What changed in this filing

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Item 1. Financial Statements

2022-11-14 compared with 2022-08-12 · 134 added, 86 removed, 466 unchanged (32% of the section changed)

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except per share amounts) 2022 2021 2022 2021

10 unchanged sentences

Loss on debt extinguishment — — — ( 81 )

(LOSS) INCOME BEFORE INCOME TAXES ( 2,817 ) 1,025 ( 7,047 ) ( 2,147 )

LOSS BEFORE INCOME TAXES ( 2,573 ) ( 1,105 ) ( 9,620 ) ( 3,252 )

PROVISION FOR INCOME TAXES 78 83 227 246

CONSOLIDATED NET (LOSS) INCOME ( 2,903 ) 943 ( 7,196 ) ( 2,310 )

CONSOLIDATED NET LOSS ( 2,651 ) ( 1,188 ) ( 9,847 ) ( 3,498 )

PREFERRED STOCK DIVIDENDS 838 709 2,456 2,012

NET (LOSS) INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS $ ( 3,683 ) $ 274 $ ( 8,814 ) $ ( 3,613 )

Basic net (loss) income per share attributable to common shareholders $ ( 0.47 ) $ 0.02 $ ( 1.15 ) $ ( 0.51 )

Basic weighted average number of common shares outstanding 7,808 7,187 7,687 7,151

Diluted net (loss) income per share attributable to common shareholders ( 0.47 ) 0.02 ( 1.15 ) ( 0.51 )

Diluted weighted average number of common shares outstanding 7,808 7,366 7,687 7,151

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS $ ( 3,489 ) $ ( 1,897 ) $ ( 12,303 ) $ ( 5,510 )

Basic and diluted net loss per share attributable to common shareholders $ ( 0.21 ) $ ( 0.26 ) $ ( 1.14 ) $ ( 0.77 )

Basic and diluted weighted average number of common shares outstanding 16,853 7,201 10,778 7,168

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

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CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

2022 December 31,

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Accounts receivable, net of allowance for doubtful accounts of $ 195 and $ 313 , respectively

10,490 13,756

Prepaid expenses 1,421 1,238

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Total assets $ 139,924 $ 148,210

LIABILITIES AND DEFICIT

LIABILITIES AND EQUITY (DEFICIT)

CURRENT LIABILITIES:

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29,466 27,010

RETAINED DEFICIT:

EQUITY (DEFICIT):

Class A common stock, $ 0.01 par value;

authorized 170,000,000 shares;

issued and outstanding 3,130,298 shares and 3,056,757 shares at June 30, 2022, and December 31, 2021, respectively

issued and outstanding 16,238,279 shares and 3,056,757 shares at September 30, 2022, and December 31, 2021, respectively

Class B common stock, $ 0.01 par value;

authorized 50,000,000 shares;

issued and outstanding 5,413,197 shares at June 30, 2022, and December 31, 2021

issued and outstanding 5,413,197 shares at September 30, 2022, and December 31, 2021

Class C common stock, $ 0.01 par value;

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Accumulated deficit ( 52,989 ) ( 40,686 )

Total deficit ( 24,740 ) ( 16,571 )

Total liabilities and deficit $ 143,389 $ 148,210

Total equity (deficit) 1,982 ( 16,571 )

Total liabilities and equity (deficit) $ 139,924 $ 148,210

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

MEDIACO HOLDING INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN RETAINED DEFICIT

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)

Class A Common Stock Class B Common Stock APIC Accumulated Deficit Total

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BALANCE, JUNE 30, 2022 3,130,298 $ 31 5,413,197 $ 54 $ 24,675 $ ( 49,500 ) $ ( 24,740 )

3,130,298 $ 31 5,413,197 $ 54 $ 24,675 $ ( 49,500 ) $ ( 24,740 )

Net loss — — — — — ( 2,651 ) ( 2,651 )

Issuance of class A to employees, officers and directors 197,324 2 — — 305 — 307

Conversion of convertible promissory notes 12,910,657 129 — — 29,775 — 29,904

Preferred stock dividends — — — — — ( 838 ) ( 838 )

