Beasley Broadcast (BBGI) 10-Q 2021 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM

10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File

No. 000-29253

BEASLEY BROADCAST GROUP, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	65-0960915
(State of Incorporation)	(I.R.S. Employer Identification Number)

3033 Riviera Drive, Suite 200

Naples, Florida 34103

(Address of Principal Executive Offices and Zip Code)

(239)

263-5000

(Registrant’s Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Each Exchange on which Registered
Class A Common Stock, par value $0.001 per share	BBGI	Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation

S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit

such files).    

Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule

12b-2

of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standar

ds provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule

12b-2

of the Exchange Act).    Yes  ☐    

No   

☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class A Common

Stock, $0.001 par value, 12,600,240 Shares Outstanding as of October 29, 2021

Class 

B

 Common

Stock, $0.001 par value, 16,662,743 Shares Outstanding as of October 29, 2021

INDEX

		Page No.
	PART I
	FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements		3
	Notes to Condensed Consolidated Financial Statements		7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		19
Item 4.	Controls and Procedures		19
	PART II
	OTHER INFORMATION
Item 1.	Legal Proceedings		20
Item 1A.	Risk Factors		20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		20
Item 3.	Defaults Upon Senior Securities		20
Item 4.	Mine Safety Disclosures		20
Item 5.	Other Information		20
Item 6.	Exhibits		21
SIGNATURES			22

BEASLEY BROADCAST GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

	December 31, 2020			September 30, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	20,759,432		$	48,141,758
Accounts receivable, less allowance for doubtful accounts of $5,033,035 in 2020 and $1,748,483 in 2021		47,395,423			47,197,566
Prepaid expenses		2,486,860			8,741,464
Other current assets		6,883,554			5,156,134
Total current assets		77,525,269			109,236,922
Property and equipment, net		53,667,550			51,037,061
Operating lease right-of-use assets		34,419,663			36,183,469
Finance lease right-of-use assets		333,333			323,333
FCC licenses		508,558,355			508,413,913
Goodwill		28,596,547			28,596,547
Other intangibles, net		25,859,192			23,428,235
Other assets		9,654,447			5,729,459
Total assets	$	738,614,356		$	762,948,939
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	12,395,407		$	6,827,616
Operating lease liabilities		7,006,194			8,082,982
Finance lease liabilities		70,171			19,487
Other current liabilities		20,988,441			28,840,426
Total current liabilities		40,460,213			43,770,511
Due to related parties		5,621,364			396,371
Long-term debt, net of unamortized debt issuance costs		258,345,380			303,409,681
Operating lease liabilities		29,632,908			30,405,364
Finance lease liabilities		1,945			0
Deferred tax liabilities		120,913,983			116,505,040
Other long-term liabilities		16,536,743			16,528,538
Total liabilities		471,512,536			511,015,505
Commitments and contingencies						0
Stockholders’ equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized; 0ne issued		0			0
Class A common stock, $0.001 par value; 150,000,000 shares authorized; 15,930,765 issued and 12,677,074 outstanding in 2020; 16,141,985 issued and 12,600,240 outstanding in 2021		15,930			16,141
Class B common stock, $0.001 par value; 75,000,000 shares authorized; 16,662,743 issued and outstanding in 2020 and 2021		16,662			16,662
Additional paid-in capital		154,004,965			150,688,962
Treasury stock, Class A common stock; 3,253,691 shares in 2020; 3,541,745 shares in 2021		(28,187,857	)		(29,000,030	)
Retained earnings		143,304,213			131,638,318
Accumulated other comprehensive loss		(1,426,619	)		(1,426,619	)
Total stockholders’ equity		267,727,294			251,933,434
Noncontrolling interests		(625,474	)		0
Total equity		267,101,820			251,933,434
Total liabilities and equity	$	738,614,356		$	762,948,939

3

BEASLEY BROADCAST GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)

	Three Months Ended September 30,
	2020			2021
Net revenue	$	49,649,659		$	62,902,935
Operating expenses:
Operating expenses (including stock-based compensation of $103,980 in 2020 and $100,688 in 2021 and excluding depreciation and amortization shown separately below)		41,589,490			51,186,064
Corporate expenses (including stock-based compensation of $124,988 in 2020 and $150,650 in 2021)		3,712,816			3,980,815
Depreciation and amortization		2,912,681			2,843,350
Other operating expense		600,000			0
Total operating expenses		48,814,987			58,010,229
Operating income		834,672			4,892,706
Non-operating income (expense):
Interest expense		(4,544,235	)		(7,021,577	)
Other income (expense), net		(42,156	)		12,186
Loss before income taxes		(3,751,719	)		(2,116,685	)
Income tax benefit		(1,031,166	)		(515,380	)
Loss before equity in earnings of unconsolidated affiliates		(2,720,553	)		(1,601,305	)
Equity in earnings of unconsolidated affiliates, net of tax		(4,221	)		(19,018	)
Net loss		(2,724,774	)		(1,620,323	)
Earnings attributable to noncontrolling interest		339,376			0
Net loss attributable to BBGI stockholders	$	(2,385,398	)		(1,620,323	)
Net loss attributable to BBGI stockholders per Class A and Class B common share:
Basic and diluted	$	(0.08	)	$	(0.06	)
Weighted average shares outstanding:
Basic		29,154,148			29,254,609
Diluted		29,154,148			29,254,609

4

BEASLEY BROADCAST GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED)

