Urban One, Inc. (NASDAQ:UONE) Q3 2021 Earnings Conference Call November 4, 2021 10:00 AM ET Company Participants Alfred Liggins - Chief Executive Officer Peter Thompson - Chief Financial Officer Kristopher Simpson - General Counsel Karen Wishart - Chief Administrative Officer Jody Drewer - Chief Financial Officer, TV One Conference Call Participants Patrick Wang - Voya Investments Matthew Sandschafer - Mesirow Operator Ladies and gentlemen, thank you for standing by and welcome to the Urban One 2021 Third Q ...

Table of Contents SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 Commission File No. 0-25969 URBAN ONE, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Delaware 52-1166660 1010 Wayne Avenue, 14th Floor Silver Spring, Maryland 20910 (Address ...

Table of Contents SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 Commission File No. 0-25969 URBAN ONE, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Delaware 52-1166660 1010 Wayne Avenue, 14th Floor Silver Spring, Maryland 20910 (Address of pr ...

[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) Consolidated net income reached $0.46 million in Q1 2021, a turnaround from a $23.06 million net loss, driven by the absence of prior-year impairment charges and a major debt refinancing [Consolidated Statements of Operations](index=5&type=section&id=Consolidated%20Statements%20of%20Operations) Net revenue slightly declined to $91.4 million, but operating income improved to $23.8 million due to the absence of a prior-year impairment charge Consolidated Statements of Operations (Q1 2021 vs Q1 2020) | Financial Metric | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | | :--- | :--- | :--- | | **Net Revenue** | $91,440 | $94,875 | | Total Operating Expenses | $67,683 | $122,162 | | *Impairment of long-lived assets* | *$0* | *$53,650* | | **Operating Income (Loss)** | $23,757 | $(27,287) | | Interest Expense | $18,045 | $19,138 | | Loss on Retirement of Debt | $6,949 | $0 | | **Consolidated Net Income (Loss)** | $461 | $(23,058) | | **Net Income (Loss) Attributable to Common Stockholders** | $7 | $(23,187) | | **Diluted EPS** | $0.00 | $(0.51) | [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased slightly to $1.17 billion, while liabilities decreased to $957.2 million, and stockholders' equity increased to $198.8 million Consolidated Balance Sheet Highlights | Account | March 31, 2021 (Unaudited, in thousands) | December 31, 2020 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $56,814 | $73,385 | | Total current assets | $203,893 | $222,966 | | Goodwill | $223,402 | $223,402 | | Radio Broadcasting Licenses | $484,066 | $484,066 | | **Total Assets** | **$1,168,751** | **$1,195,487** | | Total current liabilities | $77,973 | $106,909 | | Long-term debt, net | $809,857 | $818,924 | | **Total Liabilities** | **$957,185** | **$995,888** | | **Total Stockholders' Equity** | **$198,831** | **$186,898** | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow decreased to $14.3 million, while financing activities shifted to a $30.1 million outflow due to major debt refinancing Cash Flow Summary (Q1 2021 vs Q1 2020) | Cash Flow Activity | Three Months Ended March 31, 2021 (in thousands) | Three Months Ended March 31, 2020 (in thousands) | | :--- | :--- | :--- | | Net cash flows provided by operating activities | $14,293 | $22,035 | | Net cash flows used in investing activities | $(804) | $(1,905) | | Net cash flows (used in) provided by financing activities | $(30,060) | $12,714 | | **(Decrease) Increase in Cash** | **$(16,571)** | **$32,844** | - Financing activities in Q1 2021 were dominated by a large-scale debt refinancing, including proceeds of **$825 million** from new 2028 Notes and repayments of multiple facilities totaling over **$852 million**[27](index=27&type=chunk) [Notes to Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Details business segments, the January 2021 debt refinancing, Q1 2020 impairment charges, and ongoing At-The-Market stock offering programs - The company operates as a multi-media entity targeting African-American and urban consumers through four main segments: radio broadcasting (Radio One), syndicated programming (Reach Media), digital platforms (Interactive One), and cable television (TV One, CLEO TV)[30](index=30&type=chunk)[33](index=33&type=chunk) Net Revenue by Source (Q1 2021 vs Q1 2020) | Revenue Source | Q1 2021 (in thousands) | Q1 2020 (in thousands) | | :--- | :--- | :--- | | Radio Advertising | $33,340 | $38,417 | | Digital Advertising | $10,353 | $6,289 | | Cable Television Advertising | $20,702 | $21,033 | | Cable Television Affiliate Fees | $25,486 | $26,207 | | **Total Net Revenue** | **$91,440** | **$94,875** | - In January 2021, the company issued **$825 million** of 7.375% senior secured notes due 2028, using proceeds to repay and terminate several existing debt facilities, resulting in a **$6.9 million** loss on retirement of debt[94](index=94&type=chunk)[95](index=95&type=chunk) - Due to COVID-19's economic impact, the company recorded a non-cash impairment charge