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Item 1. Financial Statements

2024-11-14 compared with 2024-09-18 · 184 added, 125 removed, 693 unchanged (31% of the section changed)

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except per share amounts) 2024 2023 2024 2023

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Change in fair value of warrant shares liability 65,439 — 34,412 —

Other income (expense) 10 ( 123 ) 20 6

Total other expense ( 34,799 ) ( 239 ) ( 34,925 ) ( 213 )

LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES ( 48,125 ) ( 355 ) ( 51,718 ) ( 2,235 )

Other expense ( 24 ) ( 18 ) ( 4 ) ( 12 )

Total other income (expense) 62,141 ( 105 ) 27,216 ( 318 )

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 55,268 ( 2,069 ) 3,550 ( 4,304 )

PROVISION FOR INCOME TAXES 342 84 608 234

NET LOSS FROM CONTINUING OPERATIONS ( 48,307 ) ( 430 ) ( 51,984 ) ( 2,385 )

NET INCOME (LOSS) FROM DISCONTINUED OPERATIONS — 9 — ( 143 )

CONSOLIDATED NET LOSS ( 48,307 ) ( 421 ) ( 51,984 ) ( 2,528 )

NET INCOME (LOSS) FROM CONTINUING OPERATIONS 54,926 ( 2,153 ) 2,942 ( 4,538 )

NET LOSS FROM DISCONTINUED OPERATIONS — ( 163 ) — ( 306 )

CONSOLIDATED NET INCOME (LOSS) 54,926 ( 2,316 ) 2,942 ( 4,844 )

Net income attributable to noncontrolling interest 639 — 1,467 —

PREFERRED STOCK DIVIDENDS — 602 851 1,788

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS $ ( 49,263 ) $ ( 1,017 ) $ ( 53,663 ) $ ( 3,714 )

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

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 54,287 $ ( 2,918 ) $ 624 $ ( 6,632 )

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

Continuing operations $ 0.73 $ ( 0.11 ) $ 0.01 $ ( 0.25 )

Discontinued operations $ — $ ( 0.01 ) $ — $ ( 0.01 )

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

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

$ 0.73 $ ( 0.12 ) $ 0.01 $ ( 0.26 )

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

Continuing operations $ 0.66 $ ( 0.11 ) $ 0.01 $ ( 0.25 )

Discontinued operations $ — $ ( 0.01 ) $ — $ ( 0.01 )

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

$ 0.66 $ ( 0.12 ) $ 0.01 $ ( 0.26 )

Weighted average common shares outstanding:

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CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

2024 December 31,

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OTHER ASSETS:

Lease right of use assets 47,205 13,614

Operating lease right of use assets 56,273 13,614

Finance lease right of use assets 2,777 —

Noncurrent programming rights 5,674 —

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SERIES A CUMULATIVE CONVERTIBLE PARTICIPATING PREFERRED STOCK, $ 0.01 PAR VALUE, 10,000,000 SHARES AUTHORIZED;

0 AND 286,031 SHARES ISSUED AND OUTSTANDING AT JUNE 30, 2024 AND DECEMBER 31, 2023, RESPECTIVELY

0 AND 286,031 SHARES ISSUED AND OUTSTANDING AT SEPTEMBER 30, 2024 AND DECEMBER 31, 2023, RESPECTIVELY

Class A common stock, $ 0.01 par value;

authorized 170,000,000 shares;

issued and outstanding 41,278,034 shares and 20,741,865 shares at June 30, 2024, and December 31, 2023, respectively

issued and outstanding 41,226,547 shares and 20,741,865 shares at September 30, 2024, and December 31, 2023, respectively

Class B common stock, $ 0.01 par value;

authorized 50,000,000 shares;

issued and outstanding 5,413,197 shares at June 30, 2024, and December 31, 2023

issued and outstanding 5,413,197 shares at September 30, 2024, and December 31, 2023

Class C common stock, $ 0.01 par value;

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BALANCE, JUNE 30, 2024 41,278,034 $ 413 5,413,197 $ 54 $ 89,997 $ ( 76,811 ) $ 18,457 $ 32,110

Net income (loss) — — — — — 54,287 639 54,926

Issuance of class A to employees, officers and directors, net ( 51,487 ) — — — ( 29 ) — ( 29 )

BALANCE, SEPTEMBER 30, 2024 41,226,547 $ 413 5,413,197 $ 54 $ 89,968 $ ( 22,524 ) $ 19,096 $ 87,007

BALANCE, DECEMBER 31, 2022

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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, net 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

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

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands) 2024 2023

CASH FLOWS FROM OPERATING ACTIVITIES:

Consolidated net loss $ ( 51,984 ) $ ( 2,528 )

Consolidated net income (loss) $ 2,942 $ ( 4,844 )

Loss from discontinued operations, net of tax — 306

Adjustments to reconcile net loss to net cash used in operating activities -

Adjustments to reconcile net income (loss) to net cash used in operating activities -

Depreciation and amortization 3,305 437

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Repurchases of class A common stock ( 7 ) ( 737 )

Finance lease principal payments ( 159 ) —

Settlement of tax withholding obligations ( 345 ) ( 402 )

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MediaCo Operations LLC operates the Purchased Assets under the trade name Estrella MediaCo.

Our assets consist of two radio stations located in New York City, WQHT(FM) and WBLS(FM) (the “Stations”), which serve the New York City demographic market area that primarily target Black, Hispanic, and multi-cultural consumers, and as a result of the Estrella Acquisition, Estrella’s network, content, digital, and commercial operations, including network affiliation and program supply agreements with Estrella for its 11 radio stations serving Los Angeles, CA, Houston, TX, and Dallas, TX and nine television stations serving Los Angeles, CA, Houston, TX, Denver, CO, and Miami, FL.

