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What changed in BEASLEY BROADCAST GROUP INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of BEASLEY BROADCAST GROUP INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+223 added−217 removedSource: 10-K (2024-02-16) vs 10-K (2023-03-27)

Top changes in BEASLEY BROADCAST GROUP INC's 2023 10-K

223 paragraphs added · 217 removed · 180 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

40 edited+6 added−6 removed74 unchanged
Biggest changeAmong other things, the FCC: • determines the particular frequencies, locations, operating powers and other technical parameters of radio stations; • issues, renews, revokes, conditions and modifies radio station licenses; • determines whether to approve changes in ownership or control of radio station licenses; • regulates equipment used by radio stations; and • adopts and implements regulations and policies that directly or indirectly affect the ownership, operation, program content and employment practices of radio stations.
Biggest changeAmong other things, the FCC: • determines the particular frequencies, locations, operating powers and other technical parameters of radio stations; • issues, renews, revokes, conditions and modifies radio station licenses; • determines whether to approve changes in ownership or control of radio station licenses; • regulates equipment used by radio stations; and • adopts and implements regulations and policies that directly or indirectly affect the ownership, operation, program content and employment practices of radio stations. 3 Table of Contents The FCC has the power to impose penalties for violations of its rules that are implemented pursuant to the Communications Act of 1934, as amended (the “Communications Act”), including the imposition of monetary forfeitures, the issuance of short-term licenses, the imposition of conditions on the renewal of a license, and, in egregious cases, non-renewal of licenses and the revocation of licenses.
It is not uncommon for radio stations to enter into agreements under which separately owned and licensed radio stations agree to enter into cooperative arrangements of varying sorts, subject to compliance with the requirements of antitrust laws and with FCC’s rules and policies.
It is not uncommon for radio stations to enter into agreements under which separately owned and licensed radio stations agree to enter into cooperative arrangements of varying sorts, subject to compliance with the requirements of antitrust laws and with the FCC’s rules and policies.
Federal Antitrust Laws. The agencies responsible for enforcing the federal antitrust laws, the Federal Trade Commission (“FTC”) or the Department of Justice, may investigate certain acquisitions. In January 2022, they jointly announced an initiative to review and revise federal merger guidelines.
The agencies responsible for enforcing the federal antitrust laws, the Federal Trade Commission (“FTC”) or the Department of Justice, may investigate certain acquisitions. In January 2022, they jointly announced an initiative to review and revise federal merger guidelines.
Strategy We seek to secure and maintain a leadership position in the markets we serve by developing high quality local content, through our audio, digital and esports platforms, including events and experiences in the communities we serve and, in turn, offer advertisers access to a highly effective marketing platform to reach large and targeted local audiences.
Strategy We seek to secure and maintain a leadership position in the markets we serve by developing high quality local content, through our audio and digital platforms, including events and experiences in the communities we serve and, in turn, offer advertisers access to a highly effective marketing platform to reach large and targeted local audiences.
However, several public interest organizations filed petitions for review with the Court of Appeals for the Third Circuit, the same court that has considered challenges to prior ownership orders issued by the FCC. In an Order adopted in September 2019, the Third Circuit vacated the FCC’s November 2017 Reconsideration Order.
However, several public interest organizations filed petitions for review with the Court of Appeals for the Third Circuit, the same court that considered challenges to prior ownership orders issued by the FCC. In an Order adopted in September 2019, the Third Circuit vacated the FCC’s November 2017 Reconsideration Order.
We own and operate stations in the following markets: Atlanta, GA, Augusta, GA, Boston, MA, Charlotte, NC, Detroit, MI, Fayetteville, NC, Fort Myers-Naples, FL, Las Vegas, NV, Middlesex, NJ, Monmouth, NJ, Morristown, NJ, Philadelphia, PA, Tampa-Saint Petersburg, FL, and Wilmington, DE. We refer to each group of stations in each market as a market cluster.
We own and operate stations in the following markets: Atlanta, GA, Augusta, GA, Boston, MA, Charlotte, NC, Detroit, MI, Fayetteville, NC, Fort Myers-Naples, FL, Las Vegas, NV, Middlesex, NJ, Monmouth, NJ, Morristown, NJ, Philadelphia, PA, and Tampa-Saint Petersburg, FL. We refer to each group of stations in each market as a market cluster.
The non-renewal, or renewal with substantial conditions or modification, of one or more of our licenses could have a material adverse effect on our business. The FCC classifies each AM and FM radio station. An AM radio station operates on either a clear channel, regional channel or local channel.
The non-renewal, or renewal with substantial conditions or modifications, of one or more of our licenses could have a material adverse effect on our business. The FCC classifies each AM and FM radio station. An AM radio station operates on either a clear channel, regional channel or local channel.
Under these rules, our ability to transfer or assign our radio stations as a group to a single buyer in one of our current markets may be limited. Ownership Attribution. The FCC generally applies its ownership limits to attributable interests held by an individual, corporation, partnership or other entity.
Under these rules, our ability to transfer or assign our radio stations as a group to a single buyer in one of our current markets may be limited. 5 Table of Contents Ownership Attribution. The FCC generally applies its ownership limits to attributable interests held by an individual, corporation, partnership or other entity.
The streamlined rules permit a broadcast licensee to file a petition with the FCC seeking approval for a proposed foreign investor to own up to 100% of the controlling parent entity and for a non-controlling foreign investor identified in the petition to increase its equity and/or voting interest in a parent entity at a future time up to 49.9 percent.
The FCC’s rules permit a broadcast licensee to file a petition with the FCC seeking approval for a proposed foreign investor to own up to 100% of the controlling parent entity and for a non-controlling foreign investor identified in the request to increase its equity and/or voting interest in a parent entity at a future time up to 49.9 percent.
An “attributable” interest for purposes of the FCC’s broadcast ownership rules generally includes: (i) equity and debt interests which combined exceed 33% of a licensee’s total assets, if the interest holder supplies more than 15% of the licensee’s total weekly programming, or has an attributable same-market media interest, whether television or radio; (ii) a 5% or greater direct or indirect voting 6 Table of Contents Index to Financial Statements stock interest, including certain interests held in trust, unless the holder is a qualified passive investor in which case the threshold is a 20% or greater voting stock interest; (iii) any equity interest in a limited liability company or a partnership, including a limited partnership, unless properly “insulated” from management activities; and (iv) any position as an officer or director of a licensee or its direct or indirect parent.
An “attributable” interest for purposes of the FCC’s broadcast ownership rules generally includes: (i) equity and debt interests which combined exceed 33% of a licensee’s total assets, if the interest holder supplies more than 15% of the licensee’s total weekly programming, or has an attributable same-market media interest, whether television or radio; (ii) a 5% or greater direct or indirect voting stock interest, including certain interests held in trust, unless the holder is a qualified passive investor in which case the threshold is a 20% or greater voting stock interest; (iii) any equity interest in a limited liability company or a partnership, including a limited partnership, unless properly “insulated” from management activities; and (iv) any position as an officer or director of a licensee or its direct or indirect parent.
Because the FCC may investigate indecency complaints prior to notifying a licensee of the existence of a complaint, a licensee may not have knowledge of a complaint unless and until the complaint results in the issuance of a formal FCC letter of inquiry or notice of apparent liability for forfeiture.
Because the FCC may investigate indecency complaints prior to notifying a licensee of the existence of a complaint, a licensee may not have knowledge of a complaint unless and until the complaint results in the issuance of a formal FCC 4 Table of Contents letter of inquiry or notice of apparent liability for forfeiture.
In the areas of information security and data protection, the laws in several states in the United States and most countries require companies to implement specific information security controls and legal protections to protect certain types of personally identifiable information.
In the areas of information security and data protection, the laws in several states in the United States and 8 Table of Contents most countries require companies to implement specific information security controls and legal protections to protect certain types of personally identifiable information.
These reports will be available as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the Securities and Exchange Commission (the “SEC”). 11 Table of Contents Index to Financial Statements The SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, www.sec.gov.
These reports will be available as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the Securities and Exchange Commission (the “SEC”). 9 Table of Contents The SEC maintains an internet site, www.sec.gov, that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 10 Table of Contents
Boosters operate on the same frequency as the station being retransmitted and translators operate on a different frequency. 4 Table of Contents Index to Financial Statements An Order adopted by the FCC to revitalize the AM band implemented several rule changes impacting the technical operations of AM stations, including relaxation of the daytime community coverage requirements and elimination of the nighttime community coverage requirements for existing AM stations.
Boosters operate on the same frequency as the station being retransmitted and translators operate on a different frequency. An Order adopted by the FCC to revitalize the AM band implemented several rule changes impacting the technical operations of AM stations, including relaxation of the daytime community coverage requirements and elimination of the nighttime community coverage requirements for existing AM stations.
We have obtained public performance licenses from, and pay license fees to, the four major PROs in the U.S., which are the American Society of 8 Table of Contents Index to Financial Statements Composers, Authors and Publishers (“ASCAP”), Broadcast Music, Inc. (“BMI”), SESAC LLC (“SESAC”) and Global Music Rights LLC (“GMR”).
We have obtained public performance licenses from, and pay license fees to, the four major PROs in the U.S., which are the American Society of Composers, Authors and Publishers (“ASCAP”), Broadcast Music, Inc. (“BMI”), SESAC LLC (“SESAC”) and Global Music Rights LLC (“GMR”).
The FCC has expanded the breadth of indecency regulation to include material that could be considered “blasphemy,” “personally reviling epithets,” “profanity” and vulgar or coarse words, amounting to a nuisance. The maximum permitted fine for an indecency violation is $479,945 per incident and $4,430,255 for any continuing violation arising from a single act or failure to act.
The FCC has expanded the breadth of indecency regulation to include material that could be considered “blasphemy,” “personally reviling epithets,” “profanity” and vulgar or coarse words, amounting to a nuisance. The maximum permitted fine for an indecency violation is $495,500 per incident and $4,573,840 for any continuing violation arising from a single act or failure to act.
Additional federal, state, and territorial laws and regulations may be adopted with respect 10 Table of Contents Index to Financial Statements to the Internet or other online services, covering such issues as user privacy, child safety, data security, advertising, pricing, content, copyrights and trademarks, access by persons with disabilities, distribution, taxation and characteristics and quality of products and services.
Additional federal, state, and territorial laws and regulations may be adopted with respect to the Internet or other online services, covering such issues as user privacy, child safety, data security, advertising, product and service endorsements, pricing, content, copyrights and trademarks, access by persons with disabilities, distribution, taxation and characteristics and quality of products and services.
Such matters may include: • changes in the FCC’s multiple-ownership rules and attribution policies; • regulatory fees, spectrum use fees or other fees on FCC licenses; • changes in laws with respect to foreign ownership of broadcast licenses; • revisions to the FCC’s rules relating to political broadcasting, including proposals to give free airtime to candidates and other changes regarding political advertising rates, sponsorship disclosure and political file recordkeeping obligations; • technical and frequency allocation matters; • proposals to restrict or prohibit the advertising of beer, wine and other alcoholic beverages on the radio; • proposals to restrict or prohibit the advertising of online casinos, online sports betting services and fantasy sports services; • proposals to require radio broadcasters to pay royalties to musicians and record labels for the performance of music played on the stations; • proposals to limit the tax deductibility of or impose sales tax on advertising expenses by advertisers; • proposals to regulate or prohibit payments to stations by independent record promoters, record labels and others for the inclusion of specific content in broadcast programming; and • proposals in legislation to strengthen protections against online infringement of intellectual property that would impose criminal penalties on content providers, including broadcasters, that fail to comply with legal requirements to file reports regarding internet streaming in a timely manner. 9 Table of Contents Index to Financial Statements The FCC has also adopted procedures for the auction of broadcast spectrum in circumstances where two or more parties have filed for new or major change applications that are mutually exclusive.
Such matters may include: 7 Table of Contents • changes in the FCC’s multiple-ownership rules and attribution policies; • regulatory fees, spectrum use fees or other fees on FCC licenses; • changes in laws with respect to foreign ownership of broadcast licenses; • revisions to the FCC’s rules relating to political broadcasting, including proposals to give free airtime to candidates and other changes regarding political advertising rates, sponsorship disclosure and political file recordkeeping obligations; • technical and frequency allocation matters; • proposals to restrict or prohibit the advertising of beer, wine and other alcoholic beverages on the radio; • proposals to restrict or prohibit the advertising of online casinos, online sports betting services and fantasy sports services; • proposals to require radio broadcasters to pay royalties to musicians and record labels for the performance of music played on the stations; • proposals to limit the tax deductibility of or impose sales tax on advertising expenses by advertisers; • proposals to regulate or prohibit payments to stations by independent record promoters, record labels and others for the inclusion of specific content in broadcast programming; and • proposals in legislation to strengthen protections against online infringement of intellectual property that would impose criminal penalties on content providers, including broadcasters, that fail to comply with legal requirements to file reports regarding internet streaming in a timely manner.
A station’s local sales staff generates the majority of its local and regional advertising sales through direct solicitations of local advertising agencies and businesses. We retain a national representation firm to sell to advertisers outside of our local markets.
A station’s local sales staff generates the majority of its local and regional advertising sales through direct solicitations of local advertising agencies and businesses. We retain a national representation firm to sell to advertisers outside of our local markets. Competition The radio broadcasting industry is highly competitive.