of approximately **$53.6 million** in Q1 2020, with no impairment recorded in Q1 2021[87](index=87&type=chunk)[89](index=89&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Net revenue decreased 3.6% due to radio segment decline, offset by digital and Reach Media growth, with operating income improving significantly [Results of Operations](index=43&type=section&id=Results%20of%20Operations) Net revenue declined 3.6% to $91.4 million, while operating income improved to $23.8 million due to lower expenses and no impairment charge Net Revenue Change by Source (Q1 2021 vs Q1 2020) | Revenue Source | Q1 2021 (in thousands) | Q1 2020 (in thousands) | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Radio Advertising | $33,340 | $38,417 | $(5,077) | (13.2)% | | Digital Advertising | $10,353 | $6,289 | $4,064 | 64.6% | | Cable Television Advertising | $20,702 | $21,033 | $(331) | (1.6)% | | Cable Television Affiliate Fees | $25,486 | $26,207 | $(721) | (2.8)% | | **Total Net Revenue** | **$91,440** | **$94,875** | **$(3,435)** | **(3.6)%** | - The radio broadcasting segment's net revenue decreased by **20.4%** year-over-year, while the digital segment's net revenue increased by approximately **$4.1 million**, and Reach Media's revenue grew by **16.9%**[200](index=200&type=chunk) - A loss on retirement of debt of approximately **$6.9 million** was recorded in Q1 2021 associated with the settlement of the 2028 Notes offering and the repayment of previous debt facilities[209](index=209&type=chunk) [Liquidity and Capital Resources](index=52&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is supported by operations and a new $50 million asset-backed credit facility, following a major $825 million debt refinancing in January 2021 - In January 2021, the company completed a major debt refinancing by issuing **$825 million** in 7.375% notes due 2028, simplifying its debt structure and extending maturities[222](index=222&type=chunk)[223](index=223&type=chunk) - A new **$50 million** asset-backed credit facility was established in February 2021 to provide for working capital needs, replacing a previous facility[226](index=226&type=chunk) - The company utilized At-The-Market (ATM) stock sale programs, completing a **$25 million** program in January 2021 and raising approximately **$2.8 million** in net proceeds from a new program as of March 31, 2021[221](index=221&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Market risk exposure remains materially unchanged since the disclosures in the 2020 Annual Report on Form 10-K - There have been no material changes in the company's exposure to market risk since December 31, 2020[265](index=265&type=chunk) [Item 4. Controls and Procedures](index=55&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of March 31, 2021, with no material changes in internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures are effective in providing reasonable assurance of achieving desired control objectives[266](index=266&type=chunk)[267](index=267&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[268](index=268&type=chunk) [PART II. OTHER INFORMATION](index=56&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=56&type=section&id=Item%201.%20Legal%20Proceedings) Routine legal proceedings are ongoing but are not expected to materially affect financial condition or operations - The company is involved in routine legal proceedings that are not expected to have a material adverse effect on its business[271](index=271&type=chunk) [Item 1A. Risk Factors](index=56&type=section&id=Item%201A.%20Risk%20Factors) For a comprehensive understanding of potential risks, refer to the risk factors detailed in the 2020 Annual Report on Form 10-K - For a detailed discussion of risk factors, the report refers to the company's 2020 Annual Report on Form 10-K[272](index=272&type=chunk)

Financial Data and Key Metrics Changes - Net revenue for Q1 2021 was approximately $91.4 million, down 3.6% year-over-year [10] - Adjusted EBITDA for Q1 decreased by 10.6% year-over-year to $28.8 million [21] - Net income was $7,000, compared to a net loss of approximately $23.2 million or $0.51 per share for Q1 2020 [23] - Total gross debt as of March 31, 2021, was $825 million, with a net leverage ratio of 5.71 times [25] Business Line Data and Key Metrics Changes - Core radio revenue, excluding political, was down 13.7% year-over-year, with January down 28.4%, February down 19.9%, and March up 8.8% [10] - Reach Media's net revenue increased by 16.8% in Q1, driven by increased advertiser demand [13] - Digital segment net revenues increased by 64.7% in Q1, contributing to adjusted EBITDA growth of approximately $3.2 million year-over-year [14] - Cable television segment revenue decreased by 2.6% to approximately $46.2 million [15] Market Data and Key Metrics Changes - Cable TV advertising revenue was down 1.6%, and affiliate revenue decreased by 2.8% [15] - Cable subscribers for TV One decreased from 51.4 million at the end of Q4 2020 to 49.4 million at the end of Q1 2021 [15] Company Strategy and