Nasdaq triggers delisting process for Urban One
Richmond casino backer late in filing financial documents
Nasdaq has begun the delisting process for Urban One, the Maryland-based media company behind the proposed casino in Richmond, because it has not filed quarterly finance reports for fiscal year 2023 on time.
The stock exchange’s notification does not affect trading of Urban One or its presence on Nasdaq yet; according to a Friday news release by Urban One, the company will “request a hearing before a Nasdaq Hearings Panel. The hearing request will automatically stay any suspension or delisting action through Oct. 20, 2023.”
A spokesperson for Urban One said Monday there won’t be any impact on the current casino referendum campaign underway in Richmond.
Urban One acknowledged in its news release that it has not yet filed financial reports for the first and second quarters of fiscal 2023 with the Securities and Exchange Commission, due to errors related to its investment in RVA Entertainment Holdings, the limited liability corporation chosen in 2021 and 2023 as the operator for the proposed $562 million casino in Richmond, which is up for a second referendum vote in November.
In its Sept. 29 news release, Urban One says that it “identified certain errors with regard to the timing of expense recognition of non-cash stock based compensation and the accounting for the company’s investment in the operations of its Richmond casino joint venture, RVA Entertainment Holdings LLC, the activities of which primarily related to 2021.” To address the issue, Urban One says it is “currently evaluating the related accounting for the non-cash stock based compensation matter and if the Company’s investment in RVA Entertainment Holdings LLC should have been consolidated during the historical periods due to its then-75% ownership interest.”
In a July board meeting, the media company dismissed BDO as its independent accounting firm and hired Ernst & Young to serve as its public accounting firm for its fiscal year 2023, which ends Dec. 31.
Nasdaq previously notified Urban One of its late SEC filings in three letters this year, starting April 3, and the stock exchange previously gave the company a 180-day extension to file 2022 Form 10-K and the Q1 2023 Form 10-Q by Sept. 27. The 10-K form was filed in June, but the 10-Q form is still outstanding.
Urban One’s news release says that it “is in the process of completing its Q1 2023 Form 10-Q and anticipates filing the delinquent reports as soon as practicable after resolution of the discrete accounting issues” related to RVA Entertainment Holdings.
In an 8-K form filed by Urban One to the SEC on Sept. 28, the company reports $109.9 million in consolidated revenue during the first quarter of the year, ending March 31.
Urban One was the majority partner in the 2021 proposed casino in Richmond, with Peninsula Pacific Entertainment as minority partner, but the city’s referendum failed by 1,200 votes in November 2021. After much jockeying in the General Assembly, Richmond voters will once again vote this fall on a casino referendum, this time a proposal by Urban One and Churchill Downs, which bought PPE late last year and now owns the state’s Rosie’s Gaming Emporium franchise and Colonial Downs.
The renamed Richmond Grand Resort & Casino, if passed by voters, would include a 250-room hotel, a 3,000-seat concert venue, a $26.5 million upfront payment to the city government, an estimated 1,300 permanent jobs with an average salary of $55,000 and a predicted $30 million in annual tax revenue and $16 million over 10 years in charitable contributions.
According to Virginia Public Access Project’s finance report for political donations made through Aug. 31, Urban One and Churchill Downs contributed $8.14 million to the Richmond Wins, Vote Yes pro-casino PAC in August, more than three times the 2021 pro-casino campaign budget of $2.6 million.