GGB Las Vegas, LLC
We lease property for our radio stations in Las Vegas, NV from GGB Las Vegas, LLC which is controlled by George G. Beasley. The lease agreement
expires on December 31, 2023. Rental expense was $0.2 million for the year ended December 31, 2019.
LN2 DB, LLC
On March 25, 2011, we contributed $250,000 to Digital PowerRadio, LLC (now LN2 DB, LLC) in exchange for 25,000 units or
approximately 20% of the outstanding units. We contributed an additional $62,500 on February 14, 2012, $104,167 on July 31, 2012, $104,167 on April 10, 2013, $104,167 on April 4, 2014, $166,667 on April 3, 2015, and $166,667
on May 3, 2016. On February 22, 2017, we contributed $150,000 to LN2 DB, LLC in exchange for a note bearing interest at 18% per annum. On June 18, 2018, the note receivable and accrued interest due from LN2 DB, LLC totaling $187,618
was converted to additional equity in LN2 DB, LLC and we contributed an additional $150,000. We may be called upon to make additional pro rata cash contributions to LN2 DB, LLC in the future. LN2 DB, LLC is managed by Fowler Radio Group, LLC which
is partially-owned by Mark S. Fowler, an independent director of the Company. In June 2018, George G. Beasley, Caroline Beasley, Bruce Beasley, Brian Beasley and other family members also invested in LN2 DB, LLC under a recapitalization plan. In
January 2020, LN2 DB, LLC completed a study of its patents, which concluded that none of them had any significant remaining market value. Therefore, LN2 DB, LLC may decide to dissolve itself in the near future. We recorded an impairment loss of
$1.3 million for the year ended December 31, 2019.
Wintersrun Communications, LLC
We sold a tower for one radio station in Charlotte, NC to Wintersrun Communications, LLC, which is partially held by a trust for the benefit of
Caroline Beasley, Bruce G. Beasley, Brian E. Beasley and other family members of George G. Beasley and partially owned directly by Bruce G. Beasley and Brian E. Beasley, for $0.4 million then leased back the tower under an agreement which
expires on December 31, 2025. The lease met the criteria to be recorded as a finance lease, however based on the terms of the lease agreement the $0.3 million gain on sale was deferred and will be recognized as the finance lease right-of-use asset is depreciated. Rental expense was $0.1 million for the year ended December 31, 2019.
The following related party transactions are based on agreements entered into prior to our initial public offering in 2000 at which time we
did not have an Audit Committee. However, these agreements were evaluated by our board of directors at the time of entering the agreements and we believe that they are on terms at least as favorable to us as could have been obtained from a third
party.
Beasley Broadcasting Management, LLC
We lease our principal executive offices in Naples, FL from Beasley Broadcasting Management, LLC, which is held by a trust for the benefit of
Caroline Beasley, Bruce G. Beasley, Brian E. Beasley, and other family members of George G. Beasley. Rental expense was $0.2 million for the year ended December 31, 2019.
Beasley Family Towers, LLC
We lease towers for 19 radio stations in various markets from BFT. The lease agreements expire on various dates through December 28, 2020.
Rental expense was $0.4 million for the year ended December 31, 2019.
GGB Estero, LLC
We lease property for our radio stations in Ft. Myers, FL from GGB Estero, LLC which is held by a trust for the benefit of Caroline Beasley,
Bruce G. Beasley, Brian E. Beasley, and other family members of George G. Beasley. The lease agreement expires on August 31, 2024. Rental expense was $0.2 million for the year ended December 31, 2019.
Wintersrun Communications, LLC
We leased a tower for one radio station in Augusta, GA from Wintersrun. The lease agreement expires on October 16, 2025. Rental expense
was approximately $31,000 for the year ended December 31, 2019.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of December 31, 2019.
Inflation
For the years ended
December 31, 2018 and 2019, inflation has affected our performance in terms of higher costs for operating expenses, however the exact impact cannot be reasonably determined.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
Not required for smaller reporting companies.
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