Our assets consist of two radio stations located in New York City, WQHT(FM) and WBLS(FM) (the “Stations”), which serve the New York City demographic market area and primarily target Black, Hispanic, and multi-cultural consumers, and as a result of the Estrella Acquisition, Estrella’s network, content, digital, and commercial operations, including network affiliation and program supply agreements with Estrella for its 11 radio stations serving Los Angeles, CA, Houston, TX, and Dallas, TX and nine television stations serving Los Angeles, CA, Houston, TX, Denver, CO, and Miami, FL.

Among the Estrella brands that joined MediaCo are the EstrellaTV network, its influential linear and digital video content business, Estrella’s expansive digital channels, including its four FAST channels - EstrellaTV, Estrella News, Cine EstrellaTV - and Estrella Games, and the EstrellaTV app.

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

Pursuant to ASC Topic 205-40, Going Concern , the Company is required to evaluate whether there is substantial doubt about its ability to continue as a going concern within one year of the date of issuance of these financial statements (September 18, 2024).

In conducting this analysis, management considered the Company’s current projections of future cash flows, current financial condition, sources of liquidity and debt service obligations due on or before September 18, 2025.

The Company has experienced diminished revenues and profitability, driven in part by weaker sales for our annual Summer Jam concert, and expects these conditions to continue for an undetermined period of time.

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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.

At June 30, 2024, we had $ 6.5 million outstanding to Emmis under the Emmis Convertible Promissory Note (as defined in Note 10), all of which is classified as current and has debt service obligations of approximately $ 7.3 million due under its Emmis Convertible Promissory Note from September 18, 2024 (the date of issuance of these financial statements) through September 18, 2025.

In September 2024, the Company entered into the First Amendment of the First Lien Credit Agreement, with White Hawk Capital Partners, LP, which provides for $ 7.5 million of additional Delayed Draw Term Loan Commitments for Delayed Draw Term Loans, and waives the requirement for mandatory prepayment of any net proceeds received as a result of any equity issuances, up to $ 7.3 million.

At September 30, 2024, we had $ 6.5 million outstanding to Emmis under the Emmis Convertible Promissory Note (as defined in Note 10), all of which is classified as current, and debt service obligations of approximately $ 7.3 million due under the Emmis Convertible Promissory Note from November 14, 2024 (the date of issuance of these financial statements) through November 14, 2025.

In September 2024, the Company entered into the First Amendment of the First Lien Credit Agreement with White Hawk Capital Partners, LP, which provides for $ 7.5 million of additional Delayed Draw Term Loan Commitments in addition to an aggregate $ 10.0 million in existing Delayed Draw Term Loans, and waives the requirement for mandatory prepayment of any net proceeds received as a result of any equity issuances, up to $ 7.3 million.

Each Delayed Draw Term Loan will mature on the date that is two years after the drawing of such Delayed Draw Term Loan.

As a result of this amendment, management anticipates the Company will be able to meet its liquidity needs for the next twelve months with cash and cash equivalents on hand, additional draws on its First Lien Term Loan, and projected cash flows from operations.

See Note 3 for additional information.

As a result of this amendment, management anticipates the Company will be able to meet its liquidity needs for the next 12 months with cash and cash equivalents on hand, additional draws on its First Lien Term Loan, and projected cash flows from operations.

Therefore, substantial doubt has been alleviated about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued.

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Program rights expected to be amortized to expense in the following 12-month period are classified as current assets and program rights payable within the following 12-month period are classified as current liabilities.

All program rights payable are included in accounts payable and accrued expenses except for $ 5.6 million which is included in other noncurrent liabilities.

Amortization expense for the three and six months ended June 30, 2024 was $ 0.8 million which is included in operating expenses excluding depreciation and amortization.

All program rights payable are included in accounts payable and accrued expenses except for $ 5.1 million which is included in noncurrent program rights payable.

Amortization expense for the three and nine months ended September 30, 2024 was $ 0.9 million and $ 1.7 million, respectively, which is included in operating expenses excluding depreciation and amortization.

These programming rights are primarily related to one agreement which ends in February 2028.

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

Restricted cash at December 31, 2023 consisted of $ 1.3 million held in escrow related to the Company's disposition of the Fairway business, classified in current assets and the restrictions were released in June 2024.

Additionally, restricted cash of $ 1.9 million as of June 30, 2024 and December 31, 2023 was 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 October 2039, and restricted cash of $ 0.5 million as of June 30, 2024 was held for a collateral account related to merchant banking for the Company’s purchase card program and for an office lease security deposit, all included in the line item Deposits and Other in the condensed consolidated balance sheets.

Restricted cash at December 31, 2023 consisted of $ 1.3 million held in escrow related to the Company's disposition of the Fairway business, classified in current assets, as to which the restrictions were released in June 2024.

Additionally, restricted cash of $ 1.9 million as of September 30, 2024 and December 31, 2023 was 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 October 2039, and restricted cash of $ 0.5 million as of September 30, 2024 was held for a collateral account related to merchant banking for the Company’s purchase card program and for an office lease security deposit, all included in the line item Deposits and Other in the condensed consolidated balance sheets.

Fair Value Measurements

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The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

(see Note 4 for more discussion).

The Company’s Warrant Shares (as defined in Note 3) are classified as a liability for which the fair value is measured on a recurring basis using Level 2 inputs (see Note 6 for more discussion).

(see Note 4 for additional information).

The Company’s Warrant Shares (as defined in Note 3) are classified as a liability for which the fair value is measured on a recurring basis using Level 2 inputs (see Note 6 for additional information).

