What changed in this filing

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Item 1. Financial Statements

2023-11-13 compared with 2023-08-10 · 100 added, 62 removed, 425 unchanged (28% 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) 2023 2022 2023 2022

4 unchanged sentences

Depreciation and amortization 130 99 437 314

Gain on disposal of assets — — ( 39 ) —

Loss (gain) on disposal of assets 11 — ( 28 ) —

Total operating expenses 8,411 8,542 29,848 30,530

8 unchanged sentences

DISCONTINUED OPERATIONS:

Income (loss) from discontinued operations before income taxes 9 ( 656 ) ( 143 ) ( 1,697 )

Income tax expense from discontinued operations — ( 10 ) — —

NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS 9 ( 666 ) ( 143 ) ( 1,697 )

Loss from discontinued operations before income taxes ( 267 ) ( 635 ) ( 410 ) ( 2,332 )

Income tax benefit from discontinued operations 104 — 104 —

NET LOSS FROM DISCONTINUED OPERATIONS ( 163 ) ( 635 ) ( 306 ) ( 2,332 )

CONSOLIDATED NET LOSS ( 2,316 ) ( 2,651 ) ( 4,844 ) ( 9,847 )

12 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

2023 December 31,

12 unchanged sentences

Operating lease right of use assets 13,800 5,088

Restricted cash 1,906 1,876

Deposits and other 78 78

22 unchanged sentences

authorized 170,000,000 shares;

issued and outstanding 20,405,357 shares and 20,443,138 shares at June 30, 2023, and December 31, 2022, respectively

issued and outstanding 21,025,498 shares and 20,443,138 shares at September 30, 2023, and December 31, 2022, respectively

Class B common stock, $ 0.01 par value;

authorized 50,000,000 shares;

issued and outstanding 5,413,197 shares at June 30, 2023, and December 31, 2022

issued and outstanding 5,413,197 shares at September 30, 2023, and December 31, 2022

Class C common stock, $ 0.01 par value;

21 unchanged sentences

BALANCE, JUNE 30, 2023 20,405,357 $ 204 5,413,197 $ 54 $ 59,814 $ ( 16,816 ) $ 43,256

Net loss — — — — — ( 2,316 ) ( 2,316 )

Issuance of class A to employees, officers and directors 752,901 7 — — 367 — 374

Conversion of convertible promissory notes ( 132,760 ) ( 1 ) — — ( 104 ) — ( 105 )

Preferred stock dividends — — — — — ( 602 ) ( 602 )

BALANCE, SEPTEMBER 30, 2023 21,025,498 $ 210 5,413,197 $ 54 $ 60,077 $ ( 19,734 ) $ 40,607

BALANCE, DECEMBER 31, 2021

8 unchanged sentences

BALANCE, JUNE 30, 2022 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

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

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands) 2023 2022

64 unchanged sentences

In the opinion of management, all adjustments necessary for fair presentation (including normal recurring adjustments) have been included.

Reclassifications

Certain amounts in the prior years’ unaudited condensed consolidated financial statements have been reclassified to conform to the current year presentation.

Cash, Cash Equivalents and Restricted Cash

1 unchanged sentence

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

Restricted cash represents amounts held in escrow related to the disposition of the Fairway business and amounts held as collateral for a letter of credit entered into in connection with the lease in New York City for our radio operations and corporate offices.

Restricted cash represents amounts held in escrow related to the disposition of the Fairway business, classified in current assets, and amounts held as collateral for a letter of credit entered into in connection with the lease in New York City for our radio operations and corporate offices, which expires in August 2039, classified in long-term assets.

Fair Value Measurements

12 unchanged sentences

Amounts are written off after all normal collection efforts have been exhausted.