	Nine Months Ended September 30,
	2020			2021
Net revenue	$	137,683,217		$	170,689,680
Operating expenses:
Operating expenses (including stock-based compensation of $347,497 in 2020 and $347,968 in 2021 and excluding depreciation and amortization shown separately below)		133,868,282			142,648,355
Corporate expenses (including stock-based compensation of $347,174 in 2020 and $826,370 in 2021)		11,950,672			11,843,958
Depreciation and amortization		8,375,227			8,646,174
Impairment losses		6,804,412			0
Gain on disposition		0			(191,988	)
Other operating (income) expense, net		600,000			(400,000	)
Total operating expenses		161,598,593			162,546,499
Operating income (loss)		(23,915,376	)		8,143,181
Non-operating income (expense):
Interest expense		(12,580,706	)		(19,665,017	)
Loss on extinguishment of long-term debt		(2,798,789	)		(4,996,731	)
Other income, net		55,960			58,679
Loss before income taxes		(39,238,911	)		(16,459,888	)
Income tax benefit		(9,490,892	)		(4,417,660	)
Loss before equity in earnings of unconsolidated affiliates		(29,748,019	)		(12,042,228	)
Equity in earnings of unconsolidated affiliates, net of tax		(90,715	)		(75,042	)
Net loss		(29,838,734	)		(12,117,270	)
Earnings attributable to noncontrolling interest		881,814			129,249
Net loss attributable to BBGI stockholders	$	(28,956,920	)		(11,988,021	)
Net loss attributable to BBGI stockholders per Class A and Class B common share:
Basic and diluted	$	(1.02	)	$	(0.41	)
Dividends declared per common share	$	0.05		$	0
Weighted average shares outstanding:
Basic		28,362,512			29,263,963
Diluted		28,362,512			29,263,963

5

BEASLEY BROADCAST GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Nine Months Ended September 30,
	2020			2021
Cash flows from operating activities:
Net loss	$	(29,838,734	)	$	(12,117,270	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Stock-based compensation		694,671			1,174,338
Provision for bad debts		3,432,813			(1,487,150	)
Depreciation and amortization		8,375,227			8,646,174
Impairment losses		6,804,412			0
Non-cash interest expens e		290,426			0
Gain on disposition		0			(191,988	)
Amortization of loan fees		1,441,634			1,171,785
Loss on extinguishment of long-term debt		2,798,789			4,996,731
Deferred income taxes		(8,972,361	)		(4,417,660	)
Equity in earnings of unconsolidated affiliates		90,715			75,042
Change in operating assets and liabilities:
Accounts receivable		12,586,295			1,685,007
Prepaid expenses		(1,978,601	)		(6,254,604	)
Other assets		3,164,693			(1,656,170	)
Accounts payable		2,900,129			(5,567,791	)
Other liabilities		(1,295,347	)		7,796,383
Other operating activities		305,806			170,172
Net cash provided by (used in) operating activities		800,567			(5,977,001	)
Cash flows from investing activities:
Capital expenditures		(6,996,619	)		(3,704,750	)
Proceeds from dispositions		0			362,500
Proceeds from life insurance		0			3,000,000
Payments for investments		(1,000,000	)		0
Net cash used in investing activities		(7,996,619	)		(342,250	)
Cash flows from financing activities:
Issuance of debt		14,000,000			310,000,000
Payments on debt		(4,500,000	)		(268,500,000	)
Payment of debt issuance costs		(2,581,163	)		(7,604,215	)
Reduction of finance lease liabilities		(48,615	)		(52,629	)
Dividends paid		(2,795,504	)		0
Purchase of treasury stock		(34,412	)		(141,579	)
Net cash provided by financing activities		4,040,306			33,701,577
Net increase (decrease) in cash and cash equivalents		(3,155,746	)		27,382,326
Cash and cash equivalents at beginning of period		18,648,171			20,759,432
Cash and cash equivalents at end of period	$	15,492,425		$	48,141,758
Cash paid for interest	$	10,871,306		$	14,703,825
Cash paid for income taxes	$	115,400		$	1,526,303
Supplemental disclosure of non-cash investing and financing activities:
Acquisition of noncontrolling interest	$	0		$	4,490,130
Extinguishment of trade sales payable	$	0		$	934,500
Class A common stock returned to treasury stock	$	0		$	670,594
Class A common stock issued for debt repayment	$	2,250,000		$	0

6

B

EASLEY BROADCAST GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(1) Interim Financial Statements

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of Beasley Broadcast Group, Inc. and its subsidiaries (the “Company”) included in the Company’s Annual Report on Form

10-K

for the year ended December 31, 2020. These financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form

10-Q

and Article 10 of Regulation

S-X.

Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the financial statements reflect all adjustments necessary for a fair statement of the financial position and results of operations for the interim periods presented, and all such adjustments are of a normal and recurring nature. The Company’s results are subject to seasonal fluctuations; therefore the results shown on an interim basis are not necessarily indicative of results for the full year.

As of December 31, 2020, the financial statements included the accounts of the Company and its wholly owned subsidiaries and its investments in OutlawsXP, Inc. (“Outlaws”) and Renegades Holdings, Inc. (“Renegades”). The Company held an approximately 90% economic interest in Outlaws and an approximately 51% economic interest in Renegades as of December 31, 2020. Renegades held an approximately 10% economic interest in Outlaws as of December 31, 2020. On March 12, 2021, the Company entered into an agreement to exchange its ownership interest in Renegades for the interest held by Renegades in Outlaws. As a result of the exchange, Outlaws is now a wholly owned subsidiary of the Company and the Company no longer holds an economic interest in Renegades. Therefore, the accounts of Renegades are no longer consolidated in the Company’s financial statements subsequent to the date of the exchange. Also, as a result of the exchange, the Company recorded a loss of approximately $3,000 attributable to the difference between the estimated fair value of the economic interest held by Renegades in Outlaws and the carrying amount of the Company’s ownership interest in Renegades in the first quarter of 2021. The Company used a discounted cash flow model with annual revenue growth rates ranging from 5% to 57%, operating margins ranging from (27)% to 67%, and a discount rate of 13.5% to determine the loss.

The

COVID-19

pandemic continues to create significant uncertainty and disruption in the global economy and financial markets. It is reasonably possible that these uncertainties could materially impact the Company’s significant accounting estimates related to, but not limited to, allowance for doubtful accounts, impairment of Federal Communications Commission (“FCC”) licenses and goodwill, and determination of

right-of-use

assets. As a result, many of the Company’s estimates and assumptions require increased judgment and carry a higher degree of variability and volatility. The Company’s estimates may change as new events occur and additional information emerges, and such changes are recognized or disclosed in its consolidated financial statements.

