Mediaco Holding Inc. 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Note: Certain statements included in this report or in the financial statements contained herein that are not statements of historical fact, including but not limited to those identified with the words “expect,” “should,” “will” or “look” are intended to be, and are, by this Note, identified as “forward-looking statements,” as defined in the Securities Exchange Act of 1934, as amended. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future result, performance or achievement expressed or implied by such forward-looking statement. Such factors include, among others: • Potential conflicts of interest with SG Broadcasting and our status as a “controlled company”; • Our ability to operate as a standalone public company and to execute on our business strategy; • Our ability to compete with, and integrate into our operations, new media channels, such as digital video, live video streaming, YouTube, and other real-time media delivery; • Our ability to continue to sell advertising time or exchange advertising time for goods or services; • Our ability to use market research, advertising and promotions to attract and retain audiences; • U.S. regulatory requirements for owning and operating media broadcasting channels and our ability to maintain regulatory licenses granted by the FCC; • Pending U.S. regulatory requirements for paying royalties to performing artists; • Industry and economic trends within the U.S. radio and television industry, generally, and in the markets in which we operate, in particular; • Our ability to successfully attract and retain on-air talent; • Our ability to successfully produce and distribute on-air programming; • Our ability to maintain and expand distribution platforms and station affiliations; • Our ability to finance our operations or to obtain financing on terms that are favorable to MediaCo; • Our ability to successfully complete and integrate acquisitions, including the recent transactions with Estrella Broadcasting, Inc. and any future acquisitions; • The accuracy of management’s estimates and assumptions on which the Company’s financial projections are based; and • Other factors mentioned in documents filed by the Company with the Securities and Exchange Commission. For a more detailed discussion of these and other risk factors, see the Risk Factors section of our Annual Report on Form 10-K, filed with the Securities and Exchange Commission on April 1, 2024 . MediaCo does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise. GENERAL We own and operate two radio stations located in New York City, 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 and its influential linear and digital video content business and Estrella’s expansive digital channels, including its four FAST channels - EstrellaTV, Estrella News, Cine EstrellaTV, and Estrella Games - and the EstrellaTV app. See Note 3 — Business Combinations in our condensed consolidated financial statements included elsewhere in this report for additional information on the Estrella Acquisition. We derive our revenues primarily from radio, television and digital advertising sales, but we also generate revenues from events, including sponsorships and ticket sales, licensing, and syndication. Our revenues are mostly affected by the advertising rates our entities charge, as advertising sales are the primary component of our consolidated revenues. These rates are in large part based on our stations’ ability to attract audiences in demographic groups targeted by their advertisers. The Nielsen Company generally measures radio station ratings weekly for markets measured by the Portable People Meter™ as well as providing television programming ratings services for the EstrellaTV network and the Estrella VIE local television stations. Because audience ratings in a station’s local market are critical to the station’s financial success, our strategy is to use market research, advertising and promotion to attract and retain audiences in each station’s chosen demographic target group. Our revenues vary throughout the year. Revenue and operating income are usually lowest in the first calendar quarter, partly because retailers cut back their advertising spending immediately following the holiday shopping season. -28- Table of Contents In addition to the sale of advertising time for cash, stations typically exchange advertising time for goods or services, which can be used by the station in its business operations. These barter transactions are recorded at the estimated fair value of the product or service received. We generally confine the use of such trade transactions to promotional items or services for which we would otherwise have paid cash. In addition, it is our general policy not to preempt advertising spots paid for in cash with advertising spots paid for in trade. The following table summarizes the sources of our revenues from continuing operations for the three and nine months ended September 30, 2024 and 2023. The category “Other” includes, among other items, revenues related to network revenues and barter. (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2024 % of Total 2023 % of Total 2024 % of Total 2023 % of Total Net revenues: Spot Advertising $ 19,637 65.9 % $ 4,328 67.1 % $ 41,697 66.4 % $ 14,009 54.2 % Digital 5,780 19.3 % 608 9.4 % 10,051 16.0 % 3,053 11.8 % Syndication 806 2.8 % 602 9.3 % 2,092 3.3 % 1,812 7.0 % Events and Sponsorships 889 2.9 % 293 4.5 % 3,124 4.9 % 4,921 19.0 % Other 2,747 9.1 % 616 9.7 % 5,803 9.4 % 2,067 8.0 % Total net revenues $ 29,859 $ 6,447 $ 62,767 $ 25,862 Roughly 20% of our expenses vary in connection with changes in revenue. These variable expenses primarily relate to costs in our sales department, such as salaries, commissions and bad debt. Our costs that do not vary as much in relation to revenue are mostly in our programming and general and administrative departments, such as talent costs, ratings fees, rents, utilities and salaries. Lastly, our costs that are highly discretionary are costs in our marketing and promotions department, which we primarily incur to maintain and/or increase our audience and market share. KNOWN TRENDS AND UNCERTAINTIES The U.S. traditional radio and television broadcasting industries are mature industries and their growth rate has stalled. Management believes this is principally the result of two factors: (i) new media, such as various media distributed via the Internet, telecommunication companies and cable interconnects, as well as social networks, have gained advertising share against radio, television and other traditional media and created a proliferation of advertising inventory and (ii) the fragmentation of the radio and television audiences and time spent listening and viewing caused by satellite radio, audio and video streaming services, and podcasts has led some investors and advertisers to conclude that the effectiveness of broadcast advertising has diminished. Our network and stations have aggressively worked to harness the power of broadband and mobile media distribution in the development of emerging business opportunities by capitalizing on the rapidly growing Free Ad-Supported Streaming TV marketplace (“FAST”) through several operated channels, creating highly interactive direct-to-consumer (“D2C”) apps and websites with content that engages our audience and harnessing the power of digital video on our D2C platforms, YouTube, and connected TV publishers, vMVPDs and OEMs. The results of our NY Audio, Digital & Events segment broadcast operations are highly dependent on the results of our stations in the New York market. Some of our competitors that operate larger station clusters in the New York market are able to leverage their market share to extract a greater percentage of available advertising revenue through packaging a variety of advertising inventory at discounted unit rates. Market revenues in New York as measured by Miller Kaplan Arase LLP (“Miller Kaplan”), an independent public accounting firm used by the radio industry to compile revenue information, were up 3.5% for the nine months ended September 30, 2024, as compared to the same period of the prior year. Our gross revenues reported to Miller Kaplan were down 11.3%, as compared to the same period of the prior year. The decreases for our New York Cluster were largely driven by lower spend in the media and financial sectors. For Estrella MediaCo, as of September 30, 2024, EM-ADE revenue was down 3.3% over the same period in 2023, while MAGNA, a leading global media investment and intelligence company, estimated the market would be up 0.3%. EM-VD revenue was down 7.2%, versus the MAGNA market estimate of up 6.9%. As part of our business strategy, we continually evaluate potential acquisitions of businesses that we believe hold promise for long-term appreciation in value and leverage our strengths. We also regularly review our portfolio of assets and may opportunistically dispose of or otherwise monetize assets when we believe it is appropriate to do so. As part of the Estrella acquisition integration, in the three months ended September 30, 2024, we developed a plan to close and relocate certain studio and marketing operations. In fulfilling this plan, we incurred involuntary termination costs of $1.4 million in the three and nine months ended September 30, 2024, included in operating expenses excluding depreciation and amortization on our condensed consolidated statements of operations included elsewhere in this report. -29- Table of Contents MediaCo has been impacted by the rising interest rate environment in the financial markets, driving the interest accrued and paid on the Emmis Convertible Promissory Note to increase as well as providing uncertainty on our First Lien Term Loan and Second Lien Term Loan, which have variable interest rates. Although the Federal Reserve has left its benchmark rate steady since July 2023 and recently has indicated a bias in favor of eventually cutting its benchmark interest rate, it also has indicated that additional rate increases in the future may be necessary to mitigate inflationary pressures, and there can be no assurance that the Federal Reserve will not make upwards adjustments to the federal funds rate in the future. CRITICAL ACCOUNTING ESTIMATES We have considered information available to us as of the date of issuance of these financial statements and are not aware of any specific events or circumstances that would require an update to our estimates or judgments, or a revision to the carrying value of our assets or liabilities, except for those fair value estimates related to the Estrella Acquisition (see Note 3 — Business Combinations in our condensed consolidated financial statements included elsewhere in this report for additional information). Our estimates may change as new events occur and additional information becomes available. Our actual results may differ materially from these estimates. A complete description of our critical accounting estimates is contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission on April 1, 2024. As a result of the Estrella Acquisition, we believe the following are new critical accounting estimates. Acquisitions and Fair Value We account for the assets acquired and liabilities assumed in an acquisition based on their respective fair values as of the acquisition date. The excess of the fair value of the consideration transferred over the fair value of the acquired net assets, when applicable, is recorded as goodwill. The judgments made in determining estimated fair values assigned to assets acquired, liabilities assumed, and consideration transferred in a business combination, as well as estimated asset lives, can materially affect our condensed consolidated financial statements. The fair values of intangible assets are determined using information available at the acquisition date based on expectations and assumptions that are deemed reasonable by management. These fair value estimates require significant judgment with respect to market revenue, market growth rates, unit of accounting audience share, unit of accounting revenue share, the selection of appropriate discount rates, a nd other assumptions and estimates. Such estimates and assumptions are determined based upon our business plans, general economic conditions, audience behavior, and numerous other variables. Depending on the facts and circumstances, we may deem it necessary to engage an independent valuation expert to assist in valuing significant assets and liabilities. Impairment of Indefinite-lived and Long-lived Assets We review the carrying value of long-lived assets (both intangible and tangible) for potential impairment on a periodic basis and whenever events or changes in circumstances indicate the carrying value of an asset (or asset group) may not be recoverable. We identify impairment for indefinite-lived intangible assets by comparing the fair value to its carrying value using both a market approach and income approach. The fair value under the market approach is determined by multiplying the cash flows of the reporting unit by an estimated market multiple. The income approach is performed using a discounted cash flow method to determine the fair value of each reporting unit. If the carrying value of a reporting unit’s goodwill exceeds its fair value, the Company will recognize an impairment charge equal to the difference in the statement of operations. We identify impairment for long-lived assets by comparing the projected undiscounted cash flows to be generated by the asset (or asset group) to its carrying value. If an impairment is identified, a loss is recorded that is equal to the excess of the asset's carrying value over its fair value generally utilizing a discounted cash flow analysis, and the cost basis is adjusted. Goodwill and indefinite-lived intangible assets are reviewed for impairment at least annually and when certain impairment indicators are present. We have historically performed our annual goodwill and indefinite-lived intangible asset impairment assessment as of October 1 each year. Significant management judgment is required in estimating fair values in our impairment reviews and in the creation of forecasts of future operating results that are used in the discounted cash flow method of valuation. These include, but are not limited to, estimates and assumptions regarding (1) our future cash flows, revenue, and other profitability measures such as EBITDA, (2) the long-term growth rate of our business, and (3) the determination of our weighted-average cost of capital, which is a factor in determining the discount rate. We make these judgments based on our historical experience, relevant market size, and expected industry trends. These assumptions are subject to change in future periods because of, among other things, additional information, financial information based on further historical experience, changes in competition, our investment decisions, and changes in macroeconomic conditions, including rising interest rates and inflation. A change in these assumptions or the use of alternative estimates and assumptions could have a significant impact on the estimated fair value and may expose us to impairment losses. -30- Table of Contents RESULTS OF OPERATIONS Three-Month and Nine-Month Periods Ended September 30, 2024 compared to September 30, 2023 The following discussion refers to the Company’s continuing operations. Following the Estrella Acquisition, our results of operations include three reportable segments: Estrella MediaCo Video & Digital (“EM-VD”), Estrella MediaCo Audio, Digital & Events (“EM-ADE”), and NY Audio, Digital & Events (“NY-ADE”). The results of EstrellaTV and all of the Estrella MediaCo television operations, including digital, are included in our EM-VD segment. The Estrella MediaCo radio, digital and events operations are included in our EM-ADE segment. The operations of our two New York radio stations are included in our NY-ADE segment. See Note 3 — Business Combinations in our condensed consolidated financial statements included elsewhere in this report for additional information on the Estrella Acquisition. Net revenues: Three Months Ended September 30, Nine Months Ended September 30, 2024 (dollars in thousands) 2024 2023 $ Change % Change 2024 2023 $ Change % Change EM-VD $ 13,108 $ — $ 13,108 n/a $ 22,097 $ — $ 22,097 n/a EM-ADE 10,186 — 10,186 n/a 18,658 — 18,658 n/a NY-ADE 6,565 6,447 118 1.8 % 22,012 25,862 (3,850) (14.9) % Total $ 29,859 $ 6,447 $ 23,412 363.1 % $ 62,767 $ 25,862 $ 36,905 142.7 % For our EM-VD and EM-ADE segments, net revenues increased for the three and nine months ended September 30, 2024 due to the Estrella Acquisition. For our NY-ADE segment, net revenues increased for the three months ended September 30, 2024 driven by stronger telecommunications spend, partially offset by weaker broadcast and print media spend. For our NY-ADE segment, net revenues decreased for the nine months ended September 30, 2024 driven by weaker sales for our annual Summer Jam concert as well as lower spend in the media, retail and beverages categories partially offset by stronger political and telecommunications spend. We typically monitor the performance of our NY-ADE stations against the aggregate performance of the market in which we operate based on reports for the period prepared by Miller Kaplan. Miller Kaplan reports are generally prepared on a gross revenues basis and exclude revenues from trade and syndication arrangements. Miller Kaplan reported that gross revenues for the New York radio market increased 3.5% for the nine-month period ended September 30, 2024, as compared to the same period of the prior year. Our gross revenues reported to Miller Kaplan were down 11.3% for the nine-month period ended September 30, 2024, as compared to the same period of the prior year. Operating expenses excluding depreciation and amortization expense: (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2024 2024 2023 $ Change % Change 2024 2023 $ Change % Change EM-VD $ 16,581 $ — $ 16,581 n/a $ 32,151 $ — $ 32,151 n/a EM-ADE 10,010 — 10,010 n/a 19,408 — 19,408 n/a NY-ADE 6,081 7,175 (1,094) (15.2) % 22,410 25,458 (3,048) (12.0) % Total $ 32,672 $ 7,175 $ 25,497 355.4 % $ 73,969 $ 25,458 $ 48,511 190.6 % For our EM-VD and EM-ADE segments, operating expenses excluding depreciation and amortization expense increased for the three and nine months ended September 30, 2024 due to the Estrella Acquisition. For our NY-ADE segment, operating expenses excluding depreciation and amortization expense decreased for the three months ended September 30, 2024 driven by lower employee costs and professional service fees as compared to the same period of the prior year. For our NY-ADE segment, operating expenses excluding depreciation and amortization expense decreased for the nine months ended September 30, 2024 driven by lower production costs for our annual Summer Jam concert, lower lease costs as our new office lease commenced in February 2023 and the prior office lease did not terminate until the third quarter of 2023, lower employee costs and lower professional service fees, partially offset by increased information technology costs. -31- Table of Contents Corporate expenses: (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2024 2024 2023 $ Change % Change 2024 2023 $ Change % Change Corporate expenses $ 2,319 $ 1,095 $ 1,224 111.8 % $ 9,154 $ 3,981 $ 5,173 129.9 % Corporate expenses increased for the three months ended September 30, 2024 due to higher professional service fees driven by work related to the debt amendment, the Estrella Acquisition and other corporate matters, partially offset by lower salary and stock based compensation expenses. Corporate expenses increased for the nine months ended September 30, 2024 due to higher professional service fees driven by the Estrella Acquisition, partially offset by lower salary and stock based compensation expenses. Depreciation and amortization: (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2024 2024 2023 $ Change % Change 2024 2023 $ Change % Change EM-VD $ 1,259 $ — $ 1,259 n/a $ 2,273 $ — $ 2,273 n/a EM-ADE 348 — 348 n/a 627 — 627 n/a NY-ADE 134 130 4 3.1 % 405 437 (32) (7.3) % Total $ 1,741 $ 130 $ 1,611 1239.2 % $ 3,305 $ 437 $ 2,868 656.3 % For our EM-VD and EM-ADE segments, depreciation and amortization expense increased for the three and nine months ended September 30, 2024 due to the Estrella Acquisition. For our NY-ADE segment, depreciation and amortization expense remained relatively flat for the three and nine months ended September 30, 2024 due to certain assets becoming fully depreciated in the prior year offset by new assets placed into service. Loss (gain) on disposal of assets: (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2024 2024 2023 $ Change % Change 2024 2023 $ Change % Change EM-ADE $ — $ — $ — n/a $ 5 $ — $ 5 n/a NY-ADE — 11 (11) (100.0) % — (28) 28 (100.0) % Total $ — $ 11 $ (11) (100.0) % $ 5 $ (28) $ 33 (117.9) % For our NY-ADE segment, the gain on disposal of assets for the nine months ended September 30, 2023 related to the sale of vehicles in the first quarter of 2023, while there were minimal disposals for the same period in the current year. For our NY-ADE segment, the loss on disposal of assets for the three months ended September 30, 2023 related to the disposal of assets related to our previous office location, while there were no disposals for the quarter in the current year. Operating loss: (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2024 2024 2023 $ Change % Change 2024 2023 $ Change % Change EM-VD $ (4,732) $ — $ (4,732) n/a $ (12,327) $ — $ (12,327) n/a EM-ADE (172) — (172) n/a (1,382) — (1,382) n/a NY-ADE 350 (869) 1,219 (140.3) % (803) (5) (798) 15960.0 % All other (2,319) (1,095) (1,224) 111.8 % (9,154) (3,981) (5,173) 129.9 % Total $ (6,873) $ (1,964) $ (4,909) 249.9 % $ (23,666) $ (3,986) $ (19,680) 493.7 % See “Net revenues,” “Operating expenses excluding depreciation and amortization,” "Depreciation and amortization," "Loss (gain) on disposal of assets," and “Corporate expenses” above. -32- Table of Contents Interest expense, net: (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2024 2024 2023 $ Change % Change 2024 2023 $ Change % Change Interest expense, net $ (3,274) $ (87) $ (3,187) 3,663.2 % $ (7,192) $ (306) $ (6,886) 2,250.3 % Interest expense, net increased for the three and nine months ended September 30, 2024 due to the additional long-term debt related to the Estrella Acquisition. Change in fair value of warrant shares liabilities: (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2024 2024 2023 $ Change % Change 2024 2023 $ Change % Change Change in fair value of warrant shares liabilities $ 65,439 $ — $ 65,439 n/a $ 34,412 $ — $ 34,412 n/a Change in fair value of warrant shares liabilities for the three months ended September 30, 2024 was driven by the decrease in MediaCo’s share price from $3.60 at the end of the previous quarter to $1.28 as of September 30, 2024. Change in fair value of warrant shares liabilities for the nine months ended September 30, 2024 was driven by the decrease in MediaCo’s share price from $2.50 at the initial recognition of the warrant shares liability to $1.28 as of September 30, 2024. Provision for income taxes: (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2024 2024 2023 $ Change % Change 2024 2023 $ Change % Change Provision for income taxes $ 342 $ 84 $ 258 307.1 % $ 608 $ 234 $ 374 159.8 % Our provision for income taxes tax was primarily due to changes in deferred tax liabilities. Consolidated net income (loss): (dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2024 2024 2023 $ Change % Change 2024 2023 $ Change % Change Consolidated net income (loss) $ 54,926 $ (2,316) $ 57,242 (2471.6) % $ 2,942 $ (4,844) $ 7,786 (160.7) % See “Net revenues,” “Operating expenses excluding depreciation and amortization,” "Depreciation and amortization," "Loss (gain) on disposal of assets," “Corporate expenses,” “Interest expense,” and “Change in fair value of warrant shares liability” above. LIQUIDITY AND CAPITAL RESOURCES The Company’s primary sources of liquidity are cash provided by operations, availability under our First Lien Credit Agreement, and our At Market Issuance Sales Agreement. Primary uses of capital have been, and are expected to continue to be, capital expenditures, debt service obligations, working capital and acquisitions. At September 30, 2024 , the Company had cash, cash equivalents and restricted ca sh of $10.2 million and negative working capital of $(14.1) million . At December 31, 2023, we had cash, cash equivalents and restricted cash of $7.1 million and net working capital of $2.2 million. The decrease in net working capital was driven by accrued expenses and deferred revenue assumed, partially offset by accounts receivable and the current portion of programming rights acquired in the Estrella Acquisition. The Company has experienced diminished revenues and profitability, driven in part by weaker Summer Jam sales, and expects these conditions 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. -33- Table of Contents At September 30, 2024, we had $6.5 million outstanding to Emmis under the Emmis Convertible Promissory Note (as defined in Note 10 — Related Party Transactions in our condensed consolidated financial statements included elsewhere in this report for additional information), 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 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 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. 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. 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. As part of its business strategy, the Company continually evaluates potential acquisitions of businesses that it believes hold promise for long-term appreciation in value and leverage our strengths. Operating Activities Cash flows used in continuing operating activities were $30.7 million compared to $3.7 million for the nine months ended September 30, 2024 and 2023, respectivel y. The increase in the use of cash in continuing operating activities was mainly attributable to lower operating income as well as increased working capital requirements driven by the Estrella Acquisition. Investing Activities Cash flows used in continuing investing activities were $7.6 million for the nine months ended September 30, 2024, attributable to cash paid, net of cash received, for the Estrella Acquisition, as well as capital expenditures related to our NY Audio digital platform project and our build out of our new space for radio operations and corporate offices. C ash flows used in continuing investing activities were $1.1 million for the nine months ended September 30, 2023, attributable to capital expenditures related to our NY Audio digital platform project and our build out of our new space for radio operations and corporate offices. Financing Activities Cash flows provided by continuing financing activities were $41.4 million for the nine months ended September 30, 2024, attributable to proceeds from the First Lien Term Loan, partially offset by payments of debt issuance costs, finance lease principal payments, and settlement of tax withholding obligations. Cash flows used in continuing financing activities were $1.1 million for the nine months ended September 30, 2023, attributable to repurchases of our Class A common stock and settlement of tax withholding obligations. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As an emerging growth company, we are not required to provide this information.