The activity in the allowance for credit losses for the three-month and six-month periods ended June 30, 2023 and 2022 was as follows:

The activity in the allowance for credit losses for the three-month and nine-month periods ended September 30, 2023 and 2022 was as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

16 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

2 unchanged sentences

Loss from continuing operations available to common shareholders ( 2,755 ) ( 2,854 ) ( 6,326 ) ( 9,971 )

Income (loss) from discontinued operations, net of income taxes 9 ( 666 ) ( 143 ) ( 1,697 )

Loss from discontinued operations, net of income taxes ( 163 ) ( 635 ) ( 306 ) ( 2,332 )

Net loss attributable to common shareholders $ ( 2,918 ) $ ( 3,489 ) $ ( 6,632 ) $ ( 12,303 )

11 unchanged sentences

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 six-month periods ended June 30, 2023 or 2022.

For the six month period ended June 30, 2023, we repurchased under a share repurchase plan 451,844 shares of Class A common stock for an aggregate of $ 0.6 million.

Subsequent to June 30, 2023 through August 3, 2023 we repurchased an additional 15,542 shares of Class A common stock under the share repurchase plan for an aggregate of $ 17 thousand.

No shares were sold during the nine-month periods ended September 30, 2023 or 2022.

For the nine month period ended September 30, 2023, we repurchased under a share repurchase plan 584,604 shares of Class A common stock for an aggregate of $ 0.7 million.

Subsequent to September 30, 2023 through November 2, 2023 we repurchased an additional 10,229 shares of Class A common stock under the share repurchase plan for an aggregate of $ 7 thousand.

The following convertible equity shares and restricted stock awards were excluded from the calculation of diluted net loss 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) 2023 2022 2023 2022

22 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

5 unchanged sentences

Total operating expenses 267 3,452 410 10,417

Income (loss) from operations of discontinued operations 9 198 ( 143 ) 78

(Loss) income from operations of discontinued operations ( 267 ) 103 ( 410 ) 181

Interest and other, net — ( 738 ) — ( 2,513 )

Income (loss) from discontinued operations, before income taxes 9 ( 656 ) ( 143 ) ( 1,697 )

Income tax expense — ( 10 ) — —

Income (loss) from discontinued operations, net of income taxes $ 9 $ ( 666 ) $ ( 143 ) $ ( 1,697 )

Loss from discontinued operations, before income taxes ( 267 ) ( 635 ) ( 410 ) ( 2,332 )

Income tax benefit (expense) 104 — 104 —

Loss from discontinued operations, net of income taxes $ ( 163 ) $ ( 635 ) $ ( 306 ) $ ( 2,332 )

The following table presents the aggregate carrying amounts of assets and liabilities of discontinued operations for Fairway in the consolidated balance sheets:

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Accounts receivable, net — 1,026

3 unchanged sentences

INTANGIBLE ASSETS

As of June 30, 2023 and December 31, 2022, intangible assets consisted of the following:

June 30, 2023 December 31, 2022

As of September 30, 2023 and December 31, 2022, intangible assets consisted of the following:

September 30, 2023 December 31, 2022

Indefinite-lived intangible assets

6 unchanged sentences

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, 2023 and December 31, 2022.

The carrying amounts of the Company’s FCC licenses were $ 63.3 million as of September 30, 2023 and December 31, 2022.

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

16 unchanged sentences

Definite-lived intangibles

The following table presents the weighted-average useful life at June 30, 2023, and the gross carrying amount and accumulated amortization at June 30, 2023 and December 31, 2022, for our definite-lived intangible assets:

June 30, 2023 December 31, 2022

The following table presents the weighted-average useful life at September 30, 2023, and the gross carrying amount and accumulated amortization at September 30, 2023 and December 31, 2022, for our definite-lived intangible assets:

September 30, 2023 December 31, 2022

Weighted Average Remaining Useful Life

4 unchanged sentences

They cost $ 1.7 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 six months ended June 30, 2023 was $ 0.1 million.

There was no amortization expense from definite-lived intangible assets for the three and six months ended June 30, 2022.

Total amortization expense from definite-lived intangible assets for the three and nine months ended September 30, 2023 was $ 0.1 million and $ 0.2 million, respectively.

There was no amortization expense from definite-lived intangible assets for the three and nine months ended September 30, 2022.

