What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-04-01 compared with 2023-03-31 · 168 added, 201 removed, 586 unchanged (39% of the section changed)

22 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

The Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the consolidated financial statements, the Company has experienced a downturn in revenue and profitability and does not expect to be able to meet its liquidity needs within one year after the date of issuance of its consolidated financial statements.

As a result, the Company has stated that substantial doubt exists about the Company’s ability to continue as a going concern.

Management's evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1.

The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Ernst & Young LLP

1 unchanged sentence

Indianapolis, IN

March 31, 2023

April 1, 2024

MEDIACO HOLDING INC.

10 unchanged sentences

Total operating expenses 39,178 39,981

OPERATING (LOSS) INCOME ( 1,386 ) 3,938

OPERATING LOSS ( 6,787 ) ( 1,386 )

OTHER INCOME (EXPENSE):

9 unchanged sentences

Gain on sale of discontinued operations — 46,875

Income tax expense from discontinued operations ( 3,085 ) ( 10 )

NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS 40,709 ( 1,884 )

CONSOLIDATED NET INCOME (LOSS) 30,914 ( 6,082 )

Income tax benefit (expense) from discontinued operations 74 ( 3,085 )

NET (LOSS) INCOME FROM DISCONTINUED OPERATIONS ( 210 ) 40,709

CONSOLIDATED NET (LOSS) INCOME ( 7,631 ) 30,914

PREFERRED STOCK DIVIDENDS 2,415 3,330

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 27,584 $ ( 8,834 )

Net income (loss) per share attributable to common shareholders - basic and diluted:

NET (LOSS) INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS $ ( 10,046 ) $ 27,584

Net (loss) income per share attributable to common shareholders - basic and diluted:

Continuing operations $ ( 0.39 ) $ ( 0.98 )

Discontinued operations $ ( 0.01 ) $ 3.04

Net income (loss) per share attributable to common shareholders - basic and diluted:

Net (loss) income per share attributable to common shareholders - basic and diluted:

$ ( 0.40 ) $ 2.06

21 unchanged sentences

Construction in progress 740 31

16,264 16,432

Less accumulated depreciation and amortization ( 5,005 ) ( 15,683 )

10 unchanged sentences

Total other assets 15,610 7,042

Noncurrent assets of discontinued operations — 54,612

Total assets $ 95,491 $ 96,705

12 unchanged sentences

Operating lease liabilities 1,444 1,816

Other 35 1,259

Income taxes payable 29 3,008

5 unchanged sentences

OTHER NONCURRENT LIABILITIES 502 51

NONCURRENT LIABILITIES OF DISCONTINUED OPERATIONS — 18,509

Total liabilities 29,327 23,390

3 unchanged sentences

28,754 26,339

EQUITY (DEFICIT):

Class A common stock, $ 0.01 par value;

8 unchanged sentences

Accumulated deficit ( 23,148 ) ( 13,102 )

Total equity (deficit) 46,976 ( 16,571 )

Total equity 37,410 46,976

Total liabilities and equity $ 95,491 $ 96,705

7 unchanged sentences

BALANCE, DECEMBER 31, 2021 3,056,757 $ 31 5,413,197 $ 54 $ 24,030 $ ( 40,686 ) $ ( 16,571 )

Net loss — — — — — ( 6,082 ) ( 6,082 )

Sale of class A common shares 34,609 1 — — 341 — 342

Issuance of class A to employees, officers and directors 1,236,268 12 — — 2,917 — 2,929

Preferred stock dividends — — — — — ( 2,752 ) ( 2,752 )

BALANCE, DECEMBER 31, 2021 3,056,757 $ 31 5,413,197 $ 54 $ 24,030 $ ( 40,686 ) $ ( 16,571 )

Net income — — — — — 30,914 30,914

5 unchanged sentences

BALANCE, DECEMBER 31, 2022 20,443,138 $ 207 5,413,197 $ 54 $ 59,817 $ ( 13,102 ) $ 46,976

Net loss — — — — — ( 7,631 ) ( 7,631 )

Issuance of class A to employees, officers and directors 928,607 9 — — 1,242 — 1,251

Repurchase of class A common shares ( 629,880 ) ( 6 ) — — ( 765 ) — ( 771 )

Preferred stock dividends — — — — — ( 2,415 ) ( 2,415 )

BALANCE, DECEMBER 31, 2023 20,741,865 $ 210 5,413,197 $ 54 $ 60,294 $ ( 23,148 ) $ 37,410

The accompanying notes to consolidated financial statements are an integral part of these statements.

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OPERATING ACTIVITIES:

Consolidated net income (loss) $ 30,914 $ ( 6,082 )

(Income) loss from discontinued operations, net of tax ( 40,709 ) 1,884

Adjustments to reconcile net loss to net cash provided by (used in) operating activities from continuing operations:

Consolidated net (loss) income $ ( 7,631 ) $ 30,914

Loss (income) from discontinued operations, net of tax 210 ( 40,709 )

Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities from continuing operations:

Noncash loss on debt extinguishment — 1,180

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Noncash lease expense 1,557 2,162

Provision for bad debts 282 2

Provision for deferred income taxes 272 336

Noncash compensation 1,688 2,514

Loss on sale of property and equipment 565 5

Other noncash items 342 53

2 unchanged sentences

Prepaid expenses and other current assets ( 162 ) 576

Other assets — —

Accounts payable and accrued liabilities ( 1,526 ) 1,062

1 unchanged sentence

Operating lease liabilities ( 238 ) ( 2,319 )

Income taxes ( 3,129 ) —

Other liabilities ( 219 ) 678

Net cash provided by (used in) continuing operating activities 2,320 ( 615 )

Net cash provided by discontinued operating activities ( 122 ) 3,555

Net cash provided by operating activities 2,198 2,940

Net cash (used in) provided by continuing operating activities ( 5,570 ) 2,320

Net cash provided by (used in) discontinued operating activities 255 ( 122 )