(2) FCC Licenses

Licenses are tested for impairment on an annual basis, or more frequently if events or changes in circumstances indicate that the Company’s licenses might be impaired. The Company assesses qualitative factors to determine whether it is more likely than not that its licenses are impaired. If the Company determines it is more likely than not that its licenses are impaired, then the Company is required to perform a quantitative impairment test. The quantitative impairment test compares the fair value of the Company’s licenses with their carrying amounts. If the carrying amounts of the licenses exceed their fair value, an impairment loss is recognized in an amount equal to that excess. For the purpose of testing its licenses for impairment, the Company combines its licenses into reporting units based on its radio market clusters.

The Company did not identify any triggering events for impairment during the three or nine months ended September 30, 2021.

Due to the impact of the

COVID-19

pandemic on the U.S. economy, the Company tested its FCC licenses for impairment during the first quarter of 2020. As a result of the quantitative impairment test, the Company recorded impairment losses of $6.8 million related to the FCC licenses in its Atlanta, GA, Las Vegas, NV, Middlesex-Monmouth-Morristown, NJ, West Palm Beach-Boca Raton, FL, and Wilmington, DE radio market clusters. The impairment losses were primarily due to a decrease in projected revenue in these markets due to the impact of the

COVID-19

pandemic and an increase in the discount rate used in the discounted cash flow analyses to estimate the fair value of the FCC licenses due to certain risks specifically associated with the Company and the radio broadcasting industry. The fair values were estimated using an income approach. The income approach is based upon discounted cash flow analyses incorporating variables, such as projected radio market revenues, projected growth rate for radio market revenues, projected radio market revenue shares, projected radio station operating income margins, and a discount rate appropriate for the radio broadcasting industry. The key assumptions used in the discounted cash flow analyses are as follows:

Revenue growth rates	(14.1)% - 7.9%
Market revenue shares at maturity	0.6% -39.0%
Operating income margins at maturity	26.5% -35.4%
Discount rate	9.5%

7

BEASLEY BROADCAST GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

On February 3, 2021, the

Company completed the sale of

WHSR-AM

in West Palm Beach-Boca Raton, FL to a third party for $0.4 million. The sale included an FCC translator license with a carrying amount of $0.1 million.

(3) Long-Term Debt

Long-term debt is comprised of the following:

	December 31, 2020			September 30, 2021
Secured notes	$	—		$	300,000,000
PPP loan		—			10,000,000
Credit facility - term loan		238,000,000			—
Credit facility - revolving credit facility		20,000,000			—
Promissory note		5,500,000			—
		263,500,000			310,000,000
Less unamortized debt issuance costs		(5,154,620	)		(6,590,319	)
	$	258,345,380		$	303,409,681

On February 2, 2021, the Company 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”). 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, commencing on August 1, 2021. The Notes are secured on a first-lien priority basis by substantially all assets of the Company and its majority owned subsidiaries and are guaranteed jointly and severally by the Company and its majority owned subsidiaries. The Company used the net proceeds from the Notes, to repay the credit facility, the promissory note, and a loan from Mr. George Beasley (see Note 10) and to pay related accrued interest, fees and expenses. 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 its assets; enter into transactions with affiliates; prepay certain kinds of indebtedness; and issue or sell stock of its subsidiaries. Prior to February 1, 2025, the Company will be subject to certain premiums, as defined in the Indenture, for optional or mandatory (upon certain contingent events) redemption of some or all of the Notes. In connection with the issuance of the Notes and the repayment of the credit facility, the Company recorded a loss on extinguishment of long-term debt of $5.0 million during the first quarter of 2021.

On March 1, 2021, the Company entered into a loan with Synovus Bank for $10.0 million pursuant to the Paycheck Protection Program (the “PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The loan bears interest at a rate of 1.0%

per annum and matures on March 1, 2026. Principal and interest payments will be deferred, with interest accruing, until after the period in which the Company may apply for loan forgiveness pursuant to the PPP. After the deferral period, the Company will make monthly principal and interest payments, amortized over the remaining term of the loan. The loan may be prepaid at any time prior to maturity with no prepayment penalties. The loan contains customary events of default relating to, among other things, payment defaults or breaches of the terms of the promissory note. Upon the occurrence of an event of default, Synovus Bank may require immediate repayment of all amounts outstanding under the promissory note. Under the terms of the CARES Act, the Company can apply for and be granted forgiveness for all or a portion of the loan granted under the PPP. The loan is subject to forgiveness to the extent proceeds are used for certain qualifying expenses pursuant to the terms and limitations of the PPP. On September 16, 2021, the Company submitted an application for forgiveness, however, no assurance can be provided that the Company will obtain forgiveness of the loan in whole or in part.

As of December 31, 2020, the credit facility consisted of a term loan facility with a remaining balance of $238.0 million and a revolving credit facility with an outstanding balance of $20.0 million and a maximum commitment of $20.0 million. The revolving credit facility carried interest, based on LIBOR, at 4.4% as of December 31, 2020. The term loan carried interest, based on LIBOR, at 5.25% as of December 31, 2020. As noted above, the credit facility was repaid on February 2, 2021, using a portion of the proceeds from the Notes offering.

