The accompanying consolidated financial statements are prepared in conformity with U.S. generally accepted accounting principles (“GAAP”). All amounts presented in these consolidated financial statements are expressed in thousands of U.S. dollars, except share and per share amounts and unless otherwise noted.

Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation. Specifically, Corporate selling, general and administrative expenses have been collapsed with Selling, general and administrative expenses in the consolidated statements of operations and Launch support has been collapsed with Other liabilities in the consolidated statements of cash flows.

The consolidated financial statements include the accounts and operations of Urban One and subsidiaries in which Urban One has a controlling financial interest, which is generally determined when the Company holds a majority voting interest. All intercompany accounts and transactions have been eliminated in consolidation. Non-controlling interests have been recognized where a controlling interest exists, but the Company owns less than 100% of the controlled entity.

The Company is required to include the financial statements of variable interest entities (“VIE”) in its consolidated financial statements. Under the VIE model, the Company consolidates an investment if it has control to direct the activities of the entity and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

The preparation of consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions. The most significant estimates and assumptions are used in determining: (i) estimates of future cash flows, projected revenues rates, operating profit margins, and discount rates used to evaluate and recognize impairments; (ii) estimates of fair value of the Employment Agreement Award and redeemable non-controlling interest in Reach Media; and (iii) content asset amortization curves.

These estimates and assumptions may affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements. The Company bases these estimates on historical experience, the current economic environment or various other assumptions that are believed to be reasonable under the circumstances. However, economic uncertainty and any disruption in financial markets increase the possibility that actual results may differ from these estimates. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected prospectively in the period they occur.


	As of December 31,
	2025		2024

	(in thousands)
Other current liabilities
Customer advances and unearned income	$	2,754	$	2,200
Unearned event income	90		1,152
Professional fee accrual	824		3,781
Operating expense accruals	2,429		2,512
Employment Agreement Award (as defined in Note 6 - Fair Value Measurements)	2,000		3,044
Deferred barter revenue	—		1,688
Other	3,764		6,009
Total other current liabilities	$	11,861	$	20,386

Other long-term liabilities
Employment Agreement Award (as defined in Note 6 - Fair Value Measurements)	$	5,099	$	7,382
Reserve for uncertain tax position	1,993		1,829
Other	1,300		3,577
Total other long-term liabilities	$	8,392	$	12,788

Cash and cash equivalents consist of cash and money market funds at various commercial banks that have original maturities of 90 days or less. For cash and cash equivalents, cost approximates fair value. The following table provides a reconciliation of cash, cash equivalents and restricted cash as reported within the consolidated balance sheets to “Cash, cash equivalents and restricted cash, end of period” as reported within the consolidated statements of cash flows:

The Company’s cash and cash equivalents are insured by the Federal Deposit Insurance Corporation (“FDIC”). However, the Company has amounts held with banks that may exceed the amount of FDIC insurance provided on such accounts. Generally, the balances may be redeemed upon demand and are maintained with financial institutions of reputable credit, and, therefore, bear minimal credit risk. The Company routinely assesses the financial strength of significant customers, and this assessment, combined with the large number and geographical diversity of its customers, limits our concentration of risk with respect to receivables from contracts with customers. No single customer accounted for over 10.0% of the Company’s consolidated net revenues during either of the years ended December 31, 2025 or 2024.

Trade accounts receivable represent our unconditional rights to consideration arising from our performance under our customer contracts and are recorded at cost less an allowance for expected credit losses that are not expected to be recovered. The Company maintains allowances for credit losses resulting from the expected failure or inability of our customers to make required payments. The Company recognizes the allowance for expected credit losses at inception and reassess quarterly based on management’s expectation of the asset’s collectability. Management estimates credit losses on financial assets, including our trade accounts receivable, utilizing a current expected credit loss impairment model. The Company estimates the expected credit losses, measured over the contractual life of an asset considering relevant historical loss information, credit quality of the customer base, current economic conditions, and forecasts of future economic conditions. Large individual receivables for which there is an indication of increased credit risk are individually assessed for loss allowances.