BALANCE, SEPTEMBER 30, 2022 16,238,279 $ 162 5,413,197 $ 54 $ 54,755 $ ( 52,989 ) $ 1,982

BALANCE, DECEMBER 31, 2020

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BALANCE, JUNE 30, 2021 2,828,344 $ 28 5,413,197 $ 54 $ 21,831 $ ( 35,465 ) $ ( 13,552 )

2,828,344 $ 28 5,413,197 $ 54 $ 21,831 $ ( 35,465 ) $ ( 13,552 )

Net loss — — — — — ( 1,188 ) ( 1,188 )

Sale of class A common shares 19,701 — — — 180 — 180

Issuance of class A to employees, officers and directors 222,956 3 — — 791 — 794

Preferred stock dividends — — — — — ( 709 ) ( 709 )

BALANCE, SEPTEMBER 30, 2021 3,071,001 $ 31 5,413,197 $ 54 $ 22,802 $ ( 37,362 ) $ ( 14,475 )

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

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands) 2022 2021

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Purchases of property and equipment ( 462 ) ( 1,428 )

Purchases of internally-created software ( 1,295 ) —

Proceeds from the sale of property and equipment — 146

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Payments for debt-related costs — ( 354 )

Proceeds from issuance of class A common stock — 180

Settlement of tax withholding obligations ( 1,374 ) ( 497 )

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Capital Structure Changes

On July 28, 2022, SG Broadcasting LLC ("SG Broadcasting") exercised its right to convert the outstanding principal and accrued but unpaid interest on the SG Broadcasting Promissory Notes (as defined in Note 10) of $ 28.0 million and $ 1.9 million, respectively, for 12.9 million of the Company's Class A common stock.

On July 28, 2022, SG Broadcasting LLC ("SG Broadcasting") exercised its right to convert the outstanding principal and accrued but unpaid interest on the SG Broadcasting Promissory Notes (as defined in Note 10) of $ 28.0 million and $ 1.9 million, respectively, into 12.9 million shares of the Company's Class A common stock.

Basis of Presentation and Consolidation

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Cash and Cash Equivalents

We consider time deposits, money market fund shares and all highly liquid debt investment instruments with original maturities of six months or less to be cash equivalents.

We consider time deposits, money market fund shares and all highly liquid debt investment instruments with original maturities of nine months or less to be cash equivalents.

At times, such deposits may be in excess of FDIC insurance limits.

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

Net (loss) income $ ( 2,903 ) $ 943 $ ( 7,196 ) $ ( 2,310 )

Net loss $ ( 2,651 ) $ ( 1,188 ) $ ( 9,847 ) $ ( 3,498 )

Preferred dividends 838 709 2,456 2,012

Undistributed earnings allocated to participating securities — 136 — —

Net (loss) income attributable to common shareholders $ ( 3,683 ) $ 138 $ ( 8,814 ) $ ( 3,613 )

Basic weighted average common shares outstanding 7,808 7,187 7,687 7,151

Impact of restricted stock awards — 179 — —

Diluted weighted average common shares outstanding 7,808 7,366 7,687 7,151

Basic net (loss) income attributable to common shareholders $ ( 0.47 ) $ 0.02 $ ( 1.15 ) $ ( 0.51 )

Diluted net (loss) income attributable to common shareholders $ ( 0.47 ) $ 0.02 $ ( 1.15 ) $ ( 0.51 )

Net loss attributable to common shareholders $ ( 3,489 ) $ ( 1,897 ) $ ( 12,303 ) $ ( 5,510 )

Basic and diluted weighted average common shares outstanding 16,853 7,201 10,778 7,168

Basic and diluted net loss attributable to common shareholders $ ( 0.21 ) $ ( 0.26 ) $ ( 1.14 ) $ ( 0.77 )

On August 20, 2021, MediaCo Holding Inc.

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Riley”), 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.