We have no assets or liabilities for which fair value is measured on a recurring basis using Level 3 inputs.

The Company has certain assets that are measured at fair value on a non-recurring basis including those described in Note 4, Intangible Assets, and are adjusted to fair value only when the carrying values are more than the fair values.

The categorization of the framework used to price the assets is considered a Level 3 measurement due to the subjective nature of the unobservable inputs used to determine the fair value (see Note 4 for more discussion).

The Company’s long-term debt is not actively traded and is considered a Level 3 measurement.

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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, 2024 and 2023 was as follows:

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

The activity in the allowance for credit losses for the three and nine months ended September 30, 2024 and 2023 was as follows:

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

2024 2023 2024 2023

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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.

Shares of our Series A Convertible Preferred Stock, $ 0.01 par value (the “Series A preferred stock” or the “Series A preferred shares”) included rights to participate in dividends and distributions to common stockholders on an if-converted basis, and accordingly were considered participating securities until April 2024, when all outstanding shares of Series A preferred stock were converted in accordance with their terms into 20.7 million shares of MediaCo’s Class A common stock, par value $ 0.01 per share (the “Class A common stock”).

Shares of our Series A Convertible Preferred Stock, $ 0.01 par value (the “Series A preferred stock” or the “Series A preferred shares”) included rights to participate in dividends and distributions to common shareholders on an if-converted basis, and accordingly were considered participating securities until April 2024, when all outstanding shares of Series A preferred stock were converted in accordance with their terms into 20.7 million shares of MediaCo’s Class A common stock, par value $ 0.01 per share (the “Class A common stock”).

Warrant Shares (as defined in Note 3) have the right to participate in distributions on Class A common stock on an as-exercised basis, and accordingly are considered participating securities.

During periods of undistributed losses, however, no effect was given to our participating securities since they are not contractually obligated to share in the losses.

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Loss from continuing operations $ ( 48,307 ) $ ( 430 ) $ ( 51,984 ) $ ( 2,385 )

Net income attributable to noncontrolling interests ( 828 ) — ( 828 ) —

Income (loss) from continuing operations $ 54,926 $ ( 2,153 ) $ 2,942 $ ( 4,538 )

Net loss (income) attributable to noncontrolling interests ( 639 ) — ( 1,467 ) —

Preferred stock dividends — ( 602 ) ( 851 ) ( 1,788 )

Loss from continuing operations available to common shareholders ( 49,263 ) ( 1,026 ) ( 53,663 ) ( 3,571 )

Income (loss) from discontinued operations, net of income taxes — 9 — ( 143 )

Net loss attributable to common shareholders $ ( 49,263 ) $ ( 1,017 ) $ ( 53,663 ) $ ( 3,714 )

Weighted-average shares of common stock outstanding — basic and diluted 65,415 24,947 45,166 24,927

Income (loss) from continuing operations available to common shareholders 54,287 ( 2,755 ) 624 ( 6,326 )

Loss from discontinued operations, net of income taxes — ( 163 ) — ( 306 )

Net income (loss) attributable to common shareholders for basic earnings per share 54,287 ( 2,918 ) 624 ( 6,632 )

Interest expense related to convertible Emmis promissory note (1)

Net (loss) income attributable to noncontrolling interests $ 639 $ — $ — $ —

Net income (loss) attributable to common shareholders for diluted earnings per share $ 55,178 $ ( 2,918 ) $ 624 $ ( 6,632 )

Weighted-average shares of common stock outstanding — basic 74,271 24,713 54,939 25,032

Dilutive items:

Convertible Emmis promissory note 2,305 — — —

Option agreement shares 7,052 — — —

Restricted stock awards 549 — 607 —

Weighted-average shares of common stock outstanding — diluted 84,177 24,713 55,546 25,032

Earnings per share of common stock attributable to common shareholders:

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

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

Continuing operations $ 0.73 $ ( 0.11 ) $ 0.01 $ ( 0.25 )

Discontinued operations — ( 0.01 ) — ( 0.01 )

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

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

$ 0.73 $ ( 0.12 ) $ 0.01 $ ( 0.26 )

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

Continuing operations $ 0.66 $ ( 0.11 ) $ 0.01 $ ( 0.25 )

Discontinued operations — ( 0.01 ) — ( 0.01 )

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

$ 0.66 $ ( 0.12 ) $ 0.01 $ ( 0.26 )

(1) The dilutive effect of the convertible Emmis promissory note was determined using the if-converted method, in accordance with which the note is assumed to be converted into common stock at the beginning of the reporting period.

Interest expense, net of any income tax effects, is added back to the numerator of the calculation.

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, having an aggregate offering price of up to $ 12.5 million.

No shares were sold during the six-month periods ended June 30, 2024 or 2023.

For the six-month period ended June 30, 2024, we repurchased under a share repurchase plan 11,304 shares of Class A common stock for an immaterial amount.

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.

No shares were sold during the nine-month periods ended September 30, 2024 or 2023.

For the nine-month period ended September 30, 2024, we repurchased under a share repurchase plan 11,304 shares of Class A common stock for an immaterial amount.

The following convertible equity shares, convertible promissory note shares, option agreement 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) 2024 2023 2024 2023

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Recent Accounting Pronouncements Not Yet Implemented

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740):

In November 2024, the FASB issued ASU 2024-03, Accounting Standards Update (“ASU”) 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods.

The amendments in this ASU do not change or remove current expense disclosure requirements;

however, the amendments affect where such information appears in the notes to financial statements because entities are required to include certain current disclosures in the same tabular format disclosure as the other disaggregation requirements in the amendments.

