What changed in this filing

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Item 1. Financial Statements

2021-11-12 compared with 2021-08-13 · 125 added, 100 removed, 465 unchanged (33% of the section changed)

4 unchanged sentences

Three Months Ended

Six Months Ended

September 30,

Nine Months Ended

September 30,

OPERATING EXPENSES:

8 unchanged sentences

Loss on debt extinguishment

(LOSS) INCOME BEFORE INCOME TAXES

PROVISION FOR INCOME TAXES

CONSOLIDATED NET (LOSS) INCOME

LOSS BEFORE INCOME TAXES

(BENEFIT) PROVISION FOR INCOME TAXES

CONSOLIDATED NET LOSS

PREFERRED STOCK DIVIDENDS

NET (LOSS) INCOME

Basic net (loss) income per share attributable to common shareholders

Basic weighted average number of common shares outstanding

Diluted net (loss) income per share attributable to common shareholders

Diluted weighted average number of common shares outstanding

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS

Basic and diluted loss per share attributable to common shareholders

Basic and diluted weighted average number of common shares outstanding

The accompanying notes are an integral part of these unaudited condensed consolidated statements.

2 unchanged sentences

(In thousands, except share data)

September 30,

CURRENT ASSETS:

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authorized 170,000,000 shares;

issued and outstanding 1,785,880 shares and 2,828,344 shares at December 31, 2020, and June 30, 2021, respectively

issued and outstanding 1,785,880 shares and 3,071,001 shares at December 31, 2020, and September 30, 2021, respectively

Class B common stock, $ 0.01 par value;

authorized 50,000,000 shares;

issued and outstanding 5,413,197 shares at December 31, 2020, and June 30, 2021

issued and outstanding 5,413,197 shares at December 31, 2020, and September 30, 2021

Class C common stock, $ 0.01 par value;

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BALANCE, MARCH 31, 2020

Net distributions to Emmis Communications Corp.

Preferred stock dividends

BALANCE, JUNE 30, 2020

Issuance of class A to employees, officers and directors

Preferred stock dividends

BALANCE, SEPTEMBER 30, 2020

BALANCE, DECEMBER 31, 2020

5 unchanged sentences

BALANCE, JUNE 30, 2021

Sale of class A common shares

Issuance of class A to employees, officers and directors

Preferred stock dividends

BALANCE, SEPTEMBER 30, 2021

The accompanying notes are an integral part of these unaudited condensed consolidated statements.

2 unchanged sentences

(Dollars in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

25 unchanged sentences

Payments for debt-related costs

Proceeds from issuance of class A common stock

Settlement of tax withholding obligations

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(IN THOUSANDS UNLESS INDICATED OTHERWISE, EXCEPT SHARE DATA)

June 30, 2021

September 30, 2021

Summary of Significant Accounting Policies

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(“MediaCo” or the “Company”) is an Indiana corporation formed in 2019, focused on radio and outdoor advertising.

Our assets consist of two radio stations, WQHT-FM and WBLS-FM, which serve the New York City metropolitan area, as well as approximately 3,600 outdoor advertising displays in the Southeast (Georgia, Alabama and Tennessee) region and Mid-Atlantic (Kentucky) region of the United States.

Our assets consist of two radio stations, WQHT-FM and WBLS-FM, which serve the New York City metropolitan area, as well as approximately 3,600 outdoor advertising displays in the Southeast (Georgia, Alabama, South Carolina and Florida) and the Mid-Atlantic (Kentucky, West Virginia and Ohio) regions of the United States.

We derive our revenues primarily from radio and outdoor advertising sales, but we also generate revenues from events, including sponsorships and ticket sales.

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These restrictions, in turn, caused the United States economy to decline and businesses to cancel or reduce amounts spent on advertising, negatively impacting our advertising-based businesses.

Furthermore, some of our advertisers have seen a material decline in their businesses and may not be able to pay amounts owed to us when they come due.

If the spread of COVID-19 continues, or is suppressed but later reemerges as a variant strain, and public and private entities continue to implement restrictive measures, we expect that our results of operations, financial condition and cash flows will continue to be negatively affected, the extent to which is difficult to estimate at this time.

of the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period.