The Company estimates amortization expense each of the next five years as follows:

Year ending December 31, Amortization Expense

2023 (from July 1) $ 123

2023 (from October 1) $ 79

After 2027 141

32 unchanged sentences

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,

2023 % of Total 2022 % of Total 2023 % of Total 2022 % of Total

7 unchanged sentences

LONG-TERM DEBT

Long-term debt was comprised of the note payable to Emmis of $ 6.0 million at June 30, 2023 and December 31, 2022.

Long-term debt was comprised of the note payable to Emmis of $ 6.0 million at September 30, 2023 and December 31, 2022.

Emmis Convertible Promissory Note

3 unchanged sentences

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

As of June 30, 2023, the principal balance outstanding under the Emmis Convertible Promissory Note was $ 6.0 million.

Based on amounts outstanding at June 30, 2023, mandatory principal payments of long-term debt are $ 6.0 million in 2024.

As of September 30, 2023, the principal balance outstanding under the Emmis Convertible Promissory Note was $ 6.0 million.

Based on amounts outstanding at September 30, 2023, mandatory principal payments of long-term debt are $ 6.0 million in 2024.

Senior Secured Term Loan Agreement

3 unchanged sentences

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 (as defined below) of $ 28.0 million and $ 1.9 million, respectively, for 12.9 million shares of the Company’s Class A common stock.

The SG Broadcasting Promissory Notes were terminated at that time, except for one such promissory note issued on May 19, 2021 (the “May 2021 SG Broadcasting Promissory Note”), which expired on June 30, 2023, with no amounts outstanding thereunder as of December 31, 2022 or June 30, 2023.

REGULATORY, LEGAL AND OTHER MATTERS

1 unchanged sentence

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, 2023 and 2022 was 7 % and 3 %, respectively.

Our effective tax rate for the six months ended June 30, 2023 differs from the statutory tax rate primarily due to the recognition of additional valuation allowance.

On September 15, 2023, the Company received a deficiency letter (the “Nasdaq Letter”) from the Nasdaq Listing Qualifications Department (the “Staff”) notifying the Company that, for the last 31 consecutive business days preceding the date of the Nasdaq Letter, the closing bid price for the Company’s common stock was below the minimum $1.00 per share required for continued listing on The Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”).

The Nasdaq deficiency letter has no immediate effect on the listing of the Company’s common stock, and its common stock will continue to trade on The Nasdaq Capital Market under the symbol “MDIA” at this time.

In accordance with Nasdaq Listing Rule 5810(c)(3)(A)(ii), the Company has been given 180 calendar days, or until March 13, 2024, to regain compliance with the Minimum Bid Price Requirement.

If at any time before March 13, 2024, the bid price of the Company’s common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, the Staff will provide written confirmation that the Company has achieved compliance.

If the Company does not regain compliance with the Minimum Bid Price Requirement by March 13, 2024, the Company may be afforded a second 180 calendar day period to regain compliance.

To qualify, the Company would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, except for the Minimum Bid Price Requirement.

In addition, the Company would be required to notify Nasdaq of its intent to cure the deficiency during the second compliance period.

The Company would then be afforded the second 180 calendar day period to regain compliance, unless it does not appear to Nasdaq that it is possible for the Company to cure the deficiency.

If the Company does not regain compliance with the Minimum Bid Price Requirement by the end of the compliance period (or the second compliance period, if applicable), the Company’s common stock will become subject to delisting.

In the event that the Company receives notice that its common stock is being delisted, the Nasdaq listing rules permit the Company to appeal a delisting determination by the Staff to a hearings panel.

The Company intends to monitor the closing bid price of its common stock and may, if appropriate, consider available options to regain compliance with the Minimum Bid Price Requirement, including initiating a reverse stock split.

However, there can be no assurance that the Company will be able to regain compliance with the Minimum Bid Price Requirement or will otherwise be in compliance with other Nasdaq Listing Rules.

The effective tax rate for the nine months ended September 30, 2023 and 2022 was 5 % and 3 %, respectively.

Our effective tax rate for the nine months ended September 30, 2023 differs from the statutory tax rate primarily due to the recognition of additional valuation allowance.