This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

We are currently assessing the impact this standard will have on our condensed consolidated financial statements.

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.

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Improvements to Reportable Segment Disclosures to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance.

This update is effective beginning with the Company’s 2024 fiscal year annual reporting period, with early adoption permitted.

This update is effective beginning with our 2024 fiscal year annual reporting period, with early adoption permitted.

We are currently assessing the impact this standard will have on our condensed consolidated financial statements.

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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Option Agreement

On April 17, 2024, in connection with the Estrella Acquisition, MediaCo and Estrella entered into an Option Agreement (the “Option Agreement” and, together with the Estrella Acquisition and the transactions contemplated by the Network Affiliation Agreement and the Network Program Supply Agreement described below, collectively, the “Estrella Transactions”) with Estrella and certain subsidiaries of Estrella pursuant to which (i) MediaCo was granted the option to purchase 100 % of the equity interests of certain subsidiaries of Estrella holding the Estrella Broadcast Assets (the “Option Subsidiaries Equity”) in exchange for 7,051,538 shares of Class A common stock, and (ii) Estrella was granted the right to put the Option Subsidiaries Equity to MediaCo for the same consideration during a period beginning six months after the date of the closing of the Estrella Transactions (the “Closing Date”) and ending after seven years , which will automatically extend for a renewal term of seven years unless both parties mutually agree otherwise.

On April 17, 2024, in connection with the Estrella Acquisition, MediaCo and Estrella entered into an Option Agreement (the “Option Agreement” and, collectively with the Estrella Acquisition and the transactions contemplated by the Network Affiliation Agreement and the Network Program Supply Agreement described below, the “Estrella Transactions”) with Estrella and certain subsidiaries of Estrella pursuant to which (i) MediaCo was granted the option to purchase 100 % of the equity interests of certain subsidiaries of Estrella holding the Estrella Broadcast Assets (the “Option Subsidiaries Equity”) in exchange for 7,051,538 shares of Class A common stock, and (ii) Estrella was granted the right to put the Option Subsidiaries Equity to MediaCo for the same consideration during a period beginning six months after the date of the closing of the Estrella Transactions (the “Closing Date”) and ending after seven years , which will automatically extend for a renewal term of seven years unless both parties mutually agree otherwise.

Voting and Support Agreement

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Under the terms of the First Lien Credit Agreement, MediaCo received an initial term loan of $ 35.0 million on April 17, 2024 (the “Initial Loan”) and was provided with a subsequent delayed draw facility of up to $ 10.0 million that may be provided for additional working capital purposes under certain conditions (the “Delayed Draw” and the loans thereunder, the “Delayed Draw Term Loans”;

the financing contemplated by the First Lien Term Loan, together with Estrella Transaction and the payment of the Transaction Consideration, the “Transactions”).

the financing contemplated by the First Lien Term Loan, collectively with the Estrella Transaction and the payment of the Transaction Consideration, the “Transactions”).

The Initial Loan and Delayed Draw Term Loans are collectively referred to as the “First Lien Term Loans.” The proceeds of the Initial Loan were used to finance the Estrella Acquisition, pay off certain existing Estrella indebtedness in connection therewith and pay related fees and transaction costs.

The Initial Loan will mature on April 17, 2029, and each Delayed Draw Term Loan will mature on the date that is two years after the drawing of such Delayed Draw Term Loan.

The first of such Delayed Draw Term Loan of $ 5.0 million was made on May 2, 2024.

The first of such Delayed Draw Term Loan of $ 5.0 million was made on May 2, 2024 and the second of such Delayed Draw Term Loans of $ 5.0 million was made on July 17, 2024.

First Lien Term Loans will be subject to monthly interest payments at a rate of SOFR + 6.00 %.

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The First Lien Term Loans are subject to a borrowing base in accordance with the terms of the First Lien Credit Agreement.

In September 2024, the Company entered into the First Amendment of the First Lien Credit Agreement with White Hawk Capital Partners, LP, which provides for $ 7.5 million of additional Delayed Draw Term Loan Commitments for Delayed Draw Term Loans, and waives the requirement for mandatory prepayment of any net proceeds received as a result of any equity issuances, up to $ 7.3 million.

A fee of $ 0.3 million was paid in conjunction with entering into this amendment.

No amounts have been drawn as of September 30, 2024.

Second Lien Term Loan

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The Second Lien Term Loan will mature on April 17, 2029 and will be subject to monthly interest payments at a rate of SOFR + 6.00 %.

The Second Lien Term Loans are subject to a borrowing base in accordance with the terms of the Second Lien Credit Agreement.

The Second Lien Term Loan is subject to a borrowing base in accordance with the terms of the Second Lien Credit Agreement.

Series B Preferred Stock

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Issued and outstanding shares of Series B Preferred Stock will accrue dividends, payable in kind, at an annual rate equal to 6.00 % of the liquidation value thereof, subject to increase upon the occurrence of certain trigger events set forth in the Series B Articles of Amendment.

The Series B Preferred Stock is mandatorily redeemable after seven years and is not convertible into any other equity securities of the Company.

The Series B Preferred Stock is mandatorily redeemable after seven years , at the Company’s option, change of control, liquidation event, or upon the occurrence of certain trigger events set forth in the Series B Articles of Amendment, and is not convertible into any other equity securities of the Company.

As such, it is classified as a long term liability on the condensed consolidated balance sheet and accrued dividends are classified in Interest expense, net on the condensed consolidated statements of operations.

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Preliminary Purchase Price Allocation

The valuation of assets acquired and liabilities assumed has not yet been finalized as of June 30, 2024.

The purchase price allocation is preliminary and subject to change, including the valuation of noncash consideration transferred, property and equipment, intangible assets, income taxes, and goodwill, among other items.

