Company: UONE
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001041657-25-000013
Chunk: 107

Company: URBAN ONE, INC.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 7
Chunk 107
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The following table presents sensitivity analysis for the iOne reporting unit showing the impact of the most recent quantitative impairment assessment results from a 100 basis point increase or decrease in the terminal growth rate, operating profit margin, discount rate, 5% and 10% reduction in fair value of the iOne reporting unit which the Company has determined to be a significant assumption impacting the impairment:

53

Hypothetical Increase in theRecorded Impairment ChargeFor the Year EndedDecember 31, 2024iOne Reporting Unit(in millions)Impairment Charge Recorded:iOne Reporting Unit$— Hypothetical Change for iOne Reporting UnitA 100 basis point decrease in the digital industry terminal growth rates$— A 100 basis point decrease in the applicable operating profit margin0.6 A 100 basis point increase in the applicable discount rate— A 5.0% reduction in the fair value of iOne— A 10.0% reduction in the fair value of iOne0.6 

Fair Value Measurements

The Company accounts for an award in the CEO’s employment agreement (the “Employment Agreement”) at fair value. According to the Employment Agreement, the CEO is eligible to receive an award (the “Employment Agreement Award”) in an amount equal to approximately 4.0% of any proceeds from distributions or other liquidity events in excess of the return of the Company’s aggregate investment in TV One. The Company’s obligation to pay the award was triggered after the Company recovered the aggregate amount of capital contributions in TV One, and payment is required only upon actual receipt of distributions of cash or marketable securities or proceeds from a liquidity event with respect to such invested amount. The long-term portion of the award is recorded in other long-term liabilities and the current portion is recorded in other current liabilities in the consolidated balance sheets. The CEO was fully vested in the award upon execution of the Employment Agreement, and the award lapses if the CEO voluntarily leaves the Company or is terminated for cause. In April 2024, the Compensation Committee of the Board of Directors of the Company approved terms for a new employment agreement with the CEO, which were effective January 2022, including a renewal of the Employment Agreement Award upon similar terms as in the prior Employment Agreement.

The Company estimated the fair value of the Employment Agreement Award as of December 31, 2024 and 2023, at approximately $10.4 million and $23.0 million, respectively, and, accordingly,