While not a material amount, some of our advertisers experienced a material decline in their businesses and were not able to pay amounts owed to us when they came due.

Beginning in the first quarter of 2021, with the increased availability of vaccines, the U.S.

experienced an easing of restrictions on travel as well as social gatherings and business activities.

However, the broad economic impact of the COVID-19 pandemic remains across multiple sectors, specifically disrupting logistics and global supply chains.

If the spread of COVID-19 reaccelerates, or if supply chain disruptions persist, causing certain advertising categories (e.g., automotive dealers) to advertise less, we expect that our results of operations, financial condition and cash flows will continue to be negatively affected, the extent to which is difficult to estimate at this time.

The preparation of con densed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period.

Due to the uncertain future impacts of the COVID-19 pandemic and the related economic disruptions, actual results could differ from those estimates particularly as it relates to estimates reliant on forecasts and other assumptions reasonably available to the Company .

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( i ) the continued spread, duration and severity of the COVID-19 pandemic, (ii) the occurrence, spread, duration and severity of any subsequent wave or waves of outbreaks after the initial outbreak has subsided, (iii) the actions taken by the U.S.

and foreign governments to contain the COVID-19 pandemic, address its impact or respond to the reduction in global and local economic activity, (iv) the occurrence, duration and severity of a global, regional or national recession, depression or other sustained adverse market event, and (v) how quickly and to what extent normal economic and operating conditions can resume.

and foreign governments to contain the COVID-19 pandemic, address its impact or respond to the reduction in global and local economic activity, (iv) the occurrence, duration and severity of a global, regional or national recession, depression or other sustained adverse market event, including supply chain disruptions and other logistical difficulties , and (v) how quickly and to what extent normal economic and operating conditions can resume.

The accounting matters assessed included, but were not limited to, allowance for doubtful accounts, our ability to realize our deferred tax assets, and the carrying value of goodwill, FCC licenses and other long-lived assets.

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For the Three Months

Ended June 30,

Net Income Per Share

Basic net (loss) income per common share:

Net (loss) income

Ended September 30,

Net Loss Per Share

Basic and diluted net loss per common share:

Preferred dividends

Undistributed earnings allocated to participating securities

Net (loss) income attributable to common shareholders

Impact of restricted stock awards

Diluted net (loss) income per common share:

Net (loss) income attributable to common shareholders

For the Six Months

Ended June 30,

Net Income Per Share

Net loss attributable to common shareholders

For the Nine Months

Ended September 30,

Net Loss Per Share

Basic and diluted net loss per common share:

1 unchanged sentence

Net loss attributable to common shareholders

On August 20, 2021, MediaCo Holding Inc.

entered into an At Market Issuance Sales Agreement with B.

Riley Securities, Inc., pursuant to which the Company may offer and sell, from time to time through or to B.

Riley, as agent or principal, shares of the Company’s Class A Common Stock, $ 0.01 par value per share, having an aggregate offering price of up to $ 12.5 million.

During the three-month period ending September 30, 2021, Class A stock totaling $ 0.2 million was sold under the agreement.

The following convertible equity shares were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive.

The Company did not issue any restricted stock awards until the three months ended September 30, 2020.

For the Three Months

Ended June 30,

For the Six Months

Ended June 30,

Ended September 30,

For the Nine Months

Ended September 30,

(In thousands)

3 unchanged sentences

Restricted stock awards

Total anti-dilutive shares

Recent Accounting Pronouncements Not Yet Implemented

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Restricted stock awards are granted out of the Company’s 2020 and 2021 Equity Compensation Plans.

The following table presents a summary of the Company’s restricted stock grants outstanding at June 30, 2021, and restricted stock activity during the six months ended June 30, 2021 (“Price” reflects the weighted average share price at the date of grant):

The following table presents a summary of the Company’s restricted stock grants outstanding at September 30, 2021, and restricted stock activity during the nine months ended September 30, 2021 (“Price” reflects the weighted average share price at the date of grant):

Grants outstanding, beginning of period

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Recognized Non-Cash Compensation Expense

The following table summarizes stock-based compensation expense recognized by the Company during the three and six months ended June 30, 2020 and 2021.