Regulation of the Internet Our business is subject to privacy and data protection legislation and regulation. We obtain information from users of our technology platforms, including, without limitation, our websites, web pages, applications, social media pages, and mobile applications (“Platforms”), in accordance with the privacy policies and terms of use posted on the applicable Platform.
We obtain information from users of our technology platforms, including, without limitation, our websites, web pages, applications, social media pages, and mobile applications (“Platforms”), in accordance with the privacy policies and terms of use posted on the applicable Platform.
In November 2022, the FCC released a Public Notice seeking public comment on petitions for rulemaking requesting it to adopt rule changes that would improve digital FM signal quality and coverage while minimizing harmful interference to adjacent-channel stations. We filed comments supporting the proposals.
In August 2023, the FCC released a Notice of Proposed Rulemaking seeking public comment on proposals to adopt rule changes that would improve digital FM signal quality and coverage while minimizing harmful interference to adjacent-channel stations. We filed comments supporting the proposed rule changes.
In December 2018, the FCC released a Notice of Proposed Rulemaking to launch its 2018 quadrennial review of multiple ownership rules. Because of the rule changes implemented as a result of the Supreme Court decision, in 2021, the Media Bureau asked parties to update the record in the currently pending 2018 quadrennial review.
In December 2018, the FCC launched its 2018 quadrennial review of multiple ownership rules. Because of the rule changes 6 Table of Contents implemented as a result of the Supreme Court decision, in 2021, the Media Bureau asked parties to update the record in the currently pending 2018 quadrennial review.
Competition for advertising revenues also comes directly from competitors such as Amazon, Apple, Facebook and Google.
Competition for advertising revenues also comes directly from competitors such as Amazon, Apple, Meta and Alphabet.
These are low power secondary stations that retransmit the programming of a radio station to portions of the station’s service area that the primary signal does not reach because of distance or terrain barriers.
The FCC also permits AM and FM radio stations to operate FM translators and FM stations to operate FM booster stations. These are low power secondary stations that retransmit the programming of a radio station to portions of the station’s service area that the primary signal does not reach because of distance or terrain barriers.
Human Capital Resources As of March 17, 2023, we had a staff of 738 full-time employees and 355 part-time employees. We are a party to two separate collective bargaining agreements with the American Federation of Television and Radio Artists.
Human Capital Resources As of February 6, 2024, we had a staff of 755 full-time employees and 372 part-time employees. We are a party to two separate collective bargaining agreements with the American Federation of Television and Radio Artists.
Radio stations also must pay regulatory and application fees and follow various rules promulgated under the Communications Act. Those rules regulate, among other things, political advertising, sponsorship identifications, the advertisement of contests and lotteries, employment practices, broadcast of obscene and indecent content, and technical operations, including limits on human exposure to radio frequency radiation.
Those rules regulate, among other things, political advertising, sponsorship identifications, the advertisement of contests and lotteries, employment practices, broadcast of obscene and indecent content, and technical operations, including limits on human exposure to radio frequency radiation.
In October 2021, the FCC adopted a new rulemaking proceeding that would require broadcasters to follow a revised procedure to determine whether entities leasing airtime are foreign governmental entities and to upload certifications to their online public files.
In October 2021, the FCC adopted a new rulemaking proceeding that would require broadcasters to follow a revised procedure to determine whether entities leasing airtime are foreign governmental entities and to upload certifications to their online public files. The NAB and others have opposed the revised proposal, which is currently pending. Transfers or Assignment of License.
Such procedures may limit our efforts to modify or expand the broadcast signals of our radio stations. We cannot predict what other matters might be considered in the future by the FCC or Congress, nor can we judge in advance what impact, if any, the implementation of any of these proposals or changes might have on our business.
We cannot predict what other matters might be considered in the future by the FCC or Congress, nor can we judge in advance what impact, if any, the implementation of any of these proposals or changes might have on our business. Federal Antitrust Laws.
In April 2017, the FCC issued a Declaratory Ruling permitting broadcast stations to use online job postings as their sole means of recruiting, as long as online postings reach all segments of a broadcaster’s community. Content Licenses and Royalties. We must pay royalties to copyright owners of musical compositions (typically, songwriters and publishers) whenever we broadcast or stream musical compositions.
In April 2017, the FCC issued a Declaratory Ruling permitting broadcast stations to use online job postings as their sole means of recruiting, as long as online postings reach all segments of a broadcaster’s community.
The FCC has interpreted this provision of the Communications Act to require an affirmative public interest finding before a broadcast licensee may be granted or held by such an entity.
The FCC has interpreted this provision of the Communications Act to require an affirmative public interest finding before a broadcast licensee may be granted or held by such an entity. The FCC reviews situations in which foreigners own more than 25% of a holding company of an entity that holds a broadcast license on a case by case basis.
The FCC’s rules prohibit the broadcast of obscene material at any time and indecent material between the hours of 6 am and 10 pm. Broadcasters’ risk of violating the prohibition on the broadcast of indecent material is increased by the vagueness of the FCC’s definition of indecent material, coupled with the spontaneity of live programming.
Broadcasters’ risk of violating the prohibition on the broadcast of indecent material is increased by the vagueness of the FCC’s definition of indecent material, coupled with the spontaneity of live programming.
Under the currently effective rules, a licensee is required to present programming that is responsive to issues of the radio station’s community of license and to maintain records demonstrating this responsiveness.
Under the currently effective rules, a licensee is required to present programming that is responsive to issues of the radio station’s community of license and to maintain records demonstrating this responsiveness. All of our radio stations are required to maintain their public inspection files online on an FCC maintained website rather than in their physical studios.
The FCC is required to review quadrennially the media ownership rules and determine if the rules remain necessary in the public interest as a result of competition.
The FCC is required to review quadrennially the media ownership rules and determine if the rules remain necessary in the public interest as a result of competition. In August 2016, the FCC released an Order in a proceeding that combined the 2010 and 2014 quadrennial reviews which retained most of the existing multiple ownership rules.
In April 2020, the FCC adopted an Order revising technical rules applicable to LPFM stations to provide LPFM licensees with more flexibility, including allowing the use of FM boosters. Rules and Regulations Regarding Indecency, Sponsorship ID and EAS Signals.
In April 2020, the FCC adopted an Order revising technical rules applicable to LPFM stations to provide LPFM licensees with more flexibility, including allowing the use of FM boosters. In December 2023, the FCC allowed applicants seeking to operate new LPFM stations to file applications, and it is now reviewing applications filed.
We attempt to improve our competitive position with promotional campaigns aimed at the demographic groups targeted by our stations and by sales efforts designed to attract advertisers.
We attempt to improve our competitive position with promotional campaigns aimed at the demographic groups targeted by our stations and by sales efforts designed to attract advertisers. We conduct extensive market research in an effort to enhance our audience ratings and, in certain circumstances, to identify opportunities to reformat stations to reach underserved demographic groups and increase advertising revenue.
Although the 2018 quadrennial review is still pending, in December 2022, the FCC issued a public notice to begin its statutorily mandated 2022 quadrennial review.
Although the 2018 quadrennial review was still pending, in December 2022, the FCC issued a public notice to begin its statutorily mandated 2022 quadrennial review. In December 2023, the FCC issued an Order in the 2018 quadrennial review, which concluded that no significant changes to any of the multiple ownership rules were necessary.
In 2016, the FCC adopted streamlined rules and procedures for the filing and review of requests to permit foreigners to own more than 25% of a holding company’s equity. In acting upon a request for declaratory ruling, the FCC will coordinate with Executive Branch agencies on national security, law enforcement, foreign policy and other policy issues.
Entities seeking such review are required to request the FCC to issue a declaratory ruling permitting the proposed foreign ownership. In acting upon such requests, the FCC will coordinate with Executive Branch agencies on national security, law enforcement, foreign policy and other policy issues.
The NAB and others have opposed the revised proposal, which is currently pending. 5 Table of Contents Index to Financial Statements Transfers or Assignment of License. The Communications Act prohibits the assignment of broadcast licenses or the transfer of control of a broadcast licensee without the prior approval of the FCC.
The Communications Act prohibits the assignment of broadcast licenses or the transfer of control of a broadcast licensee without the prior approval of the FCC.
Under changes to the FCC rules implemented in 2017 and 2018, all of our radio stations are required to maintain their public inspection files online on an FCC maintained website rather than in their physical studios. This means that the materials in these stations’ public files are more widely accessible.
This means that the materials in these stations’ public files are more widely accessible. Radio stations also must pay regulatory and application fees and follow various rules promulgated under the Communications Act.
We conduct extensive market research in an effort to enhance our audience ratings and, in certain circumstances, to identify opportunities to reformat stations to reach underserved demographic groups and increase advertising revenue. 3 Table of Contents Index to Financial Statements Federal Regulation of Radio Broadcasting The radio broadcasting industry is subject to extensive and changing federal regulations administered by the FCC.
Federal Regulation of Radio Broadcasting The radio broadcasting industry is subject to extensive and changing federal regulations administered by the FCC.
Removed
We own the Houston Outlaws, an esports team that competes in the Overwatch League, and an esports team that competes in the Rocket League. Ownership of the Houston Outlaws partners us with Blizzard Entertainment and its parent company, Activision Blizzard, a leading global developer and publisher of interactive entertainment content and services. Competition The radio broadcasting industry is highly competitive.
Added
Rules and Regulations Regarding Indecency, Sponsorship ID and EAS Signals. The FCC’s rules prohibit the broadcast of obscene material at any time and indecent material between the hours of 6 am and 10 pm.
Removed
The FCC has the power to impose penalties for violations of its rules that are implemented pursuant to the Communications Act of 1934, as amended (the “Communications Act”), including the imposition of monetary forfeitures, the issuance of short-term licenses, the imposition of conditions on the renewal of a license, and, in egregious cases, non-renewal of licenses and the revocation of licenses.
Added
The Order made permanent the contour overlap method used to evaluate the number of radio stations in areas that are outside Nielsen rated markets. The 2022 quadrennial review remains pending. Programming and Operations. The Communications Act requires broadcasters to serve the public interest.
Removed
In general, commercial FM radio stations are classified as follows, in order of increasing power and antenna height: Class A, B1, C3, B, C2, C1, C0 or C. The FCC also permits AM and FM radio stations to operate FM translators and FM stations to operate FM booster stations.
Added
In July 2021, the FCC adopted a Further Notice of Proposed rulemaking requesting parties to refresh the record regarding rules requiring broadcasters to annually report information on the composition of their workforce. The requirement to file this information has been suspended for almost two decades.
Removed
In November 2013, the FCC confirmed that it would review situations in which foreigners own more than 25% of a holding company of an entity that holds a broadcast license on a case by case basis.
Added
The proceeding is pending but the FCC has drafted an Order which is expected to be adopted in 2024. Content Licenses and Royalties. We must pay royalties to copyright owners of musical compositions (typically, songwriters and publishers) whenever we broadcast or stream musical compositions.
Removed
In August 2016, the FCC released an Order in a proceeding that combined the 2010 and 2014 quadrennial reviews 7 Table of Contents Index to Financial Statements which retained most of the existing multiple ownership rules.
Added
The FCC has also adopted procedures for the auction of broadcast spectrum in circumstances where two or more parties have filed for new or major change applications that are mutually exclusive. Such procedures may limit our efforts to modify or expand the broadcast signals of our radio stations.
Removed
The FCC has requested comments to address the impact of the local radio multiple ownership rule as well as the local TV ownership rule on competition and whether the rules continue to be in the public interest. Programming and Operations. The Communications Act requires broadcasters to serve the public interest.
Added
In December 2023, the agencies issued revisions to the merger guidelines, which may increase scrutiny of certain mergers. Regulation of the Internet Our business is subject to privacy and data protection legislation and regulation.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

49 edited+19 added−4 removed82 unchanged
Biggest changeWe may lose key executives and other key employees, including on-air talent, to competing stations or other types of media competitors. Our business depends upon the continued efforts, abilities and expertise of our executive officers and other key employees.
Biggest changeThere can be no assurance that our cybersecurity risk management program and processes, including our policies, controls, or procedures, will be fully implemented, complied with or effective in protecting our information technology systems and confidential information. We may lose key executives and other key employees, including on-air talent, to competing stations or other types of media competitors.
Any compromise of our technology systems resulting from attacks by hackers or breaches due to employee error or malfeasance could result in the loss, disclosure, misappropriation of or access to clients’, listeners’, employees’ or business partners’ information.
Any compromise of our technology systems resulting from attacks by hackers or breaches due to employee error or malfeasance could result in the loss, disclosure, misappropriation of or access to clients’, listeners’, employees’ contractors' or business partners’ information.
Historically, we have entered into certain transactions with members of the Beasley family and affiliated entities that may conflict with the interests of our stockholders now or in the future. See “Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operation — Related Party Transactions” and Note 18 to the accompanying financial statements.
Historically, we have entered into certain transactions with members of the Beasley family and affiliated entities that may conflict with the interests of our stockholders now or in the future. See “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operation – Related Party Transactions” and Note 17 to the accompanying financial statements.
Further, advertising revenue may vary from even- to odd-numbered years based on the volatility and unpredictability of political advertising revenue. Political advertising revenue from elections, which is generally greater in even-numbered years when deferral elections occur, has the potential to create fluctuations in our operating results on a year-to-year basis.
Further, advertising revenue may vary from even- to odd-numbered years based on the volatility and unpredictability of political advertising revenue. Political advertising revenue from elections, which is generally greater in even-numbered years when federal elections occur, has the potential to create fluctuations in our operating results on a year-to-year basis.
