ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2022

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

	(Unaudited)
	(In thousands)
Net Revenue:
Radio Advertising	$	45,081	$	43,089	$	128,726	$	119,033
Political Advertising		2,766		711		5,137		1,991
Digital Advertising		20,063		14,981		53,427		40,351
Cable Television Advertising		26,801		22,969		86,336		66,638
Cable Television Affiliate Fees		23,923		25,877		74,210		76,760
Event Revenues & Other		2,769		3,836		4,726		5,723
Net Revenue (as reported)	$	121,403	$	111,463	$	352,562	$	310,496

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


	September 30, 2022		December 31, 2021		September 30, 2021
	(Unaudited)				(Unaudited)
	(In thousands)
Contract assets:
Unbilled receivables	$	13,653	$	10,735	$	9,403

Contract liabilities:
Customer advances and unearned income	$	10,296	$	7,494	$	8,357
Reserve for audience deficiency		8,306		6,020		6,332
Unearned event income		3,338		—		6,700

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 September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021

	(Unaudited)				(Unaudited)
Numerator:
Net income attributable to common stockholders	$	4,213	$	13,876	$	35,616	$	31,749
Denominator:
Denominator for basic net income per share - weighted average outstanding shares		46,625,484		51,190,105		49,504,238		49,816,663
Effect of dilutive securities:
Stock options and restricted stock		3,581,124		3,890,289		3,667,555		4,015,472
Denominator for diluted net income per share - weighted-average outstanding shares		50,206,608		55,080,394		53,171,793		53,832,135

Net income attributable to common stockholders per share – basic	$	0.09	$	0.27	$	0.72	$	0.64
Net income attributable to common stockholders per share – diluted	$	0.08	$	0.25	$	0.67	$	0.59

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 September 30, 2022
Liabilities subject to fair value measurement:
Employment agreement award (a)	$	27,297	$	—	$	—	$	27,297

Mezzanine equity subject to fair value measurement:
Redeemable noncontrolling interests (b)	$	19,964	$	—	$	—	$	19,964

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

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

(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 2022, the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) 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.

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


	Employment		Redeemable
	Agreement		Noncontrolling
	Award		Interests

	(In thousands)

Balance at December 31, 2021	$	28,193	$	17,015
Net income attributable to noncontrolling interests		—		1,831
Distribution		(3,092)		—
Dividends paid to noncontrolling interests		—		(1,599)
Change in fair value		2,196		2,717
Balance at September 30, 2022	$	27,297	$	19,964

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	$	(2,196)	$	—

Schedule of significant unobservable input value


			As of		As of
			September 30,		December 31,
		Significant	2022		2021

		Unobservable	Significant Unobservable
Level 3 liabilities	Valuation Technique	Inputs	Input Value
Employment agreement award	Discounted Cash Flow	Discount Rate	10.5	%	9.5	%
Employment agreement award	Discounted Cash Flow	Long-term Growth Rate	0.5	%	0.5	%
Redeemable noncontrolling interest	Discounted Cash Flow	Discount Rate	11.5	%	11.5	%
Redeemable noncontrolling interest	Discounted Cash Flow	Long-term Growth Rate	0.4	%	0.4	%

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 September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021

	(Unaudited)						(Unaudited)
	(Dollars In thousands)						(Dollars In thousands)
Operating Lease Cost (Cost resulting from lease payments)	$	3,185		$	3,265		$	9,607		$	9,814
Variable Lease Cost (Cost excluded from lease payments)		10			10			30			30
Total Lease Cost	$	3,195		$	3,275		$	9,637		$	9,844

Operating Lease - Operating Cash Flows (Fixed Payments)	$	3,501		$	3,465		$	10,507		$	10,215
Operating Lease - Operating Cash Flows (Liability Reduction)	$	2,524		$	2,274		$	7,452		$	6,696

Weighted Average Lease Term - Operating Leases		4.79	years		5.07	years		4.79	years		5.07	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 three months ending December 31, 2022	$	3,405
2023		12,293
2024		11,226
2025		6,499
2026		4,195
Thereafter		9,888
Total future lease payments		47,506
Imputed interest		10,890
Total	$	36,616