In determining the allowance for credit losses, management groups similar types of financial assets with consistent risk characteristics. Pools are determined generally based on the Company's four reportable segments, with sub-segmentation between local and national advertising customers in the Radio Broadcasting and Digital segments. The risk characteristics of the financial asset portfolios are monitored by management and reviewed periodically. The forecasts for future economic conditions are based on several factors including, but not limited to, changes in external economic forecasts and current collection rates. Our estimates of the allowance for credit losses may not be indicative of our actual credit losses requiring additional charges to be incurred to reflect the actual amount collected. Past due trade accounts receivable balances are written off against our allowance for credit losses when our internal collection efforts have been unsuccessful.

Goodwill consists of the excess of the purchase price over the fair value of tangible and identifiable intangible net assets acquired. The Company assesses our goodwill for impairment at the reporting unit level. A reporting unit is an operating segment or a business one level below that operating segment if discrete financial information is available. Goodwill is not amortized but is tested annually for impairment at the reporting unit level on October 1 of each year, or more frequently when events or changes in circumstances or other conditions suggest impairment may have occurred. Impairment exists when the asset carrying values exceed their respective fair values. The excess is recorded to operations as an impairment charge.

In testing for goodwill impairment, the Company uses a weighting of the income and market approaches. The income approach estimates the fair value of the reporting unit, which involves, but is not limited to, judgmental estimates and assumptions about projected revenues assumptions, operating profit margins, discount rates and terminal rates. Additionally, the Company utilizes a market value approach to supplement the discounted cash flow model. The market value approach utilizes average EBITDA multiples from guideline public companies. The Company performs a market-based analysis by comparing the estimated fair value of the reporting units to the market capitalization of the Company.

During the a portion of the year-ended December 31, 2025 and during the full year-ended December 31, 2024, in accordance with ASC 350, “Intangibles – Goodwill and Other”, (“ASC 350”), the Company did not amortize its radio broadcasting licenses, TV One Trade Name or goodwill. Instead, the Company performed a test for impairment annually across all reporting units, TV One Trade Name and radio broadcasting licenses, or on an interim basis when events or changes in circumstances or other conditions suggest impairment may have occurred. For goodwill, the Company’s individual radio markets within the Radio Broadcasting reporting unit and each of the other three business segments represent a reporting unit.

Other intangible assets, except for unamortized trade names, continue to be amortized on a straight-line or accelerated basis over their useful lives. The Company evaluates amortizable intangible assets for recoverability when circumstances indicate impairment may have occurred, using an undiscounted cash flow methodology. If the future undiscounted cash flows for the intangible asset are less than net book value, then the net book value is reduced to the estimated fair value.

As of May 31, 2025, an overall decline in revenue and operating profit margin created a triggering event indicating the fair value of the Company's Radio Broadcasting, Reach Media and Digital reporting units were more likely than not to be less than their carrying value. Therefore, the Company performed interim quantitative assessments at 10 of the reporting units containing goodwill. During the three months ended June 30, 2025, the Company recorded impairment losses of approximately $4.9 million and $3.9 million to reduce the carrying value of our Digital and Radio Broadcasting goodwill balances, respectively.

On July 1, 2025, the Company determined the components of our Radio Broadcasting operating segment represent a single reporting unit. The change was primarily driven by the continued integration of the individual markets under a centralized leadership structure resulting in interdependent processes across Radio Broadcasting. The Company utilized a quantitative impairment assessment immediately before the change and performed a qualitative assessment immediately thereafter. Based on this assessment, no impairment losses were recognized.

The Company performed an annual qualitative impairment assessment as of October 1, 2025 for all reporting units. Based on the qualitative impairment assessment performed, the Company performed a quantitative assessment for the Digital reporting unit. Based on the quantitative assessment, the Company recorded impairment losses of approximately $1.7 million to reduce the carrying value of our Digital goodwill balances. For the remaining reporting units no goodwill impairment losses were recognized.