The following table summarizes stock-based compensation expense recognized by the Company during the three and nine months ended September 30, 2020 and 2021.

The Company did not recognize any tax benefits related to stock-based compensation during the periods presented below.

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Operating expenses, excluding depreciation and amortization

1 unchanged sentence

Share-based compensation expense

As of June 30, 2021, there was $ 2.7 million of unrecognized compensation cost, net of estimated forfeitures, related to nonvested share-based compensation arrangements.

As of September 30, 2021, there was $ 3.0 million of unrecognized compensation cost, net of estimated forfeitures, related to nonvested share-based compensation arrangements.

The cost is expected to be recognized over a weighted average period of approximately 1.1 years.

Intangible Assets

As of December 31, 2020 and June 30, 2021, intangible assets consisted of the following:

As of December 31, 2020 and September 30, 2021, intangible assets consisted of the following:

As of December 31, 2020

As of June 30, 2021

As of September 30, 2021

Indefinite-lived intangible assets

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therefore, they are not subject to amortization, but are tested for impairment at least annually as discussed below.

The carrying amounts of the Company’s FCC licenses were $ 63.3 million as of December 31, 2020 and June 30, 2021.

The carrying amounts of the Company’s FCC licenses were $ 63.3 million as of December 31, 2020 and September 30, 2021.

Pursuant to our accounting policy, stations in a geographic market cluster are considered a single unit of accounting.

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If the carrying value of a reporting unit’s goodwill exceeds its fair value, the Company recognizes an impairment charge equal to the difference in the statement of operations.

All goodwill on the condensed consolidated balance sheets as of December 31, 2020 and June 30, 2021 is assigned to our Outdoor Advertising segment.

While the COVID-19 pandemic has negatively affected our outdoor operations, as of June 30, 2021, we don’t believe the long-term value of the outdoor business, and thus the associated goodwill, has been impaired.

All goodwill on the condensed consolidated balance sheets as of December 31, 2020 and September 30, 2021 is assigned to our Outdoor Advertising segment.

While the COVID-19 pandemic has negatively affected our outdoor operations, as of September 30, 2021, we don’t believe the long-term value of the outdoor business, and thus the associated goodwill, has been impaired.

The Company conducts its impairment test as of October 1 of each year, unless indications of impairment exist during an interim period.

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Definite-lived intangibles

The following table presents the weighted-average useful life at June 30, 2021, and the gross carrying amount and accumulated amortization for our definite-lived intangible assets at December 31, 2020, and June 30, 2021:

The following table presents the weighted-average useful life at September 30, 2021, and the gross carrying amount and accumulated amortization for our definite-lived intangible assets at December 31, 2020, and September 30, 2021:

As of December 31, 2020

As of June 30, 2021

As of September 30, 2021

(in 000's, except years)

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In accordance with ASC paragraph 360-10, the Company performs an analysis to (i) determine if indicators of impairment of a long-lived asset are present, (ii) test the long-lived asset for recoverability by comparing undiscounted cash flows of the long-lived asset to its carrying value and (iii) measure any potential impairment by comparing the long-lived asset's fair value to its current carrying value.

Total amortization expense from definite-lived intangibles for the three and six-month periods ended June 30, 2020 was $ 0.5 million and $ 0.9 million, respectively.

Total amortization expense from definite-lived intangible assets for the three and six-month periods ended June 30, 2021 was $ 0.3 million and $ 0.6 million, respectively.

The following table presents the Company's estimate of future amortization expense for definite-lived intangibles:

Total amortization expense from definite-lived intangible assets for the three and nine-month periods ended September 30, 2020 was $ 0.5 million and $ 1.0 million, respectively.

Total amortization expense from definite-lived intangible assets for the three and nine-month periods ended September 30, 2021 was $ 0.3 million and $ 0.9 million, respectively.