Net cash (used in) provided by operating activities ( 5,315 ) 2,198

INVESTING ACTIVITIES:

2 unchanged sentences

Proceeds from sale of discontinued operations — 78,982

Net cash provided by (used in) continuing investing activities 77,613 ( 366 )

Net cash (used in) provided by continuing investing activities ( 1,666 ) 77,613

Net cash used in discontinued investing activities — ( 422 )

Net cash provided by (used in) investing activities 77,191 ( 1,257 )

Net cash (used in) provided by investing activities ( 1,666 ) 77,191

FINANCING ACTIVITIES:

Payments on long-term debt — ( 68,573 )

Proceeds from long-term debt — 4,000

Proceeds of class A common stock issuances — 342

Repurchases of class A common stock ( 771 ) ( 222 )

Payments for debt related costs — ( 354 )

Settlement of tax withholding obligations ( 440 ) ( 1,343 )

Net cash (used in) provided by continuing financing activities ( 70,138 ) 302

Net cash used in continuing financing activities ( 1,211 ) ( 70,138 )

Net cash used in discontinued financing activities ( 38 ) ( 71 )

Net cash (used in) provided by financing activities ( 70,209 ) 267

INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH 9,180 1,950

Net cash used in financing activities ( 1,249 ) ( 70,209 )

(DECREASE) INCREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH ( 8,230 ) 9,180

CASH, CASH EQUIVALENTS AND RESTRICTED CASH:

1 unchanged sentence

End of period $ 7,071 $ 15,301

Cash, cash equivalents and restricted cash of discontinued operations $ — $ —

Cash, cash equivalents and restricted cash of continuing operations at end of period $ 15,301 $ 6,121

SUPPLEMENTAL DISCLOSURES:

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Interest $ — $ 6,308

Income taxes — —

Income taxes - Federal 2,290 —

Income taxes - State 752 —

The accompanying notes to consolidated financial statements are an integral part of these statements.

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

On December 9, 2022, Fairway Outdoor LLC, FMG Kentucky, LLC and FMG Valdosta, LLC (collectively, “Fairway”), all of which are wholly owned direct and indirect subsidiaries of MediaCo, entered into an Asset Purchase Agreement (the “Purchase Agreement”), with The Lamar Company, L.L.C., a Louisiana limited liability company (the “Purchaser”).

The transactions contemplated by the Purchase Agreement closed as of the date of the Purchase Agreement.

The purchase price was $ 78.6 million, subject to certain customary adjustments, paid at closing in cash.

The sale resulted in a pre-tax gain of $ 46.9 million in the fourth quarter of 2022.

We have classified the related assets and liabilities associated with our Fairway business as discontinued operations in our consolidated balance sheets and the results of our Fairway business have been presented as discontinued operations in our consolidated statements of income for all periods presented through December 9, 2022 as the sale represented a strategic shift in our business that had a major effect on our operations and financial results.

We have classified the related assets and liabilities associated with our Fairway business as discontinued operations in our consolidated balance sheets and the results of our Fairway business have been presented as discontinued operations in our consolidated statements of income for all periods presented as the sale represented a strategic shift in our business that had a major effect on our operations and financial results.

Unless otherwise noted, discussion in the notes to consolidated financial statements refers to the Company's continuing operations.

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

Going Concern

The accompanying 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 within one year of the date of the filing of these financial statements (April 1, 2024).

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 April 1, 2025.

The Company has experienced downturns in revenues and profitability and expects these to continue 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 $ 7.1 million due under its Emmis Convertible Promissory Note (as defined in Note 13) from April 1, 2024 (the date of issuance of these financial statements) through April 1, 2025.

As a result of this debt service obligation to Emmis, management anticipates the Company will be unable to meet its liquidity needs for the next twelve months with cash and cash equivalents on hand and projected cash flows from operations.

As a result, there is substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued.

Management is prepared to implement additional cost cutting measures, as necessary, and intends to seek additional borrowings to meet its debt service obligations, if needed.

While the Company has been successful in obtaining additional liquidity in the past, no assurances can be made that the Company will receive such liquidity in the future.

Emerging Growth Company

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

Restricted cash at December 31, 2022 represents $ 2.5 million held in escrow related to the Company's disposition of the Fairway business and $ 1.8 million 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 at December 31, 2023 and 2022 represents $ 1.3 million and $ 2.5 million, respectively, held in escrow related to the Company's disposition of the Fairway business and $ 1.9 million and $ 1.8 million, respectively, 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 and included in the line item Deposits and Other in the consolidated balance sheets.

Property and Equipment

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Earnings Per Share

Our basic and diluted net loss per share is computed using the two-class method.

The two-class method is an earnings allocation that determines net income per share for each class of common stock and participating securities according to their participation rights in dividends and undistributed earnings or losses.

Our basic and diluted net income (loss) per share is computed using the two-class method.

The two-class method is an earnings allocation that determines net income (loss) per share for each class of common stock and participating securities according to their participation rights in dividends and undistributed earnings or losses.

Shares of Series A preferred stock include rights to participate in dividends and distributions to common stockholders on an if-converted basis, and accordingly are considered participating securities.

2 unchanged sentences

As there is a loss from continuing operations, all potentially dilutive items were anti-dilutive and thus basic and diluted weighted-average shares are the same.