8

BEASLEY BROADCAST GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

On November 14, 2019, the Company acquired a majority interest in an esports team and issued a promissory note for $16.5 million to the seller. On June 30, 2020, the Company entered into an amendment to the promissory note applicable to the remaining balance. As amended, the promissory note bore

cash-pay

interest at 5% per annum payable quarterly in arrears and additional

payment-in-kind

interest at 10% per annum. The promissory note had a remaining balance of $5.5 million as of December 31, 2020. As noted above, the amended promissory note was repaid on February 2, 2021, using a portion of the proceeds from the Notes offering.​​​​​​​

(4) Stockholders’ Equity

The changes in stockholders’ equity for the three and nine months ended September 30, 2020 and 2021 are as follows:

	Three months ended September 30,						Nine months ended September 30,
	2020			2021			2020			2021
Beginning balance	$	257,061,115		$	253,307,219		$	284,471,958		$	267,101,820
Issuance of common stock		2,540,425			—			2,540,425			—
Stock-based compensation		228,968			251,338			694,671			1,174,338
Acquisition of noncontrolling interest		—			—			—			(4,490,130	)
Purchase of treasury stock		(2,493	)		(4,800	)		(34,412	)		(812,173	)
Net loss		(2,724,774	)		(1,620,323	)		(29,838,734	)		(12,117,270	)
Elimination of noncontrolling interest		—			—			—			1,076,849
Cash dividends		—			—			(1,398,321	)		—
Noncontrolling interest created in consolidation		—			—			667,654			—
Ending balance	$	257,103,241		$	251,933,434		$	257,103,241		$	251,933,434

(5) Revenue

Revenue is comprised of the following:

	Three months ended September 30,				Nine months ended September 30,
	2020		2021		2020		2021
Audio	$	44,159,807	$	54,043,650	$	120,567,001	$	146,988,486
Digital		4,994,487		8,318,112		14,344,769		22,065,183
Other		495,365		541,173		2,771,447		1,636,011
	$	49,649,659	$	62,902,935	$	137,683,217	$	170,689,680

The Company recognizes revenue when it satisfies a performance obligation under a contract with an advertiser. The transaction price is allocated to performance obligations based on executed contracts which represent relative standalone selling prices. Payment is generally due within 30 days, although certain advertisers are required to pay in advance. Revenues are reported at the amount the Company expects to be entitled to receive under the contract. The Company has elected to use the practical expedient to expense sales commissions as incurred. Payments received from advertisers before the performance obligation is satisfied are recorded as deferred revenue in the balance sheet. Substantially all deferred revenue is recognized within twelve months of the payment date.

	December 31, 2020		September 30, 2021
Deferred revenue	$	3,732,890	$	3,247,752

9

BEASLEY BROADCAST GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

	Three months ended September 30,				Nine months ended September 30,
	2020		2021		2020		2021
Losses on receivables	$	965,864	$	99,836	$	2,054,342	$	1,797,402

Audio revenue includes revenue from the sale or trade of aired commercial spots to advertisers directly or through national, regional or local advertising agencies. Each commercial spot is considered a performance obligation. Revenue is recognized when the commercial spots have aired. Trade sales are recorded at the estimated fair value of the goods or services received. If commercial spots are aired before the goods or services are received, then a trade sales receivable is recorded. If goods or services are received before the commercial spots are aired, then a trade sales payable is recorded. Other revenue includes revenue from concerts, promotional events, talent fees and other miscellaneous items. Such revenue is generally recognized when the concert, promotional event, or talent services are completed.

	December 31, 2020		September 30, 2021
Trade sales receivable	$	956,999	$	886,223
Trade sales payable		892,543		804,354

	Three months ended September 30,				Nine months ended September 30,
	2020		2021		2020		2021
Trade sales revenue	$	1,211,223	$	1,781,124	$	3,755,119	$	3,786,046

Digital revenue includes revenue from the sale of streamed commercial spots, station-owned assets and third-party products. Each streamed commercial spot, station-owned asset and third-party product is considered a performance obligation. Revenue is recognized when the commercial spots have streamed. Station-owned assets are generally scheduled over a period of time and revenue is recognized over time as the digital items are used for advertising content except for streamed commercial spots. Third-party products are generally scheduled over a period of time with an impression target each month. Revenue from the sale of third-party products is recognized over time as the digital items are used for advertising content and impression targets are met each month.

(6) Stock-Based Compensation

The Beasley Broadcast Group, Inc. 2007 Equity Incentive Award Plan (the “2007 Plan”) permits the Company to issue up to 7.5 million shares of Class A common stock. The 2007 Plan allows for eligible employees, directors and certain consultants of the Company to receive restricted stock units, shares of restricted stock, stock options or other stock-based awards. The restricted stock units and restricted stock awards that have been granted under the 2007 Plan generally vest over one to five years of service.

A summary of restricted stock unit activity is presented below:

	Units		Weighted- Average Grant-Date Fair Value
Unvested as of July 1, 2021		677,052	$	3.30
Granted		0		0
Vested		0		0
Forfeited		0		0
Unvested as of September 30, 2021		677,052	$	3.30

10

BEASLEY BROADCAST GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

A summary of restricted stock activity is presented below:

	Shares			Weighted- Average Grant-Date Fair Value
Unvested as of July 1, 2021		12,500		$	4.84
Vested		(7,500	)		4.90
Forfeited		0			0
Unvested as of September 30, 2021		5,000		$	4.75

As of September 30, 2021, there was $1.3 million of total unrecognized compensation cost for restricted stock units and shares of restricted stock granted under the 2007 Plan. That cost is expected to be recognized over a weighted-average period of 1.9 years.

(7) Other Operating (Income) Expense, Net

Other operating income, net for the nine months ended September 30, 2021 includes life insurance proceeds of $3.0 million related to the death of Mr. George Beasley, the Company’s former Chairman, in June 2021, partially offset by certain payments totaling $1.5 million that were paid in accordance with Mr. Beasley’s employment contract, payments of $0.6 million for consulting services related to the

COVID-19

pandemic and expenses of $0.5 million related to the early termination of a programming contract. Other operating expense for the three and nine months ended September 30, 2020 includes payments of $0.6 million for consulting services related to the

COVID-19

pandemic.

(8) Income Taxes

The Company’s effective tax rate was (27)% and (24)% for the three months ended September 30, 2020 and 2021, respectively, and (24)% and (27)% for the nine months ended September 30, 2020 and 2021, 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.