Development Direction - The company is optimistic about the full year, anticipating a significant rebound in radio business for Q2 [8] - Urban One is pursuing a $600 million casino resort project in Richmond, Virginia, which could create a significant new revenue stream [32][37] - The management sees a positive advertising climate for African-American owned media companies, with increased commitments from major corporations [27][30] Management's Comments on Operating Environment and Future Outlook - Management noted that the timing of advertising dollars is harder to predict, but there is a robust economy with rising demand [40] - The company is focused on deleveraging and is cautious about financing strategies, emphasizing the importance of maintaining a sustainable leverage ratio [54][104] - Management expressed confidence in achieving EBITDA targets for the full year, contingent on winning the Richmond license [60][121] Other Important Information - The company saved approximately $1 million in employee compensation and $650,000 in travel and office expenses year-over-year [17] - Capital expenditures were approximately $804,000 compared to $1.4 million last year [24] Q&A Session Summary Question: Can you provide an update on Q2 pacing? - Management indicated that Q2 pacing is currently up by more than 70%, with April finishing up about 89% [40][43] Question: What is the status of the Richmond casino project? - The company is in discussions with the city and expects to know the outcome by the end of May or early June [36][72] Question: How do you view the current M&A landscape? - Management believes the company is well-positioned to be a consolidator in the radio space, focusing on creating value through potential asset swaps or acquisitions [108][110] Question: What are the plans for free cash flow? - Management plans to allocate free cash flow towards the Richmond investment or to pay down debt, depending on the outcome of the project [123][126]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from to Commission File No. 0-25969 URBAN ONE, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of (I.R.S. Employer incor ...

Financial Data and Key Metrics Changes - In Q3 2020, net revenue decreased by 17.2% year-over-year to approximately $91.9 million, but increased by 20.9% from Q2 2020 [12] - EBITDA guidance for 2020 is projected to be between $125 million and $130 million, compared to $133 million in the previous year [10][11] - The net loss for Q3 2020 was approximately $12.8 million or $0.29 per share, compared to a net income of approximately $5.4 million or $0.12 per share in Q3 2019 [30] Business Line Data and Key Metrics Changes - Radio segment net revenue was down 31.9% year-over-year in Q3 but up 54.3% from Q2, including approximately $2.4 million from political advertising [12][13] - Reach Media's net revenue decreased by 29%, but adjusted EBITDA increased by approximately $1.3 million or 68% year-over-year [16] - Digital segment net revenues increased by 3.4%, driven by strength in direct advertising sales, with adjusted EBITDA growth of approximately $864,000 or 121% year-over-year [17] Market Data and Key Metrics Changes - National advertising sales for Q3 were down 21.5% year-over-year, while local ad sales were down 36% [13] - Political advertising revenue for the fourth quarter is expected to exceed $20 million, significantly higher than previous records [15] - Cable television segment revenue decreased by 2.7%, with advertising revenue down by 1.8% [17] Company Strategy and Development Direction - The company is focusing on consolidating its radio assets to create economies of scale and enhance advertiser clout [37] - A recent radio asset swap with Entercom aims to expand market presence and improve revenue potential in Charlotte [39] - The company is committed to deleveraging and maintaining liquidity throughout the pandemic, with a focus on cost control and operational efficiency [35][43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the pandemic, citing strong performance in political advertising and improvements in core business segments [34][35] - The radio business is expected to improve in 2021, although it may not return to pre-COVID levels [47] - The company anticipates that the casino business will continue to perform well, particularly in regional markets [101] Other Important Information - The company executed a stock-based tax repurchase of 3,195 shares of Class D common stock for $6,000 [31] - A non-cash impairment expense of $29 million was recorded due to COVID-19 impacts on radio market revenue [27] - Interest expense decreased by 9.9% to approximately $18.2 million for Q3 2020 [28] Q&A Session Summary Question: Can you provide the multiple on the radio station sale in St. Louis? - The multiple was 16.8 times [52] Question: What are the fees on the MGM National Harbor put interest? - The fees are 6.67% [53] Question: How is the company planning to address near-term maturities in its capital structure? - The company plans to re-rack the entire capital structure in 2021, ideally after the COVID quarters [55][60] Question: What is the normalized EBITDA expected for 2021? - Management indicated that 2021 is not expected to return to pre-COVID levels, and they will approach budgeting cautiously [69][72] Question: Is there an opportunity for consolidation in cable TV? - While the company is focused on radio consolidation, they are also leveraging the strength of their cable assets [73][75]

[PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Consolidated Financial Statements](index=6&type=section&id=Item%201.%20Consolidated%20Financial%20Statements) This section presents Urban One, Inc.'s unaudited consolidated financial statements for the three and nine months ended September 30, 2020, and 2019, along with detailed notes on accounting policies [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) Urban One reported a net loss of $12.8 million in Q3 2020 and $34.5 million for the nine months, primarily due to revenue declines and significant impairment charges Consolidated Statements of Operations (Unaudited, In thousands) | | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | **Net Revenue** | $91,912 | $111,055 | $262,795 | $331,075 | | **Operating Income (Loss)** | $3,968 | $31,117 | $(2,937) | $75,034 | | **Impairment of long-lived assets** | $29,050 | $0 | $82,700 | $3,800 | | **Consolidated Net (Loss) Income** | $(12,277) | $5,687 | $(33,693) | $9,845 | | **Net (Loss) Income Attributable to Common Stockholders** | $(12,772) | $5,359 | $(34,539) | $8,846 | | **Diluted EPS** | $(0.29) | $0.12 | $(0.77) | $0.19 | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased slightly to $1.21 billion as of September 30, 2020, primarily due to impairments, while cash and cash equivalents significantly increased to $102.2 million Consolidated Balance Sheet Highlights (Unaudited, In thousands) | | Sep 30, 2020 | Dec 31, 2019 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $102,223 | $33,073 | | **Total current assets** | $233,543 | $186,039 | | **Goodwill** | $223,872 | $239,772 | | **Radio Broadcasting Licenses** | $516,372 | $582,697 | | **Total assets** | $1,210,537 | $1,249,919 | | **Total current liabilities** | $122,743 | $101,038 | | **Long-term debt, net** | $827,128 | $850,308 | | **Total liabilities** | $1,036,995 | $1,056,280 | | **Total stockholders' equity** | $162,425 | $183,075 | [Consolidated Statements of Cash Flows](index=12&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities increased to $64.4 million for the nine months ended September 30, 2020, supported by financing activities and a draw on the ABL facility Cash Flow Summary (Unaudited, In thousands) | | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | | **Net cash flows provided by operating activities** | $64,443 | $51,048 | | **Net cash flows (used in) provided by investing activities** | $(3,651) | $9,553 | | **Net cash flows provided by (used in) financing activities** | $8,358 | $(44,588) | | **Increase in cash, cash equivalents and restricted cash** | $69,150 | $16,013 | | **Cash, cash equivalents and restricted cash, end of period** | $102,696 | $31,903 | [Notes to Consolidated Financial Statements](index=14&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, business segments, debt structure, and significant events, including COVID-19 impacts, impairment charges, and subsequent debt and asset exchanges - The company operates as a multi-media entity targeting African-American and urban consumers across four segments: radio broadcasting, Reach Media, digital, and cable television [32](index=32&type=chunk)[35](index=35&type=chunk) - Due to COVID-19, the company recorded significant non-cash impairment charges of **$15.9 million for goodwill** and **$66.8 million for radio broadcasting licenses** for the nine months ended September 30, 2020 [64](index=64&type=chunk)[95](index=95&type=chunk) - In August 2020, the company raised approximately **$14.8 million** in net proceeds from an "at-the-market" stock offering by issuing **2.9 million Class A shares** [143](index=143&type=chunk) - Subsequent to quarter-end, the company successfully exchanged **$347.0 million** (99.15% of outstanding) of its 7.375% Senior Secured Notes for new 8.75% notes with a later maturity to enhance financial flexibility [180](index=180&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) - In November 2020, the company signed an asset exchange agreement with Entercom Communications Corp., trading stations in St. Louis, Philadelphia, and Washington, D.C. for stations in Charlotte, NC [188](index=188&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=44&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the significant negative impact of COVID-19 on revenues, particularly in radio, leading to net losses, but notes improved operating cash flow and bolstered liquidity through cost-cutting and financing actions [Results of Operations](index=50&type=section&id=Results%20of%20Operations) Net revenue declined 17.2% in Q3 2020 and 20.6% for the nine months, primarily due to reduced