As of December 31, 2025, an overall decline in revenue, forecasted revenue and operating profit margin brought on by industry and macro-economic conditions created a triggering event indicating the fair value of each of the Cable Television and Reach Media reporting units were more likely than not to be less than its’ carrying value. As a result, the Company performed an interim quantitative impairment assessment for the Cable Television and Reach Media reporting units to determine whether they were impaired. The Company estimated the fair value of the reporting units by utilizing a discounted cash flow model. The key assumptions used in the discounted cash flow model for goodwill include projected revenues, operating profit margins, terminal rate and discount rate. For Cable Television, the Company utilized a market value approach to supplement the discounted cash flow model. The market value approach utilized average EBITDA multiples from guideline public companies. See Note 6 - Fair Value Measurements of the Company's consolidated financial statements for key inputs in the Cable Television and Reach Media segments. Based on the assessment, the Company recognized impairment losses of approximately $53.1 million, and $0.5 million to reduce the carrying value of our Cable Television and Reach Media goodwill balances, respectively, for the year ended December 31, 2025.

In connection with past acquisitions, a portion of the purchase price was allocated to radio broadcasting licenses and the TV One Trade Name. Historically, these intangible assets were not amortized but tested annually for impairment at the reporting unit level and accounting unit level on October 1 of each year, or more frequently when events or changes in circumstances or other conditions suggest impairment may have occurred. Impairment exists when the asset carrying values exceed their respective fair values. The excess is recorded to operations as an impairment charge.

The Company tested radio broadcasting license impairment at the accounting unit level using the income approach, which involves, but is not limited to, judgmental estimates and assumptions about market revenues and projected revenues by markets, market shares, operating profit margins, and discount rates.

As of March 31, 2025 and May 31, 2025, the Company's projected market revenues and operating profit margins declined within the Radio Broadcasting segment creating a triggering event indicating that the fair value of certain of the Company’s radio broadcasting licenses were more likely than not to be less than its carrying value.

The Company recognized an impairment loss of approximately $6.4 million associated with five radio markets within the Radio Broadcasting segment, included in impairment of goodwill and intangible assets, on the consolidated statement of operations during the three months ended March 31, 2025.

The Company recognized an impairment loss of approximately $121.3 million associated with twelve radio markets within the Radio Broadcasting segment, included in impairment of goodwill and intangible assets, on the consolidated statement of operations during the three months ended June 30, 2025.

For the years ended December 31, 2025 and 2024, the Company recorded impairment losses against radio broadcasting licenses, of approximately $127.8 million and $118.5 million, respectively, which are included within the impairment of goodwill and intangible assets in the consolidated statements of operations.

Due to industry and macro-economic conditions along with ongoing declines in national and local radio listenership, and forecasted cash flows for Radio Broadcasting, the Company reassessed the useful life for the broadcasting licenses. As a result of the reassessment, the Company concluded that the useful life should change from indefinite-lived to finite-lived intangible assets effective June 1, 2025. The Company has adopted an accelerated amortization method and will amortize the assets over a range of 9 to 18-year period. This was considered a change in estimate, was accounted for prospectively, and resulted in amortization expense included in depreciation and amortization, on the consolidated statement of operations. See further information in Note 12 - Goodwill, Net And Other Intangible Assets, Net.

For the year ended December 31, 2024, the Company noted a continued decline in revenues in the Cable Television segment, indicating that it was more likely than not that its TV One Trade Name was impaired. Therefore, the Company performed a quantitative impairment assessment for the trade name for TV One to determine whether it was impaired.

To determine the fair value of the TV One Trade Name, the Company utilized the relief from royalty approach which values a trade name by calculating the present value of royalty payments avoided given the continued use. The key assumptions used in the analysis for the trade name include cumulative probability of continued use, percentage of royalty payments avoided, projected revenues, terminal rates, and discount rates.

The Company recognized an impairment loss of approximately $13.1 million associated with the TV One Trade Name within the Cable Television segment, included in impairment of goodwill and intangible assets, on the consolidated statement of operations during the year ended December 31, 2024.

Due to industry and macro-economic conditions along with ongoing subscriber churn, and forecasted cash flows for TV One, the Company reassessed the useful life for the TV One Trade Name. As a result of the reassessment, the Company concluded that the useful life should change from indefinite-lived to a finite-lived intangible asset effective January 1, 2025. The Company has adopted an accelerated amortization method and will amortize this asset over a 20-year period. This was considered a change in estimate, was accounted for prospectively, and resulted in amortization expense included in depreciation and amortization, on the consolidated statement of operations. See further information in Note 12 - Goodwill, Net And Other Intangible Assets, Net.