The valuation of assets acquired and liabilities assumed has not yet been finalized as of September 30, 2024.

The purchase price allocation is preliminary and subject to change, including purchase price consideration, property and equipment, intangible assets, income taxes, and goodwill, among other items.

The amounts recognized will be finalized as the information necessary to complete the analysis is obtained, but no later than one year after the acquisition date.

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Total Consideration 154,523

(1) Represents the fair value of warrants to purchase 28,206,152 shares of Class A common stock issued in the Estrella Transactions valued at the close price on the day prior to close of $ 2.50 .

(1) Represents the fair value of warrants to purchase 28,206,152 shares of Class A common stock issued in the Estrella Transactions valued at the closing price on the day prior to close of $ 2.50 .

(2) Represents the fair value of the Series B Preferred Stock and Second Lien Term Loan using a required yield of 15.23 % and 14.14 %, respectively.

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Net assets acquired 154,523

(1) Fair value of noncontrolling interests based on 7,051,538 warrants issued in Option Agreement valued at the close price on the day prior to close of $ 2.50 .

(1) Fair value of noncontrolling interests based on 7,051,538 warrants issued in Option Agreement valued at the closing price on the day prior to close of $ 2.50 .

Property and equipment is primarily composed of broadcasting equipment and leasehold improvements.

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Acquired property and equipment will be depreciated on a straight-line basis over the respective estimated remaining useful lives.

The amount allocated to definite-lived intangible assets represents the estimated fair values of customer relationships of $ 15.6 million, favorable leasehold interests of $ 13.0 million, and programming rights of $ 10.2 million and will be amortized over the estimated remaining useful lives of 15 years, 35 years and 4 years, respectively.

The amount allocated to definite-lived intangible assets represents the estimated fair values of customer relationships of $ 15.6 million and programming rights of $ 10.2 million and will be amortized over the estimated remaining useful lives of 15 years and four years , respectively.

The amount allocated to indefinite-lived intangible assets represents the estimated fair values of the FCC licenses of $ 112.2 million and goodwill of $ 15.0 million.

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Goodwill of $ 4.5 million and $ 10.5 million from this transaction is allocated to our Estrella MediaCo Video & Digital and Estrella MediaCo Audio, Digital & Events segments, respectively.

As part of the acquisition, we incurred costs of $ 5.5 million and $ 9.0 million for the three and six months ended June 30, 2024, respectively, primarily related to transaction bonuses and professional services, which are included in the operating expenses excluding depreciation and amortization and corporate expenses line items in the condensed consolidated statement of operations.

As part of the acquisition, we incurred costs of $ 9.0 million for the nine months ended September 30, 2024, primarily related to transaction bonuses and professional services, which are included in the operating expenses excluding depreciation and amortization and corporate expense line items in the condensed consolidated statement of operations.

Additionally, there were $ 1.8 million of deferred financing costs and $ 1.1 million of original issue discount related to the issuance of the First Lien Credit Agreement included in the line item long term debt, net of current.

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The carrying amounts of the VIE’s consolidated assets and liabilities included in the condensed consolidated balance sheet are as follows:

September 30,

Cash and cash equivalents $ 4,519

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Prepaid expenses 504

Current programming rights 13

Other current assets 28

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OTHER ASSETS:

Lease right of use assets 2,818

Operating lease right of use assets 2,789

Deposits and other 578

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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Pro Forma Financial Information

The following table presents the estimated unaudited pro forma combined results of MediaCo and Estrella for the three and six months ended June 30, 2024 and 2023 as if the acquisition had occurred on January 1, 2023:

The following table presents the estimated unaudited pro forma combined results of MediaCo and Estrella for the three and nine months ended September 30, 2024 and 2023 as if the acquisition had occurred on January 1, 2023:

Three Months Ended

(unaudited) Six Months Ended

September 30,

(unaudited) Nine Months Ended

September 30,

2024 2023 2024 2023

Net revenues $ 29,859 $ 29,886 $ 84,508 $ 91,978

Loss from continuing operations before income taxes ( 57,721 ) ( 13,535 ) ( 67,110 ) ( 35,188 )

Income (loss) from continuing operations before income taxes 59,858 ( 4,438 ) ( 10,132 ) ( 37,090 )

The supplemental pro forma financial information has been prepared using the acquisition method of accounting and is based on the historical financial information of MediaCo and Estrella.

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INTANGIBLE ASSETS

As of June 30, 2024 and December 31, 2023, intangible assets consisted of the following:

June 30, 2024 December 31, 2023

As of September 30, 2024 and December 31, 2023, intangible assets consisted of the following:

September 30, 2024 December 31, 2023

Indefinite-lived intangible assets

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Customer relationships 14,082 —

Favorable leasehold interests 12,962 —

Software 1,224 1,327

Total definite-lived intangible assets $ 29,212 $ 1,327

Total definite-lived intangible assets, net $ 15,337 $ 1,327

Total noncurrent other intangible assets, net and goodwill $ 205,778 $ 64,593

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

The carrying amounts of the Company’s FCC licenses were $ 175.5 million and $ 63.3 million as of June 30, 2024 and December 31, 2023, respectively.

The carrying amounts of the Company’s FCC licenses were $ 175.5 million and $ 63.3 million as of September 30, 2024 and December 31, 2023, respectively.

Pursuant to our accounting policy and the provisions of ASC350-30, which states that separately recorded indefinite-lived intangible assets should be combined into a single unit of accounting for purposes of testing for impairment if they are operated as a single asset, we aggregate FCC licenses for impairment testing if their signals are simulcast and are operating as one revenue producing asset.