Media and audio content production and distribution are inherently risky businesses because the revenues derived from the production and distribution of media content or a audio program, and the licensing of rights to the intellectual property associated with the content or program, depend primarily upon their acceptance and perceptions by the public, which are difficult to predict.
Media and audio content production and distribution are inherently risky businesses because the revenues derived from the production and distribution of media content or an audio program, and the licensing of rights to the intellectual property associated with the content or program, depend primarily upon their acceptance and perceptions by the public, which are difficult to predict.
These risks include, but are not limited to: • shifts in population, demographics or audience preferences; • increased competition for advertising revenues with other radio stations, broadcast television, digital, satellite and cable television, video streaming services, newspapers and magazines, outdoor advertising, direct mail, internet radio, satellite radio, smart phones, tablets, and other wireless media, the internet, social media, smart speakers and other forms of advertising; • increased competition for advertising revenues from Amazon, Apple, Facebook and Google; and • changes in government regulations and policies and actions of federal regulatory bodies, including the FCC, Internal Revenue Service, the Department of Justice, and the Federal Trade Commission.
These risks include, but are not limited to: • shifts in population, demographics or audience preferences; • increased competition for advertising revenues with other radio stations, broadcast television, digital, satellite and cable television, video streaming services, newspapers and magazines, outdoor advertising, direct mail, internet radio, satellite radio, smart phones, tablets, and other wireless media, the internet, social media, smart speakers and other forms of advertising; • increased competition for advertising revenues from Amazon, Apple, Meta and Alphabet; and • changes in government regulations and policies and actions of federal regulatory bodies, including the FCC, Internal Revenue Service, the Department of Justice, and the Federal Trade Commission.
RISK FACTORS CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Our disclosure and analysis in this annual report on Form 10-K concerning our operations, cash flows and financial position, including, in particular, the likelihood of our success in developing and expanding our business, includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Exchange Act.
RI SK FACTORS CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS Our disclosure and analysis in this annual report on Form 10-K concerning our operations, cash flows and financial position, including, in particular, the likelihood of our success in developing and expanding our business, includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Exchange Act.
The FCC also requires radio stations to comply with certain technical requirements to limit interference between two or more radio stations. Possible changes in interference protections, creation of additional classes of FM stations, spectrum allocations and other technical rules may negatively affect the operation of our stations.
The FCC also requires radio stations to comply with 14 Table of Contents certain technical requirements to limit interference between two or more radio stations. Possible changes in interference protections, creation of additional classes of FM stations, spectrum allocations and other technical rules may negatively affect the operation of our stations.
Florida is susceptible to hurricanes, and we have our corporate offices located in Naples, and stations located in Fort Myers and Tampa. These stations contributed 13% of our net revenue in 2022.
Florida is susceptible to hurricanes, and we have our corporate offices located in Naples, and stations located in Fort Myers and Tampa. These stations contributed 13% of our net revenue in 2023.
We also maintain reserves to cover the uncollectibility of a portion of our accounts receivable, however, the estimate which is based on current information may differ from actual results. A future impairment of our FCC licenses and/or goodwill could adversely affect our operating results. As of December 31, 2022, our FCC licenses and goodwill represented 70% of our total assets.
We also maintain reserves to cover the uncollectibility of a portion of our accounts receivable, however, the estimate which is based on current information may differ from actual results. A future impairment of our FCC licenses and/or goodwill could adversely affect our operating results. As of December 31, 2023, our FCC licenses and goodwill represented 69% of our total assets.
These other media platforms include broadcast television, digital, satellite and cable television, video streaming services, newspapers and magazines, outdoor advertising, direct mail, internet radio, satellite radio, smart phones, tablets, and other wireless media, the internet, social media, smart speakers, podcasts and other forms of advertising.
These other media platforms include broadcast television, digital, satellite and cable television, video streaming services, newspapers and magazines, outdoor advertising, direct mail, internet radio, satellite radio, smart phones, tablets, and other 12 Table of Contents wireless media, the internet, social media, smart speakers, podcasts and other forms of advertising.
Our technology systems and related data also may be vulnerable to a variety of sources of interruption due to events beyond our control, including natural disasters, terrorist attacks, telecommunications failures, cyber-attacks, computer viruses, hackers and other security issues.
Our technology systems and related data are also vulnerable to a variety of sources of interruption due to events beyond our control, including natural disasters, terrorist attacks, telecommunications failures, cyber-attacks, computer viruses, hackers and other security issues.
Even if such measures are effective, there could be a difference between the timing of when these beneficial actions impact our results of operations and when the cost of inflation is incurred. 12 Table of Contents Index to Financial Statements The radio broadcasting industry faces many unpredictable business risks and is sensitive to external economic forces that could have a material adverse effect on our advertising revenues and results of operations.
Even if such measures are effective, there could be a difference between the timing of when these beneficial actions impact our results of operations and when the cost of inflation is incurred. 11 Table of Contents The radio broadcasting industry faces many unpredictable business risks and is sensitive to external economic forces that could have a material adverse effect on our advertising revenues and results of operations.
If the economic environment does worsen, there can be no assurance that we will not experience a decline in revenues, which may negatively impact our financial condition and results of operations. 13 Table of Contents Index to Financial Statements Our stations may not be able to compete effectively in their respective markets for advertising revenues, which could adversely affect our revenue and cash flows.
If the economic environment does worsen, there can be no assurance that we will not experience a decline in revenues, which may negatively impact our financial condition and results of operations. Our stations may not be able to compete effectively in their respective markets for advertising revenues, which could adversely affect our revenue and cash flows.
Credit risk on our receivables is heightened during periods of uncertain economic conditions, and there can be no assurance that our 17 Table of Contents Index to Financial Statements procedures to monitor and limit exposure to credit risk will be effective and enable us to avoid losses, which could have a material adverse effect on our results from operations, cash flows or financial position.
Credit risk on our receivables is heightened during periods of uncertain economic conditions, and there can be no assurance that our procedures to monitor and limit exposure to credit risk will be effective and enable us to avoid losses, which could have a material adverse effect on our results from operations, cash flows or financial position.
The stations located in Boston, MA, Detroit, MI and Philadelphia, PA contributed 58% of our net revenue in 2022.
The stations located in Boston, MA, Detroit, MI and Philadelphia, PA contributed 58% of our net revenue in 2023.
While no cyber-attack has had a material impact thus far, if successful, these types of attacks could have a material adverse effect on our financial condition, results of operations and cash flows, due to, among other things, the loss of customer data, interruptions to our operations, and damage to our reputation.
While no cyber-attack has had a material impact thus far, if successful, these types of attacks could have a material adverse effect on our financial condition, results of operations and cash flows, due to, among other things, the loss of customer data and other confidential information, interruptions to our operations, and 17 Table of Contents damage to our reputation.
Any internal technology error or failure impacting systems hosted internally or externally, or any large-scale external interruption in technology infrastructure we depend on, such as power, telecommunications or the internet, may disrupt our technology network. Any individual, sustained or repeated failure of technology could impact our customer service and result in increased costs or reduced revenues.
Any technology error or failure impacting systems hosted internally or externally, or any large-scale interruption to the technology infrastructure we depend on, such as power, telecommunications or the internet, may disrupt our operations. Any individual, sustained or repeated failure of technology could impact our customer service and result in increased costs or reduced revenues.
Furthermore, until third-party services resume, the inability to originate or distribute programming could have a material adverse effect on our business and results of operations. Disruptions or security breaches of our information technology infrastructure could interfere with our operations, compromise client information and expose us to liability, possibly causing our business and reputation to suffer.
Furthermore, until third-party services resume, the inability to originate or distribute programming could have a material adverse effect on our business and results of operations. Disruptions or security breaches of our information technology infrastructure could interfere with our operations, compromise client information, expose us to liability, and cause material adverse effects on our business and reputation.
Accordingly, we have greater exposure to adverse events or conditions in any of these markets, such as changes in the economy, shifts in population or demographics, or changes in audience tastes, which could adversely impact our results from operations, cash flows or financial position. We are exposed to credit risk on our accounts receivable.
Accordingly, we have greater exposure to adverse events or conditions in any of these markets, such as changes in the economy, shifts in population or demographics, or changes in audience tastes, or local government actions, which could adversely impact our results from operations, cash flows or financial position. 15 Table of Contents We are exposed to credit risk on our accounts receivable.
Due to the impact of the COVID-19 pandemic, our board of directors has suspended future quarterly dividend payments until it is determined that resumption of dividend payments is in the best interest of the Company’s stockholders. While we intend to pay a regular quarterly cash dividend, future payments, if any, will be at the discretion of our Board of Directors.
Our board of directors has suspended future quarterly dividend payments until it is determined that resumption of dividend payments is in the best interest of the Company’s stockholders. While we intend to pay a regular quarterly cash dividend, future payments, if any, will be at the discretion of our Board of Directors.
We are subject to social and natural catastrophic events that are beyond our control, such as health epidemics, natural disasters and other catastrophes, which have materially and adversely affected our business and may continue to materially and adversely affect our results of operations, liquidity and financial condition.
We are subject to social and natural catastrophic events that are beyond our control, such as health epidemics, including the COVID-19 pandemic, natural disasters and other catastrophes, which have materially and adversely affected our business and may continue to materially and adversely affect our results of operations, liquidity and financial condition.
Some of those competitors may be able to outbid us for acquisitions because they have greater financial resources. FCC ownership rules limit the number of stations that an entity can own in specific local markets, and in certain markets, we do not have room to acquire additional stations.
Some of those competitors may be able to outbid us for acquisitions because they have greater financial resources. FCC ownership rules limit the number of stations that an entity can own in specific local markets, and in certain markets, we do not have room to acquire additional stations in the FM service or in both the AM and FM services.
These sales, or the possibility that these sales may occur, could make it more difficult for us to raise capital by selling equity or equity-related securities in the future. 21 Table of Contents Index to Financial Statements The difficulties associated with any attempt to gain control of our Company may adversely affect the price of our Class A common stock.
These sales, or the possibility that these sales may occur, could make it more difficult for us to raise capital by selling equity or equity-related securities in the future. The difficulties associated with any attempt to gain control of our Company may adversely affect the price of our Class A common stock.
If we cannot continue to develop and improve our advertising products and services, or if prices for our advertising products and services decrease, our digital advertising revenues could be adversely affected. 14 Table of Contents Index to Financial Statements Our success is dependent upon audience acceptance of our content, particularly our audio programs, which is difficult to predict.
If we cannot continue to develop and improve our advertising products and services, or if prices for our advertising products and services decrease, our digital advertising revenues could be adversely affected. Our success is dependent upon audience acceptance of our content, particularly our audio programs, which is difficult to predict.
This market volatility could depress the price of our Class A common stock without regard to our operating performance. In addition, our operating results may be below expectations of public market analysts and investors. If this were to occur, the market price of our Class A common stock could decrease, perhaps significantly. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
This market volatility could depress the price of our Class A common stock without regard to our operating performance. In addition, our operating results may be below expectations of public market analysts and investors. If this were to occur, the market price of our Class A common stock could decrease, perhaps significantly.
Various other audio technologies and services that have been developed and introduced include: • home and personal digital audio devices (e.g., smart phones, tablets, smart speakers); • satellite delivered digital audio radio services that offer numerous programming channels; • internet-based audio music services; • audio programming by internet content providers, internet radio stations, cable systems, direct broadcast satellite systems, personal communications services and other digital audio broadcast formats; • HD Radio, which provides multi-channel, multi-format digital radio services in the same bandwidth currently occupied by traditional AM and FM radio services; • low power FM radio stations, which are non-commercial FM radio broadcast outlets that serve small, localized areas; • portable digital devices and systems that permit users to listen to programming on a time-delayed basis and to fast-forward through programming and/or advertisements; and • vehicles equipped with dashboards that provide internet connectivity that increase the number of audio and video platforms available in vehicles (e.g., ATSC 3.0 technology) or that eliminate certain older technologies such as AM radio. 15 Table of Contents Index to Financial Statements These and other new technologies have the potential to change the means by which advertisers can reach target audiences most effectively.
Various other audio technologies and services that have been developed and introduced include: • home and personal digital audio devices (e.g., smart phones, tablets, smart speakers); • satellite delivered digital audio radio services that offer numerous programming channels; • internet-based audio music services; • audio programming by internet content providers, internet radio stations, cable systems, direct broadcast satellite systems, personal communications services and other digital audio broadcast formats; • HD Radio, which provides multi-channel, multi-format digital radio services in the same bandwidth currently occupied by traditional AM and FM radio services; • low power FM radio stations, which are non-commercial FM radio broadcast outlets that serve small, localized areas; • portable digital devices and systems that permit users to listen to programming on a time-delayed basis and to fast-forward through programming and/or advertisements; and • vehicles equipped with dashboards that provide internet connectivity that increase the number of audio and video platforms available in vehicles (e.g., ATSC 3.0 technology) or that eliminate tuners for certain older technologies such as AM radio.
Our radio stations also compete for audiences and advertising revenues within their respective markets directly with Amazon, Apple, Facebook and Google.
Our radio stations also compete for audiences and advertising revenues within their respective markets directly with Amazon, Apple, Meta and Alphabet.
As a result, our ability to identify and consummate future acquisitions is uncertain. In addition, our consummation of all future acquisitions is subject to various conditions, including FCC and other regulatory approvals. The FCC must approve any transfer of control or assignment of broadcast licenses.