Accounting Standards Codification paragraph 740-10 clarified the accounting for uncertainty in income taxes by prescribing a recognition threshold and measurement attribute of the financial statement recognition and measurement of a tax position taken or expected to be taken within a tax return.

For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities.

The amount recognized is measured as the largest benefit that reaches greater than 50% likelihood of being realized upon ultimate settlement.

During this quarter, we recorded approximately $ 374 thousand of gross tax liability for uncertain tax positions related to federal and state income tax returns filed.

Additionally, we recognize accrued interest and penalties related to unrecognized tax benefits as components of our income tax provision.

As of September 30, 2023, the amount of interest accrued was approximately $ 15 thousand, which did not include the federal tax benefit of interest deductions.

We determine if an arrangement is a lease at inception.

13 unchanged sentences

We elected this policy for all classes of underlying assets.

Short-term lease expense recognized in the three and six months ended June 30, 2023 and 2022 was not material.

Short-term lease expense recognized in the three and nine months ended September 30, 2023 and 2022 was not material.

On November 18, 2022, the Company entered into a lease agreement in New York City for our radio operations and corporate offices with a lease commencement date of February 1, 2023 and a noncancellable lease term through August 2039.

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

2 unchanged sentences

Right-of-use assets obtained in exchange for new operating lease liabilities — — 10,391 —

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Weighted average remaining lease term - operating leases (in years) 14.1 7.0

Weighted average discount rate - operating leases 11.4 % 5.9 %

As of June 30, 2023, the annual minimum lease payments of our operating lease liabilities were as follows:

As of September 30, 2023, the annual minimum lease payments of our operating lease liabilities were as follows:

Year ending December 31,

14 unchanged sentences

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.

The SG Broadcasting Promissory Notes were terminated at that time, except for the May 2021 SG Broadcasting Promissory Note, which remains outstanding, but with no amounts outstanding thereunder as of December 31, 2022 or June 30, 2023.

The SG Broadcasting Promissory Notes were terminated at that time, except for the May 2021 SG Broadcasting Promissory Note, which expired on June 30, 2023, with no amounts outstanding thereunder as of December 31, 2022 or September 30, 2023.

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.

1 unchanged sentence

On December 21, 2022, Emmis exercised its right under the Emmis Convertible Promissory Note to convert $ 0.9 million of the outstanding principal and $ 0.1 million of accrued but unpaid interest for 0.8 million shares of the Company’s Class A common stock.

Consequently, the principal amount outstanding as of December 31, 2022 and June 30, 2023 under the Emmis Convertible Promissory Note was $ 6.0 million.

The Company recognized interest expense of $ 0.3 million and $ 0.4 million related to the Emmis Convertible Promissory Note for the six months ended June 30, 2023 and 2022, respectively.

The Company recognized no interest expense related to the SG Broadcasting Promissory Notes for the six months ended June 30, 2023 and $ 1.5 million for the six months ended June 30, 2022.

Consequently, the principal amount outstanding as of December 31, 2022 and September 30, 2023 under the Emmis Convertible Promissory Note was $ 6.0 million.

The Company recognized interest expense of $ 0.4 million and $ 0.6 million related to the Emmis Convertible Promissory Note for the nine months ended September 30, 2023 and 2022, respectively.

The Company recognized no interest expense related to the SG Broadcasting Promissory Notes for the nine months ended September 30, 2023 and $ 1.8 million for the nine months ended September 30, 2022.

The terms of these Emmis Convertible Promissory Note is described in Note 5.

9 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 $ 1.2 million and $ 1.6 million, respectively, for the six months ended June 30, 2023 and 2022.

As of June 30, 2023 and December 31, 2022, unpaid cumulative dividends were $ 1.3 million and $ 0.1 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 $ 1.8 million and $ 2.5 million, respectively, for the nine months ended September 30, 2023 and 2022.

As of September 30, 2023 and December 31, 2022, unpaid cumulative dividends were $ 1.9 million and $ 0.1 million, respectively, and included in the balance of preferred stock in the accompanying condensed consolidated balance sheets.

On December 28, 2022, SG Broadcasting exercised its right to partially convert $ 4.0 million of the outstanding balance on the MediaCo Series A Preferred Shares for 3.3 million shares of the Company’s Class A common stock.