The following table presents the Company's estimate of future amortization expense for definite-lived intangible assets:

Year ending December 31,

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The following table presents the Company's revenues disaggregated by revenue source:

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Revenue by Source:

5 unchanged sentences

Long Term Debt

Long-term debt was comprised of the following at December 31, 2020, and June 30, 2021:

Long-term debt was comprised of the following at December 31, 2020, and September 30, 2021:

September 30,

Senior credit facility

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At its inception, the Senior Credit Facility included covenants pertaining to, among other things, the ability to incur indebtedness, restrictions on the payment of dividends, minimum liquidity requirements, collateral maintenance, minimum Consolidated Fixed Charge Coverage Ratio of 1.10:1.00 , and other customary restrictions.

As of June 30, 2021, a number of amendments had been entered into by the Company and GACP to modify, among other things, certain provisions relating to the repayment of the Term Loan (as defined in the Senior Credit Facility).

As of September 30, 2021, a number of amendments had been entered into by the Company and GACP to modify, among other things, certain provisions relating to the repayment of the Term Loan (as defined in the Senior Credit Facility).

On May 19, 2021, the Company entered into Amendment No.

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As a result of the $ 3.0 million payment made under the amendment, the Company recorded a loss on debt extinguishment of $ 81 thousand during the three-month period ended June 30, 2021.

For the period May 19, 2021 through June 30, 2021, the multiple applied to billboard cash flow was in excess of 3.5 x and the advance rate applied to the Company's FCC Licenses exceeded 60 % in order for the Company to achieve minimal compliance with its loan to value covenant.

Therefore, the incremental annual interest rate of 1 % applied during this period and an additional interest payment of $ 24 thousand was paid in kind on June 1, 2021 and added to the principal balance outstanding.

$ 58 thousand of incremental interest was accrued for at June 30, 2021 and was paid in kind after June 30, 2021.

As of June 30, 2021, there is $ 68.0 million outstanding under the Senior Credit Facility, which is carried net of a total unamortized discount of $ 2.1 million.

For the period May 19, 2021 through September 30, 2021, the multiple applied to billboard cash flow was in excess of 3.5 x and the advance rate applied to the Company's FCC Licenses exceeded 60 % in order for the Company to achieve minimal compliance with its loan to value covenant.

Therefore, the incremental annual interest rate of 1 % applied during this period and additional interest payments of $ 174 thousand and $ 199 thousand were paid in kind during the three and nine month periods ended September 30, 2021, respectively, all of which were added to the principal balance outstanding.

$ 57 thousand of incremental interest was accrued for at September 30, 2021 and was paid in kind after September 30, 2021.

As of September 30, 2021, there is $ 68.2 million outstanding under the Senior Credit Facility, which is carried net of a total unamortized discount of $ 2.0 million.

Emmis Convertible Promissory Note

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The Emmis Convertible Promissory Note matures on November 25, 2024 .

As of June 30, 2021, the principal balance outstanding under the Emmis Convertible Promissory Note is $ 5.5 million.

As of September 30, 2021, the principal balance outstanding under the Emmis Convertible Promissory Note is $ 5.5 million.

Second Amended and Restated SG Broadcasting Promissory Note, Additional SG Broadcasting Promissory Note and May 2021 SG Broadcasting Promissory Note

The Second Amended and Restated SG Broadcasting Promissory Note carries interest at a base rate equal to the interest on any senior credit facility, including any applicable paid in kind rate, or if no senior credit facility is outstanding, of 6.0 %, and an additional increase of 1.0 % following the second anniversary of the date of issuance and additional increases of 1.0 % following each successive

anniversary thereafter.

The Second Amended and Restated SG Broadcasting Promissory Note matures on May 25, 2025 .

3 unchanged sentences

Additionally, interest under the Additional SG Broadcasting Promissory Note is payable in kind through maturity, and is convertible into MediaCo Class A common stock at the option of SG Broadcasting at a strike price equal to the thirty day volume weighted average price of the MediaCo Class A common stock on the date of conversion.

On September 30, 2021, annual interest of $ 25 thousand was paid in kind and added to the principal balance outstanding.