radio advertising, partially offset by political advertising and significant cost-cutting measures Net Revenue by Source - Q3 2020 vs Q3 2019 (In thousands) | Revenue Source | Q3 2020 | Q3 2019 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Radio Advertising | $34,919 | $50,813 | $(15,894) | (31.3)% | | Political Advertising | $4,324 | $300 | $4,024 | 1,341.3% | | Digital Advertising | $8,121 | $8,171 | $(50) | (0.6)% | | Cable Television Advertising | $19,603 | $20,649 | $(1,046) | (5.1)% | | Cable Television Affiliate Fees | $24,421 | $25,330 | $(909) | (3.6)% | | Event Revenues & Other | $524 | $5,792 | $(5,268) | (91.0)% | | **Total Net Revenue** | **$91,912** | **$111,055** | **$(19,143)** | **(17.2)%** | - Operating expenses for Q3 2020 significantly decreased across programming, technical, and SG&A categories due to extensive cost-cutting initiatives [214](index=214&type=chunk)[216](index=216&type=chunk) - A non-cash impairment charge of **$29.1 million** was recorded in Q3 2020, related to goodwill and radio broadcasting licenses [220](index=220&type=chunk) Broadcast and Digital Operating Income (Non-GAAP) (In thousands) | | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :--- | :--- | :--- | :--- | :--- | | **Broadcast and digital operating income** | $44,194 | $43,644 | $112,002 | $122,122 | | **Broadcast and digital operating income margin** | 48.1% | 39.3% | 42.6% | 36.9% | [Liquidity and Capital Resources](index=60&type=section&id=Liquidity%20and%20Capital%20Resources) The company bolstered liquidity through cost-cutting, a $27.5 million ABL facility draw, and a $14.8 million stock offering, projecting adequate cash and covenant compliance for the next 12 months - The company drew approximately **$27.5 million** on its ABL Facility in March 2020 to enhance liquidity amid pandemic uncertainty [250](index=250&type=chunk) - Management concluded the company has adequate cash reserves and will meet debt service requirements and covenants for at least the next 12 months, following reforecasts and cost-cutting [249](index=249&type=chunk)[250](index=250&type=chunk) Debt Covenant Compliance as of September 30, 2020 | Covenant | Actual Ratio | Covenant Limit | Status | | :--- | :--- | :--- | :--- | | **2017 Credit Facility** | | | | | Interest Coverage Ratio | 2.02x | > 1.25x | Compliant | | Senior Secured Leverage Ratio | 4.55x | < 5.85x | Compliant | | **2018 Credit Facility** | | | | | Total Gross Leverage Ratio | 6.36x | < 7.50x | Compliant | [Critical Accounting Policies and Estimates](index=63&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Critical accounting estimates include goodwill and radio broadcasting license valuations, which saw significant impairment charges in 2020, and the realizability of deferred tax assets - Goodwill and radio broadcasting licenses represent approximately **61.2% of total assets** as of September 30, 2020, making their valuation a critical estimate [263](index=263&type=chunk) Impairment Charges for Nine Months Ended Sep 30, 2020 (in millions) | Asset | Impairment Charge | | :--- | :--- | | Goodwill (Atlanta & Indianapolis) | $15.9 | | Radio Broadcasting Licenses (various markets) | $66.8 | - Management concluded that the company's deferred tax assets (DTAs) are more likely than not realizable, based on cumulative income and future profitability forecasts, avoiding a valuation allowance [273](index=273&type=chunk)[274](index=274&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=68&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk exposure has not materially changed since its December 31, 2019, Annual Report on Form 10-K disclosures - There have been no material changes to the company's market risk exposure since December 31, 2019 [293](index=293&type=chunk) [Item 4. Controls and Procedures](index=68&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures were not effective as of September 30, 2020, due to previously identified material weaknesses, with remediation efforts ongoing - Management concluded that disclosure controls and procedures are not effective due to previously identified material weaknesses [294](index=294&type=chunk) - The company is actively remediating three material weaknesses identified in the 2019 Form 10-K, with completion expected in 2020 [298](index=298&type=chunk) [PART II. OTHER INFORMATION](index=70&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=70&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine legal proceedings not expected to materially affect its financial condition or results of operations - Urban One states that ongoing legal proceedings are routine and not expected to have a material adverse effect on the company [301](index=301&type=chunk) [Item 1A. Risk Factors](index=70&type=section&id=Item%201A.