Long-lived assets, excluding goodwill, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets may not be fully recoverable. If an impairment indicator is present, the Company evaluates recoverability by comparing the carrying amount of the asset or group of assets to future undiscounted net cash flows expected to be generated by the asset or group of assets. Assets are grouped at the lowest levels for which there are identifiable cash flows that are largely independent of the cash flows generated by other asset groups. The Company reviewed these long-lived assets during 2025 and 2024 and concluded there were no indicators of impairment.

As of December 31, 2025 and 2024, the Company’s financial instruments consisted of cash and cash equivalents, restricted cash, trade accounts receivable, accounts payable, its asset-backed facility and long-term debt. The carrying amounts approximated fair value for each of these financial instruments as of December 31, 2025 and 2024, except for the Company’s long-term debt, which is disclosed in Note 13 - Debt.

The Company recognizes revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. In general, spot and digital advertising is satisfied as advertising spots or as impressions are delivered. For cable television affiliate revenue, the Company grants a license to the affiliate to distribute its television programming content through the license period, and the Company recognizes revenue based on the number of subscribers each month. Finally, for event-based revenue, the Company’s events typically occur on one specified date when revenue is recognized. However, there may be performance obligations that are satisfied in the weeks leading up to the event, such as radio and digital advertising. In such instances revenue is recognized as the underlying performance obligations are satisfied based on the allocated transaction price and the pattern of delivery to the customer.

Within the Radio Broadcasting and Reach Media segments, revenues are generated from the sale of spot advertisements and sponsorships. Revenue from the sale of spot advertisements is recognized when the advertisements are run. Revenue from sponsorships is recognized as each underlying sponsorship performance obligation is satisfied. Revenue is recognized for each performance obligation based on the allocated transaction price and the pattern of transfer to the customer. The Company records revenue at the amount of consideration that it receives.

Within the Digital segment, Interactive One generates the majority of the Company’s digital revenue. The Company’s digital revenue is principally derived from advertising services on non-radio station branded but Company-owned websites. Advertising services include the sale of banner and sponsorship advertisements. As the Company runs its advertising campaigns, the customer simultaneously receives benefits as impressions are delivered, and revenue is recognized based on the pattern of delivery. The amount of revenue recognized each month is based on the number of impressions delivered multiplied by the effective per impression unit price. Interactive One’s contracts with advertisers are typically a year or less in duration and are generally billed monthly upon satisfaction of the performance obligations.

The Cable Television segment derives advertising revenue from the sale of television airtime to advertisers and revenue is recognized when the advertisements are run. In the agreements governing advertising campaigns, the Company may also promise to deliver to its customers a guaranteed minimum number of viewers or impressions on a specific television network within a particular demographic. These guaranteed advertising campaigns are considered to represent a single, distinct performance obligation. For these campaigns, revenues are recognized based on the audience levels reached multiplied by the average price per impression. The Company provides the advertiser with advertising until the guaranteed audience level is delivered, and invoiced amounts may exceed the value of the actual audience delivery. As such, a portion of revenues associated with such campaigns is deferred until the guaranteed audience level is delivered or the rights associated with the guarantees lapse, which is typically less than one year. Actual audience and delivery information is obtained from independent ratings services. Cable Television’s contracts with advertisers are typically a year or less in duration and are generally billed monthly. The Company also provides certain advertising services without guaranteed audience level and are billed monthly based on satisfaction of the performance obligation.

The Company’s Cable Television segment also derives revenue from affiliate fees under the terms of various multi-year affiliation agreements based on a per subscriber royalty payable by the affiliate, in exchange for the right to distribute the Company’s programming. The majority of the Company’s distribution fees are collected monthly throughout the year and distribution revenue is recognized over the term of the contracts based on contracted programming rates and reported subscriber levels. The Company applies the sales- or usage-based royalty exception for its affiliate agreements. The amount of distribution fees due to the Company is reported by distributors based on actual subscriber levels. Such information is generally not received until after the close of the reporting period. In these cases, the Company estimates the number of subscribers receiving the Company’s programming to estimate royalty revenue. Historical adjustments to recorded estimates have not been material.