On May 19, 2021, the Company issued to SG Broadcasting a subordinated convertible promissory note (the “May 2021 SG Broadcasting Promissory Note”), in return for which SG Broadcasting contributed $ 3.0 million to the Company to make the prepayment of Senior Credit Facility debt required under Amendment No.

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4 to the Senior Credit Facility.

As of June 30, 2021, there was a total of $ 25.4 million outstanding under the Second Amended and Restated SG Broadcasting Promissory Note, the Additional SG Broadcasting Promissory Note and the May 2021 SG Broadcasting Promissory Note.

Based on amounts outstanding at June 30, 2021, mandatory principal payments of long-term debt for the next five years and thereafter are summarized below:

As of September 30, 2021, there was a total of $ 25.4 million outstanding under the Second Amended and Restated SG Broadcasting Promissory Note, the Additional SG Broadcasting Promissory Note and the May 2021 SG Broadcasting Promissory Note.

Based on amounts outstanding at September 30, 2021, mandatory principal payments of long-term debt for the next five years and thereafter are summarized below:

Year ended December 31,

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In the opinion of management of the Company, however, there are no legal proceedings pending against the Company that we believe are likely to have a material adverse effect on the Company.

The effective tax rate for the six months ended June 30, 2020 and 2021 was 233 % and 8 %, respectively.

The effective tax rate for the nine months ended September 30, 2020 and 2021 was ( 154 )% and ( 8 )%, respectively.

During the three-month period ended June 30, 2020, as a result of a sharp deterioration of business activity related to the COVID-19 pandemic and the significant operating losses expected in 2020, the Company determined that it was more likely than not that it would be unable to realize its deferred tax assets and recorded a $ 15.6 million valuation allowance against these assets through an increase to our provision for income taxes.

Our effective tax rate for the six months ended June 30, 2021 differs from the statutory tax rate due to the recognition of additional valuation allowance.

Our effective tax rate for the nine months ended September 30, 2021 differs from the statutory tax rate due to the recognition of additional valuation allowance.

On May 25, 2021, the Company purchased 24 outdoor advertising structures consisting of 41 faces from DS Outdoor LLC dba Hotspots Outdoor for $ 0.4 million.

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Variable lease payments, which represent lease payments that vary due to changes in facts or circumstances occurring after the commencement date other than the passage of time, are expensed in the period in which the obligation for these payments was incurred.

Variable lease expense recognized in the six months ended June 30, 2020 and 2021, was not material.

We elected not to apply the recognition requirements of Accounting Standards Codification 842, “ Leases” , to short-term leases, which are deemed to be leases with a lease term of twelve months or less.

Variable lease expense recognized in the nine months ended September 30, 2021, was not material.

We elected not to apply the recognition requirements of ASC 842, “ Leases” , to short-term leases, which are deemed to be leases with a lease term of twelve months or less.

Instead, we recognized lease payments in the condensed consolidated statements of operations on a straight-line basis over the lease term and variable payments in the period in which the obligation for these payments was incurred.

We elected this policy for all classes of underlying assets.

Short-term lease expense recognized in the six months ended June 30, 2020 and 2021, was not material.

Short-term lease expense recognized in the nine months ended September 30, 2021, was not material.

The impact of operating leases to our condensed consolidated financial statements was as follows:

Six Months Ended

Three Months Ended

September 30,

Three Months Ended

September 30,

Nine Months Ended

September 30,

Nine Months Ended

September 30,

Operating lease cost

Other Information

Nine Months Ended

September 30,

Nine Months Ended

September 30,

Operating cash flows from operating leases

Right-of-use assets obtained in exchange for new operating lease liabilities

As of December 31,

As of September 30,

Weighted average remaining lease term - operating leases (in years)

Weighted average discount rate - operating leases

As of June 30, 2021, the annual minimum lease payments of our operating lease liabilities were as follows:

As of September 30, 2021, the annual minimum lease payments of our operating lease liabilities were as follows:

Year ending December 31,

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Total recorded lease liabilities

Our outdoor advertising business generates lessor revenue derived from operating leases accounted for under ASC 842, “Leases.” Minimum fixed lease consideration under non-cancelable operating leases for each of the next five years and thereafter, excluding variable lease consideration, as of June 30, 2021, is as follows:

Year ending December 31,

7 unchanged sentences

Liabilities settled

Balance at June 30, 2021

Balance at September 30, 2021

Segment Information

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The accounting policies as described in the summary of significant accounting policies included in the Company’s Annual Report filed on Form 10-K for the year ended December 31, 2020, and in Note 1 to these condensed consolidated financial statements, are applied consistently across segments.