The following is a reconciliation of basic and diluted net loss per share attributable to Class A and Class B common shareholders:

The following is a reconciliation of basic and diluted net income (loss) per share attributable to Class A and Class B common shareholders:

Year Ended December 31,

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Loss from continuing operations available to common shareholders ( 9,836 ) ( 13,125 )

Income (loss) from discontinued operations, net of income taxes 40,709 ( 1,884 )

Net income (loss) available to common shareholders 27,584 ( 8,834 )

(Loss) income from discontinued operations, net of income taxes ( 210 ) 40,709

Net (loss) income available to common shareholders ( 10,046 ) 27,584

Weighted-average shares of common stock outstanding — basic and diluted 24,876 13,380

Earnings per share of common stock attributable to common shareholders:

Net income (loss) per share attributable to common shareholders - basic and diluted:

Net (loss) income per share attributable to common shareholders - basic and diluted:

Continuing operations $ ( 0.39 ) $ ( 0.98 )

Discontinued operations ( 0.01 ) 3.04

Net income (loss) per share attributable to common shareholders - basic and diluted:

Net (loss) income per share attributable to common shareholders - basic and diluted:

$ ( 0.40 ) $ 2.06

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The preparation of 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 COVID-19 pandemic, the global economy and financial markets have been disrupted and there is uncertainty about the length and severity of the consequences caused by the pandemic.

The Company has considered information available to it as of the date of issuance of these financial statements and is not aware of any specific events or circumstances that would require an update to its estimates or judgments, or a revision to the carrying value of its assets or liabilities.

3 unchanged sentences

Certain amounts have been reclassified to conform to the current year presentation.

Recent Accounting Pronouncements Not Yet Implemented

In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update 2016-13, Financial Instruments – Credit Losses , which introduces new guidance for an approach based on using expected losses to estimate credit losses on certain types of financial instruments.

Recent Accounting Pronouncements Implemented

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses , which introduces new guidance for an approach based on using expected losses to estimate credit losses on certain types of financial instruments.

It also modifies the impairment model for available-for-sale debt securities and provides a simplified accounting model for purchased financial assets with credit deterioration since their origination.

Instruments in scope include loans, held-to-maturity debt securities and net investments in leases as well as reinsurance and trade receivables.

This standard will be effective for us as of January 1, 2023.

We do not expect the adoption of the new standard to have a significant impact on our consolidated financial statements.

We adopted this standard on January 1, 2023.

The adoption of the new standard did not have a significant impact on our consolidated financial statements.

Recent Accounting Pronouncements Not Yet Implemented

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures , which is intended to enhance the transparency and decision usefulness of income tax disclosures by enhancing information about how an entity’s operations and related tax risks and its tax planning and operation opportunities affect its tax rate and prospects for future cash flows.

This guidance is effective for fiscal years beginning after December 31, 2024, with early adoption permitted.

Adoption allows for prospective application, with retrospective application permitted.

We are currently assessing the impact this standard will have on our consolidated financial statements, including, but not limited to, our income taxes footnote disclosure.

DISCONTINUED OPERATIONS

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This agreement commenced with the close of the transaction and was terminated at the end of the initial term in February 2023.

The financial results of Fairway are presented as income from discontinued operations on our consolidated statements of income through December 9, 2022, when the sale was completed.

The financial results of Fairway are presented as income from discontinued operations on our consolidated statements of income.

The following table presents the financial results of Fairway:

Year ended December 31,

2023 2022 (a)

Net revenues $ — $ 13,484

2 unchanged sentences

Depreciation and amortization — 3,035

Loss (gain) on disposal of assets 68 ( 47 )

Loss on disposal of assets — 68

Total operating expenses 284 13,471

Income from operations of discontinued operations 13 1,519

(Loss) income from operations of discontinued operations ( 284 ) 13

Interest and other, net — ( 3,094 )

1 unchanged sentence

Pre-tax gain on sale — 46,875

Income (loss) from discontinued operations, before income taxes 43,794 ( 1,874 )

Income tax provision ( 3,085 ) ( 10 )

Income (loss) from discontinued operations, net of income taxes $ 40,709 $ ( 1,884 )

(Loss) income from discontinued operations, before income taxes ( 284 ) 43,794

Income tax benefit (expense) 74 ( 3,085 )

(Loss) income from discontinued operations, net of income taxes $ ( 210 ) $ 40,709

(a) Includes Fairway financial results through the transaction close on December 9, 2022 and the related gain on sale.

2 unchanged sentences

Accounts receivable, net — 1,026

Prepaid expenses — 74

Total current assets of discontinued operations — 1,066

Property and equipment, net — 25,358

Goodwill — 13,102

Other intangible assets, net — 1,661

Operating lease right of use assets — 14,413

Deferred tax assets — 78

Total noncurrent assets of discontinued operations — 54,612

Total assets of discontinued operations 1,066 56,363

Accounts payable and accrued expenses — 659

Accrued salaries and commissions — 149

Deferred revenue — 725

Operating lease liabilities — 1,526

Other current liabilities — 152

Total current liabilities of discontinued operations — 659

Operating lease liabilities, net of current — 11,242

Asset retirement obligations — 7,267

Total noncurrent liabilities of discontinued operations — 18,509

Total liabilities of discontinued operations 659 21,429

MediaCo has authorized Class A common stock, Class B common stock, and Class C common stock.

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The Repurchase Plan does not include specific price targets or timetables and may be suspended or terminated at any time.

During the fourth quarter of 2022, we repurchased under the Repurchase Plan 187,078 shares of Class A common stock for an aggregate of $ 0.2 million.

Subsequent to December 31, 2022 through March 17, 2023 we repurchased under the Repurchase Plan an additional 382,137 shares of Class A common stock for an aggregate of $ 0.6 million.

During the years ended December 31, 2023 and 2022, we repurchased under the Repurchase Plan 629,880 and 187,078 shares of Class A common stock for an aggregate of $ 0.8 million and $ 0.2 million, respectively.

Subsequent to December 31, 2023 through March 21, 2024 we repurchased under the Repurchase Plan an additional 11,304 shares of Class A common stock for an immaterial amount.

On August 20, 2021, MediaCo Holding Inc.

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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 year ended December 31, 2021, Class A stock totaling $ 0.3 million was sold under the agreement.

During the year ended December 31, 2022, no stock was sold under this agreement.

During the years ended December 31, 2023 and 2022, no stock was sold under this agreement.