(9) Earnings Per Share

Earnings per share calculation information is as follows:

	Three months ended September 30,						Nine months ended September 30,
	2020			2021			2020			2021
Net loss attributable to BBGI stockholders	$	(2,385,398	)	$	(1,620,323	)	$	(28,956,920	)	$	(11,988,021	)
Weighted-average shares outstanding:
Basic		29,154,148			29,254,609			28,362,512			29,263,963
Effect of dilutive restricted stock units and restricted stock		0			0			0			0
Diluted		29,154,148			29,254,609			28,362,512			29,263,963
Net loss attributable to BBGI stockholders per Class A and Class B common share – basic and diluted	$	(0.08	)	$	( 0.06	)	$	(1.02	)	$	(0.41	)

The Company excluded the effect of restrictive stock units and restricted stock under the treasury stock method when reporting a net loss as the addition of shares was anti-dilutive. The number of shares excluded w

as

 44,490 and 130,195 for the three months ended September 30, 2020 and 2021, respectively, and 70,245 and 130,589 for the nine months ended September 30, 2020 and 2021, respectively.

(10) Related Party Transactions

In June 2020, Mr. George Beasley, the Company’s former Chairman, provided a $5.0 million loan to the Company that accrued

payment-in-kind

interest at 6% per annum with no cash payments due until the loan’s maturity in December 2023. Mr. Beasley and GGB Family Limited Partnership also each entered into standby letters of credit in combined aggregate face amount of $5.0 million in favor of U.S. Bank, National Association for the benefit of the Company as a source of backup liquidity that could have been drawn by U.S. Bank, National Association in the event that the Company failed to maintain a minimum liquidity amount. The loan was repaid on February 2, 2021, using a portion of the proceeds from the Notes offering (see Note 3).

11

BEASLEY BROADCAST GROUP, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(11) Financial Instruments

The carrying amount of the Company’s financial instruments including cash and cash equivalents, accounts receivable and accounts payable approximate fair value due to the short-term nature of these financial instruments.

The estimated fair value of the Company’s secured notes, based on available market information as of September 30, 2021, was $306.75 million. The Company used Level 2 measurements under the fair value measurement hierarchy to determine the estimated fair value of the secured notes. The carrying amount of the Company’s long-term debt as of December 31, 2020 was $263.5 million, which approximated fair value based on current market interest rates.

(12) Segment Information

Effective January 1, 2021, the Company created a digital division that generates revenue primarily from the sale of digital advertising to customers of the Company’s radio stations and other advertisers throughout the United States. All digital operations are the responsibility of the Company’s Chief Digital Officer who reports to the Company’s Chief Executive Officer (the Company’s chief operating decision maker). As a result, the Company has identified two reportable segments, Audio and Digital. The Audio segment generates revenue primarily from the sale of commercial advertising to customers of the Company’s radio stations in the following radio 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, West Palm Beach-Boca Raton, FL, and Wilmington, DE. Corporate includes general and administrative expenses and certain other income and expense items not allocated to the operating segments.

Non-operating

corporate items including interest expense and income taxes, are reported in the accompanying condensed consolidated statements of comprehensive loss. The identification of segments is consistent with how the segments report to and are managed by the Company’s chief operating decision maker.

Reportable segment information for the three months ended September 30, 2021 is as follows:

	Audio		Digital		Other			Corporate			Total
Net revenue	$	54,043,650	$	8,318,112	$	541,173		$	0		$	62,902,935
Operating expenses		42,287,054		8,047,207		851,803			0			51,186,064
Corporate expenses		0		0		0			3,980,815			3,980,815
Depreciation and amortization		1,896,729		4,371		796,018			146,232			2,843,350
Operating income (loss)	$	9,859,867	$	266,534	$	(1,106,648	)	$	(4,127,047	)	$	4,892,706

Reportable segment information for the nine months ended September 30, 2021 is as follows:

	Audio			Digital			Other			Corporate			Total
Net revenue	$	146,988,486		$	22,065,183		$	1,636,011		$	0		$	170,689,680
Operating expenses		116,737,528			23,215,540			2,695,287			0			142,648,355
Corporate expenses		0			0			0			11,843,958			11,843,958
Depreciation and amortization		5,812,342			8,513			2,403,940			421,379			8,646,174
Gain on disposition		(191,988	)		0			0			0			(191,988	)
Other operating (income) expense, net		500,000			0			0			(900,000	)		(400,000	)
Operating income (loss)	$	24,130,604		$	(1,158,870	)	$	(3,463,216	)	$	(11,365,337	)	$	8,143,181

Reportable segment information as of September 30, 2021 is as follows:

	Audio		Digital		Other		Corporate		Total
Capital expenditures	$	3,098,655	$	87,432	$	2,852	$	515,811	$	3,704,750
Property and equipment, net		46,154,908		78,919		22,618		4,780,616		51,037,061
FCC licenses		508,413,913		0		0		0		508,413,913
Goodwill		25,377,447		0		3,219,100		0		28,596,547
Other intangibles, net		2,010,106		0		21,238,466		179,663		23,428,235

12

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

General

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. We own and operate radio stations in the following radio 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, West Palm Beach-Boca Raton, FL, and Wilmington, DE. We refer to each group of radio stations in each radio market as a market cluster. 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. 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. Forward-looking statements, which address the Company’s expected business and financial performance and financial condition, among other matters, contain words such as: “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” “may,” “will,” “plans,” “projects,” “could,” “should,” “would,” “seek,” “forecast,” or other similar expressions.

Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Although the Company believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that the expectations will be attained or that any deviation will not be material. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. 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. 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 Federal Communications Commission (“FCC”) licenses and/or goodwill, as well as any changes to federal, state or local government laws, regulations or orders in connection with the pandemic;

• 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 radio 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 radio programs;

• the ability of the Company to respond to changes in technology, standards and services that affect the radio industry;

• the Company’s dependence on federally issued licenses subject to extensive federal regulation;

• actions by the FCC or new legislation affecting the radio industry;

• the Company’s dependence on selected market clusters of radio stations for a material portion of its net revenue;

13

• 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 radio 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;

• 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.

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.