As a result, our ability to identify and consummate future acquisitions is uncertain. In addition, our consummation of all future acquisitions is subject to various conditions, including FCC and other regulatory approvals. The FCC must approve any transfer of control or assignment of broadcast licenses. In addition, acquisitions may encounter intense scrutiny under federal and state antitrust laws.
Finally, the costs of developing and distributing content and programming most popular with the public may change significantly if new performance royalties (such as those that have been proposed by members of Congress from time to time) are imposed upon radio broadcasters or internet operators, and such changes could have a material impact upon our business.
In addition, changes in ratings methodology and technology could adversely impact our ratings and negatively affect our advertising revenues. 13 Table of Contents Finally, the costs of developing and distributing content and programming most popular with the public may change significantly if new performance royalties (such as those that have been proposed by members of Congress from time to time) are imposed upon radio broadcasters or internet operators, and such changes could have a material impact upon our business.
Future quarterly dividend payments can also be changed or discontinued at any time and will be subject to limitations under the terms of the Indenture governing our Notes, 18 Table of Contents Index to Financial Statements as well as any future agreements.
Future quarterly dividend payments can also be changed or discontinued at any time and will be subject to limitations under the terms of the Indenture governing our Notes (as defined below), as well as any future agreements.
As of December 31, 2022, we had long-term debt of $290.0 million and equity of $223.5 million. Our long-term debt is substantial in amount and could have an impact on you.
As of December 31, 2023, we had long-term debt of $267.0 million and equity of $149.0 million. Our long-term debt is substantial in amount and could have an impact on you.
Although the 2022 hurricane season did not have a material impact on our operations, our corporate offices and our stations located in Florida and other stations located along the east coast of the United States have been materially affected by hurricanes in the past and may be materially affected in the future, which could have an adverse impact on our business, financial condition and results of operations.
Our corporate offices and our stations located in Florida and other 16 Table of Contents stations located along the east coast of the United States have been materially affected by hurricanes in the past and may be materially affected in the future, which could have an adverse impact on our business, financial condition and results of operations.
For example, if there is an event causing a change of programming at one of our stations, there could be no assurance that any replacement programming would generate the same level of ratings, revenues, or profitability as the previous programming. In addition, changes in ratings methodology and technology could adversely impact our ratings and negatively affect our advertising revenues.
For example, if there is an event causing a change of programming at one of our stations, there could be no assurance that any replacement programming would generate the same level of ratings, revenues, or profitability as the previous programming.
If the FCC requires any FM translator station that we operate to modify its facilities to eliminate interference caused to another station or to cease broadcasting, it could materially impair the operations of the station that the FM translator rebroadcasts which could have a material adverse effect on us. 16 Table of Contents Index to Financial Statements Vigorous enforcement of the FCC’s indecency rules could have a material adverse effect on our business.
If the FCC requires any FM translator station that we operate to modify its facilities to eliminate interference caused to another station or to cease broadcasting, it could materially impair the operations of the station that the FM translator rebroadcasts which could have a material adverse effect on us.
The unique combination of skills and experience possessed by our key executives would be difficult to replace, and the loss of a key executive could impair our ability to execute our operating and acquisition strategies.
Our business depends upon the continued efforts, abilities and expertise of our executive officers and other key employees. The unique combination of skills and experience possessed by our key executives would be difficult to replace, and the loss of a key executive could impair our ability to execute our operating and acquisition strategies.
We cannot predict the effect, if any, that competition arising from other technologies or regulatory change may have on the radio broadcasting industry or on our financial condition and results of operations.
These and other new technologies have the potential to change the means by which advertisers can reach target audiences most effectively. We cannot predict the effect, if any, that competition arising from other technologies or regulatory change may have on the radio broadcasting industry or on our financial condition and results of operations.
Any such loss, disclosure, misappropriation or access could result in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy of personal information, disruption of our operations and damage to our reputation, any or all of which could adversely affect our business. 19 Table of Contents Index to Financial Statements Our business is dependent upon the proper functioning of our internal business processes and information systems and modification or interruption of such systems may disrupt our business, processes and internal controls.
Any such loss, disclosure, misappropriation or access could result in legal claims or proceedings (including class actions), liability or regulatory penalties under laws protecting the privacy of personal information, disruption of our operations and damage to our reputation, any or all of which could adversely affect our business.
These include catastrophic events, power anomalies or outages and natural disasters, and, increasingly, technological risks associated with computer system or network failures, viruses or malware, physical or electronic intrusions, and unauthorized access associated with cyber-attacks.
These include catastrophic events, power anomalies or outages and natural disasters, and, increasingly, technological risks associated with computer system or network failures, viruses or malware, misconfigurations, bugs or securities vulnerabilities in hardware and software, physical or electronic intrusions, and unauthorized access associated with cyber-attacks that threaten the confidentiality, integrity and availability of our information technology systems and confidential information.
If these information technology systems fail or are interrupted, our operations may be adversely affected and operating results could be harmed. Our information technology systems, and those of third-party providers, may also be vulnerable to damage or disruption caused by circumstances beyond our control.
Our information technology systems, and those of third-party providers, are vulnerable to damage or disruption caused by circumstances beyond our control.
The FCC’s rules prohibit the broadcast of obscene material at any time and indecent material between the hours of 6 a.m. and 10 p.m. The risk of violating the prohibition on the broadcast of indecent material is increased by the vagueness of the FCC’s definition of indecent material, coupled with the spontaneity of live programming.
The risk of violating the prohibition on the broadcast of indecent material is increased by the vagueness of the FCC’s definition of indecent material, coupled with the spontaneity of live programming.
These third-party contracts and services include, but are not limited to, electrical power, satellite transponders, uplinks and downlinks and telecom circuits. Distribution may be disrupted due to one or more third parties losing their ability to provide particular services to us, which could adversely affect our distribution capabilities.
Distribution may be disrupted due to one or more third parties losing their ability to provide particular services to us, which could adversely affect our distribution capabilities.
Our technology security initiatives, disaster recovery plans and other measures may not be adequate or implemented properly to prevent a business disruption and its adverse financial consequences to our reputation. In addition, as a part of our ordinary business operations, we may collect and store sensitive data, including the personal information of our clients, listeners and employees.
Our technology security initiatives, disaster recovery plans and other measures may not be adequate or implemented properly to prevent a cyberattack or business disruption and its adverse financial consequences to our reputation.
The current maximum permitted fines are $479,945 per incident and $4,430,255 for any continuing violation arising from a single act or failure to act. In a decision issued in June 2012, the Supreme Court did not find that the FCC’s indecency standards were inconsistent with the First Amendment, which means the FCC may continue to enforce the standards.
In a decision issued in June 2012, the Supreme Court did not find that the FCC’s indecency standards were inconsistent with the First Amendment, which means the FCC may continue to enforce the standards.
In 20 Table of Contents Index to Financial Statements addition, acquisitions may encounter intense scrutiny under federal and state antitrust laws. Any delays, injunctions, conditions or modifications by any government agencies could have a negative effect on us and result in the abandonment of all or part of attractive acquisition opportunities.
Any delays, injunctions, conditions or modifications by any government agencies could have a negative effect on us and result in the abandonment of all or part of attractive acquisition opportunities. Our success also depends on our ability to integrate acquired businesses and achieve fully the strategic and financial objectives related thereto.
The Beasley family controls Beasley Broadcast Group, Inc. and members of the Beasley family own a substantial equity interest in Beasley Broadcast Group, Inc. Their interests may conflict with yours.
The failure to identify, consummate and integrate acquired stations could have a material adverse effect on our financial condition, results of operations and cash flows. 18 Table of Contents The Beasley family controls Beasley Broadcast Group, Inc. and members of the Beasley family own a substantial equity interest in Beasley Broadcast Group, Inc. Their interests may conflict with yours.
We cannot predict whether we will be successful in identifying future acquisition opportunities or what the consequences will be of any acquisitions. The failure to identify, consummate and integrate acquired stations could have a material adverse effect on our financial condition, results of operations and cash flows.
We cannot predict whether we will be successful in identifying future acquisition opportunities or what the consequences will be of any acquisitions.
We increasingly rely on technology to operate our business, including our own information technology systems and the information technology systems and technology of our third-party providers. The proper functioning of our internal business processes and information systems is critical to the efficient operation and management of our business.
We rely heavily on technology, such as computer systems, hardware, software, technology infrastructure and online sites and networks for both internal and external operations, to operate our business, including our own information technology systems and the information technology systems and technology of our third-party providers.
Accordingly, we can give no assurance that we will achieve the results anticipated or implied by our forward-looking statements. We face risks related to health epidemics, natural disasters and other catastrophes, which have materially and adversely affected our results of operations, liquidity and financial condition.
As a result of these factors, if our Class A common stock is delisted from Nasdaq, the value and liquidity of our Class A common stock would likely be significantly adversely affected. We face risks related to health epidemics, natural disasters and other catastrophes, which have materially and adversely affected our results of operations, liquidity and financial condition.
Removed
The COVID-19 pandemic has resulted in a widespread health crisis that has adversely affected businesses, economies, and financial markets worldwide, and has caused significant volatility in U.S. and international debt and equity markets. In 2020, we were impacted by deteriorating general economic conditions resulting from the COVID-19 pandemic that caused a downturn in the advertising industry.
Added
Accordingly, we can give no assurance that we will achieve the results anticipated or implied by our forward-looking statements. There can be no assurance that we will be able to comply with the continued listing standards of the Nasdaq Global Market.
Removed
The decreased demand for advertising materially negatively impacted our results of operations, liquidity and financial condition.
Added
Our Class A common stock is currently listed for trading on the Nasdaq Global Market, and we must satisfy certain continued listing requirements to maintain the listing.
Removed
The extent to which the COVID-19 pandemic will continue to impact our business and financial results going forward will be dependent on future developments such as: the length and severity of the pandemic; any potential resurgence of the pandemic, including from the more transmissible variant strains and the emergence of any new variants of concern; future government regulations and actions in response to the pandemic; the timing, availability, effectiveness and adoption rates of vaccines and treatments; and the overall impact of the COVID-19 pandemic on the global economy and capital markets, among many other factors, all of which remain highly uncertain and unpredictable.
Added
On April 27, 2023, we received a written notice (the “April Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying us that, for the last 30 consecutive business days, the bid price for our Class A common stock had closed below the $1.00 per share minimum bid price requirement for continued inclusion on the Nasdaq Global Market pursuant to Nasdaq Listing Rule 5450(a)(1) (the “Minimum Bid Price Requirement”).
Removed
Our success also depends on our ability to integrate acquired businesses and achieve fully the strategic and financial objectives related thereto.
Added
On May 19, 2023, we received a notice from Nasdaq notifying us that we had regained compliance with the Minimum Bid Price Requirement and that the matter was closed.
Added
On October 13, 2023, we received a written notice (the “October Notice”) from the Listing Qualifications Department of Nasdaq notifying us that, for the last 30 consecutive business days, the bid price for our Class A common stock had closed below the Minimum Bid Price Requirement.
Added
In accordance with Nasdaq rules, we have been provided 180 calendar days, or until April 10, 2024, to regain compliance. The October Notice is only a notification of deficiency, not of imminent delisting, and has no current effect on the listing or trading of our securities on the Nasdaq Global Market.
Added
We intend to actively monitor the closing bid price of our Class A common stock and will consider all reasonable available options to regain compliance with the Minimum Bid Price Requirement, which may include transferring the listing to the Nasdaq Capital Market and/or seeking stockholder approval to effect a reverse stock split.
Added
There can be no assurance that we will regain compliance with the Minimum Bid Price Requirement during the 180-day compliance period, secure a second 180-day period to regain compliance, maintain compliance with the other Nasdaq listing requirements or be successful in appealing any delisting determination.
Added
If we are delisted from Nasdaq but obtain a substitute listing for our Class A common stock, it will likely be on a market with less liquidity, and therefore experience potentially more price volatility than experienced on Nasdaq.
Added
Stockholders may not be able to sell their shares of our Class A common stock on any such substitute market in the quantities, at the times, or at the prices that could potentially be available on a more liquid trading market.
Added
Vigorous enforcement of the FCC’s indecency rules could have a material adverse effect on our business. The FCC’s rules prohibit the broadcast of obscene material at any time and indecent material between the hours of 6 a.m. and 10 p.m.
Added
The current maximum permitted fines for an indecency violation is $495,500 per incident and $4,573,840 for any continuing violation arising from a single act or failure to act.
Added
These third-party contracts and services include, but are not limited to, electrical power, satellite transponders, uplinks and downlinks and telecom circuits. We do not control these third parties or the quality, security or testing of various third-party software, hardware or infrastructure products that are utilized in our business.
Added
In addition, as a part of our ordinary business operations, we and certain of our third-party providers collect, process, store and maintain sensitive data, including the personal information of our clients, listeners, employees, contractors, business partners and others as well as trade secrets and other propriety business information.
Added
Our business is dependent upon the proper functioning of our business processes and information systems and modification or interruption of such systems may disrupt our business, processes and internal controls.
Added
The proper functioning of our business processes and information systems is critical to the efficient operation and management of our business. If these information technology systems fail or are interrupted, our operations may be adversely affected and operating results could be harmed.
Added
Cyberattacks are expected to accelerate on a global basis in frequency and magnitude as threat actors are increasingly sophisticated in using techniques and tools – including generative and other artificial intelligence – that circumvent security controls, evade detection and remove forensic evidence.