CONVERTIBLE PREFERRED STOCK

6 unchanged sentences

On December 13, 2023 and 2022, dividends of $ 2.4 million and $ 3.4 million, respectively, were paid in kind.

The payment in kind increased the accrued value of the preferred stock and 80,000 additional shares were issued as part of this payment.

The payment in-kind (“PIK”) increased the accrued value of the preferred stock 26,031 and 80,000 additional shares, respectively, were issued as part of these payments.

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.

1 unchanged sentence

On and after May 25, 2020, when the conversion option became effective, the Series A Preferred Shares became participating securities and we began calculating earnings per share using the two-class method.

There were 300,000 shares designated as MediaCo Series A Preferred shares available to be issued as of December 31, 2022, and 2021.

There were 300,000 shares designated as MediaCo Series A Preferred shares available to be issued as of December 31, 2022.

On March 23, 2023, the Company filed Articles of Amendment to its Articles of Amendment of Amended & Restated Articles of Incorporation to increase the number of designated shares of MediaCo Series A Preferred Shares from 300,000 to 500,000 .

The additional shares will only be issued in payment of the PIK dividend payable on outstanding shares of the Convertible Preferred Stock.

The additional shares will only be issued in payment of the PIK dividends payable on outstanding shares of the Convertible Preferred Stock.

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.

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The following table summarizes stock-based compensation expense recognized by the Company for the years ended December 31, 2023 and 2022.

The Company recognized tax benefits of $ 0.2 million related to stock-based compensation for the year ended December 31, 2021.

Tax expense related to stock compensation for the year ended December 31, 2022 was not material.

Tax expense related to stock compensation for the year ended December 31, 2023 was $ 0.2 million and was not material for the year ended December 31, 2022.

Year Ended December 31,

1 unchanged sentence

Corporate expenses 680 1,950

Income from discontinued operations before income taxes 232 220

Loss from discontinued operations before income taxes — 232

Stock-based compensation expense $ 1,688 $ 2,747

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Advertising revenues presented in the consolidated financial statements are reflected on a net basis, after the deduction of advertising agency fees, usually at a rate of 15 % of gross revenues .

Radio Advertising

Spot Radio Advertising

On-air broadcast revenue is recognized when or as performance obligations under the terms of a contract with a customer are satisfied.

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Substantially all deferred revenue is recognized within twelve months of the payment date.

Nontraditional

Nontraditional revenues principally consist of ticket sales and sponsorship of events our stations conduct in their local market.

These revenues are recognized when our performance obligations are fulfilled, which generally coincides with the occurrence of the related event.

Digital revenue relates to revenue generated from the sale of digital marketing services (including display advertisements and video sponsorships) to advertisers on Company-owned websites and from revenue generated from content distributed across other digital platforms.

Digital revenue relates to revenue generated from the sale of digital marketing services (including display advertisements and video pre-roll and sponsorships) to advertisers on Company-owned websites and from revenue generated from content distributed across other digital platforms.

Digital revenues are generally recognized as the digital advertising is delivered.

Other revenue includes barter revenue and network revenue.

Syndication revenue relates to revenue generated from the sale of rights to broadcast shows we produce as well as revenues from syndicated shows we broadcast for a fee.

Syndication revenues are generally recognized ratably over the term of the contract.

Events and Sponsorships

Events and Sponsorships revenues principally consist of ticket sales and sponsorship of events our stations conduct in their local market.

These revenues are recognized when our performance obligations are fulfilled, which generally coincides with the occurrence of the related event.

Other revenue includes barter revenue, network revenue, talent fee revenue and other revenue.

The Company provides advertising broadcast time in exchange for certain products and services, including on-air radio programming.

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This network revenue is recognized as we broadcast the advertisements.

Talent fee revenue are fees earned for appearances by our talent, which is recognized when our performance obligations are fulfilled, which generally coincides with the occurrence of the related appearance.

Other revenue is comprised of brand integrations, custom on-air shows, or other amounts earned that do not fit in any other category and are recognized when our performance obligations are fulfilled.

Disaggregation of revenue

2 unchanged sentences

Net revenues:

Radio Advertising $ 25,790 66.8 % $ 30,012 71.9 %

Nontraditional 3,973 10.3 % 4,864 11.7 %

Spot Radio Advertising $ 18,650 57.6 % $ 25,790 66.8 %

Digital 3,677 11.4 % 4,713 12.2 %

Syndication 2,427 7.5 % 1,891 4.9 %

Events and Sponsorships 5,766 17.8 % 3,380 8.8 %

Other 1,871 5.7 % 2,821 7.3 %

1 unchanged sentence

LONG-TERM DEBT

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

December 31, 2022 December 31, 2021

Senior credit facility $ — $ 68,343

Notes payable to Emmis 5,950 6,154

Notes payable to SG Broadcasting — 27,574

Current maturities — ( 2,754 )

Unamortized original discount — ( 1,790 )

Total long-term debt, net of current portion and debt discount $ 5,950 $ 97,527

Senior secured term loan agreement

The Company had a five-year senior secured term loan agreement (the “Senior Credit Facility”) with GACP Finance Co., LLC, (“GACP”) a Delaware limited liability company, as administrative agent and collateral agent.

The Senior Credit Facility bore interest at a rate equal to the London Interbank Offered Rate (“LIBOR”), plus 7.5 %, with a 2.0 % LIBOR floor and a 1.0 % incremental interest rate paid in kind under certain circumstances (as discussed below).

The Senior Credit Facility matured on November 25, 2024.

Prior to subsequent amendments discussed below, the Senior Credit Facility required interest payments on the first business day of each calendar month, and quarterly payments on the principal in an amount equal to one and one quarter percent of the initial aggregate principal amount were due on the last day of each calendar quarter.

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.

Several amendments were 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.

4 to its Senior Credit Facility.

Under the terms of Amendment No.