No shares were sold during the six-month period ended June 30, 2022.

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

No shares were sold during the nine-month period ended September 30, 2022.

The following convertible equity shares and restricted stock awards were excluded from the calculation of diluted net (loss) income per share because their effect would have been anti-dilutive.

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands) 2022 2021 2022 2021

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Total anti-dilutive shares 18,402 15,729 10,380 21,411

Liquidity and Going Concern

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

Pursuant to ASC Topic 205-40, “ Going Concern ,” the Company is required to evaluate whether there is substantial doubt about its ability to continue as a going concern each reporting period.

In evaluating the Company’s ability to continue as a going concern for this reporting period, management evaluated the conditions and events that could raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date of the filing of these financial statements (November 14, 2022).

Management considered the Company’s ability to forecast future cash flows, current financial condition, sources of liquidity and debt service obligations due on or before November 14, 2023.

The Company has been and continues to be negatively impacted by the broad economic impact of the COVID-19 pandemic, which remains across multiple sectors, specifically disrupting logistics and global supply chains.

If apprehension persists around interest rate volatility, supply chain disruptions, and COVID-19, consumer spending may be adversely impacted, causing certain advertising categories (e.g., automotive dealers) to advertise less.

The Company expects continued negative impact on revenues and profitability for an undetermined period of time.

Management has considered these circumstances in assessing the Company’s liquidity over the next year.

Liquidity is a measure of an entity’s ability to meet potential cash requirements, maintain its assets, fund its operations, and meet the other general cash needs of its business.

The Company’s liquidity is impacted by general economic, financial, competitive, and other factors beyond its control.

The Company’s liquidity requirements consist primarily of funds necessary to pay its expenses, principally debt service and operational expenses, such as labor costs, and other related expenditures.

The Company generally satisfies its liquidity needs through cash provided by operations.

In addition, the Company has taken steps to enhance its ability to fund its operational expenses by reducing various costs and is prepared to take additional steps as necessary.

The Company has debt service obligations of approximately $ 11.1 million due under its Senior Credit Facility from November 14, 2022, the date of issuance of these financial statements, through November 14, 2023.

Because the Company’s operating results and financial condition have been adversely impacted by the broad economic impacts of the COVID-19 pandemic, the Company’s revenues and profitability may continue to decline over the next several months, as compared to the same periods of the prior year.

Because the duration and severity of the impact is unknown as of the filing of this Form 10-Q, management is unable to determine with certainty that the Company will be able to meet its liquidity needs for the next twelve months with cash and cash equivalents on hand, projected cash flows from operations, and/or additional borrowings.

Under the terms of its Senior Credit Facility, the Company has certain financial covenants.

Management is also unable to determine whether the Company will be in compliance with its debt covenants for the next twelve months.

On November 12, MediaCo entered into Amendment No.

5 to its Senior Credit Facility, which lowered the minimum liquidity requirement to $ 2.0 million through December 15, 2022 and $ 3.0 million thereafter and removed the testing requirement for the minimum consolidated fixed charge coverage ratio covenant on September 30, 2022.

There is substantial doubt that the Company will be in compliance with these covenants in subsequent periods.

If necessary, management intends to request a waiver or amendment to its Senior Credit Facility and seek additional borrowings from Standard General.

While the Company has been successful in obtaining waivers and amendments under its Senior Credit Facility and has also received additional liquidity from Standard General in the past, no assurances can be made that the Company will be successful or receive such liquidity in the future.

Additionally, management regularly reviews our portfolio of assets and may opportunistically dispose of or otherwise monetize assets when we believe it is appropriate to do so.

Based on our evaluation of ASC Topic 205-40, “ Going Concern ,”, there is substantial doubt about our ability to continue as a going concern through November 14, 2023.

Furthermore, depending on the duration and severity of the impacts on our businesses discussed above, we may record impairments of assets in the future.