3 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.

$ 0.1 million of income was recognized and $ 0.2 million of out-of-pocket expenses were incurred for the nine months ended September 30, 2022 in relation to the Billboard Agreement.

On December 9, 2022, in connection with the sale of the assets held by Fairway, the Billboard Agreement was terminated pursuant to mutual agreement between Fairway and Billboards.

In October 2023, we entered into agreements with five consultants that are currently employed by affiliates of Standard General.

Four of the agreements have a term that expires on February 1, 2024 and are billed at hourly rates between $ 150 and $ 250 per hour.

One agreement may be terminated at any time by either party and is billed at $ 1,000 per month, plus expenses.

As of September 30, 2023, $ 13 thousand of fees were incurred related to these agreements.

SUBSEQUENT EVENTS

On July 11, 2023, Bradford A.

Tobin, the President, Chief Operating Officer, General Counsel and Secretary of MediaCo, resigned as an officer of the Company, effective on such date.

On October 11, 2023, Rahsan-Rahsan Lindsay, the Chief Executive Officer of the Company, resigned as an officer of the Company and as a member of the Board of Directors of the Company, both effective on such date.

To facilitate the transition of Mr.

Tobin’s duties, he remained an employee of the Company, serving in an advisory position, through August 11, 2023.

Lindsay’s duties, he remained as consultant to the Company through October 31, 2023.

In connection with Mr.

Tobin’s resignation, he and the Company entered into a Separation and Release Agreement, dated July 11, 2023 (the “Separation Agreement”), pursuant to which Mr.

Tobin received, in lieu of any compensation to which he would have been entitled under his Employment Agreement dated February 9, 2022 (the “Employment Agreement”), a lump sum cash payment equal to (i) $ 175,000 , which is equal to six months of the cash portion of Mr.

Tobin’s current base salary, plus (ii) $ 19,000 , as payment of the cost of six months of COBRA benefits.

In addition, the vesting of all equity awards held by Mr.

Tobin was accelerated to the date of his separation, in accordance with the Employment Agreement.

The Separation Agreement is subject to a customary release and customary confidentiality, non-disparagement and other provisions.

Lindsay’s resignation, he and the Company entered into a Separation and Release Agreement, dated October 11, 2023 (the “Separation Agreement”), pursuant to which Mr.

Lindsay received, upon execution of a customary release, a lump sum cash payment of $ 119,516 , which is equal to two months of the cash portion of Mr.

Lindsay’s current base salary, plus an additional amount relating to accrued paid time off.

The Separation Agreement is subject to customary confidentiality, non-disparagement and other provisions.

The Separation Agreement also provided that Mr.

Tobin and the Company entered into a consulting agreement covering the period from August 12, 2023 through November 11, 2023, during which Mr.

Tobin will be available to provide consulting services to the Company for up to ten hours per week on an as needed basis at an hourly rate.

Also on July 11, 2023, the Company announced the appointment of Kudjo Sogadzi, age 40, as the Company’s Chief Operating Officer, effective July 14, 2023.

Sogadzi will join the Company as an at-will employee and shall receive (i) an annual base salary of $ 200,000 , (ii) a grant, made on the Start Date, of Class A common shares of the Company totaling $ 150,000 , with the number of Shares calculated using a 5-day VWAP ending on the date prior to the Start Date, which Shares shall vest annually in three equal tranches on the first three anniversaries of the Start Date, and (iii) the potential to earn a discretionary annual bonus, subject to approval by the Board of Directors and Compensation Committee of the Board, with a target amount of 50 % of his annual base salary.

Lindsay and the Company will enter into a consulting agreement covering the period through October 31, 2023, during which Mr.

Lindsay was available to provide consulting services to the Company on an as needed basis for a lump sum payment of $ 33,242 , payable within thirty days after the date of the consulting agreement.

On October 12, 2023, the Company announced the appointment of Kudjo Sogadzi, the Company’s current Chief Operating Officer as interim President of the Company.

There were no other subsequent events other than the stock repurchases discussed 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