URBAN ONE, INC. Material Event - What Happened

Urban One, Inc. recently announced a significant corporate action: a reverse stock split. This summary cuts through the financial jargon to explain what happened, why it matters, and what investors should know, presented in clear, straightforward language.

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1. What happened? (The actual event, in plain English)

Urban One, Inc. announced a 1-for-10 reverse stock split for all classes of its common stock (Class A, B, C, and D shares). This means that for every ten shares an investor currently owns, they will now own one share.

2. When did it happen?

The reverse stock split becomes effective on January 22, 2026, at 11:59 p.m. Eastern Time. Urban One filed the Certificate of Amendment (the official paperwork) on January 16, 2026, following the announcement of the specific 1-for-10 ratio on January 6, 2026.

3. Why did it happen? (The backstory and context)

Why implement a reverse stock split? While the filing does not explicitly state the reason, companies typically execute a reverse stock split to increase their stock price per share. This is often a strategic decision, driven by factors such as:

• Meeting Exchange Requirements: Urban One's shares trade on Nasdaq, which mandates a minimum bid price, typically $1.00 per share. Stocks trading below this threshold for an extended period risk delisting. This reverse split suggests Urban One's stock traded below the $1.00 mark, and the split aims to elevate the price to maintain its listing.
• Investor Perception & Marketability: A higher stock price per share can make a stock appear more attractive to a broader range of investors, especially institutional investors (e.g., large mutual funds or pension funds). Many institutions have policies that prevent investment in "penny stocks" (shares trading at very low prices), regardless of the company's underlying value. A higher nominal price can enhance the stock's appeal and potentially increase liquidity.

The company's Board of Directors and shareholders previously approved a reverse split within a range of 1-for-2 to 1-for-30. The Audit Committee then finalized the 1-for-10 ratio, reflecting a deliberate decision to address these market factors.

4. Why does this matter? (Impact and significance)

This event changes your share count and the price per share, but it does not change the initial total value of your investment or the company's overall market capitalization. For instance, if you owned 100 shares at $0.50 each (total value $50), after a 1-for-10 split, you would own 10 shares, each worth approximately $5.00 (maintaining a total value of $50).

Urban One explicitly stated that the split "will not affect the Company’s underlying business operations, total stockholders’ equity, or the proportional ownership interests of existing shareholders." This means:

• Business Operations: Urban One's core businesses—a diversified media company targeting African-American consumers through radio broadcasting, cable television (TV One, CLEO TV), digital platforms, and event management—will continue unchanged. The split is a financial restructuring, not an operational one.
• Total Stockholders' Equity: This accounting figure, representing owners' claim on assets, remains unchanged. The split is merely a reclassification of existing shares, not an injection or withdrawal of capital.
• Proportional Ownership: Your percentage ownership of the company remains the same, as all shares are reduced by the same 1-for-10 ratio.

5. What happens next? (Immediate and future implications)

What are the immediate and future implications of this reverse stock split?

• Immediate Adjustments: The split becomes effective on January 22, 2026. Brokerage accounts will automatically adjust share counts and prices per share. If you hold a fractional share after the split (e.g., 1.5 shares from 15 original shares), the company will pay cash for that fractional part based on the closing price on the effective date, typically processed within a few business days.
• Future Outlook: The stock will trade at a higher price per share. Urban One hopes this action helps maintain its Nasdaq listing and attracts more investors. However, investors should understand the risks associated with reverse stock splits:
  • Does Not Solve Underlying Issues: A reverse split is a cosmetic change; it does not improve the company's financial health, revenue growth, or profitability.
  • Negative Market Perception: Investors sometimes view reverse splits as a sign of distress, which can lead to further selling pressure.
  • Potential for Further Decline: If the company's business fundamentals do not improve, the stock price may eventually fall below the minimum bid price, potentially leading to another delisting threat.
  • Liquidity Impact: While aiming to attract institutional investors, a higher price per share with fewer outstanding shares can sometimes reduce trading volume and liquidity.

The market will react to this new price point, but underlying business performance remains the main driver of the stock's long-term value. Investors should monitor for signs of improved financial performance, strategic growth initiatives, and sustained profitability in future earnings reports.

6. What should investors/traders know? (Practical takeaways)

For investors and traders, here are key takeaways:

• What to Monitor: Observe the stock's performance after the split. Will the higher price per share hold? Does it attract new investors as the company hopes? More importantly, focus on Urban One's actual business performance: revenue trends, profitability, debt levels, and strategic updates regarding its media properties or other ventures.
• Potential Volatility: Expect some initial volatility as the market adjusts to the new price point. While the total value of your investment should not change due to the split, market perception and subsequent trading activity can influence the price. Remember that reverse splits do not guarantee a sustained higher price.
• The Broader Perspective: Consider a reverse stock split like reorganizing a pizza: you still have the same amount, but instead of 10 small slices, you now have 1 large slice. The company's intrinsic value has not changed; only how its shares are divided. The fundamental questions for investors remain: How is Urban One's business performing, and what are its strategies for long-term growth and profitability? This split is a necessary step to maintain market access, but creating shareholder value depends on operational execution.