Added
As a result, we may be unable to detect, investigate, remediate or recover from future attacks or incidents, or to avoid a material adverse impact to our systems or information.
Added
Moreover, remote and hybrid working arrangements at our company (and at many third-party providers) also increase cybersecurity risks due to the challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changePROPERTIES As of March 17, 2023, we own or lease property in the following locations: Location Description Owned/Leased Atlanta, GA Office space for stations Third-party lease Augusta, GA Office space for stations Owned Land for office space Related party lease Boston, MA Office space for stations Third-party lease Camden, NJ Office space for station Owned Land for office space Related party lease Charlotte, NC Office space for stations Third-party lease Detroit, MI Office space for stations Owned Estero, FL Office space for stations Related party lease Fayetteville, NC Office space for stations Related party lease Las Vegas, NV Office space for stations Related party lease Middlesex, NJ Office space for stations Owned Monmouth, NJ Office space for stations Owned Morristown, NJ Office space for stations Owned Philadelphia, PA Office space for stations Third-party lease Tampa, FL Office space for stations Third-party lease Wilmington, DE Office space for station Third party lease 22 Table of Contents Index to Financial Statements The land for office space in Augusta, GA is leased from GGB Augusta, LLC, which is held by a trust for the benefit of Caroline Beasley, our Chief Executive Officer and a member of our board of directors, Bruce Beasley, our President and a member of our board of directors, Brian Beasley, our Chief Operating Officer and a member of our board of directors, and other members of the Beasley family.
Biggest changePR OPERTIES As of February 6, 2024, we own or lease property in the following locations: Location Description Owned/Leased Atlanta, GA Office space for stations Third-party lease Augusta, GA Office space for stations Owned Land for office space Related party lease Boston, MA Office space for stations Third-party lease Camden, NJ Office space for station Owned Charlotte, NC Office space for stations Third-party lease Detroit, MI Office space for stations Owned Estero, FL Office space for stations Related party lease Fayetteville, NC Office space for stations Related party lease Las Vegas, NV Office space for stations Related party lease Middlesex, NJ Office space for stations Owned Monmouth, NJ Office space for stations Owned Morristown, NJ Office space for stations Owned Philadelphia, PA Office space for stations Third-party lease Tampa, FL Office space for stations Third-party lease The land for office space in Augusta, GA is leased from GGB Augusta, LLC, which is held by a trust for the benefit of Caroline Beasley, our Chief Executive Officer and a member of our board of directors, Bruce Beasley, our President and a member of our board of directors, Brian Beasley, our Chief Operating Officer and a member of our board of directors, and other members of the Beasley family.
Beasley and other members of the Beasley family. The office space in Estero, FL is leased from Beasley Family Properties, LLC, which is held by a trust for the benefit of Caroline Beasley, Bruce G. Beasley, Brian E. Beasley and other members of the Beasley family.
The office space in Estero, FL is leased from Beasley Family Properties, LLC, which is held by a trust for the benefit of Caroline Beasley, Bruce G. Beasley, Brian E. Beasley and other members of the Beasley family.
The land for office space in Camden, NJ and office space in Fayetteville, NC are leased from Beasley Family Towers, LLC, which is partially held by a trust for the benefit of Caroline Beasley, Bruce G. Beasley, Brian E. Beasley and other members of the Beasley family and partially owned directly by Caroline Beasley, Bruce G. Beasley, Brian E.
The office space in Fayetteville, NC is leased from Beasley Family Towers, LLC, which is partially held by a trust for the benefit of Caroline Beasley, Bruce G. Beasley, Brian E. Beasley and other members of the Beasley family and partially owned directly by Caroline Beasley, Bruce G. Beasley, Brian E. Beasley and other members of the Beasley family.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 4. MINE SAFETY DISCLOSURES Not applicable. 23 Table of Contents Index to Financial Statements PART II
Biggest changeITEM 4. MINE SAFE TY DISCLOSURES Not applicable. 21 Table of Contents PAR T II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures. 23 Part II — Other Information Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 24 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 25 Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 36 Item 8. Financial Statements and Supplementary Data. 37
Biggest changeItem 4. Mine Safety Disclosures. 21 Part II—Other Information Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 22 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 23 Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 32 Item 8. Financial Statements and Supplementary Data. 33

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe number of holders of Class A common stock does not count separately the number of beneficial holders whose shares are held of record by a broker or clearing agency.
Biggest changeThe number of holders of Class A common stock does not count separately the number of beneficial holders whose shares are held of record by a broker or clearing agency. Dividends Our board of directors has suspended future quarterly dividend payments until it is determined that resumption of dividend payments is in the best interest of the Company’s stockholders.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information We have two authorized and outstanding classes of equity securities: Class A common stock, $.001 par value, and Class B common stock, $.001 par value.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY , RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information We have two authorized and outstanding classes of equity securities: Class A common stock, $.001 par value per share, and Class B common stock, $.001 par value per share.
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value That May Yet Be Purchased Under the Program October 1 – 31, 2022 — — — $ — November 1 – 30, 2022 — — — — December 1 – 31, 2022 24,336 $ 1.06 — — Total 24,336 On March 27, 2007, our board of directors approved the Beasley Broadcast Group, Inc. 2007 Equity Incentive Award Plan (the “2007 Plan”).
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value That May Yet Be Purchased Under the Program October 1 – 31, 2023 — — — $ — November 1 – 30, 2023 — — — — December 1 – 31, 2023 15,601 $ 0.90 — — Total 15,601 On March 27, 2007, our board of directors approved the Beasley Broadcast Group, Inc. 2007 Equity Incentive Award Plan (the “2007 Plan”).
Our Class A common stock trades on the NASDAQ Global Market under the symbol “BBGI.” There is no established public trading market for our Class B common stock. Holders As of March 17, 2023, there were approximately 137 holders of record of our Class A common stock and 21 holders of record of our Class B common stock.
Our Class A common stock trades on the NASDAQ Global Market under the symbol “BBGI.” There is no established public trading market for our Class B common stock. Holders As of February 6, 2024, there were approximately 139 holders of record of our Class A common stock and 24 holders of record of our Class B common stock.
Repurchases of Equity Securities The following table presents information with respect to purchases we made of our Class A common stock during the three months ended December 31, 2022.
In addition, the Indenture governing our Notes limits our ability to pay dividends. Repurchases of Equity Securities The following table presents information with respect to purchases we made of our Class A common stock during the three months ended December 31, 2023.
All shares purchased during the three months ended December 31, 2022 were purchased to fund withholding taxes in connection with the vesting of restricted stock units. 24 Table of Contents Index to Financial Statements
The 2007 Plan permits us to purchase sufficient shares to fund withholding taxes in connection with the vesting of restricted stock units. All shares purchased during the three months ended December 31, 2023 were purchased to fund withholding taxes in connection with the vesting of restricted stock units. 22 Table of Contents
Removed
Dividends In response to the COVID-19 pandemic, our board of directors has suspended future quarterly dividend payments until it is determined that resumption of dividend payments is in the best interest of the Company’s stockholders. In addition, the Indenture governing our Notes limits our ability to pay dividends.
Removed
The 2007 Plan permits us to purchase sufficient shares to fund withholding taxes in connection with the vesting of restricted stock units and shares of restricted stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

80 edited+18 added−25 removed27 unchanged
Biggest changeResults of Operations — Consolidated Year Ended December 31, Change 2021 2022 $ % Net revenue $ 241,426,308 $ 256,381,018 $ 14,954,710 6.2 % Operating expenses 199,470,185 213,236,063 13,765,878 6.9 Corporate expenses 16,578,046 18,001,359 1,423,313 8.6 Impairment losses — 52,874,470 52,874,470 — Gain on exchange — 3,350,539 3,350,539 — Other operating income, net 400,000 — (400,000 ) (100.0 ) Loss on extinguishment of long-term debt 4,996,731 — (4,996,731 ) (100.0 ) Gain on forgiveness of long-term debt 10,000,000 — (10,000,000 ) (100.0 ) Other income, net 68,437 1,382,322 1,313,885 1919.8 Income tax benefit 5,321,630 17,787,434 12,465,804 234.2 Net loss 1,535,094 42,057,430 40,522,336 2639.7 31 Table of Contents Index to Financial Statements Results of Operations — Segments Year Ended December 31, Change 2021 2022 $ % Net revenue Audio $ 206,460,883 $ 213,036,307 $ 6,575,424 3.2 % Digital 32,743,850 40,755,164 8,011,314 24.5 Other 2,221,575 2,589,547 367,972 16.6 $ 241,426,308 $ 256,381,018 $ 14,954,710 6.2 Operating expenses Audio $ 163,639,369 $ 173,011,492 $ 9,372,123 5.7 % Digital 32,355,572 36,398,687 4,043,115 12.5 Other 3,475,244 3,825,884 350,640 10.1 $ 199,470,185 $ 213,236,063 $ 13,765,878 6.9 Net Revenue.
Biggest changeResults of Operations - Consolidated Year Ended December 31, Change 2022 2023 $ % Net revenue $ 256,381,018 $ 247,109,258 $ (9,271,760 ) -3.6 % Operating expenses 213,236,063 208,247,221 (4,988,842 ) -2.3 % Corporate expenses 18,001,359 18,246,731 245,372 1.4 % FCC licenses impairment losses 23,799,383 89,214,665 65,415,282 274.9 % Goodwill impairment losses 16,253,087 10,582,360 (5,670,727 ) -34.9 % Other impairment losses 12,822,000 — (12,822,000 ) -100.0 % Gain on exchange 3,350,539 — (3,350,539 ) -100.0 % Extinguishment of franchise fee — 6,000,000 6,000,000 — Gain on repurchases of long-term debt 1,131,346 7,807,875 6,676,529 590.1 % Income tax benefit 17,787,434 24,287,366 6,499,932 36.5 % Net loss 42,057,430 75,120,138 33,062,708 78.6 % Results of Operations - Segments 27 Table of Contents Year Ended December 31, Change 2022 2023 $ % Net revenue Audio $ 213,036,307 $ 199,481,868 $ (13,554,439 ) -6.4 % Digital 40,755,164 45,417,296 4,662,132 11.4 % Other 2,589,547 2,210,094 (379,453 ) -14.7 % $ 256,381,018 $ 247,109,258 $ (9,271,760 ) -3.6 % Operating expenses Audio $ 173,011,492 $ 163,608,414 $ (9,403,078 ) -5.4 % Digital 36,398,687 40,844,592 4,445,905 12.2 % Other 3,825,884 3,794,215 (31,669 ) -0.8 % $ 213,236,063 $ 208,247,221 $ (4,988,842 ) -2.3 % Net Revenue.
The income approach is based upon discounted cash flow analyses incorporating variables such as projected audio market revenues, projected growth rate for audio market revenues, projected audio market revenue shares, projected audio operating income margins, and a discount rate appropriate for the audio industry.
The income approach is based upon discounted cash flow analyses incorporating variables such as projected audio market revenues, projected growth rate for audio market revenues, projected audio market revenue shares, projected audio station operating income margins, and a discount rate appropriate for the audio industry.
The income approach is based upon discounted cash flow analyses incorporating variables such as projected audio market revenues, projected growth rate for audio market revenues, projected audio market revenue shares, projected audio operating income margins, and a discount rate appropriate for the audio industry.
The income approach is based upon discounted cash flow analyses incorporating variables such as projected audio market revenues, projected growth rate for audio market revenues, projected audio market revenue shares, projected audio station operating income margins, and a discount rate appropriate for the audio industry.
The determination of when an event has occurred and estimates of future cash flows and fair value all require management judgment. The use of different assumptions or estimates may result in alternative assessments that could be materially different. We did not identify any triggering events that may have resulted in an impairment loss on our property and equipment in 2022.
The determination of when an event has occurred and estimates of future cash flows and fair value all require management judgment. The use of different assumptions or estimates may result in alternative assessments that could be materially different. We did not identify any triggering events that may have resulted in an impairment loss on our property and equipment in 2023.
The Indenture contains restrictive covenants that limit the ability of the Company and its subsidiaries to, among other things, incur additional indebtedness, guarantee indebtedness or issue disqualified stock or, in the case of such subsidiaries, preferred stock; pay dividends on, repurchase or make distributions in respect of our capital stock or make other restricted payments; make certain investments or acquisitions; sell, transfer or otherwise convey certain assets; create liens; enter into agreements restricting certain subsidiaries’ ability to pay dividends or make other intercompany transfers; consolidate, merge, sell or otherwise dispose of all or substantially all of our assets; enter into transactions with affiliates; prepay certain kinds of indebtedness; and issue or sell stock of our subsidiaries.
The Indenture contains restrictive covenants that limit the ability of the Company and its subsidiaries to, among other things, incur additional indebtedness, guarantee indebtedness or issue disqualified stock or, in the case of such subsidiaries, preferred stock; pay dividends on, repurchase or make distributions in respect of our capital stock or make other restricted payments; make certain investments or acquisitions; sell, transfer or otherwise convey certain assets; create liens; enter into agreements restricting certain subsidiaries’ ability to pay dividends or make other intercompany transfers; consolidate, merge, sell or 29 Table of Contents otherwise dispose of all or substantially all of our assets; enter into transactions with affiliates; prepay certain kinds of indebtedness; and issue or sell stock of our subsidiaries.