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. 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 radio 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. 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. Advertising rates are primarily based on the following factors:

• a radio station’s audience share in the demographic groups targeted by advertisers as measured principally by periodic reports issued by Nielsen Audio;

• the number of radio stations, as well as other forms of media, in the market competing for the attention of the same demographic groups;

• the supply of, and demand for, radio advertising time; and

• the size of the market.

14

Our net revenue is affected by general economic conditions, competition and our ability to improve operations at our radio market clusters. Seasonal revenue fluctuations are also common in the radio broadcasting industry and are primarily due to variations in advertising expenditures by local and national advertisers. Our revenues typically are lowest in the first calendar quarter of the year. In addition, our revenues tend to fluctuate between years, consistent with, among other things, increased advertising expenditures in even-numbered years by political candidates, political parties and special interest groups. This political spending typically is heaviest during the fourth quarter of such years.

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 radio station websites, applications, and other distribution platforms. We derive revenue from our websites through the sale of advertiser promotions and advertising on our websites and the sale of advertising airtime during audio streaming of our radio stations over the internet. We also generate revenue from selling third-party digital products and services.

Operating Expenses.

Our operating expenses consist primarily of programming, engineering, sales, advertising and promotion, and general and administrative expenses incurred at our radio stations. We strive to control our operating expenses by centralizing certain functions at our corporate offices and consolidating certain functions in each of our radio market clusters.

Critical Accounting Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires us to make estimates and assumptions that affect reported amounts and related disclosures. We consider an accounting estimate to be critical if:

• it requires assumptions to be made that were uncertain at the time the estimate was made; and

• changes in the estimate or different estimates that could have been selected could have a material impact on our results of operations or financial condition.

Our critical accounting estimates are described in Item 7 of our Annual Report on Form

10-K

for the year ended December 31, 2020. There have been no additional material changes to our critical accounting estimates during the nine months ended September 30, 2021.

Recent Accounting Pronouncements

There were no recent accounting pronouncements that have or will have a material effect on our financial condition or results of operations.

Three Months Ended September 30, 2021 Compared to the Three Months Ended September 30, 2020

The following summary table presents a comparison of our results of operations for the three months ended September 30, 2020 and 2021, with respect to certain of our key financial measures. These changes illustrated 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 1 of this report.

	Three Months ended September 30,						Change
	2020			2021			$			%
Net revenue	$	49,649,659		$	62,902,935		$	13,253,276			26.7	%
Operating expenses		41,589,490			51,186,064			9,596,574			23.1
Corporate expenses		3,712,816			3,980,815			267,999			7.2
Other operating expense		600,000			—			(600,000	)		(100.0	)
Interest expense		4,544,235			7,021,577			2,477,342			54.5
Income tax benefit		(1,031,166	)		(515,380	)		515,786			50.0
Net loss		(2,724,774	)		(1,620,323	)		1,104,451			40.5

15

Net Revenue.

Net revenue increased $13.3 million during the three months ended September 30, 2021 as compared to the three months ended September 30, 2020. Significant factors affecting net revenue included an increase in audio revenue and digital revenue primarily due to recovery from the

COVID-19

pandemic that was partially offset by a decrease in political advertising.

Operating Expenses.

Operating expenses increased $9.6 million during the three months ended September 30, 2021 as compared to the three months ended September 30, 2020. Significant factors affecting operating expenses included an increase in audio operating expenses primarily due to recovery from the

COVID-19

pandemic and an increase in digital operating expenses.

Corporate Expenses.

Corporate expenses increased $0.3 million during the three months ended September 30, 2021 as compared to the three months ended September 30, 2020. The primary factors affecting corporate expenses were an increase in cash compensation and contract services partially offset by an allocation of digital expenses from corporate expenses to operating expenses.

Other Operating Expense.

Other operating expense for the three months ended September 30, 2020 includes payments of $0.6 million for consulting services related to the

COVID-19

pandemic.

Interest Expense.

Interest expense increased $2.5 million during the three months ended September 30, 2021, as compared to the three months ended September 30, 2020. The primary factors affecting interest expense were an increase in long-term debt outstanding and the applicable interest rate.

Income Tax Benefit.

Our effective tax rate was approximately (27)% and (24)% for the three months ended September 30, 2020 and 2021, 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.

Net loss for the three months ended September 30, 2021 was $1.6 million compared to net loss of $2.7 million for the three months ended September 30, 2020 as a result of the factors described above.

Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020

The following summary table presents a comparison of our results of operations for the nine months ended September 30, 2020 and 2021, with respect to certain of our key financial measures. These changes illustrated 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 1 of this report.

	Nine Months ended September 30,						Change
	2020			2021			$			%
Net revenue	$	137,683,217		$	170,689,680		$	33,006,463			24.0	%
Operating expenses		133,868,282			142,648,355			8,780,073			6.6
Corporate expenses		11,950,672			11,843,958			(106,714	)		(0.9	)
Impairment losses		6,804,412			—			(6,804,412	)		(100.0	)
Other operating (income) expense, net		600,000			(400,000	)		(1,000,000	)		(166.7	)
Interest expense		12,580,706			19,665,017			7,084,311			56.3
Loss on extinguishment of long-term debt		2,798,789			4,996,731			2,197,942			78.5
Income tax benefit		(9,490,892	)		(4,417,660	)		5,073,232			53.5
Net loss		(29,838,734	)		(12,117,270	)		17,721,464			59.4

Net Revenue.

Net revenue increased $33.0 million during the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020. Significant factors affecting net revenue included an increase in audio revenue and digital revenue primarily due to recovery from the

COVID-19

pandemic, partially offset by a decrease in political advertising and other revenue.

Operating Expenses.

Operating expenses increased $8.8 million during the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020. Significant factors affecting operating expenses included an increase in audio operating expenses primarily due to recovery from the

COVID-19

pandemic and an increase in digital operating expenses.

Corporate Expenses.