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Outdoor Advertising

2 unchanged sentences

Depreciation and amortization

Gain on disposal of assets

Operating income (loss)

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Outdoor Advertising

3 unchanged sentences

Loss on disposal of assets

Operating loss

Six Months Ended June 30, 2021

Operating income (loss)

Nine Months Ended September 30, 2021

Outdoor Advertising

4 unchanged sentences

Operating income (loss)

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Outdoor Advertising

6 unchanged sentences

As of December 31, 2020

As of June 30, 2021

As of September 30, 2021

Employee Retention Credits

The Consolidated Appropriations Act, passed in December 2020, expanded the employee retention credit program and due to revenue declines we have experienced, we qualified for approximately $ 0.9 million of employee retention credits in the second quarter of 2021 and expect to qualify for a similar amount in the third quarter of 2021.

We recognized a receivable of $ 0.9 million as of June 30, 2021.

The credits cover 70 % of qualified wages, plus the cost to continue providing health benefits to our employees, subject to a $ 7 thousand cap per employee.

The Company expects to receive the first $ 0.9 million of retention credits from the IRS following the filing of its Form 941 Employer's Quarterly Federal Tax Return for the second quarter of 2021.

The Consolidated Appropriations Act, passed in December 2020, expanded the employee retention credit program.

The credits cover 70 % of qualified wages, plus the cost to continue providing health benefits to our employees, subject to a $ 7 thousand cap per employee per quarter.

Due to revenue declines we have experienced, we qualified for approximately $ 0.9 million and $ 1.0 million of employee retention credits during the second quarter and third quarter of 2021, respectively.

During the third quarter, the Company received a payment of $ 0.9 million related to the second quarter employee retention credits and retained $ 0.8 million of employment tax withholdings.

Approximately $ 0.2 million of employee retention credits are recorded in other current assets in the accompanying condensed consolidated balance sheets and are expected to be collected by the Company after filing its Form 941 Employer's Quarterly Federal Tax Return for the third quarter of 2021.

Related Party Transactions

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The sale closed on November 25, 2019, at which time MediaCo and Emmis also entered into the management agreement (the “Management Agreement”), an employee leasing agreement (the “Employee Leasing Agreement”) and certain other ancillary agreements.

For the six months ended June 30, 2020 and 2021, MediaCo recorded $ 0.6 million of management fee expense, which is included in corporate expenses in the accompanying condensed consolidated statements of operations.

$ 0.1 million was unpaid as of June 30, 2021 and December 31, 2020, and is included in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheets.

For the nine months ended September, 2020 and 2021, MediaCo recorded $ 0.9 million of management fee expense, which is included in corporate expenses in the accompanying condensed consolidated statements of operations.

$ 0.1 million was unpaid as of September 30, 2021 and December 31, 2020, and is included in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheets.

Emmis has given formal notice that it does not intend to extend the Management Agreement beyond the initial term, which expires in November 2021 .

Under the Employee Leasing Agreement, the employees of the Stations remained employees of Emmis and we reimbursed Emmis for the cost of these employees, including health and benefit costs.

Expense related to the Employee Leasing Agreement, which is included in operating expenses, was $ 4.5 million for the six months ended June 30, 2020.

Expense related to the Employee Leasing Agreement, which is included in operating expenses, was $ 7.0 million for the nine months ended September 30, 2020.

No amount of expense related to the Employee Leasing Agreement remained unpaid as of December 31, 2020.

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4 to the Senior Credit Facility.

Consequently, the principal amount outstanding under the Emmis Convertible Promissory Note and the SG Broadcasting Promissory Notes as of June 30, 2021 was $ 5.5 million and $ 25.4 million, respectively.

