Business Context and Reporting Period
Company: URBAN ONE, INC.
Filing Type: Form 8-K (Current Report)
Date of Report: April 7, 2025
Principal Event: Change in Registrant's Certifying Accountant.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on the transition of the independent registered public accounting firm.
Material Changes
- Dismissal of Auditor: The Company dismissed Ernst & Young LLP (EY) as its independent registered public accounting firm, effective April 7, 2025.
- Appointment of New Auditor: The Audit Committee appointed PricewaterhouseCoopers LLC (PwC) as the new independent registered public accounting firm for the fiscal year ending December 31, 2025, effective April 7, 2025.
- Audit History: EY's audit reports for the years ended December 31, 2024, and 2023 contained no adverse opinions, disclaimers, or qualifications.
- Disagreements: The Company reported no disagreements with EY regarding accounting principles, practices, or auditing scope during the relevant periods.
Outlook, Risks, and Contingencies
Material Weaknesses in Internal Controls
The filing discloses material weaknesses in internal control over financial reporting identified in the 2023 and 2024 Annual Reports (Form 10-K). While some have been remediated, the following areas were cited as deficiencies:
- Control Environment: Insufficient qualified resources with requisite GAAP knowledge to design and execute controls; inadequate communication of objectives and responsibilities.
- IT General Controls: Deficiencies in user access controls, program change management, and IT operations for systems supporting financial reporting.
- Financial Statement Close Process: Inadequate precision in management reviews, ineffective segregation of duties for manual journal entries, and insufficient review of significant non-recurring transactions.
- Management Review Controls: Controls did not sufficiently evaluate data completeness and accuracy in judgmental areas; insufficient evidence maintained to demonstrate effective reviews.
- Fixed Asset Controls: Inadequate controls over the approval of IT equipment purchases and the recognition of such equipment as fixed assets.
Forward-Looking Statements
The Company cautions that forward-looking statements involve risks including health epidemics, cost and availability of capital, ability to obtain equity financing, and general market conditions.
Investor Verification Checklist
- Verify the status of remediation efforts for the disclosed material weaknesses in internal controls over financial reporting.
- Review the letter from EY (Exhibit 16.1) to confirm their agreement with the disclosures regarding the dismissal.
- Monitor the transition process between EY and PwC for any potential delays in future financial reporting.
- Assess the impact of the identified IT general control deficiencies on the integrity of financial data systems.