28,193		—		—	$	28,193
Total	$	28,193	$	—	$	—	$	28,193

Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests (b)	$	17,015	$	—	$	—	$	17,015

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

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

(a)

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.

(b)

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.

(c)

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.

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, 2019	$	1,921	$	27,017	$	10,564
Net income attributable to redeemable noncontrolling interests		—		—		1,544
Dividends paid to redeemable noncontrolling interests		—		—		(2,802)
Distribution		(1,188)		(3,685)		—
Change in fair value		47		2,271		3,395
Balance at December 31, 2020	$	780	$	25,603	$	12,701
Net income attributable to redeemable noncontrolling interests		—		—		2,315
Dividends paid to redeemable noncontrolling interests		—		—		(2,400)
Distribution		(1,060)		(3,573)		—
Change in fair value		280		6,163		4,399
Balance at December 31, 2021	$	—	$	28,193	$	17,015

The amount of total income (losses) for the period included in earnings attributable to the change in unrealized losses relating to assets and liabilities still held at December 31, 2021	$	(280)	$	(6,163)	$	—
The amount of total income (losses) for the period included in earnings attributable to the change in unrealized losses relating to assets and liabilities still held at December 31, 2020	$	(47)	$	(2,271)	$	—

Schedule of significant unobservable input value

For Level 3 assets and liabilities measured at fair value on a recurring basis, the significant unobservable inputs used in the fair value measurements were as follows:


			As of		As of
			December 31,		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	9.5	%	10.5	%
Employment agreement award	Discounted Cash Flow	Long-term Growth Rate	0.5	%	1.0	%
Redeemable noncontrolling interest	Discounted Cash Flow	Discount Rate	11.5	%	11.0	%
Redeemable noncontrolling interest	Discounted Cash Flow	Long-term Growth Rate	0.4	%	1.0	%

*Contingent consideration liability is fully settled as of December 31, 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:


	Year Ended December 31,
	2021			2020

	(Dollars In thousands)
Operating Lease Cost (Cost resulting from lease payments)	$	13,055		$	12,687
Variable Lease Cost (Cost excluded from lease payments)		40			143
Total Lease Cost	$	13,095		$	12,830

Operating Lease - Operating Cash Flows (Fixed Payments)	$	13,784		$	13,243
Operating Lease - Operating Cash Flows (Liability Reduction)	$	9,124		$	8,354

Weighted Average Lease Term - Operating Leases		4.94	years		5.37	years
Weighted Average Discount Rate - Operating Leases		11.00	%		11.00	%

Schedule of maturities of lease liabilities


For the Year Ended December 31,	(Dollars in thousands)
2022	$	13,685
2023		11,750
2024		10,639
2025		5,903
2026		3,712
Thereafter		8,209
Total future lease payments		53,898
Imputed interest		12,598
Total	$	41,300