Recent Accounting Pronouncements Not Yet Implemented

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INTANGIBLE ASSETS AND GOODWILL

As of June 30, 2022 and December 31, 2021, intangible assets consisted of the following:

June 30, 2022 December 31, 2021

As of September 30, 2022 and December 31, 2021, intangible assets consisted of the following:

September 30, 2022 December 31, 2021

Indefinite-lived intangible assets

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Customer list 201 929

Software 1,295 —

Total $ 78,597 $ 78,030

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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 June 30, 2022 and December 31, 2021.

The carrying amounts of the Company’s FCC licenses were $ 63.3 million as of September 30, 2022 and December 31, 2021.

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

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Valuation of Goodwill

All goodwill on the condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021 is part of the Outdoor Advertising segment.

All goodwill on the condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021 is part of the Outdoor Advertising segment.

The Company tests goodwill for impairment at least annually.

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Definite-lived intangibles

The following table presents the weighted-average useful life at June 30, 2022, and the gross carrying amount and accumulated amortization at June 30, 2022, and December 31, 2021, for our definite-lived intangible asset:

June 30, 2022 December 31, 2021

The following table presents the weighted-average useful life at September 30, 2022, and the gross carrying amount and accumulated amortization at September 30, 2022, and December 31, 2021, for our definite-lived intangible assets:

September 30, 2022 December 31, 2021

Weighted Average Remaining Useful Life

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Customer list 0.2 $ 2,906 $ 2,705 $ 201 $ 2,906 $ 1,977 $ 929

Software 5.7 $ 1,295 $ — $ 1,295 $ — $ — $ —

The customer list was acquired as part of the purchase of our Outdoor Advertising segment and was valued as part of the purchase price allocation performed at closing.

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A useful life of three years was assigned to the customer list.

Total amortization expense from definite-lived intangible assets for the three and six-month periods ended June 30, 2022 was $ 0.2 million and $ 0.5 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 Company estimates amortization expense of $ 0.4 million for the remainder of the year ending December 31, 2022 and none thereafter.

The software was developed internally by our Radio segment and represents our updated website and mobile application, which offer increased functionality and opportunities to grow and interact with our audience.

They cost $ 1.3 million to develop and useful lives of five years and seven years were assigned to the application and website, respectively.

Total amortization expense from definite-lived intangible assets for the three and nine-month periods ended September 30, 2022 was $ 0.2 million and $ 0.7 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 Company estimates amortization expense of $ 0.3 million for the remainder of the year ending December 31, 2022 and $ 0.2 million each year for the next five years.

The Company generates revenue from the sale of services including, but not limited to:

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

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 % of Total 2021 % of Total 2022 % of Total 2021 % of Total

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LONG-TERM DEBT

Long-term debt was comprised of the following at June 30, 2022, and December 31, 2021:

June 30, 2022 December 31, 2021

Long-term debt was comprised of the following at September 30, 2022, and December 31, 2021:

September 30, 2022 December 31, 2021

Senior credit facility $ 66,737 $ 68,343

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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, 2022, 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, 2022, 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).

Most recently, on May 19, 2021, the Company entered into Amendment No.

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• the Company made a principal payment of $ 3.0 million to reduce borrowings outstanding under the Senior Credit Facility;

• no quarterly scheduled principal payments are required through and including the quarter ending June 30, 2022;

• no quarterly scheduled principal payments are required through and including the quarter ending September 30, 2022;

• the Minimum Consolidated Fixed Charge Coverage Ratio (as defined in the Senior Credit Facility) was reduced to 1.00 :1.00 from April 1, 2020 through and including December 31, 2022, with it increasing to 1.10 :1.00 on and after January 1, 2023;

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Therefore, the incremental annual interest rate of 1.0 % applied during this period and additional interest payments of $ 0.2 million were paid in kind during the three-month period ended March 31, 2022, all of which were added to the principal balance outstanding.

For the period from April 1, 2022 to June 30, 2022, the incremental annual interest rate of 1.0 % did not apply as the principal balance outstanding was less than the minimum borrowing base.

As of June 30, 2022, there was $ 67.7 million outstanding under the Senior Credit Facility, carried net of a total unamortized discount of $ 1.5 million.