Some of the Company’s contracts with customers contain multiple performance obligations. In an arrangement with multiple distinct performance obligations, the transaction price is allocated among the separate performance obligations on a relative stand-alone selling price basis. The stand-alone selling price is determined with consideration given to market conditions, the size and scope of the contract, customer information, and other factors.

Unbilled receivables consist of earned revenue that has not yet been billed. Contract assets are included in trade accounts receivable, net on the consolidated balance sheets. Customer advances and unearned income represent advance payments by customers for future services under contract that are generally fulfilled in the near term. For advertising sold based on audience guarantees, audience deficiency typically results in an obligation to deliver additional advertising units to the customer, generally within 1 year of the campaign end date. To the extent that audience guarantees are not met, a reserve for audience deficiency is recorded until such a time that the audience guarantee has been satisfied. Unearned event income represents payments by customers for upcoming events. Contract liabilities are included in other current liabilities on the consolidated balance sheets.

The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of 1 year or less or (ii) contracts for which variable consideration is a sales-based or usage-based royalty promised in exchange for a license of intellectual property.

The Cable Television segment has entered into certain affiliate agreements requiring various payments for launch support. Launch support assets are used to initiate carriage under affiliate agreements and are amortized over the term of the respective contracts. Amortization is recorded as a reduction to revenue. Launch assets are included in other intangible assets, net on the consolidated balance sheets, except for the portion of the unamortized balance that is expected to be amortized within 1 year which is included in other current assets.

In a barter transaction, the Company provides broadcast advertising time in exchange for programming content and certain services. The Company includes the value of such exchanges in both broadcasting net revenue and station operating expenses. The valuation of barter time is based upon the fair value of the network advertising time provided for the programming content and services received. Barter transaction revenue and expenses for the years ended December 31, 2025 and 2024 are as follows:

The Company recognizes income taxes in accordance with the liability method of accounting. Deferred tax assets or liabilities are computed based upon the difference between financial statement and income tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in statutory tax rates on deferred tax assets and liabilities is recognized into income in the period of enactment. Deferred income tax expense or benefits are based upon the changes in the net deferred tax asset or liability from period to period.

The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, the Company will make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. Conversely, if management determines that the Company would not be able to realize the recorded amount of deferred tax assets in the future, the Company will make an adjustment to the deferred tax asset valuation allowance, which would increase the provision for income taxes.

The Company records uncertain tax positions on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more likely than not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statements of operations. Accrued interest and penalties are included in other current liabilities on the consolidated balance sheets.

On February 21, 2025, our Board of Directors (the “Board”) authorized a reverse stock split across all classes of the Company’s outstanding common stock (the “Reverse Stock Split”). The Board's authorization was subject to the approval of the Company's stockholders, which was obtained on June 18, 2025. On January 16, 2026, the Company announced that its Board of Directors has approved the Reverse Stock Split of all classes of its common stock, including its publicly traded shares of Class A Common Stock and Class D Common Stock at a ratio of 1-for-10. The Reverse Stock Split was conducted to regain compliance with the $1.00 minimum bid price requirement (the “Minimum Bid Price Requirement”) for continued listing on the Nasdaq Capital Market (“Nasdaq”) with respect shares of the Company’s Class D Common Stock.

On January 16, 2026, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation (the “Certificate of Amendment”) with the Secretary of State of the State of Delaware to effect a 1-for-10 Reverse Stock Split of all classes of the Company’s Common Stock (A, B, C and D), including its publicly traded Class A Common Stock and Class D Common Stock, which became effective as of 11:59 p.m. Eastern Time on January 22, 2026 (the “Effective Date”). No fractional shares were issued in connection with the Reverse Stock Split. Instead, in lieu of any fractional shares, the Company paid cash for each holder’s fractional shares in an amount equal to the closing sales price of the Company’s Class A Common Stock or Class D Common Stock, respectively, as reported on Nasdaq on the Effective Date.

Unless noted, all shares of Common Stock, including stock options, and restricted stock units, as well as all exercise prices, conversion prices and per share information in the Consolidated Financial Statements have been retroactively adjusted to reflect the Reverse Stock Split, as if the split occurred at the beginning of the earliest period presented in this Annual Report.

The Company estimates the fair value of stock-based awards on the date of grant. The fair value of stock options with only service conditions is determined using the Black-Scholes option pricing model. The fair value of restricted stock awards is based on the closing price of the Company's Common Stock on the date of grant. The Company amortizes the fair value of awards expected to vest on a straight-line basis over the requisite service periods of the awards, which is generally the period from the grant date to the end of the vesting period. The determination of the fair value of the Company's stock option awards is based on a variety of factors, including, but not limited to, the Company's Common Stock price, risk-free rate, expected stock price volatility over the expected life of awards and dividend yield. The Company develops its expected term assumption by analyzing its employees’ past and expected exercise patterns for similar options for executive option grants; and applies the simplified method for non-executive option grants. The Company accounts for forfeitures as they occur.

Under the Company's annual incentive compensation plan, the Company may grant immediate or future vesting of restricted stock awards and stock options to certain employees. For these awards, stock-based compensation expense is recognized over the requisite service period. As noted above, all shares of Common Stock, including all shares issued for compensation, including stock options, and restricted stock units, as well as all exercise prices, have been retroactively adjusted to reflect the Reverse Stock Split.

The Company reports the financial and non-financial assets and liabilities measured at fair value on a recurring and non-recurring basis under the provisions of ASC 820, “Fair Value Measurement” (“ASC 820”) which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.

The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:

Certain assets and liabilities are measured at fair value on a non-recurring basis using Level 3 inputs. These assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances. Included in this category are goodwill, net, employment agreement award, redeemable non-controlling interests, and other intangible assets, net, that are written down to fair value when they are determined to be impaired, as well as content assets that are periodically written down to net realizable value.

Redeemable non-controlling interests are interests held by third parties in the Company’s subsidiaries that are redeemable outside of the Company’s control either for cash or other assets. These interests are classified as mezzanine equity and measured at the greater of estimated redemption value at the end of each reporting period or the historical cost basis of the non-controlling interests adjusted for cumulative earnings allocations. The resulting increases or decreases in the estimated redemption amount are affected by corresponding charges against retained earnings, or in the absence of retained earnings, additional paid-in-capital.

The Company’s Cable Television segment has entered into contracts to license entertainment programming rights and programs from distributors and producers. Contract payments are typically made in quarterly installments over the terms of the contract period. Each contract is recorded as an asset and a liability at an amount equal to its gross contractual commitment when the license period begins, and the program is available for its first airing. The Company also has programming for which the Company has engaged third parties to develop and produce, and it owns most or all rights (commissioned programming).

For programming that is predominantly monetized as part of a content group, such as the Company’s commissioned programs, capitalized costs are amortized based on an estimate of the Company’s usage and benefit from such programming. The estimates require management’s judgment and include consideration of factors such as expected revenues to be derived from the programming, the expected number of future airings, among other factors. The Company’s acquired programs’ capitalized costs are amortized based on projected usage, generally resulting in an amortization pattern that is the greater of straight-line over the contract term or projected usage. Commissioned programming, including films and television series, are amortized on a straight-line or accelerated basis based on viewership patterns, not to exceed 10 years, or if still in production, 5 years from the delivery of the most recent episode, if later.

The Company utilizes judgment to determine the amortization patterns of the Company’s content assets. Key assumptions include the categorization of content based on shared characteristics and the use of a quantitative model to predict revenue. For grouping of assets with similar characteristics, which the Company defines as genre, this model considers projected viewership which is based on (i) estimated household universe; (ii) ratings; and (iii) expected number of airings across different broadcast time slots.

For content that is predominantly monetized as a group, unamortized costs are tested for impairment whenever events or changes in circumstances indicate that the fair value of the group may be less than its unamortized costs. Groups are tested for impairment by comparing the cash flows of the group to the aggregate unamortized costs of the group. If the unamortized costs exceed the projected cash flows, an impairment charge is recorded for the excess and allocated to individual titles within the group on a pro rata basis using the relative carrying value of the titles. Program rights with no future programming usefulness are substantially abandoned, resulting in the write-off of remaining unamortized cost.

The Company determined there were no impairment indicators during the years ended December 31, 2025 and 2024. Impairment and amortization of content assets are recorded in the consolidated statements of operations as programming and technical expenses. All commissioned and licensed content is classified as a long-term asset, except for the portion of the unamortized content balance that is expected to be amortized within 1 year of the consolidated balance sheet date which is classified as a current asset. Tax incentives offered by state governments are measured based on production activities and are recorded as a reduction to capitalized production costs within the commissioned programming content assets.

The Company’s operating leases are for office space, studio space, broadcast towers, and transmitter facilities. The Company determines whether a contract is, or contains, a lease at inception. In determining whether a contract is or contains a lease, the Company considers all relevant facts and circumstances, including whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The determination involves judgment with respect to whether the Company has the right to obtain substantially all of the economic benefits from the use of the identified asset and whether the Company has the right to direct the use of the identified asset.

Right of use (“ROU”) assets represent the Company’s right to use an underlying asset during the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets are initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred less any lease incentives received. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease.

Lease liabilities are recognized at commencement date based on the present value of the lease payments over the lease term. Many of the Company’s leases provide options to extend the terms of the agreements. Generally, renewal periods are excluded when calculating the lease liabilities as the Company does not consider the exercise of such options to be reasonably certain. When exercise of a renewal option is reasonably assured, the optional terms and related payments are included within lease liability calculation. The implicit rate within the Company’s lease agreements is generally not determinable and, as such, the Company’s estimated collateralized incremental borrowing rate is used.

Certain operating lease agreements include lease payments that are adjusted periodically based on an index and a rate, such as the Consumer Price Index or a market rental rate. The Company recognizes the effect of the changes in rates and indices in the appropriate period which is accounted for as a component of straight-line lease expense.

For leases with an initial term of twelve months or less, the Company elected the exemption from recording ROU assets and lease liabilities and recognizes lease payments on a straight-line basis over the lease term. The Company has elected to combine lease and non-lease components for the purpose of calculating ROU assets and lease liabilities, to the extent that the non-lease components are fixed.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which requires additional disclosures including greater disaggregation of information in the reconciliation of the statutory rate to the effective rate and income taxes paid disaggregated by jurisdiction. The ASU is effective for fiscal years beginning after December 15, 2024. The Company adopted the ASU on January 1, 2025 prospectively and incorporated the required disclosures in Note 14 - Income Taxes.

In September 2025, the FASB issued ASU No. 2025-06, “Intangibles - Goodwill and Other - Internal Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software”, which amends certain aspects of the accounting for and disclosure of software costs under ASC 350-40. The standard is effective for annual reporting periods beginning after December 15, 2027, including interim reporting periods within those annual reporting periods. Early adoption is permitted, and the standard can be applied prospectively, retrospectively, or on a modified basis for in-process projects. The Company is in the process of evaluating the impact of this new guidance on its consolidated financial statements.

In July 2025, the FASB issued ASU No. 2025-05, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets”, which allows entities to apply a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606 “Revenue from Contracts with Customers”. The standard is effective for fiscal years beginning after December 15, 2025, including interim periods within those fiscal years. Early adoption is permitted, and the standard is to be applied prospectively. The Company is in the process of evaluating the impact of this new guidance on its consolidated financial statements.

In November 2024, the FASB issued ASU No. 2024-03, “Income Statement (Subtopic 220-40): Disaggregation of Income Statement Expenses”, which focuses on the disaggregation of income statement expenses. ASU No. 2024-03 requires entities to provide more detailed disclosures about certain significant expense categories in their financial statements. The amendments of ASU 2024-03 are effective for annual reporting periods beginning after December 15, 2026, and for interim reporting periods beginning after December 15, 2027. Early adoption is permitted and the amendments may be applied prospectively or retrospectively. The Company is in the process of evaluating the impact of this new guidance on the disclosures within its consolidated financial statements.