Corporate expenses decreased $0.1 million during the nine months ended September 30, 2021 as compared to the nine months ended September 30, 2020. The primary factors affecting corporate expenses were an allocation of digital expenses from corporate expenses to operating expenses partially offset by an increase in cash and stock-based compensation and contract services.

16

Impairment Losses.

Due to the impact of the

COVID-19

pandemic on the U.S. economy, we tested our FCC licenses for impairment during the first quarter of 2020. As a result of the quantitative impairment test, we recorded impairment losses of $6.8 million related to the FCC licenses in our Atlanta, GA, Las Vegas, NV, Middlesex-Monmouth-Morristown, NJ, West Palm Beach-Boca Raton, FL, and Wilmington, DE radio market clusters. The impairment losses were primarily due to a decrease in projected revenue in these markets due to the impact of the

COVID-19

pandemic and 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 specifically associated with the Company and the radio broadcasting industry.

Other Operating (Income) Expense, Net.

Other operating income, net for the nine months ended September 30, 2021 includes life insurance proceeds of $3.0 million related to the death of Mr. George Beasley, the Company’s former Chairman, in June 2021, partially offset by certain payments totaling $1.5 million that were paid in accordance with Mr. Beasley’s employment contract, payments of $0.6 million for consulting services related to the

COVID-19

pandemic and expenses of $0.5 million related to the early termination of a programming contract. Other operating expense for the nine months ended September 30, 2020 includes payments of $0.6 million for consulting services related to the

COVID-19

pandemic.

Interest Expense.

Interest expense increased $7.1 million during the nine months ended September 30, 2021, as compared to the nine months ended September 30, 2020. The primary factors affecting interest expense were an increase in long-term debt outstanding and the applicable interest rate.

Loss on Extinguishment of Long-Term Debt.

We recorded a loss on extinguishment of long-term debt of $5.0 million during the nine months ended September 30, 2021, resulting from the issuance of secured notes on February 2, 2021 and the use of proceeds to repay the credit facility. We recorded a loss on modification of long-term debt of $2.8 million during the nine months ended September 30, 2020, resulting from an amendment to our credit agreement.

Income Tax Benefit.

Our effective tax rate was approximately (24)% and (27)% for the nine months ended September 30, 2020 and 2021, 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.

Net loss for the nine months ended September 30, 2021 was $12.1 million compared to net loss of $29.8 million for the nine months ended September 30, 2020 as a result of the factors described above.

Liquidity and Capital Resources

Overview.

 Our primary source of liquidity is internally generated cash flow. Our primary liquidity needs have been, and for the next twelve months and thereafter are expected to continue to be, for working capital, debt service, and other general corporate purposes, including capital expenditures and radio station acquisitions. Historically, our capital expenditures have not been significant. In addition to property and equipment associated with radio station acquisitions, our capital expenditures have generally been, and are expected to continue to be, related to the maintenance of our office and studio space, the maintenance of our radio towers and equipment, and digital products and information technology. 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. 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”). 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, commencing on August 1, 2021. The Notes are secured on a first-lien priority basis by substantially all assets of the Company and its majority owned subsidiaries and are guaranteed jointly and severally by the Company and its majority owned subsidiaries. We used the net proceeds from the Notes, to repay the credit facility, the promissory note, and a loan from Mr. George Beasley (see Note 10 to the accompanying financial statements) and to pay related accrued interest, fees and expenses. 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

17

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.

PPP loan

. On March 1, 2021, we entered into a loan with Synovus Bank for $10.0 million pursuant to the Paycheck Protection Program (the “PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The loan bears interest at a rate of 1.0% per annum and matures on March 1, 2026. Principal and interest payments will be deferred, with interest accruing, until after the period in which we may apply for loan forgiveness pursuant to the PPP. After the deferral period, we will make monthly principal and interest payments, amortized over the remaining term of the loan. The loan may be prepaid at any time prior to maturity with no prepayment penalties. The loan contains customary events of default relating to, among other things, payment defaults or breaches of the terms of the promissory note. Upon the occurrence of an event of default, Synovus Bank may require immediate repayment of all amounts outstanding under the promissory note. Under the terms of the CARES Act, we can apply for and be granted forgiveness for all or a portion of the loan granted under the PPP. The loan is subject to forgiveness to the extent proceeds are used for certain qualifying expenses pursuant to the terms and limitations of the PPP. On September 16, 2021, we submitted an application for forgiveness, however, no assurance can be provided that we will obtain forgiveness of the loan in whole or in part.

Credit Facility.

 As of December 31, 2020, the credit facility consisted of a term loan facility with a remaining balance of $238.0 million and a revolving credit facility with an outstanding balance of $20.0 million and a maximum commitment of $20.0 million. The revolving credit facility carried interest, based on LIBOR, at 4.4% as of December 31, 2020. The term loan carried interest, based on LIBOR, at 5.25% as of December 31, 2020. As noted above, the credit facility was repaid on February 2, 2021, using a portion of the proceeds from the Notes offering.

On November 14, 2019, we acquired a majority interest in an esports team and issued a promissory note for $16.5 million to the seller. On June 30, 2020, we entered into an amendment to the promissory note applicable to the remaining balance. As amended, the promissory note bore

cash-pay

interest at 5% per annum payable quarterly in arrears and additional

payment-in-kind

interest at 10% per annum. The promissory note had a remaining balance of $5.5 million as of December 31, 2020. As noted above, the promissory note was repaid on February 2, 2021, using a portion of the proceeds from the Notes offering.

In June 2020, Mr. George Beasley, our former Chairman, provided a $5.0 million loan to the Company that accrued

payment-in-kind

interest at 6% per annum with no cash payments due until the loan’s maturity in December 2023. Mr. Beasley and GGB Family Limited Partnership also each entered into standby letters of credit in combined aggregate face amount of $5.0 million in favor of U.S. Bank, National Association for the benefit of the Company as a source of backup liquidity in the event we failed to maintain a minimum liquidity amount. As noted above, the loan was repaid on February 2, 2021, using a portion of the proceeds from the Notes offering.