MediaCo is in compliance with the debt covenants as of June 30, 2022 and anticipates being in compliance in future periods.

For the period from April 1, 2022 to September 30, 2022, the incremental annual interest rate of 1.0 % did not apply as the principal balance outstanding was less than the minimum borrowing base.

As of September 30, 2022, there was $ 66.7 million outstanding under the Senior Credit Facility, carried net of a total unamortized discount of $ 1.3 million.

On November 12, 2022, MediaCo entered into Amendment No.

There is substantial doubt that the Company will be in compliance with these covenants in subsequent periods.

See further discussion in Note 1.

Emmis Convertible Promissory Note

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

As of June 30, 2022, the principal balance outstanding under the Emmis Convertible Promissory Note was $ 6.2 million.

As of September 30, 2022, the principal balance outstanding under the Emmis Convertible Promissory Note was $ 6.1 million.

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

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On March 18, 2022, the Company and SG Broadcasting agreed to amend the May 2021 SG Broadcasting Promissory Note to extend the Company’s ability to draw the remaining $ 3.0 million on the May 2021 SG Broadcasting Promissory Note from June 30, 2022 to June 30, 2023.

As of June 30, 2022, there was a total of $ 28.0 million outstanding under the SG Broadcasting Promissory Notes and the May 2021 SG Broadcasting Promissory Note.

On July 28, 2022, SG Broadcasting exercised its right to convert the outstanding principal and accrued but unpaid interest on the SG Broadcasting Promissory Notes of $ 28.0 million and $ 1.9 million, respectively, for 12.9 million of the Company's Class A common stock.

Based on amounts outstanding at June 30, 2022, mandatory principal payments of long-term debt for the next five years and thereafter are summarized below:

Based on amounts outstanding at September 30, 2022, mandatory principal payments of long-term debt for the next five years and thereafter are summarized below:

Year ended December 31,

Senior Credit Facility Emmis Note SG Broadcasting Notes Total Payments

Senior Credit Facility Emmis Note Total Payments

Remainder of 2022

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2024 62,147 6,124 68,271

2025 — — 28,011 28,011

Thereafter — — —

Total $ 66,737 $ 6,124 $ 72,861

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The plan was accepted and Nasdaq granted an extension of up to 180 calendar days from the date of the Nasdaq Letter to evidence compliance.

In the event the Company fails to regain compliance within the plan period, the Company would have the right to a hearing before an independent panel.

The hearing request would stay any suspension or delisting action pending the conclusion of the hearing process and the expiration of any additional extension period granted by the panel following the hearing.

The Company intends to take all reasonable measures available to regain compliance under the Nasdaq Listing Rules and remain listed on Nasdaq.

One component of the Company's plan to evidence compliance, as accepted by Nasdaq, is the conversion by the holder of the SG Broadcasting Promissory Notes of the entire amount of outstanding principal and accrued but unpaid interest into shares of the Company's Class A common stock.

On July 28, 2022, the holder exercised its right under the SG Broadcasting Promissory Notes to convert the outstanding principal and accrued but unpaid interest on the SG Broadcasting Promissory Notes of $ 28.0 million and $ 1.9 million, respectively, for 12.9 million shares of the Company's Class A common stock.

Neither the Nasdaq Letter nor the Company’s noncompliance have an immediate effect on the listing or trading of the Company’s common stock, which will continue to trade on The Nasdaq Capital Market under the symbol “MDIA.”

The effective tax rate for the six months ended June 30, 2022, and 2021 was 2 % and 8 %, respectively.

Our effective tax rate for the six months ended June 30, 2022 differs from the statutory tax rate primarily due to the recognition of additional valuation allowance.

On July 28, 2022, the holder exercised its right under the SG Broadcasting Promissory Notes to convert the outstanding principal and accrued but unpaid interest of $ 28.0 million and $ 1.9 million, respectively, for 12.9 million shares of the Company's Class A common stock.