We own and operate stations in the following markets: Atlanta, GA, Augusta, GA, Boston, MA, Charlotte, NC, Detroit, MI, Fayetteville, NC, Fort Myers-Naples, FL, Las Vegas, NV, Middlesex, NJ, Monmouth, NJ, Morristown, NJ, Philadelphia, PA, Tampa-Saint Petersburg, FL, and Wilmington, DE. We refer to each group of stations in each market as a market cluster.
We own and operate stations in the following markets: Atlanta, GA, Augusta, GA, Boston, MA, Charlotte, NC, Detroit, MI, Fayetteville, NC, Fort Myers-Naples, FL, Las Vegas, NV, Middlesex, NJ, Monmouth, NJ, Morristown, NJ, Philadelphia, PA, and Tampa-Saint Petersburg, FL. We refer to each group of stations in each market as a market cluster.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview We are a multi-platform media company whose primary business is operating radio stations throughout the United States. We offer local and national advertisers integrated marketing solutions across audio, digital and event platforms.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYS IS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview We are a multi-platform media company whose primary business is operating radio stations throughout the United States. We offer local and national advertisers integrated marketing solutions across audio, digital and event platforms.
The mortality assumptions are based on the mortality tables and mortality improvement scales which are selected based on the most recent study of the Society of Actuaries. The SERP is frozen so future employment does not change the benefit amounts. Actual results will differ from results which are estimated based on assumptions. See Note 12 to the accompanying financial statements.
The mortality assumptions are based on the mortality tables and mortality improvement scales which are selected based on the most recent study of the Society of Actuaries. The SERP is frozen so future employment does not change the benefit amounts. Actual results will differ from results which are estimated based on assumptions. See Note 11 to the accompanying financial statements.
IBR is defined as the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. See Note 11 to the accompanying financial statements. Supplemental Employee Retirement Plan.
IBR is defined as the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. See Note 10 to the accompanying financial statements. Supplemental Employee Retirement Plan.
Net Cash Used In Investing Activities. Net cash used in investing activities during the year ended December 31, 2022 included payments of $13.4 million for capital expenditures and a payment of $2.0 million for the acquisition of Guarantee, partially offset by proceeds of $1.2 million from a station disposition.
Net cash used in investing activities for the year ended December 31, 2022 included payments of $13.4 million for capital expenditures and a payment of $2.0 million for the acquisition of Guarantee, partially offset by proceeds of $1.2 million from a station disposition. Net Cash Used In Financing Activities.
Results of Operations Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021 The following summary table presents a comparison of our results of operations for the years ended December 31, 2021 and 2022, with respect to certain of our key financial measures. The changes illustrated in the table are discussed in greater detail below.
Results of Operations Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 The following summary table presents a comparison of our results of operations for the years ended December 31, 2022 and 2023, with respect to certain of our key financial measures. The changes illustrated in the table are discussed in greater detail below.
The impairment losses were primarily due to an increase in the discount rate used in the discounted cash flow analyses to estimate the fair value of FCC licenses and goodwill due to certain risks associated with the U.S. economy.
The impairment losses were primarily due to an increase in the discount rate used in the discounted cash flow analyses to estimate the fair value of FCC licenses due to certain risks associated with the U.S. economy.
We use trade sales agreements to reduce cash paid for operating costs and expenses by exchanging advertising airtime for goods or services; however, we endeavor to minimize trade revenue in order to maximize cash revenue from our available airtime. We also continue to invest in digital support services to develop and promote our station websites, applications, and other distribution platforms.
We use trade sales agreements to reduce cash paid for operating costs and expenses by exchanging advertising airtime for goods or services; however, we endeavor to minimize trade revenue in order to maximize cash revenue from our available airtime. 24 Table of Contents We also continue to invest in digital support services to develop and promote our station websites, applications, and other distribution platforms.
This ongoing evaluation requires management judgment, and if we had made different assumptions about these factors, the allowance for doubtful accounts could have been materially different. Property and Equipment. We are required to assess the recoverability of our property and equipment whenever an event has occurred that may result in an impairment loss.
This ongoing evaluation requires management judgment, and if we had made different assumptions about these factors, the allowance for credit losses could have been materially different. Property and Equipment. We are required to assess the recoverability of our property and equipment whenever an event has occurred that may result in an impairment loss.
Our effective tax rate was approximately (79)% and (30)% for the year ended December 31, 2021 and 2022, respectively. These rates differ from the federal statutory rate of 21% due to the effect of state income taxes, certain non-taxable income, and certain expenses that are not deductible for tax purposes. Net Loss.
Our effective tax rate was approximately (30)% and (24)% for the year ended December 31, 2022 and 2023, respectively. These rates differ from the federal statutory rate of 21% due to the effect of state income taxes, certain non-taxable income, and certain expenses that are not deductible for tax purposes. Net Loss.
We have also purchased or constructed office and studio space in some of our markets to facilitate the consolidation of our operations. In response to the COVID-19 pandemic, our board of directors has suspended future quarterly dividend payments until it is determined that resumption of dividend payments is in the best interest of the Company’s stockholders.
We have also purchased or constructed office and studio space in some of our markets to facilitate the consolidation of our operations. Our board of directors has suspended future quarterly dividend payments until it is determined that resumption of dividend payments is in the best interest of the Company’s stockholders.
Net loss for the year ended December 31, 2022 was $42.1 million compared to a net loss of $1.5 million for the year ended December 31, 2021, as a result of the factors described above. Liquidity and Capital Resources Overview. Our primary sources of liquidity is internally generated cash flow and cash on hand.
Net loss for the year ended December 31, 2023 was $75.1 million compared to a net loss of $42.1 million for the year ended December 31, 2022, as a result of the factors described above. Liquidity and Capital Resources Overview. Our primary sources of liquidity is internally generated cash flow and cash on hand.
If we determine it is more likely than not that our FCC licenses are impaired, then we are required to perform a quantitative impairment test. In 2022, we elected to perform the quantitative impairment test for our FCC licenses in all markets. The quantitative impairment test compares the fair value of our FCC licenses with their carrying amounts.
If we determine it is more likely than not that our FCC licenses are impaired, then we are required to perform a quantitative impairment test. In 2023, we performed the quantitative impairment test for our FCC licenses in all markets. The quantitative impairment test compares the fair value of our FCC licenses with their carrying amounts.
Factors that could cause actual results or events to differ materially from these forward-looking statements include, but are not limited to: • the effects of the COVID-19 pandemic, including its potential effects on the economic environment and the Company’s results of operations, liquidity and financial condition, and the increased risk of impairments of the Company’s FCC licenses and/or goodwill; • external economic forces that could have a material adverse impact on the Company’s advertising revenues and results of operations; • the ability of the Company’s stations to compete effectively in their respective markets for advertising revenues; • the ability of the Company to develop compelling and differentiated digital content, products and services; • audience acceptance of the Company’s content, particularly its audio programs; • the ability of the Company to respond to changes in technology, standards and services that affect the audio industry; • the Company’s dependence on federally issued licenses subject to extensive federal regulation; • actions by the FCC or new legislation affecting the audio industry; • increases to royalties the Company pays to copyright owners or the adoption of legislation requiring royalties to be paid to record labels and recording artists; • the Company’s dependence on selected market clusters of stations for a material portion of its net revenue; • credit risk on the Company’s accounts receivable; • the risk that the Company’s FCC licenses and/or goodwill could become impaired; • the Company’s substantial debt levels and the potential effect of restrictive debt covenants on the Company’s operational flexibility and ability to pay dividends; • the potential effects of hurricanes on the Company’s corporate offices and stations; • the failure or destruction of the internet, satellite systems and transmitter facilities that the Company depends upon to distribute its programming; • disruptions or security breaches of the Company’s information technology infrastructure and information systems; • the loss of key personnel; • the Company’s ability to integrate acquired businesses and achieve fully the strategic and financial objectives related thereto and their impact on the Company’s financial condition and results of operations; • the fact that the Company is controlled by the Beasley family, which creates difficulties for any attempt to gain control of the Company; and • other economic, business, competitive, and regulatory factors affecting the businesses of the Company, including those set forth in the Company’s filings with the SEC.
Factors that could cause actual results or events to differ materially from these forward-looking statements include, but are not limited to: • the Company's ability to comply with the continued listing standards of the Nasdaq Global Market; • risks from social and natural catastrophic events; • external economic forces and conditions that could have a material adverse impact on the Company’s advertising revenues and results of operations; • the ability of the Company’s stations to compete effectively in their respective markets for advertising revenues; • the ability of the Company to develop compelling and differentiated digital content, products and services; • audience acceptance of the Company’s content, particularly its audio programs; • the ability of the Company to respond to changes in technology, standards and services that affect the audio industry; • the Company’s dependence on federally issued licenses subject to extensive federal regulation; • actions by the FCC or new legislation affecting the audio industry; • increases to royalties the Company pays to copyright owners or the adoption of legislation requiring royalties to be paid to record labels and recording artists; • the Company’s dependence on selected market clusters of stations for a material portion of its net revenue; • credit risk on the Company’s accounts receivable; • the risk that the Company’s FCC licenses and/or goodwill could become impaired; 23 Table of Contents • the Company’s substantial debt levels and the potential effect of restrictive debt covenants on the Company’s operational flexibility and ability to pay dividends; • the potential effects of hurricanes on the Company’s corporate offices and stations; • the failure or destruction of the internet, satellite systems and transmitter facilities that the Company depends upon to distribute its programming; • disruptions or security breaches of the Company’s information technology infrastructure and information systems; • the loss of key personnel; • the Company’s ability to integrate acquired businesses and achieve fully the strategic and financial objectives related thereto and their impact on the Company’s financial condition and results of operations; • the fact that the Company is controlled by the Beasley family, which creates difficulties for any attempt to gain control of the Company; and • other economic, business, competitive, and regulatory factors affecting the businesses of the Company, including those set forth in the Company’s filings with the SEC.
As a result of the quantitative impairment test performed as of June 30, 2022, we recorded impairment losses of $5.9 million related to the goodwill in our Boston, MA, Charlotte, NC, Fayetteville, NC, Fort Myers-Naples, FL, and Tampa-Saint Petersburg, FL market clusters.
As a result of the quantitative impairment test, we recorded impairment losses of $5.9 million related to the goodwill in our Boston, MA, Charlotte, NC, Fayetteville, NC, Fort Myers-Naples, FL, and Tampa-Saint Petersburg, FL market clusters.
In the second quarter of 2022, we repurchased $5.0 million aggregate principal amount of the Notes for an aggregate price equal to 96% of the principal amount and recorded an aggregate gain of $0.1 million as a result of the repurchases. Income Tax Benefit.
In the second quarter of 2022, we purchased $5.0 million aggregate principal amount of the Notes for an aggregate price equal to 96% of the principal amount and recorded an aggregate gain of $0.1 million as a result of the purchases. Income Tax Benefit.
Rental expense was approximately $48,000 for the year ended December 31, 2022. GGB Las Vegas, LLC We lease office space for our stations in Las Vegas, NV from GGB Las Vegas, LLC, which is controlled by members of the Beasley family. The lease agreement expires on December 31, 2023.
The lease agreement expires on October 31, 2028. Rental expense was approximately $52,000 for the year ended December 31, 2023. GGB Las Vegas, LLC We lease office space for our stations in Las Vegas, NV from GGB Las Vegas, LLC, which is controlled by members of the Beasley family. The lease agreement expires on December 31, 2028.
In the third quarter of 2022, we repurchased $5.0 million aggregate principal amount of the Notes for an aggregate price equal to 77% of the principal amount and recorded an aggregate gain of $1.0 million as a result of the repurchases.
In the third quarter of 2022, we purchased $5.0 million aggregate principal amount of the Notes for an aggregate price equal to 77% of the principal amount and recorded an aggregate gain of $1.0 million as a result of the purchases.
As of December 31, 2022, goodwill with an aggregate carrying amount of $13.3 million represented 2% of our total assets. We are required to test our goodwill for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that our goodwill might be impaired.
As of December 31, 2023, goodwill with an aggregate carrying amount of $0.9 million represented 0.2% of our total assets. We are required to test our goodwill for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that our goodwill might be impaired.
National sales are generally facilitated by our national representation firm, which serves as our agent in these transactions. Our net revenue is generally determined by the advertising rates that we are able to charge and the number of advertisements that we can broadcast without jeopardizing listener levels.
National advertiser agencies generally purchase advertising for multiple markets. National sales are generally facilitated by our national representation firm, which serves as our agent in these transactions. Our net revenue is generally determined by the advertising rates that we are able to charge and the number of advertisements that we can broadcast without jeopardizing listener levels.
The Company undertakes no obligation to update or revise any forward-looking statements. 25 Table of Contents Index to Financial Statements Forward-looking statements involve a number of risks and uncertainties, and actual results or events may differ materially from those projected or implied in those statements.
The Company undertakes no obligation to update or revise any forward-looking statements. Forward-looking statements involve a number of risks and uncertainties, and actual results or events may differ materially from those projected or implied in those statements.
Rental expense was $0.2 million for the year ended December 31, 2022. Wintersrun Communications, LLC We sold a tower for one station in Charlotte, NC to Wintersrun Communications, LLC, which is partially held by a trust for the benefit of Caroline Beasley, Bruce G. Beasley, Brian E.
Rental expense was $0.2 million for the year ended December 31, 2023. Wintersrun Communications, LLC We leased a tower for one station in Charlotte, NC from Wintersrun Communications, LLC ("Wintersrun"), which is partially held by a trust for the benefit of Caroline Beasley, Bruce G. Beasley, Brian E.