• SG Broadcasting agreed to contribute up to $ 7.0 million to the Company in the form of subordinated debt, with $ 3.0 million contributed at closing, $ 1.0 million contributed on June 1, 2021, and up to an additional $ 3.0 million to be contributed through June 30, 2022, if necessary, to satisfy certain conditions described in Amendment No.

• 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 March 31, 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;

• for purposes of calculating compliance with the Minimum Consolidated Fixed Charge Coverage Ratio, Consolidated EBITDA (as defined in the Senior Credit Facility) includes certain amounts contributed by SG Broadcasting in the form of subordinated debt or equity, including those described above;

• for purposes of calculating the Company’s borrowing base under the Senior Credit Facility, the multiple applied to Billboard Cash Flow (as defined in the Senior Credit Facility) increased from 3.5 to 5.0 and the advance rate applied to the radio stations’ FCC licenses increased from 60 % to 70 %;

• at any time the multiple applied to Billboard Cash Flow exceeds 3.5 or the advance rate applied to the radio stations’ FCC licenses exceeds 60 %, an incremental annual interest rate of 1.0 % applies and is paid-in-kind monthly;

• certain specified events of default were waived;

• an amendment fee of $ 0.4 million was paid in cash.

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 year ended December 31, 2021.

For the period May 19, 2021 through March 31, 2022, 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 1.0 % 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 was added to the principal balance outstanding.

For the period from April 1, 2022 to December 9, 2022, the incremental annual interest rate of 1.0 % did not apply as the principal balance outstanding was less than the minimum borrowing base.

On November 12, 2022, 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.

On December 9, 2022, following the consummation of the transactions contemplated by the Purchase Agreement, the Company repaid in full, without penalty, all of its obligations under the Senior Credit Facility, which was terminated at that time.

Long-term debt was comprised of the note payable to Emmis of $ 6.5 million and $ 6.0 million at December 31, 2023 and 2022, respectively, and was classified as current at December 31, 2023 as the note matures within the next 12 months.

Emmis Convertible Promissory Note

Our November 25, 2019 convertible promissory note payable to Emmis Communications Corporation (the “Emmis Convertible 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 %, plus an additional 1.0 % on any payment of interest in kind and, without regard to whether the Company pays such interest in kind, 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.

Because the Senior Credit Facility prohibited the Company from paying interest in cash on the Emmis Convertible Promissory Note, the Company has been accruing interest since inception using the rate applicable if the interest will be paid-in-kind.

The Emmis Convertible Promissory Note is convertible, in whole or in part,

into MediaCo Class A common stock at the option of Emmis and 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.

The Emmis Convertible Promissory Note (as defined in Note 13) 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 %, plus an additional 1.0 % on any payment of interest in kind and, without regard to whether the Company pays such interest in kind, 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 Company has been accruing interest since inception using the rate applicable if the interest will be paid in kind.

The Emmis Convertible Promissory Note is convertible, in whole or in part, into MediaCo Class A common stock at the option of Emmis and 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.

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

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For the year ended December 31, 2023, interest of $ 0.5 million was paid-in-kind and added to the principal balance outstanding which was $ 6.5 million at December 31, 2023.

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

The 2019/2020 SG Broadcasting Promissory Notes (as defined below), which in July 2022 were converted in full into shares of MediaCo Class A common stock, carried 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 2019/2020 SG Broadcasting Promissory Notes were set to mature on May 25, 2025.

Additionally, interest under the 2019/2020 SG Broadcasting Promissory Notes was payable in kind through maturity, and 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 May 19, 2021, the Company issued to SG Broadcasting a subordinated convertible promissory note (the “May 2021 SG Broadcasting Promissory Note” and, collectively with the 2019/2020 SG Broadcasting Promissory Notes, the “SG Broadcasting Promissory Notes”), 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.

Up to $ 7.0 million may be borrowed pursuant to the May 2021 SG Broadcasting Promissory Note.

The May 2021 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 % on November 25, 2021 and additional annual increases of 1.0 % following each successive anniversary thereafter.

The May 2021 SG Broadcasting Promissory Note matures on May 25, 2025 and interest is payable in-kind through maturity.

Subject to prior shareholder approval of the issuance of the shares, which was obtained on June 28, 2022, the May 2021 SG Broadcasting Promissory Note 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 June 1, 2021, SG Broadcasting contributed $ 1.0 million to the Company under the May 2021 SG Broadcasting Promissory Note as required by Amendment No.

4 to the Senior Credit Facility.

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.

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.

The 2019/2020 SG Broadcasting Promissory Notes were terminated at that time, while the May 2021 SG Broadcasting Promissory Note remains outstanding, but with no amounts outstanding as of December 31, 2022.

Based on amounts outstanding at December 31, 2022, mandatory principal payments of long-term debt are $ 6.0 million in 2024 (all under the Emmis Convertible Promissory Note) and none thereafter.

The Company has debt service obligations of approximately $ 7.1 million due under its Emmis Convertible Promissory Note from April 1, 2024 (the date of issuance of these financial statements) through April 1, 2025.

See Note 1 for additional information.

Senior secured term loan agreement

Until December 9, 2022, the Company had a five-year senior secured term loan agreement (the “Senior Credit Facility”) with GACP Finance Co., LLC, (“GACP”) a Delaware limited liability company, as administrative agent and collateral agent.

SG Broadcasting Promissory Notes

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 in Note 13) 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 its expiration or as of December 31, 2022.

FAIR VALUE MEASUREMENTS

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We determine if an arrangement is a lease at inception.

We have operating leases for office space and tower space, expiring at various dates through August 2039.

We have operating leases for office space and tower space, expiring at various dates through October 2039.

Some leases have options to extend and some have options to terminate.

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Operating lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease.

Operating lease assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

Operating lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term.

As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

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We elected this policy for all classes of underlying assets.

Short-term lease expense for the years ended December 31, 2022, and 2021, was not material.

Short-term lease expense for the year ended December 31, 2023 was $ 0.1 million and was not material for the year ended December 31, 2022.