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 52,758 shares during the nine months ended September 30, 2021.

We expect to provide for future liquidity needs through one or a combination of the following sources of liquidity:

• internally generated cash flow;

• additional borrowings or notes offerings, to the extent permitted under the Indenture governing our Notes; and

• additional equity offerings.

We believe we will have sufficient liquidity and capital resources to permit us to provide for our liquidity requirements and meet our financial obligations for the next twelve months and thereafter. 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.

Cash Flows

. The following summary table presents a comparison of our cash flows for the nine months ended September 30, 2020 and 2021 with respect to certain of our key measures affecting our liquidity. 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 1 of this report.

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	Nine Months ended September 30,
	2020			2021
Net cash provided by (used in) operating activities	$	800,567		$	(5,977,001)
Net cash used in investing activities		(7,996,619	)		(342,250	)
Net cash provided by financing activities		4,040,306			33,701,577
Net increase (decrease) in cash and cash equivalents	$	(3,155,746	)	$	27,382,326

Net Cash Provided By (Used In) Operating Activities.

 Net cash used in operating activities increased $6.8 million during the nine months ended September 30, 2021, as compared to the nine months ended September 30, 2020. Significant factors affecting the increase in net cash used in operating activities included a $25.2 million increase in cash paid for operating expenses, a $3.8 million increase in interest payments and a $1.4 million increase in income tax payments, partially offset by a $22.1 million increase in cash receipts from revenue and a $0.6 million decrease in cash paid for corporate expenses.

Net Cash Used In Investing Activities.

 Net cash used in investing activities during the nine months ended September 30, 2021 included payments of $3.7 million for capital expenditures partially offset by proceeds of $3.0 million from life insurance. Net cash used in investing activities for the same period in 2020 included payments of $7.0 million for capital expenditures and payments of $1.0 million for investments.

Net Cash Provided By Financing Activities.

 Net cash provided by financing activities during the nine months ended September 30, 2021 included proceeds of $300.0 million from the issuance of secured notes and proceeds from the $10.0 million PPP loan, partially offset by credit facility and promissory note repayments of $263.5 million, repayment of the $5.0 million loan provided by George Beasley, and payments of $7.6 million for debt issuance costs related to the secured notes. Net cash provided by financing activities for the same period in 2020 included proceeds of $9.0 million from the issuance of indebtedness under our revolving credit facility and proceeds from the $5.0 million loan provided by George Beasley, partially offset by credit facility and promissory note repayments of $4.5 million, payments of $2.8 million for cash dividends, and payments of $2.6 million for debt issuance costs related to the amendment to our credit agreement.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not required for smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures pursuant to Exchange Act Rule

13a-15(b)

as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective as of the end of the period covered by this report.

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

We currently and from time to time are involved in litigation and are the subject of threats of litigation that are incidental to the conduct of our business. These include indecency claims and related proceedings at the FCC, as well as claims and threatened claims by private third parties. However, we are not a party to any lawsuit or other proceedings, or the subject of any threatened lawsuit or other proceedings, which, in the opinion of management, is likely to have a material adverse effect on our financial condition or results of operations.

ITEM 1A. RISK FACTORS.

There have been no material changes to the risks affecting our Company as previously disclosed in Item 1A, “Risk Factors” of our annual report on Form

10-K

for the year ended December 31, 2020.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

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 September 30, 2021.

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 of Shares That May Yet Be Purchased Under the Program
July 1 – 31, 2021		—		—		—		—
August 1 – 31, 2021		—		—		—		—
September 1 – 30, 2021		1,875	$	2.56		—		—
Total		1,875

On March 27, 2007, our board of directors approved the Beasley Broadcast Group, Inc. 2007 Equity Incentive Award Plan (the “2007 Plan”). The original ten year term of the 2007 Plan ended on March 27, 2017. Our stockholders approved an amendment to the 2007 Plan at the Annual Meeting of Stockholders on June 8, 2017 to, among other things, extend the term of the 2007 Plan until March 27, 2027. 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. All shares purchased during the three months ended September 30, 2021 were purchased to fund withholding taxes in connection with the vesting of restricted stock.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

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Exhibit Number	Description
10.1	Executive employment agreement by and between Beasley Broadcast Group, Inc. and Caroline Beasley dated as of September 20, 2021 (incorporated by reference to Exhibit 10.1 to Beasley Broadcast Group, Inc.’s Current Report on Form 8-K filed on September 24, 2021).
10.2	Executive employment agreement by and between Beasley Broadcast Group, Inc. and Bruce Beasley dated as of September 20, 2021 (incorporated by reference to Exhibit 10.2 to Beasley Broadcast Group, Inc.’s Current Report on Form 8-K filed on September 24, 2021).
10.3	Executive employment agreement by and between Beasley Broadcast Group, Inc. and Brian Beasley dated as of September 20, 2021 (incorporated by reference to Exhibit 10.3 to Beasley Broadcast Group, Inc.’s Current Report on Form 8-K filed on September 24, 2021).
10.4	Executive employment agreement by and between Beasley Mezzanine Holdings, LLC and Marie Tedesco dated as of September 20, 2021 (incorporated by reference to Exhibit 10.4 to Beasley Broadcast Group, Inc.’s Current Report on Form 8-K filed on September 24, 2021).
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) (17 CFR 240.15d-14(a)).
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) (17 CFR 240.15d-14(a)).
32.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(b)/15d-14(b) (17 CFR 240.15d-14(b)) and 18 U.S.C. Section 1350.
32.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(b)/15d-14(b) (17 CFR 240.15d-14(b)) and 18 U.S.C. Section 1350.
101.INS	XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	BEASLEY BROADCAST GROUP, INC.
Dated: November 5, 2021	/s/ Caroline Beasley
	Name: Caroline Beasley
	Title: Chief Executive Officer (principal executive officer)
Dated: November 5, 2021	/s/ Marie Tedesco
	Name: Marie Tedesco
	Title: Chief Financial Officer (principal financial and accounting officer)

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