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Valuation of Goodwill

As a result of the Estrella Acquisition, the Company recorded $ 14.9 million of goodwill, which accounts for all goodwill on the condensed consolidated balance sheet as of June 30, 2024, and of which $ 4.5 million is allocated to our Estrella MediaCo Video & Digital segment and $ 10.4 million is allocated to our Estrella MediaCo Audio, Digital & Events segment.

As a result of the Estrella Acquisition, the Company recorded $ 15.0 million of goodwill, which accounts for all goodwill on the condensed consolidated balance sheet as of September 30, 2024, and of which $ 4.5 million is allocated to our Estrella MediaCo Video & Digital segment and $ 10.5 million is allocated to our Estrella MediaCo Audio, Digital & Events segment.

ASC Topic 350-20-35 requires the Company to test goodwill for impairment at least annually.

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Definite-lived intangibles

The following table presents the weighted-average useful life at June 30, 2024, and the gross carrying amount and accumulated amortization at June 30, 2024 and December 31, 2023, for our definite-lived intangible assets:

June 30, 2024 December 31, 2023

The following table presents the weighted-average useful life at September 30, 2024, and the gross carrying amount and accumulated amortization at September 30, 2024 and December 31, 2023, for our definite-lived intangible assets:

September 30, 2024 December 31, 2023

Weighted Average Remaining Useful Life

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Customer relationships 3.7 $ 15,572 $ 1,490 $ 14,082 $ — $ — $ —

Favorable leasehold interests 34.8 13,039 77 12,962 — — —

Software 3.6 1,733 509 1,224 1,583 256 1,327

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The customer relationships, favorable leasehold interests, and a time brokerage agreement were acquired as part of the Estrella Acquisition.

Total amortization expense from definite-lived intangible assets for each of the three and six months ended June 30, 2024 and 2023 and included in the depreciation and amortization line item in the condensed consolidated statements of operations was as follows:

Total amortization expense from definite-lived intangible assets for each of the three and nine months ended September 30, 2024 and 2023 and included in the depreciation and amortization line item in the condensed consolidated statements of operations was as follows:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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Year ending December 31, Amortization Expense

2024 (from July 1) $ 2,013

2024 (from October 1) $ 913

After 2028 4,674

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Payments received from advertisers before the performance obligation is satisfied are recorded as deferred revenue.

Certain network sales contracts include a guaranteed number of impressions.

If the guarantee is not met the Company is obligated to provide additional spots at no charge until the guaranteed number of impressions is met, referred to as a makegood liability.

The liability for each contract is calculated by determining the cost per guarantee per the original contract, multiplied by the number of under-delivered impressions.

As of June 30, 2024, the makegood liability assumed in the Estrella Acquisition was $ 8.5 million and is presented in Deferred revenue on the condensed consolidated balance sheets as is expected to be recognized over four years .

Certain network sales contracts include a guaranteed rating.

If the guarantee is not met the Company is obligated to provide additional spots at no charge until the guaranteed rating is met, referred to as a makegood liability.

The liability for each contract is calculated by determining the cost per guarantee per the original contract, multiplied by the number of deficiency units.

As of September 30, 2024, the makegood liability assumed in the Estrella Acquisition was $ 9.0 million and is presented in Deferred revenue on the condensed consolidated balance sheets as is expected to be recognized over four years .

We do not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.

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Payments received from advertisers before the performance obligation is satisfied are recorded as deferred revenue in the condensed consolidated balance sheets.

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 applications as well as through third party publishers either through direct relationships with the publishers or through digital advertising exchanges.

Digital revenue relates to revenue generated from the sale of digital marketing services (including video, audio and display advertisements and sponsorships) to advertisers on Company-owned websites and applications as well as through third party publishers or OEM partners either through direct distribution relationships with the partner or through digital advertising exchanges.

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

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The following table presents the Company’s revenues disaggregated by revenue source and segment.

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

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

2024 % of Total 2023 % of Total 2024 % of Total 2023 % of Total

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Digital 5,780 19.3 % 608 9.4 % 10,051 16.0 % 3,053 11.8 %

EM-VD 166 0.6 % — — % 166 0.3 % — — %

EM-ADE 47 0.2 % — — % 142 0.2 % — — %

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LONG-TERM DEBT, WARRANTS, AND SERIES B PREFERRED STOCK

Long-term debt, Warrant shares, and Series B Preferred Stock was comprised of the following at June 30, 2024 and December 31, 2023.

The Emmis Convertible Promissory Note (as defined below) was classified as current at June 30, 2024 and December 31, 2023 as the note matures within the next 12 months.

June 30, 2024 December 31, 2023

Long-term debt, Warrant shares, and Series B Preferred Stock was comprised of the following at September 30, 2024 and December 31, 2023.

The Emmis Convertible Promissory Note (as defined below) was classified as current at September 30, 2024 and December 31, 2023 as the note matures within the next 12 months.

September 30, 2024 December 31, 2023

Emmis Convertible Promissory Note $ 6,458 $ 6,458

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

As of June 30, 2024, the principal balance outstanding under the Emmis Convertible Promissory Note was $ 6.5 million.

As of September 30, 2024, the principal balance outstanding under the Emmis Convertible Promissory Note was $ 6.5 million.

First Lien Term Loans

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Under the terms of the First Lien Credit Agreement, MediaCo received an Initial Loan of $ 35.0 million on April 17, 2024 and was provided with a subsequent delayed draw facility of up to $ 10.0 million that may be provided for additional working capital purposes under certain conditions.

A delayed draw of $ 5.0 million was made on May 2, 2024.