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 October 2039.

This resulted in a right of use asset of $ 10.4 million and an operating lease liability of $ 10.4 million when recorded at lease commencement.

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

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Total recorded lease liabilities $ 15,777

On November 18, 2022, the Company entered into a lease agreement in New York City for our radio operations and corporate offices.

The lease commencement date was not until February 1, 2023 and as such, was not included in our consolidated balance sheets as of December 31, 2022.

The noncancellable lease term extends through August 2039 and resulted in a right of use asset of $ 12.7 million and an operating lease liability of $ 12.7 million when recorded at lease commencement.

INTANGIBLE ASSETS

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When indicators of impairment are present, the Company will perform an interim impairment test.

We will perform additional interim impairment assessments whenever triggering events suggest

such testing for the recoverability of these assets is warranted.

We will perform additional interim impairment assessments whenever triggering events suggest such testing for the recoverability of these assets is warranted.

During the years ended December 31, 2023, and 2022, the Company did not record any impairment losses.

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They cost $ 1.6 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 intangibles for the years ended December 31, 2022, and 2021, was $ 0.1 million and $ 0.2 million, related to an intangible asset that was fully amortized as of December 31, 2021, respectively.

Assets related to our websites placed in service during 2022 were disposed in the current year resulting in a loss of $ 0.3 million, included in Loss on disposal of assets in the consolidated statements of operations.

Total amortization expense from definite-lived intangibles for the years ended December 31, 2023, and 2022, was $ 0.3 million and $ 0.1 million, respectively.

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

Year ended December 31, Amortization Expense

After 2027 130

Total $ 1,327

OTHER COMMITMENTS AND CONTINGENCIES

In addition to the lease payments described in Note 9, t he Company has various commitments under contracts that include purchase obligations, employment agreements and leases commencing in 2023 with annual commitments at December 31, 2022 as follows:

T he Company has various commitments under contracts that include purchase obligations and employment agreements with annual commitments at December 31, 2023 as follows:

Year ended December 31, Total Payments

Thereafter 26,383

Total $ 3,883

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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”).

equity and thus the Company's Class A common stock (listed on The Nasdaq Capital Market) would be subject to delisting unless the Company requests a hearing before a Nasdaq Hearings Panel (the “Panel”) on or before November 22, 2022.

On November 15, 2022, the Company received a second deficiency letter (the “Second Nasdaq Letter”) from the staff of the Nasdaq Listing Qualifications Department (the “Staff”) stating that because the Company had reported stockholders’ equity of $ 2.0 million in its Quarterly Report on Form 10-Q for the period ended September 30, 2022, the Company no longer complies with Nasdaq Listing Rule 5550(b)(1), which requires a minimum $ 2.5 million stockholders’ equity and thus the Company's Class A common stock (listed on The Nasdaq Capital Market) would be subject to delisting unless the Company requests a hearing before a Nasdaq Hearings Panel (the “Panel”) on or before November 22, 2022.

Pursuant to the Nasdaq Letter, the Company promptly requested a hearing before the Panel, with the intention of presenting a plan to regain compliance with the Rule.

On December 14, 2022, the Company received a letter (the “Third Nasdaq Letter”) from the Nasdaq Office of General Counsel stating that it had been informed the Staff that the Company’s stockholders’ equity deficiency had been cured, and that the Company is now in compliance with all applicable listing standards.

On December 14, 2022, the Company received a letter (the “Third Nasdaq Letter”) from the Nasdaq Office of General Counsel stating that it had been informed by the Staff that the Company’s stockholders’ equity deficiency had been cured, and that the Company is now in compliance with all applicable listing standards.

Consequently, the Third Nasdaq Letter informed the Company that the scheduled hearing to appeal the delisting proceedings had been cancelled, and the Company’s stock will continue to be listed on The Nasdaq Stock Market.

On September 15, 2023, the Company received a notification letter from the Nasdaq Listing Qualifications Department (the “Staff”) notifying the Company that, because the closing bid price for the Company's Class A common stock was below $1.00 for 30 consecutive business days, the Company no longer met the minimum bid price requirement for continued listing on The Nasdaq Capital Market under Nasdaq Marketplace Rule 5550(a)(2), requiring a minimum bid price of $1.00 per share (the “Minimum Bid Price Requirement”).

The Nasdaq deficiency letter has no immediate effect on the listing of the Class A common stock, and the Class A 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 was given 180 calendar days, or until March 13, 2024, to regain compliance with the Minimum Bid Price Requirement.

The Company did not achieve compliance during that period.

On March 14, 2024, the Company received a notification letter from the Staff notifying the Company that that it had been granted an additional 180 days, or until September 9, 2024, to regain compliance with the Minimum Bid Price Requirement, based on meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on The Nasdaq Capital Market with the exception of the bid price requirement, and the Company’s written notice of its intention to cure the deficiency during the second compliance period.

If at any time before September 9, 2024, the bid price of our Class A 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 we have achieved compliance.

If we do not regain compliance with the Minimum Bid Price Requirement by the end of the second compliance period, the Class A common stock will become subject to delisting.

In the event that the Company receives notice that the Class A 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 continue to monitor the closing bid price of the Common Stock between now and September 9, 2024, and will 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 provision for income taxes for continuing operations for the years ended December 31, 2023, and 2022, consisted of the following:

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Right of use asset ( 4,220 ) ( 1,577 )

Property and equipment — ( 1,511 )

Total deferred tax liabilities ( 12,917 ) ( 9,340 )

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With this consideration, the total valuation allowance recorded at December 31, 2023 and 2022, was $ 16.6 million and $ 14.7 million, respectively, resulting in a net $ 2.8 million and $ 2.5 million DTL, respectively.

As of December 31, 2022, the Company has no federal net operating losses (“NOLs”) and state NOLs of $ 6.8 million available to offset future taxable income.