The Note Conversion increased the Company’s stockholders’ equity by approximately $ 29.9 million.

As a result, the Company regained compliance with the stockholders’ equity requirement based upon the transactions and events described above.

On August 1, 2022, Nasdaq sent the Company a letter confirming conditional compliance with Listing Rule 5550(b)(1), reminding the Company that it must maintain compliance on a go forward basis (the “Nasdaq Compliance Letter”).

The Company understands that Nasdaq will continue to monitor the Company’s ongoing compliance with the stockholders’ equity requirement.

In the event the Company fails to maintain compliance within the plan period, the Company may be subject to delisting from Nasdaq.

The Company would have the right to a hearing before an independent panel with respect to a delisting decision, which hearing request would stay the decision pending the conclusion of the hearing process.

Neither the Nasdaq Letter nor the Nasdaq Compliance Letter, have an immediate effect on the listing or trading of the Company’s common stock, which will continue to trade on The Nasdaq Capital Market under the symbol “MDIA.”

The effective tax rate for the nine months ended September 30, 2022, and 2021 was ( 2 )% and ( 8 )%, respectively.

Our effective tax rate for the nine months ended September 30, 2022 differs from the statutory tax rate primarily due to the recognition of additional valuation allowance.

We determine if an arrangement is a lease at inception.

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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 for the six months ended June 30, 2022 and 2021 was $ 0.1 million.

Variable lease expense for the three months ended June 30, 2022 and 2021 was not material.

Variable lease expense for the nine months ended September 30, 2022 and 2021 was $ 0.1 million.

Variable lease expense for the three months ended September 30, 2022 and 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.

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We elected this policy for all classes of underlying assets.

Short-term lease expense recognized in the three and six months ended June 30, 2022 and 2021 was not material.

Short-term lease expense recognized in the three and nine months ended September 30, 2022 and 2021 was not material.

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

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

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Right-of-use assets obtained in exchange for new operating lease liabilities 50 — 415 314

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Weighted average remaining lease term - operating leases (in years) 8.4 8.5

Weighted average discount rate - operating leases 9.6 % 9.4 %

As of June 30, 2022, the annual minimum lease payments of our operating lease liabilities were as follows:

As of September 30, 2022, 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 $ 18,632

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, 2022, is as follows:

Year ending December 31,

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Liabilities settled ( 77 )

Balance at June 30, 2022

Balance at September 30, 2022

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, 2021, and in Note 1 to these condensed consolidated financial statements, are applied consistently across segments.

The following tables present the Company's segment results for the three and six months ended June 30, 2022 and 2021:

Three Months Ended June 30, 2022 Radio Outdoor Advertising All Other Consolidated

The following tables present the Company's segment results for the three and nine months ended September 30, 2022 and 2021:

Three Months Ended September 30, 2022 Radio Outdoor Advertising All Other Consolidated

Net revenues $ 8,270 $ 3,555 $ — $ 11,825

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Operating income (loss) $ 1,202 $ 89 $ ( 1,460 ) $ ( 169 )

Three Months Ended June 30, 2021 Radio Outdoor Advertising All Other Consolidated

Three Months Ended September 30, 2021 Radio Outdoor Advertising All Other Consolidated

Net revenues $ 14,361 $ 3,459 $ — $ 17,820

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Operating income (loss) $ 3,715 $ 497 $ ( 2,422 ) $ 1,790

Six Months Ended June 30, 2022 Radio Outdoor Advertising All Other Consolidated

Nine Months Ended September 30, 2022 Radio Outdoor Advertising All Other Consolidated

Net revenues $ 28,914 $ 10,598 $ — $ 39,512

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Operating income (loss) $ 3,712 $ 139 $ ( 5,286 ) $ ( 1,435 )

Six Months Ended June 30, 2021 Radio Outdoor Advertising All Other Consolidated

Nine Months Ended September 30, 2021 Radio Outdoor Advertising All Other Consolidated

Net revenues $ 31,714 $ 10,225 $ — $ 41,939

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Total Assets Radio Outdoor Advertising Consolidated

June 30, 2022 $ 87,047 $ 56,342 $ 143,389

September 30, 2022 $ 84,843 $ 55,081 $ 139,924

December 31, 2021 90,485 57,725 148,210

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The Management Agreement was terminated in November 2021 at the expiration of the initial term.