%20Risk%20Factors) The primary risk factor is the significant and uncertain impact of the COVID-19 pandemic on advertising demand and event revenues, despite the company's cost-cutting and liquidity measures - The COVID-19 outbreak is causing significant disruption, with advertisers reducing or eliminating spending, particularly impacting the radio segment's reliance on local advertisers [302](index=302&type=chunk) - The pandemic has led to the postponement or cancellation of special events, including the 2020 Tom Joyner Foundation Fantastic Voyage cruise, impacting alternative revenue sources [302](index=302&type=chunk) - To mitigate financial impact, the company implemented cost-cutting measures and drew **$27.5 million** on its ABL facility to enhance liquidity [304](index=304&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=71&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - None [307](index=307&type=chunk) [Item 3. Defaults Upon Senior Securities](index=71&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None [308](index=308&type=chunk) [Item 4. Mine Safety Disclosures](index=71&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable [309](index=309&type=chunk) [Item 5. Other Information](index=71&type=section&id=Item%205.%20Other%20Information) The company reported no other information for this item - None [310](index=310&type=chunk) [Item 6. Exhibits](index=71&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and XBRL financial data - Exhibits filed include CEO/CFO certifications under Sarbanes-Oxley Sections 302 and 906, and the XBRL Interactive Data File [311](index=311&type=chunk)

Financial Data and Key Metrics Changes - Net revenue decreased by 37.5% in Q2 2020, totaling approximately $76 million [6] - Consolidated adjusted EBITDA fell by 38.1% year-over-year to $24.5 million [15] - Net income was approximately $1.4 million or $0.03 per share, down from $6.6 million or $0.15 per share in Q2 2019 [18] - Operating expenses decreased by 37.6% to approximately $53 million [11] Business Line Data and Key Metrics Changes - Radio segment net revenue declined by 58.4%, with national ad sales down 49.1% and local advertising sales down 61.2% [7] - Reach Media's net revenue fell by 66.6%, largely due to the postponement of the Tom Joyner Fantastic Voyage cruise [8] - Digital segment net revenues decreased by 20.4% [9] - Cable television segment revenue was approximately $43.8 million, down 5.7% [9] Market Data and Key Metrics Changes - The worst affected advertising categories included entertainment (down 90%), food and beverage (down 83%), and travel and transportation (down 72%) [7] - Cable subscribers decreased from 51.8 million at the end of Q1 to 51.4 million at the end of Q2 [10] Company Strategy and Development Direction - The company is focusing on local radio recovery as a key driver for future performance [21] - TV One is expected to achieve approximately $90 million in EBITDA for 2020, up from $82-83 million in 2019 [23] - The company is engaging in deep conversations with political campaigns to leverage advertising opportunities [22] Management's Comments on Operating Environment and Future Outlook - Management noted that Q2 was the bottom of the downturn, with sequential improvement expected in Q3 [5] - There is cautious optimism regarding recovery, with July showing improvement in ad revenue pacing [21] - The company is experiencing increased advertiser interest, particularly from major brands focusing on African-American owned media [26] Other Important Information - The MGM National Harbor casino reopened at 50% capacity, contributing to revenue recovery [24] - The company saved approximately $7.1 million in employee compensation through layoffs and furloughs [12] Q&A Session Summary Question: How does the overall radio ad environment compare to the marketplace? - Management believes they are outperforming the market based on channel checks and pacing data [32][34] Question: Will the increased focus on African-American owned businesses benefit across the platform? - Advertisers are engaging in cross-platform conversations, benefiting both radio and TV [36] Question: What is needed for advertising to recover alongside traffic volume improvements? - A stabilization of the operating environment and a reduction in COVID-19 cases are necessary for recovery [38][40] Question: What is the current liquidity position? - The company reported around $76 million in cash, indicating a strong liquidity position [45] Question: Are there any thoughts on capital structure during the COVID-19 crisis? - The company is actively managing capital structure and engaging with debt holders to ensure compliance and explore options [46] Question: Can events pivot to virtual formats? - While possible, virtual events cannot match the profitability of in-person events due to reliance on ticket sales [50] Question: What are the expectations for revenue sharing from MGM National Harbor? - Revenue will not reach previous levels, but performance is expected to be better than initially anticipated at 50% capacity [51]

SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 Commission File No. 0-25969 URBAN ONE, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) Delaware 52-1166660 1010 Wayne Avenue, 14th Floor Silver Spring, Maryland 20910 (Address of principal executive ...