As of December 31, 2023, the Company has $ 12.1 million of federal net operating losses (“NOLs”) and $ 19.9 million of state NOLs available to offset future taxable income.

The federal NOLs do not expire.

Certain state NOL carryforwards begin expiring in the year ending December 2039.

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

As of December 31, 2022, the Company has no uncertain tax positions.

As of December 31, 2023, the estimated value of the Company's net uncertain tax positions was approximately $ 0.4 million all which is reported as a noncurrent liability.

The following is a tabular reconciliation of the total amounts of gross unrecognized tax benefits for the years ended December 31, 2023 and 2022:

December 31, 2023 December 31, 2022

Gross unrecognized tax benefit - opening balance $ — $ —

Gross increases - tax position prior year ( 390 ) —

Gross increases - tax position current year — —

Decreases relating to settlement with taxing authorities — —

Gross decreases - lapse of applicable statute of limitation — —

Gross unrecognized tax benefit - ending balance ( 390 ) —

All of the unrecognized tax benefits as of December 31, 2023 and 2022, if recognized, would reduce the Company’s provision for income taxes.

Due to the uncertain and complex application of tax regulations, it is possible that the ultimate resolution of audits may result in liabilities that could be different from this estimate.

In such case, the Company will record additional tax expense or tax benefit in the tax provision, or reclassify amounts on the accompanying consolidated balance sheets in the period in which such matter is effectively settled with the taxing authority.

The Company recognizes interest accrued related to unrecognized tax benefits and penalties as income tax expense.

Related to the uncertain tax positions noted above, the Company accrued $ 25 thousand of interest and no penalties during the current year.

RELATED PARTY TRANSACTIONS

Transaction Agreement with Emmis and SG Broadcasting

On June 28, 2019, MediaCo entered into a Contribution and Distribution Agreement with Emmis and SG Broadcasting, pursuant to which (i) Emmis contributed the assets of its radio stations WQHT(FM) and WBLS(FM), in exchange for $ 91.5 million in cash, a $ 5.0 million note and 23.72 % of the common stock of MediaCo, (ii) Standard General purchased 76.28 % of the common stock of MediaCo, and (iii) the common stock of MediaCo received by Emmis was distributed pro rata in a taxable dividend to Emmis’ shareholders on January 17, 2020.

On June 28, 2019, MediaCo entered into a Contribution and Distribution Agreement with Emmis Communications Corporation (“Emmis”) and SG Broadcasting, pursuant to which (i) Emmis contributed the assets of its radio stations WQHT(FM) and WBLS(FM), in exchange for $ 91.5 million in cash, a $ 5.0 million note and 23.72 % of the common stock of MediaCo, (ii) Standard General purchased 76.28 % of the common stock of MediaCo, and (iii) the common stock of MediaCo received by Emmis was distributed pro rata in a taxable dividend to Emmis’ shareholders on January 17, 2020.

The common stock of MediaCo acquired by Standard General is entitled to ten votes per share and the common stock acquired by Emmis and distributed to Emmis’ shareholders is entitled to one vote per share.

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

The Management Agreement with Emmis Operating Company was for an initial term of two years (cancellable by MediaCo after 18 months) under which Emmis provided various services to us, including accounting, human resources, information technology, legal, public reporting and tax.

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

We paid Emmis an annual fee of $ 1.3 million in equal monthly installments for these services, plus reimbursement of certain expenses directly related to our operations.

For the years ended December 31, 2021, MediaCo recorded $ 1.1 million of management fee expense which is included in corporate expenses in the accompanying consolidated statements of operations.

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

Convertible Promissory Notes

As a result of the transaction described above, on November 25, 2019, we issued convertible promissory notes to both Emmis (the Emmis Convertible Promissory Note) and SG Broadcasting (the “November 2019 SG Broadcasting Promissory Note”) in the amounts of $ 5.0 million and $ 6.3 million, respectively.

On February 28, 2020, the Company and SG Broadcasting amended and restated the November 2019 SG Broadcasting Promissory Note such that the maximum aggregate principal amount issuable under the note was increased from $ 6.3 million to $ 10.3 million.

Also on February 28, 2020, SG Broadcasting loaned an additional $ 2.0 million to the Company pursuant to the amended note for working capital purposes.

On March 27, 2020, the Company and SG Broadcasting further amended and restated the November 2019 SG Broadcasting Promissory Note (as so amended and restated, the “Second Amended and Restated SG Broadcasting Promissory Note”) such that the maximum aggregate principal amount issuable under the note was increased from $ 10.3 million to $ 20.0 million.

On March 27, 2020, SG Broadcasting loaned an additional $ 3.0 million to the Company pursuant to the Second Amended and Restated SG Promissory Note for working capital purposes.

On August 28, 2020, SG Broadcasting loaned an additional $ 8.7 million to the Company pursuant to the Second Amended and Restated SG Promissory Note for working capital purposes, bringing the total principal amount outstanding to $ 20.0 million.

On September 30, 2020, SG Broadcasting loaned an additional $ 0.3 million to the Company pursuant to an additional promissory note (the “Additional SG Broadcasting Promissory Note” and, together with the Second Amended and Restated SG Broadcasting Promissory Note, the “2019/2020 SG Broadcasting Promissory Notes”) for working capital purposes.

On November 25, 2020, annual interest of $ 0.5 million and $ 1.1 million was paid in kind and added to the principal balances of the Emmis Convertible Promissory Note and the 2019/2020 SG Broadcasting Promissory Notes, respectively.

On May 19, 2021, the Company issued to SG Broadcasting the May 2021 SG Broadcasting Promissory Note, in return for which SG Broadcasting loaned $ 3.0 million to the Company to make the prepayment of Senior Credit Facility debt required under Amendment No.

Up to $ 7.0 million may be borrowed pursuant to the May 2021 SG Broadcasting Promissory Note.

On June 1, 2021, SG Broadcasting loaned $ 1.0 million to the Company under the May 2021 SG Broadcasting Promissory Note as required by Amendment No.

4 to the Senior Credit Facility.

On September 30, 2021, annual interest of $ 25 thousand on the 2019/2020 SG Broadcasting Promissory Notes was paid in kind and added to the principal balance outstanding.

On November 25, 2021, annual interest of $ 0.6 million and $ 2.2 million was paid in kind and added to the principal balances of the Emmis Convertible Promissory Note and the SG Broadcasting Promissory Notes, respectively.

As a result of the transaction described above, on November 25, 2019, we issued convertible promissory notes to both Emmis (such note, the “Emmis Convertible Promissory Note”) and SG Broadcasting (such note, the “November 2019 SG Broadcasting Promissory Note”) in the amounts of $ 5.0 million and $ 6.3 million, respectively.

Through December 31, 2021, there were additional borrowings from SG Broadcasting and annual interest amounts paid in kind on the Emmis Convertible Promissory Note and SG Broadcasting Promissory Notes such that the principal balances outstanding as of December 31, 2021 were $ 6.2 million and $ 27.6 million, respectively.

In addition to the November 2019 SG Broadcasting Promissory Note, we issued additional promissory notes to evidence our indebtedness to SG Broadcasting (collectively with the November 2019 SG Broadcasting Promissory Note, the “SG Broadcasting Promissory Notes”).

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.

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, and the 2019/2020 SG Broadcasting Promissory Notes were terminated at that time, while the May 2021 SG Broadcasting Promissory Note remains outstanding, but with no amounts outstanding as of December 31, 2022.

See Note 7 and Note 11.

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, 2023 or 2022.

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.

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

For the year ended December 31, 2023, interest of $ 0.5 million was paid-in-kind and added to the principal balance outstanding which was $ 6.5 million at December 31, 2023

The Company recognized interest expense of $ 0.6 million and $ 0.8 million related to the Emmis Convertible Promissory Note for the years ended December 31, 2023, and 2022, respectively.

The Company recognized interest expense of $ 1.8 million and $ 2.5 million related to the SG Broadcasting Promissory Notes for the years ended December 31, 2022, and 2021, respectively.

The Company recognized no interest expense related to the SG Broadcasting Promissory Notes for the year ended December 31, 2023 and $ 1.8 million for the year ended December 31, 2022.

The terms of these notes are described in Note 7.

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On December 13, 2023 and 2022, $ 2.4 million and $ 3.4 million, respectively, of dividends were paid in kind.

These payments in kind increased the accrued value of the preferred stock and 80,000 additional shares were issued as part of this payment.

These payments in kind increased the accrued value of the preferred stock and 26,031 and 80,000 additional shares, respectively, were issued as part of this payment.

As of December 31, 2023, and 2022, unpaid cumulative dividends were $ 0.2 million and $ 0.1 million, respectively, and included in the balance of preferred stock in the accompanying consolidated balance sheets.

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Loan Proceeds Participation Agreement

On April 22, 2020, MediaCo and Emmis entered into a certain Loan Proceeds Participation Agreement (the “LPPA”) pursuant to which (i) Emmis agreed to use certain of the proceeds of the loan Emmis received pursuant to the Paycheck Protection Program (“PPP”) under Division A, Title I of the CARES Act to pay certain wages of employees leased to MediaCo pursuant to the Employee Leasing Agreement, between Emmis and MediaCo (ii) Emmis agreed to waive up to $ 1.5 million in reimbursement obligations of MediaCo to Emmis under the Employee Leasing Agreement to the extent that the PPP Loan is forgiven, and (iii) MediaCo agreed to promptly pay Emmis an amount equal to 31.56 % of the amount of the PPP Loan, if any, that Emmis is required to repay, up to the amount of the reimbursement obligations forgiven under (ii) above.

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 2021, Emmis received notification that the full amount of the loan was forgiven.

Management Agreement for Billboards LLC

On August 11, 2020, the board of directors of the Company unanimously authorized the entry into a certain Management Agreement (the “Billboard Agreement”) between Fairway Outdoor LLC (a subsidiary of the Company, “Fairway”) and Billboards LLC (an affiliate of Standard General, “Billboards”).

Under the Billboard Agreement, Fairway will manage the billboard business of Billboards in exchange for payments of $ 25,000 per quarter and reimbursement of all out-of-pocket expenses incurred by Fairway in the performance of its duties under the Billboard Agreement.

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.

Under the Billboard Agreement, Fairway managed the billboard business of Billboards in exchange for payments of $ 25,000 per quarter and reimbursement of all out-of-pocket expenses incurred by Fairway in the performance of its duties under the Billboard Agreement.

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

$ 0.1 million of income was recognized in the year ended December 31, 2022 in relation to the Billboard Agreement, none of which was outstanding as of December 31, 2022.

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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.

Two of the agreements have a term that expired on February 1, 2024 and are billed at hourly rates of $ 125 and $ 150 per hour.

Two of the agreements have a term that expires on April 1, 2024 and are billed at rates of $ 6,000 and $ 8,400 per month.

One agreement may be terminated at any time by either party and is billed at $ 18,000 per month, plus expenses.

As of December 31, 2023, $ 49 thousand of fees were incurred related to these agreements.

SUBSEQUENT EVENTS

MediaCo is in ongoing negotiations with the SAG-AFTRA union for the WBLS (FM) station.

Currently, a term sheet has been agreed upon and we expect a definitive agreement to be signed in the second quarter.

In March 2023, a one-time bonus award of $ 0.4 million was approved and granted to select employees.

These awards are to be paid partially in cash and partially in restricted stock awards, which vest immediately upon grant in March 2023.

There were no other subsequent events other than those discussed in Note 3, Note 4 and Note 9.

There were no other subsequent events other than share repurchases discussed in Note 3 and the Nasdaq letter received as discussed in Note 11.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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-K

Item 8. Financial Statements and Supplementary Data