The first of such Delayed Draw Term Loans of $ 5.0 million was made on May 2, 2024 and the second of such Delayed Draw Term Loans of $ 5.0 million was made on July 17, 2024.

The proceeds of the Initial Loan were used to finance the Estrella Acquisition, pay off certain existing Estrella indebtedness in connection therewith and pay related fees and transaction costs.

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The First Lien Term Loans are subject to a borrowing base in accordance with the terms of the First Lien Credit Agreement.

In September 2024, the Company entered into the First Amendment of the First Lien Credit Agreement with White Hawk Capital Partners, LP, which provides for $ 7.5 million of additional Delayed Draw Term Loan Commitments for Delayed Draw Term Loans, and waives the requirement for mandatory prepayment of any net proceeds received as a result of any equity issuances, up to $ 7.3 million.

A fee of $ 0.3 million was paid in conjunction with entering into this amendment.

No amounts have been drawn as of September 30, 2024.

Second Lien Term Loan

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The Warrant terminates six-months from the date shareholder approval is obtained, at which point, to the extent not fully exercised, the Warrant shall be deemed automatically exercised.

Based on amounts outstanding at June 30, 2024, mandatory principal payments of long-term debt and preferred stock for the next five years and thereafter are summarized below:

Based on amounts outstanding at September 30, 2024, mandatory principal payments of long-term debt and preferred stock for the next five years and thereafter are summarized below:

Year ended December 31, Emmis Note First Lien Term Loans Second Lien Term Loan Series B Preferred Stock Total Payments

Remainder of 2024 (from July 1) $ 6,458 $ — $ — $ — $ 6,458

Remainder of 2024 (from October 1) $ 6,458 $ — $ — $ — $ 6,458

2025 — — — — —

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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.

On April 17, 2024, the Company received a notification letter from the Staff indicating that the Company has regained compliance with Nasdaq’s Minimum Bid Price Requirement and the matter is closed.

On August 20, 2024, the Company received a notification letter from the Staff of the Nasdaq notifying the Company that it was not in compliance with Nasdaq Listing Rule 5250(c)(1) (the “Listing Rule”) as a result of its failure to timely file its Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 (the “Q2 2024 Form 10-Q”), as described more fully in the Company’s Form 12b-25 Notification of Late Filing (the “Form 12b-25”) filed with the Securities and Exchange Commission (the “SEC”) on August 14, 2024.

The Listing Rule requires Nasdaq-listed companies to timely file all required periodic reports with the SEC.

The Notice indicates that the Company has until October 21, 2024 to submit a plan to regain compliance with the Listing Rule with respect to the delinquent filing, and indicates that any additional Nasdaq Staff exception to allow the Company to regain compliance with the delinquent filing will be limited to a maximum of 180 calendar days from the due date of the Q2 2024 Form 10-Q (as extended pursuant to Rule 12b-25 under the Securities Exchange Act of 1934, as amended), or February 17, 2025.

The Company intends to submit a compliance plan to Nasdaq and take the necessary steps to regain compliance with the Listing Rule as soon as practicable.

The Notice indicated that the Company had until October 21, 2024 to submit a plan to regain compliance with the Listing Rule with respect to the delinquent filing, and that any additional Nasdaq Staff exception to allow the Company to regain compliance with the delinquent filing would be limited to a maximum of 180 calendar days from the due date of the Q2 2024 Form 10-Q (as extended pursuant to Rule 12b-25 under the Securities Exchange Act of 1934, as amended), or February 17, 2025.

As described in the Form 12b-25, the filing of the Q2 2024 Form 10-Q was delayed due to delays in finalizing financial statements for the quarter ended June 30, 2024 related to the inclusion in the results for such period of the operations of the business acquired in the Estrella Acquisition, which delay could not be eliminated without unreasonable effort or expense.

Receipt of the Notice has no immediate effect on the listing of MediaCo’s Class A common stock, which will continue to trade on The Nasdaq Capital Market under the symbol “MDIA” at this time.

The effective tax rate for the six months ended June 30, 2024 and 2023 was 1 % and 7 %, respectively.

Our effective tax rate for the six months ended June 30, 2024 differs from the statutory tax rate primarily due to the recognition of additional valuation allowance.

The Company regained compliance on September 18, 2024 upon filing of the Q2 2024 Form 10-Q.

The effective tax rate for the nine months ended September 30, 2024 and 2023 was 17 % and 5 %, respectively.

Our effective tax rate for the nine months ended September 30, 2024 differs from the statutory tax rate primarily due to the recognition of additional valuation allowance.

ASC 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.

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

As of June 30, 2024, the amount of interest accrued was approximately $ 43 thousand, which did not include the federal tax benefit of interest deductions.

As of September 30, 2024, the amount of interest accrued was approximately $ 52 thousand, which did not include the federal tax benefit of interest deductions.

We determine if an arrangement is a lease at inception.

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None of our leases contain variable lease payments.

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

We elected not to apply the recognition requirements of ASC 842, Leases , to short-term leases, which are deemed to be leases with a lease term of 12 months or less.

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

We elected this policy for all classes of underlying assets.

Short-term lease expense recognized in the three and six months ended June 30, 2024 and 2023 was not material.

Short-term lease expense recognized in the three and nine months ended September 30, 2024 and 2023 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 October 2039.