The Company recognized interest expense of $ 0.3 million related to the Emmis Convertible Promissory Note for the six months ended June 30, 2020 and June 30, 2021.

The Company recognized interest expense of $ 0.4 million and $ 1.1 million related to the SG Promissory Notes for the six months ended June 30, 2020 and June 30, 2021, respectively.

On September 30, 2021, annual interest of $ 25 thousand on the Second Amended Promissory Note was paid in kind and added to the principal balance outstanding.

Consequently, the principal amount outstanding under the Emmis Convertible Promissory Note and the SG Broadcasting Promissory Notes as of September 30, 2021 was $ 5.5 million and $ 25.4 million, respectively.

The Company recognized interest expense of $ 0.4 million and $ 0.5 million related to the Emmis Convertible Promissory Note for the nine months ended September 30, 2020 and September 30, 2021, respectively.

The Company recognized interest expense of $ 0.8 million and $ 1.8 million related to the SG Promissory Notes for the nine months ended September 30, 2020 and September 30, 2021, respectively.

The terms of these notes are described in Note 5.

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Issued and outstanding shares of MediaCo Series A Preferred Shares shall accrue cumulative dividends, payable in kind, at an annual rate equal to the interest rate on any senior debt of the Company, including any applicable paid in kind rate (see Note 5), or if no senior debt is outstanding, 6 %, plus additional increases of 1 % on December 12, 2020 and each anniversary thereof.

The current rate in effect at June 30, 2021 is 11.5 %.

The current rate in effect at September 30, 2021 is 11.5 %.

MediaCo Series A Preferred Shares are redeemable for cash at the option of SG Broadcasting at any time on or after June 12, 2025 , and so the shares are classified outside of permanent equity.

3 unchanged sentences

The payment in kind increased the accrued value of the preferred stock and no additional shares were issued as part of this payment.

Dividends on Series A Convertible Preferred Stock held by SG Broadcasting were $ 1.1 million and $ 1.3 million for the six months ended June 30, 2020 and 2021, respectively.

As of December 31, 2020, and June 30, 2021, unpaid cumulative dividends were $ 0.1 million and $ 1.4 million, respectively, and included in the balance of preferred stock in the accompanying condensed consolidated balance sheets.

Dividends on Series A Convertible Preferred Stock held by SG Broadcasting were $ 1.6 million and $ 2.0 million for the nine months ended September 30, 2020 and 2021, respectively.

As of December 31, 2020, and September 30, 2021, unpaid cumulative dividends were $ 0.1 million and $ 2.1 million, respectively, and included in the balance of preferred stock in the accompanying condensed consolidated balance sheets.

Loan Proceeds Participation Agreement

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Standard General L.P., on behalf of all of the funds for which it serves as an investment advisor, agreed to guaranty MediaCo’s obligations under the LPPA.

During the three months ended June 30, 2021, Emmis received notification that the full amount of the loan has been forgiven.

During the nine months ended September 30, 2021, Emmis received notification that the full amount of the loan has been forgiven.

Management Agreement for Billboards LLC

2 unchanged sentences

The Billboard Agreement has an effective date of August 1, 2020, has a term of three years, and has customary provisions on limitation of liability and indemnification.

$ 50 thousand of income was recognized in the six months ended June 30, 2021 in relation to the Billboard Agreement, all of which was outstanding as of June 30, 2021.

Additionally, Fairway incurred $ 83 thousand of out-of-pocket expenses for the period, none of which has been reimbursed as of June 30, 2021.

Income recognized in relation to the Billboard Agreement for the nine-month periods ended September 30, 2020 and 2021 was $ 17 thousand and $ 0.1 million, respectively.

Additionally, Fairway incurred $ 0.1 million of out-of-pocket expenses for both of the nine-month periods ended September 30, 2020 and 2021.

As of both December 31, 2020 and September 30, 2021, there was $ 0.2 million due from Billboards in relation to the Billboard Agreement and recorded as a receivable in the accompanying condensed consolidated balance sheets, comprised of both the management fee and out of pocket expenses due to Fairway.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements