PART III — NARRATIVE
State below in reasonable detail why Forms 10-K, 20-F, 11-K, 10-Q, 10-D, N-SAR, N-CEN, or the transition report or portion thereof, could not be filed within the prescribed time period.
On April 7, 2023, Urban One, Inc. (the “Company”) announced that in connection with the preparation of its financial statements for the year ended December 31, 2022, the Company’s management, in consultation with its independent registered public accounting firm, re-evaluated the Company’s accounting for the valuation of its investment interest in MGM National Harbor (the “MGM Interest”), which the Company sold for cash proceeds of approximately $136.8 million on April 21, 2023. After further review of the Company’s accounting for its MGM Interest, it was determined that adjustments were required to the Company’s financial statements as of January 1, 2021 and for each of the annual and interim periods ended December 31, 2021 and September 30, 2022 (the “Affected Periods”), due to understatements in the value of the MGM Interest.
Therefore, on April 7, 2023, the Company’s management and the audit committee of the Company’s board of directors (the “Audit Committee”) concluded that the Company’s previously issued financial statements for each of the annual and interim periods ended December 31, 2021 and September 30, 2022, should be restated to accurately state the increased value of the MGM Interest. As such, the Company announced it would restate its financial statements for the Affected Periods (the “Restatement”) in the Company’s 2022 Form 10-K (“2022 Form 10-K”).
The Company’s management concluded that in light of the error described above, a material weakness exists in the Company’s internal control over financial reporting for the Affected Periods. The Company’s remediation plan with respect to such material weakness was described in greater detail in the 2022 Form 10-K filed on June 30, 2023.
Due to the Company’s continued efforts in connection with the Restatement, preparation of the 2022 Form 10-K and continued assessment of its internal controls, the Company was not able to finalize the financial statements and related information for inclusion in its quarterly report on Form 10-Q for the quarter ended March 31, 2023 (“2023 Q1 Form 10-Q”). Accordingly, the Company was unable to file its 2023 Q1 Form 10-Q within the prescribed time period and has yet to complete the 2023 Q1 Form 10-Q. In addition, the Company was not able to finalize the financial statements and related information for inclusion in its quarterly report on Form 10-Q for the quarter ended June 30, 2023 ("2023 Q2 Form 10-Q"). Accordingly, the Company was unable to file its 2023 Q2 Form 10-Q within the prescribed time period and has yet to complete the 2023 Q2 Form 10-Q.
As previously reported on a Current Report on Form 8-K filed July 12, 2023, subsequent to the filing of the 2022 Annual Report on Form 10-K, the Company notified BDO USA, LLP. (“BDO”) that it would be dismissed as the Company’s independent registered public accounting firm. The Audit Committee of the Company’s Board of Directors (the “Audit Committee”) approved the dismissal of BDO on July 11, 2023 and BDO’s dismissal as the Company’s independent registered public accounting firm was effective on July 12, 2023. The Audit Committee has appointed Ernst & Young LLP (“E&Y”) to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2023 effective as of July 12, 2023.
Given the change of the Company’s independent registered public accounting firm and the work required for E&Y to re-familiarize itself with the Company, the Company’s continued assessment of its internal controls, the Company is not able to finalize the financial statements and related information for inclusion in its quarterly report on Form 10-Q for the quarter ended September 30, 2023 (“2023 Q3 Form 10-Q”). Accordingly, the Company is unable to file its 2023 Q3 Form 10-Q within the prescribed time period as it works to complete each of the Company’s 2023 Q1 Form 10-Q, 2023 Q2 Form 10-Q and 2023 Q3 Form 10-Q.