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

For the nine months ended September 30, 2021, MediaCo recorded $ 0.9 million of management fee expense, which is included in corporate expenses in the accompanying condensed consolidated statements of operations.

The Employee Leasing Agreement was terminated in January 2021 at the expiration of the initial term.

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On May 19, 2022, annual interest of $ 0.4 million was paid in kind and added to the principal balance of the SG Broadcasting Promissory Notes.

Consequently, the principal amount outstanding as of June 30, 2022 under the Emmis Convertible Promissory Note and the SG Broadcasting Promissory Notes was $ 6.2 million and $ 28.0 million, respectively.

The Company recognized interest expense of $ 0.4 million and $ 0.3 million related to the Emmis Convertible Promissory Note for the six months ended June 30, 2022, and 2021, respectively.

The Company recognized interest expense of $ 1.5 million and $ 1.1 million related to the SG Broadcasting Promissory Notes for the six months ended June 30, 2022, and 2021, respectively.

On July 28, 2022, SG Broadcasting exercised its right under the SG Broadcasting Promissory Notes to fully convert the outstanding principal and accrued but unpaid interest into the Company's Class A common stock.

On August 19, 2022, Emmis exercised its right under the Emmis Convertible Promissory Note to convert $ 30 thousand of the outstanding principal for 11 thousand shares of the Company's Class A common stock.

Consequently, the principal amount outstanding as of September 30, 2022 under the Emmis Convertible Promissory Note was $ 6.1 million.

The Company recognized interest expense of $ 0.6 million and $ 0.5 million related to the Emmis Convertible Promissory Note for the nine months ended September 30, 2022, and 2021, respectively.

The Company recognized interest expense of $ 1.8 million related to the SG Broadcasting Promissory Notes for both the nine months ended September 30, 2022, and 2021.

The terms of these notes are described in Note 4.

On July 28, 2022, SG Broadcasting exercised its right under the SG Broadcasting Promissory Notes to convert the outstanding principal and accrued but unpaid interest on the SG Broadcasting Promissory Notes.

Convertible Preferred Stock

8 unchanged sentences

The Series A Preferred Shares are participating securities and we calculate earnings per share using the two-class method.

Dividends on Series A Convertible Preferred Stock held by SG Broadcasting were $ 1.6 million and $ 1.3 million, respectively, for the six months ended June 30, 2022, and 2021.

As of June 30, 2022, and December 31, 2021, unpaid cumulative dividends were $ 1.8 million and $ 0.2 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 $ 2.5 million and $ 2.0 million, respectively, for the nine months ended September 30, 2022, and 2021.

As of September 30, 2022, and December 31, 2021, unpaid cumulative dividends were $ 2.6 million and $ 0.2 million, respectively, and included in the balance of preferred stock in the accompanying condensed consolidated balance sheets.

Loan Proceeds Participation Agreement

6 unchanged sentences

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

$ 50 thousand of income was recognized and $ 105 thousand of out-of-pocket expenses were incurred for the six months ended June 30, 2022 in relation to the Billboard Agreement, $ 16 thousand of which was outstanding at June 30, 2022.

$ 0.1 million of income was recognized for the nine months ended September 30, 2022 and 2021.

$ 0.2 million and $ 0.1 million of out-of-pocket expenses were incurred for the nine months ended September 30, 2022 and 2021, respectively, in relation to the Billboard Agreement, $ 0.1 million of which was outstanding at September 30, 2022 and December 31, 2021.

SUBSEQUENT EVENTS

On November 12, 2022 , MediaCo entered into Amendment No.

There is substantial doubt that the Company will be in compliance with these covenants in subsequent periods.

See further discussion in Note 1.

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