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Weighted average remaining lease term - operating leases (in years) 12.9 14.0

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

1 unchanged sentence

Cash flows from finance leases 187 — 311 —

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Weighted average remaining lease term - finance leases (in years) 4.5 0.0

Weighted average discount rate - finance leases 11.3 % — %

As of June 30, 2024, the annual minimum lease payments of our operating lease liabilities were as follows:

As of September 30, 2024, the annual minimum lease payments of our operating lease liabilities were as follows:

Year ending December 31,

2024 (from July 1)

2024 (from October 1)

After 2028 67,671

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Total recorded operating lease liabilities $ 46,728

As of June 30, 2024, the annual minimum lease payments of our finance lease liabilities were as follows:

As of September 30, 2024, the annual minimum lease payments of our finance lease liabilities were as follows:

Year ending December 31,

2024 (from July 1) $ 373

2024 (from October 1) $ 187

After 2028 218

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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.

Consequently, the principal amount outstanding as of December 31, 2023 and June 30, 2024 under the Emmis Convertible Promissory Note was $ 6.5 million.

The Company recognized interest expense of $ 0.4 million and $ 0.3 million related to the Emmis Convertible Promissory Note for the six months ended June 30, 2024 and 2023, respectively.

Consequently, the principal amount outstanding as of December 31, 2023 and September 30, 2024 under the Emmis Convertible Promissory Note was $ 6.5 million.

The Company recognized interest expense of $ 0.7 million and $ 0.4 million related to the Emmis Convertible Promissory Note for the nine months ended September 30, 2024 and 2023, respectively.

The terms of the Emmis Convertible Promissory Note are described in Note 6.

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

Dividends on Series A Convertible Preferred Stock held by SG Broadcasting were $ 0.9 million and $ 1.2 million, respectively, for the six months ended June 30, 2024 and 2023.

As December 31, 2023, unpaid cumulative dividends were $ 0.2 million 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 $ 0.9 million and $ 1.8 million, respectively, for the nine months ended September 30, 2024 and 2023.

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

Consulting Agreements & Other Activity

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

For the six months ended June 30, 2024, $ 0.3 million of fees were incurred related to these agreements.

For the nine months ended September 30, 2024, $ 0.4 million of fees were incurred related to these agreements.

These agreements were terminated as of September 30, 2024.

In March 2024, we made payments of $ 15,000 to the National Association of Investment Companies, of which a member of our board of directors is the President & CEO.

On October 29, 2024, the Company and Standard Media Group LLC (“SMG”) entered into an Employee Leasing Agreement, effective as of October 1, 2024 (the “Leasing Agreement”).

Under the Leasing Agreement, the Company will obtain the services of several SMG employees to serve various roles for the Company, including with respect to the legal, digital products, broadcast IT, and news operations function.

The Leasing Agreement is an at-cost arrangement, with the Company paying only for a percentage of the actual cost of employing each leased employee, with no markup or service fees above the Company’s share of the actual fully-loaded cost of each leased employee.

SEGMENT INFORMATION

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These unallocated expenses primarily consist of broad corporate functions, including executive management, legal, human resources, corporate accounting and finance, and technology.

Revenue and operating income (loss) by reportable segment, and corporate and other, and the reconciliation to consolidated income (loss) from continuing operations before income taxes were as follows for the three and six months ended June 30, 2024 and 2023:

Three Months Ended June 30, 2024 EM-VD EM-ADE NY-ADE Corporate and other Consolidated

Three Months Ended September 30, 2024 EM-VD EM-ADE NY-ADE Corporate and other Consolidated

Net revenues $ 13,108 $ 10,186 $ 6,565 $ — $ 29,859

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Depreciation and amortization 1,259 348 134 — 1,741

Loss on disposal of assets — 5 — — 5

Operating (loss) income $ ( 4,732 ) $ ( 172 ) $ 350 $ ( 2,319 ) $ ( 6,873 )

Three Months Ended June 30, 2023 EM-VD EM-ADE NY-ADE Corporate and other Consolidated

Three Months Ended September 30, 2023 EM-VD EM-ADE NY-ADE Corporate and other Consolidated

Net revenues $ — $ — $ 6,447 $ — $ 6,447

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Depreciation and amortization — — 130 — 130

Operating income (loss) $ — $ — $ 886 $ ( 1,002 ) $ ( 116 )

Six Months Ended June 30, 2024 EM-VD EM-ADE NY-ADE Corporate and other Consolidated

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

Operating loss $ — $ — $ ( 869 ) $ ( 1,095 ) $ ( 1,964 )

Nine Months Ended September 30, 2024 EM-VD EM-ADE NY-ADE Corporate and other Consolidated

Net revenues $ 22,097 $ 18,658 $ 22,012 $ — $ 62,767

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Loss on disposal of assets — 5 — — 5

Operating (loss) income $ ( 7,595 ) $ ( 1,210 ) $ ( 1,153 ) $ ( 6,835 ) $ ( 16,793 )

Six Months Ended June 30, 2023 EM-VD EM-ADE NY-ADE Corporate and other Consolidated

Operating loss $ ( 12,327 ) $ ( 1,382 ) $ ( 803 ) $ ( 9,154 ) $ ( 23,666 )

Nine Months Ended September 30, 2023 EM-VD EM-ADE NY-ADE Corporate and other Consolidated

Net revenues $ — $ — $ 25,862 $ — $ 25,862

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Gain on disposal of assets — — ( 28 ) — ( 28 )

Operating income (loss) $ — $ — $ 864 $ ( 2,886 ) $ ( 2,022 )

Operating loss $ — $ — $ ( 5 ) $ ( 3,981 ) $ ( 3,986 )

Assets by reportable segment were as follows:

September 30,

2024 December 31,

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SUBSEQUENT EVENTS

In July 2024, the Company drew $ 5.0 million of the Delayed Draw Term Loan, making the facility fully utilized.

There were no other subsequent events other than the Nasdaq notice received in August 2024 as discussed in Note 7.

There were no subsequent events other than the employee leasing agreement discussed in Note 10 .

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