We used the net proceeds from the Notes, to refinance in full our previously outstanding credit facility, to repay a previously outstanding promissory note and loan from George Beasley (see Note 10 to the accompanying financial statements) and to pay related accrued interest, fees and expenses.
We used the net proceeds from the Notes, to refinance in full our previously outstanding credit facility, to repay a previously outstanding promissory note and loan from George Beasley and to pay related accrued interest, fees and expenses.
We consider an accounting estimate to be critical if: • it involves a significant level of estimation uncertainty; and 27 Table of Contents Index to Financial Statements • changes in the estimate or different estimates that could have been selected have had or are reasonably likely to have a material impact on our results of operations or financial condition.
We consider an accounting estimate to be critical if: • it involves a significant level of estimation uncertainty; and • changes in the estimate or different estimates that could have been selected have had or are reasonably likely to have a material impact on our results of operations or financial condition. Accounts Receivable.
Related Party Transactions Beasley Broadcasting Management, LLC We lease our principal executive offices in Naples, FL from Beasley Broadcasting Management, LLC, which is held by a trust for the benefit of Caroline Beasley, Bruce G. Beasley, Brian E. Beasley, and other members of the Beasley family. The lease agreement expires on May 31, 2023.
Related Party Transactions 30 Table of Contents Beasley Broadcasting Management, LLC We lease our principal executive offices in Naples, FL from Beasley Broadcasting Management, LLC, which is held by a trust for the benefit of Caroline Beasley, Bruce G. Beasley, Brian E. Beasley, and other members of the Beasley family. The lease agreement expires on December 31, 2031.
However, there can be no assurance that impairments of our property and equipment will not occur in future periods. FCC Licenses. As of December 31, 2022, FCC licenses with an aggregate carrying amount of $487.2 million represented 68% of our total assets.
However, there can be no assurance that impairments of our property and equipment will not occur in future periods. FCC Licenses. As of December 31, 2023, FCC licenses with an aggregate carrying amount of $393.0 million represented 68% of our total assets.
We calculate the term for each lease agreement to include the noncancellable period specified in the agreement together with: (1) the periods covered by options to extend the lease if we are reasonably certain to exercise that option, (2) the periods covered by an option to terminate if we 30 Table of Contents Index to Financial Statements are reasonably certain not to exercise that option and (3) the period covered by an option to extend (or not terminate) if controlled by the lessor.
We calculate the term for each lease agreement to include the noncancellable period specified in the agreement together with: (1) the periods covered by options to extend the lease if we are reasonably certain to exercise that option, (2) the periods covered by an option to terminate if we are reasonably certain not to exercise that option and (3) the period covered by an option to extend (or not terminate) if controlled by the lessor.
However, poor financial results or unanticipated expenses could give rise to default under the Notes, additional debt servicing requirements or other additional financing or liquidity requirements sooner than we expect, and we may not secure financing when needed or on acceptable terms. Off-Balance Sheet Arrangements.
However, poor financial results or unanticipated expenses could give rise to default under the Notes, additional debt servicing requirements or other additional financing or liquidity requirements sooner than we expect, and we may not secure financing when needed or on acceptable terms. Off-Balance Sheet Arrangements. We did not have any off-balance sheet arrangements as of December 31, 2023.
Net cash provided by operating activities was $11.1 million during the year ended December 31, 2022, as compared to net cash used in operating activities of $1.9 million during the year ended December 31, 2021.
Net cash used in operating activities was $4.7 million during the year ended December 31, 2023, as compared to net cash provided by operating activities of $11.1 million during the year ended December 31, 2022.
For the purpose of testing our goodwill for impairment, we have identified our market clusters and esports segment as our reporting units. Due to an increase in interest rates in the U.S. economy, we tested our goodwill for impairment during the second quarter of 2022.
For the purpose of testing our goodwill for impairment, we have identified our market clusters as our reporting units. Due to an increase in interest rates in the U.S. economy and a decrease in projected revenues, we tested our goodwill for impairment during the third quarter of 2023.
Repayment of the loan to Interactive Life, Inc. is guaranteed by Mr. Harb with 3,333,334 shares of Class A common stock of Quu, Inc. Inflation For the years ended December 31, 2021 and 2022, inflation has affected our performance in terms of higher costs for operating expenses, however, the exact impact cannot be reasonably determined.
Harb with 3,333,334 shares of Class A common stock of Quu, Inc. 31 Table of Contents Inflation For the years ended December 31, 2022 and 2023, inflation has affected our performance in terms of higher costs for operating expenses; however, the exact impact cannot be reasonably determined.
For example, if the discount rate used in our discounted cash flow analyses was increased to 10.0% without any additional changes to the other assumptions used in the discounted cash flow analyses, we would have recorded additional impairment losses of $20.5 million related to the FCC licenses in each of our market clusters except Atlanta, GA. Other Intangibles.
For example, as of November 30. 2023, if the discount rate used in our discounted cash flow analyses was increased to 10.5% without any additional changes to the other assumptions used in the discounted cash flow analyses, we would have recorded additional impairment losses of $20.4 million related to the FCC licenses in each of our market clusters. 26 Table of Contents Leases.
GGB Augusta, LLC We lease land for our stations in Augusta, GA from GGB Augusta, LLC, which is held by a trust for the benefit of Caroline Beasley, Bruce G. Beasley, Brian E. Beasley, and other members of the Beasley family. The lease agreement expires on November 1, 2023.
Rental expense was $0.1 million for the year ended December 31, 2023. GGB Augusta, LLC We lease land for our stations in Augusta, GA from GGB Augusta, LLC, which is held by a trust for the benefit of Caroline Beasley, Bruce G. Beasley, Brian E. Beasley, and other members of the Beasley family.
Although we believe the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements.
Although we believe the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. We do not intend, and undertake no obligation, to update any forward-looking statement.
On April 1, 2022, we completed the sale of substantially all of the assets used in the operations of WWNN-AM in West Palm Beach-Boca Raton, FL to a third party for $1.25 million in cash.
On April 1, 2022, we completed the sale of substantially all of the assets used in the operations of WWNN-AM in West Palm Beach-Boca Raton, FL to a third party for $1.25 million in cash. As a result of the sale, we recorded an impairment loss of $1.9 million related to the FCC license during the first quarter of 2022.
Rental expense was $0.3 million for the year ended December 31, 2022. Beasley Family Properties, LLC On September 30, 2021, the office space leased from GGB Estero, LLC for our stations in Fort Myers, FL was transferred to Beasley Family Properties, LLC, which is held by a trust for the benefit of Caroline Beasley, Bruce G. Beasley, Brian E.
Rental expense was $0.3 million for the year ended December 31, 2023. Beasley Family Properties, LLC We lease office space for our stations in Fort Myers, FL from Beasley Family Properties, LLC, which is held by a trust for the benefit of Caroline Beasley, Bruce G. Beasley, Brian E. Beasley, and other members of the Beasley family.
These forward-looking statements are based on the current beliefs and expectations of the Company’s management and are subject to known and unknown risks and uncertainties.
All statements other than statements of historical fact included in this document are forward-looking statements. These forward-looking statements are based on the current beliefs and expectations of the Company’s management and are subject to known and unknown risks and uncertainties.
Due to an increase in interest rates in the U.S. economy, we tested our FCC licenses for impairment during the second quarter of 2022.
Due to an increase in interest rates in the U.S. economy and a decrease in projected revenues, we tested our FCC licenses for impairment during the third quarter of 2023.
In the second quarter of 2022, we repurchased $5.0 million aggregate principal amount of the Notes for an aggregate price equal to 96% of the principal amount and recorded an aggregate gain of $0.1 million as a result of the repurchases.
In the second quarter of 2023, we repurchased $3.0 million principal amount of the Notes for a price equal to 66% of the principal amount and recorded a gain of $1.0 million as a result of the repurchase.
Our analysis includes whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
We are required to determine whether a contract is or contains a lease at inception. Our analysis includes whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
In the third quarter of 2022, we repurchased $5.0 million aggregate principal amount of the Notes for an aggregate price equal to 77% of the principal amount and recorded an aggregate gain of $1.0 million as a result of the repurchases.
In the fourth quarter of 2023, we repurchased $20.0 million aggregate principal amount of the Notes for an aggregate price equal to 65% of the principal amount and recorded an aggregate gain of $6.8 million as a result of the repurchases.
The impairment losses were due to an increase in the discount rate used in the discounted cash flow analyses to estimate the fair value of our FCC licenses due to certain risks associated with the U.S. economy. The fair values of our FCC licenses were estimated using an income approach.
The impairment losses were primarily due to an increase in the discount rate due to certain risks associated with the U.S. economy and a decrease in the projected revenues in each market cluster used in the discounted cash flow analyses to estimate the fair value of our FCC licenses.
The changes set forth in the table are discussed in greater detail below. This section should be read in conjunction with the financial statements and notes to financial statements included in Item 8 of this report.
This section should be read in conjunction with the financial statements and notes to financial statements included in Item 8 of this report.
As a result of our annual quantitative impairment tests performed during the fourth quarter of 2022, we recorded impairment losses of $19.2 million related to the FCC licenses in our Boston, MA, Charlotte, NC, Fort Myers-Naples, FL, Middlesex-Monmouth-Morristown, NJ, and Wilmington, DE market clusters, an impairment loss of $8.9 million related to the goodwill in our Boston, MA market cluster and an impairment loss of $1.5 million related to goodwill in the esports segment.
As a result of our annual quantitative impairment test performed during the fourth quarter of 2022, we recorded impairment losses of $19.2 million related to the FCC licenses in our Boston, MA, Charlotte, NC, Fort Myers-Naples, FL, Middlesex-Monmouth-Morristown, NJ, and Wilmington, DE market clusters. The impairment losses were primarily due to a decrease in projected revenue in these markets.
From time to time, we repurchase sufficient shares of our common stock to fund withholding taxes in connection with the vesting of restricted stock units and shares of restricted stock. We paid $0.1 million to repurchase 97,113 shares during the year ended December 31, 2022.
From time to time, we repurchase sufficient shares of our common stock to fund withholding taxes in connection with the vesting of restricted stock units. We paid approximately $84,000 to repurchase 87,873 shares during the year ended December 31, 2023.
We lease office space for our stations in Fayetteville, NC from BFT. The lease agreement expires on August 31, 2030. Rental expense was $0.1 million for the year ended December 31, 2022.
The remaining lease agreement for the tower that is still owned by BFT expires on January 31, 2026. Rental expense was $0.8 million for the year ended December 31, 2023. We lease office space for our stations in Fayetteville, NC from BFT. The lease agreement expires on August 31, 2030.
As a result of the test, we recorded an impairment loss of $12.8 million primarily due to a decrease in projected revenue in the esports segment. Due to an increase in interest rates in the U.S. economy, we tested our FCC licenses and goodwill for impairment during the second quarter of 2022.
The impairment losses were primarily due to a decrease in projected revenue in the Boston, MA market and the esports segment. Due to an increase in interest rates in the U.S. economy, we tested our goodwill for impairment during the second quarter of 2022.
As a result of the quantitative impairment test performed as of June 30, 2022, we recorded impairment losses of $2.8 million related to the FCC licenses in our Fort Myers-Naples, FL, Las Vegas, NV, and Wilmington, DE market clusters.
Due to an increase in interest rates in the U.S. economy, we tested our FCC licenses for impairment during the second quarter of 2022. As a result of the quantitative impairment tests, we recorded impairment losses of $2.8 million related to the FCC licenses in our Fort Myers-Naples, FL, Las Vegas, NV, and Wilmington, DE market clusters.
We performed a quantitative impairment test for our franchise rights in the esports segment as of December 31, 2022. As a result of the test, we recorded an impairment loss of $12.8 million. The impairment loss was primarily due to a decrease in projected revenue in the esports segment.
As a result of the test, we recorded an impairment loss of $12.8 million primarily due to a decrease in projected revenue in the esports segment. Gain on Exchange.
Digital revenue increased $8.0 million during the year ended December 31, 2022 as compared to the year ended December 31, 2021, primarily due to continued growth in the digital segment and the acquisition of Guarantee Digital, LLC (“Guarantee”). Operating Expenses.
Digital revenue increased $4.7 million during the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily due to continued growth in the digital segment. Operating Expenses. Operating expenses decreased $5.0 million during the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Digital operating expenses increased $4.0 million during the year ended December 31, 2022 as compared to the year ended December 31, 2021, primarily due to continued investment in the digital segment and the acquisition of Guarantee. Corporate Expenses.
Digital operating expenses increased $4.4 million during the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily due to continued investment in the digital segment. Corporate Expenses. Corporate expenses during the year ended December 31, 2023 were comparable to the year ended December 31, 2022. FCC Licenses Impairment Losses.
The key assumptions used in the discounted cash flow analyses are as follows: Revenue growth rates 0.3% - 2.7% Market revenue shares at maturity 0.7% - 44.7% Operating income margins at maturity 19.7% - 30.4% Discount rate 9.5% The carrying amount of our FCC licenses for each reporting unit and the percentage by which fair value exceeded the carrying amount are as follows: Market cluster FCC licenses Excess Atlanta, GA $ 832,300 54.5 % Augusta, GA 6,113,075 5.5 Boston, MA 125,394,900 — Charlotte, NC 53,726,600 — Detroit, MI 29,978,201 6.9 Fayetteville, NC 8,974,679 0.4 Fort Myers-Naples, FL 7,160,900 — Las Vegas, NV 37,080,600 0.8 Middlesex, Monmouth, Morristown, NJ 21,735,200 — Philadelphia, PA 119,674,192 6.6 Tampa-Saint Petersburg, FL 61,787,351 4.8 Wilmington, DE 14,791,800 — Goodwill.
The key assumptions used in the discounted cash flow analyses are as follows: Revenue growth rates (16.5)% - 24.4% Market revenue shares at maturity 0.4% - 45.5% Operating income margins at maturity 19.7% - 29.9% Discount rate 10.0% The carrying amount of our FCC licenses for each reporting unit and the percentage by which fair value exceeded the carrying amount are as follows: Market cluster FCC licenses Excess Atlanta, GA $ 440,300 0.1 % Augusta, GA 4,776,100 — Boston, MA 95,901,400 0.7 Charlotte, NC 44,495,600 1.9 Detroit, MI 25,205,800 5.8 Fayetteville, NC 7,295,100 2.7 Fort Myers-Naples, FL 5,191,700 — Las Vegas, NV 30,145,300 2.3 Middlesex, Monmouth, Morristown, NJ 16,726,200 — Philadelphia, PA 106,737,400 0.9 Tampa-Saint Petersburg, FL 56,092,000 0.6 Goodwill.
Local revenue generally consists of commercial advertising sales, digital advertising sales and other sales to advertisers in a station’s local market, either directly to the advertiser or through the advertiser’s agency. National revenue generally consists of commercial advertising sales through advertiser agencies. National advertiser agencies generally purchase advertising for multiple markets.
Revenues are reported at the amount we expect to be entitled to receive under the contract. Local revenue generally consists of commercial advertising sales, digital advertising sales and other sales to advertisers in a station’s local market, either directly to the advertiser or through the advertiser’s agency. National revenue generally consists of commercial advertising sales through advertiser agencies.
We lease a tower for one station in Augusta, GA from Wintersrun. The lease agreement expires on October 15, 2025. Rental expense was approximately $31,000 for the year ended December 31, 2022. Loan to Interactive Life, Inc.
We lease a tower for one station in Augusta, GA from Wintersrun. The lease agreement expires on October 15, 2025. Rental expense was approximately $31,000 for the year ended December 31, 2023. Quu, Inc. We currently hold an investment in Quu, Inc. ("Quu"), a company that provides us with access to an application for digital revenue.
Significant factors affecting the $13.1 million increase in net cash provided by operating activities included a $15.5 million increase in cash receipts from revenue and a $10.5 million decrease in cash paid for operating expenses, partially offset by an $11.1 million increase in interest payments and a $1.6 million increase in cash paid for corporate expenses.
Significant factors affecting the $15.8 million decrease in net cash used in operating activities included a $13.9 million increase in cash paid for operating expenses and a $3.3 million decrease in cash receipts from revenue. Net Cash Provided By (Used In) Investing Activities.
The impairment losses were due to an increase in the discount rate used in the discounted cash flow analyses to estimate the fair value of our goodwill due to certain risks associated with the U.S. economy. The fair values of our goodwill were estimated using an income approach.
The impairment loss was primarily due to an increase in the discount rate due to certain risks associated with the U.S. economy and a decrease in the projected revenues used in the discounted cash flow analysis to estimate the fair value of our goodwill.
Beasley Family Towers, LLC We lease towers for 16 stations in various markets from Beasley Family Towers, LLC (“BFT”), which is partially held by a trust for the benefit of Caroline Beasley, Bruce G. Beasley, Brian E.
The lease agreement expires on August 31, 2024. Rental expense was $0.2 million for the year ended December 31, 2023. Beasley Family Towers, LLC We leased towers for 19 stations in various markets from Beasley Family Towers, LLC (“BFT”), which is partially held by a trust for the benefit of Caroline Beasley, Bruce G. Beasley, Brian E.
In May 2022, we provided a $250,000 loan to Interactive Life, Inc. that accrues interest at 8.625% per annum with no cash payments due until the loan’s maturity in May 2024. Interactive Life, Inc. is controlled by Mr. Joseph Harb. We currently hold an investment in Quu, Inc., a company that is controlled by Mr. Harb.
Payments to Quu for access to the application were $0.4 million for the year ended December 31, 2023. Loan to Interactive Life, Inc. In May 2022, we provided a $250,000 loan to Interactive Life, Inc. that accrues interest at 8.625% per annum with no cash payments due until the loan’s maturity in May 2024.
Cautionary Note Regarding Forward-Looking Statements This report contains “forward-looking statements” about the Company within the meaning of the Private Securities Litigation Reform Act of 1995, which relate to future, not past, events. All statements other than statements of historical fact included in this document are forward-looking statements.
Unless the context otherwise requires, all references in this report to the “Company,” “we,” “us” or “our” are to Beasley Broadcast Group, Inc. and its subsidiaries. Cautionary Note Regarding Forward-Looking Statements This report contains “forward-looking statements” about the Company within the meaning of the Private Securities Litigation Reform Act of 1995, which relate to future, not past, events.
Year ended December 31, 2021 2022 Net cash provided by (used in) operating activities $ (1,907,227 ) $ 11,147,084 Net cash used in investing activities (1,136,268 ) (14,177,688 ) Net cash provided by (used in) financing activities 33,662,705 (8,813,385 ) Net increase (decrease) in cash and cash equivalents $ 30,619,210 $ (11,843,989 ) Net Cash Provided By (Used In) Operating Activities.
Year ended December 31, 2022 2023 Net cash provided by (used in) operating activities $ 11,147,084 $ (4,678,549 ) Net cash provided by (used in) investing activities (14,177,688 ) 6,870,446 Net cash used in financing activities (8,813,385 ) (14,992,629 ) Net decrease in cash and cash equivalents $ (11,843,989 ) $ (12,800,732 ) Net Cash Provided By (Used In) Operating Activities.
As a result of the quantitative impairment test performed as of November 30, 2022, we recorded 28 Table of Contents Index to Financial Statements impairment losses of $19.2 million related to the FCC licenses in our Boston, MA, Charlotte, NC, Fort Myers-Naples, FL, Middlesex-Monmouth-Morristown, NJ, and Wilmington, DE market clusters.
As a result of the quantitative impairment test performed as of November 30, 2023, we recorded impairment losses of $1.0 million related to the FCC licenses in our Augusta, GA, Fort Myers-Naples, FL, and Middlesex-Monmouth-Morristown, NJ market clusters. The impairment losses were primarily due to a decrease in projected revenue in these markets.
Operating expenses increased $13.8 million during the year ended December 31, 2022 as compared to the year ended December 31, 2021. Audio operating expenses increased $9.4 million during the year ended December 31, 2022 as compared to the year ended December 31, 2021, primarily due to recovery from the COVID-19 pandemic.
Audio operating expenses decreased $9.4 million during the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily due to continued expense management in the audio segment.
The impairment losses were primarily due to a decrease in projected revenue in these markets. The fair values of our FCC licenses were estimated using an income approach.
The fair values of our FCC licenses were estimated using an income approach.
We did not have any off-balance sheet arrangements as of December 31, 2022. 34 Table of Contents Index to Financial Statements Cash Flows . The following summary table presents a comparison of our cash flows for the years ended December 31, 2021 and 2022 with respect to certain of our key measures affecting our liquidity.
Cash Flows . The following summary table presents a comparison of our cash flows for the years ended December 31, 2022 and 2023 with respect to certain of our key measures affecting our liquidity. The changes set forth in the table are discussed in greater detail below.
On February 2, 2021, we issued $300.0 million aggregate principal amount of 8.625% senior secured notes due on February 1, 2026 (the “Notes”) under an indenture dated February 2, 2021 (the “Indenture”). 33 Table of Contents Index to Financial Statements Interest on the Notes accrues at the rate of 8.625% per annum and is payable semiannually in arrears on February 1 and August 1 of each year.
In addition, as discussed in “Secured Notes” below, the Indenture governing our Notes limits our ability to pay dividends. Secured Notes. On February 2, 2021, we issued $300.0 million aggregate principal amount of 8.625% senior secured notes due on February 1, 2026 (the “Notes”) under an indenture dated February 2, 2021 (the “Indenture”).
The impairment losses were primarily due to a decrease in projected revenue in these markets and the esports segment. We also performed a quantitative impairment test for our franchise rights in the esports segment during the fourth quarter of 2022.
The impairment losses were primarily due to an increase in the discount rate used in the discounted cash flow analyses to estimate the fair value of goodwill due to certain risks associated with the U.S. economy. Other Impairment Losses. We also performed a quantitative impairment test for our franchise rights in the esports segment during the fourth quarter of 2022.
As a result of the quantitative impairment test, we recorded an impairment loss of $8.9 million related to the goodwill in our Boston, MA market cluster. The impairment loss was primarily due to a decrease in projected revenue in Boston. The fair value of our goodwill was estimated using an income approach.
As a result of our annual quantitative impairment test performed during the fourth quarter of 2022, we recorded an impairment loss of $8.9 million related to the goodwill in our Boston, MA market cluster and an impairment loss of $1.5 million related to 28 Table of Contents goodwill in the esports segment.
We do not intend, and undertake no obligation, to update any forward-looking statement. 26 Table of Contents Index to Financial Statements Financial Statement Presentation The following discussion provides a brief description of certain key items that appear in our financial statements and general factors that impact these items. Net Revenue.
Financial Statement Presentation The following discussion provides a brief description of certain key items that appear in our financial statements and general factors that impact these items. Net Revenue. Our net revenue is primarily derived from the sale of commercial spots to advertisers directly or through national, regional or local advertising agencies.
Net revenue increased $15.0 million during the year ended December 31, 2022 as compared to the year ended December 31, 2021. Audio revenue increased $6.6 million during the year ended December 31, 2022 as compared to the year ended December 31, 2021, primarily due to recovery from the COVID-19 pandemic and political advertising for the 2022 elections.
Net revenue decreased $9.3 million during the year ended December 31, 2023 as compared to the year ended December 31, 2022. Audio revenue decreased $13.6 million during the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily due to a decrease in agency revenue including political advertising.
Net cash used in investing activities for the same period in 2021 included payments of $4.5 million for capital expenditures, partially offset by proceeds of $3.0 million from life insurance. Net Cash Provided By (Used In) Financing Activities. Net cash used in financing activities during the year ended December 31, 2022 included Notes repurchases of $8.7 million.
Net cash used in financing activities during the year ended December 31, 2023 included Notes purchases of $14.9 million. Net cash used in financing activities for the year ended December 31, 2022 included Notes purchases of $8.7 million.
As a result of the sale, we recorded an impairment loss of $1.9 million related to the FCC license during the first quarter of 2022. 32 Table of Contents Index to Financial Statements Gain on Exchange.
As a result of entering into the agreement, we recorded an impairment loss of $10.0 million related to the FCC license during the second quarter of 2023.
The key assumptions used in the discounted cash flow analyses are as follows: Revenue growth rates (1.9)% - 15.9% Market revenue shares at maturity 0.6% - 44.0% Operating income margins at maturity 19.2% - 32.6% Discount rate 9.5% Interest rates in the U.S. economy continued to increase during the third quarter of 2022; however, there were no changes to the discount rate or any other items used in the discounted cash flow analyses to estimate the fair value of the FCC licenses.
The key assumptions used in the discounted cash flow analyses are as follows: Revenue growth rates (1.2)% - 1.8% Market revenue shares at maturity 0.4% - 44.7% Operating income margins at maturity 19.7% - 30.4% Discount rate 10.0% 25 Table of Contents We performed the annual quantitative impairment test for our FCC licenses in all markets during the fourth quarter of 2023.
Beasley and other 35 Table of Contents Index to Financial Statements members of the Beasley family and partially owned directly by Caroline Beasley, Bruce G. Beasley, Brian E. Beasley and other members of the Beasley family. The lease agreements expire on various dates through December 31, 2038. Rental expense was $0.8 million for the year ended December 31, 2022.
Beasley and other members of the Beasley family and partially owned directly by Bruce G. Beasley and Brian E. Beasley. During the fourth quarter of 2023, Wintersrun sold the tower to an unrelated third party. As a result, the lease is no longer considered a related party transaction. Rental expense was $0.1 million for the year ended December 31, 2023.
The impairment loss was primarily due to a decrease in projected revenue in the esports segment. We believe we have made reasonable estimates and assumptions to calculate the estimated fair value of our FCC licenses and goodwill, however, these estimates and assumptions are highly judgmental in nature. Actual results can be materially different from estimates and assumptions.
The key assumptions used in the discounted cash flow analyses are as follows: Revenue growth rates (9.3)% - 1.4% Operating income margins 27.9% Discount rate 10.0% We believe we have made reasonable estimates and assumptions to calculate the estimated fair value of our FCC licenses and goodwill, however, these estimates and assumptions are highly judgmental in nature.
As a result of the quantitative impairment tests, we recorded impairment losses of $2.8 million related to the FCC licenses in our Fort Myers-Naples, FL, Las Vegas, NV, and Wilmington, DE market clusters and impairment losses of $5.9 million related to the goodwill in our Boston, MA, Charlotte, NC, Fayetteville, NC, Fort Myers-Naples, FL, and Tampa-Saint Petersburg, FL market clusters.
As a result of the quantitative impairment test performed as of September 30, 2023, we recorded impairment losses of $78.2 million related to the FCC licenses in each of our market clusters.

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