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Item 8. Financial Statements and Supplementary Data

2025-04-15 compared with 2024-04-01 · 571 added, 240 removed, 514 unchanged (61% of the section changed)

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To the Shareholders and the Board of Directors of MediaCo Holding Inc.

and Subsidiaries

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of MediaCo Holding Inc.

and subsidiaries (the Company) as of December 31, 2023 and 2022, the related consolidated statements of operations, changes in retained earnings (deficit), and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

and subsidiaries (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, changes in equity and noncontrolling interests, and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with U.S.

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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

We have served as the Company’s auditor since 2019.

Indianapolis, IN

Indianapolis, Indiana

April 15, 2025

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Interest expense, net ( 11,137 ) ( 426 )

Change in fair value of warrant shares liability 38,360 —

Other income 2 100

Loss on debt extinguishment — ( 1,218 )

Total other expense ( 326 ) ( 8,073 )

Total other income (expense) 27,225 ( 326 )

LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES ( 982 ) ( 7,113 )

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Loss from discontinued operations before income taxes — ( 284 )

Gain on sale of discontinued operations — 46,875

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

Income tax benefit from discontinued operations — 74

NET LOSS FROM DISCONTINUED OPERATIONS — ( 210 )

CONSOLIDATED NET LOSS ( 1,302 ) ( 7,631 )

NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST 2,773 —

PREFERRED STOCK DIVIDENDS 851 2,415

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

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

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS $ ( 4,926 ) $ ( 10,046 )

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

Continuing operations $ ( 0.08 ) $ ( 0.39 )

Discontinued operations $ — $ ( 0.01 )

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

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

$ ( 0.08 ) $ ( 0.40 )

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Accounts receivable, net of allowance for doubtful accounts of $ 1,079 and $ 353 , respectively

Prepaid expenses 891 979

Other 1,188 341

Current assets of discontinued operations — 1,066

Current programming rights 2,781 —

Prepaid expenses and other current assets 1,307 2,079

Total current assets 39,276 13,908

PROPERTY AND EQUIPMENT:

Land and buildings 2,779 —

Leasehold improvements 1,761 1,102

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Indefinite-lived intangibles 165,964 63,266

Goodwill 28,338 —

Other intangibles 15,693 3,737

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Operating lease right of use assets 48,067 13,614

Finance lease right of use assets 2,623 —

Noncurrent acquired programming rights 5,022 —

Deposits and other 2,937 1,996

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2024 DECEMBER 31,

LIABILITIES AND RETAINED DEFICIT

LIABILITIES AND EQUITY AND NONCONTROLLING INTERESTS

CURRENT LIABILITIES:

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Operating lease liabilities 6,401 1,444

Finance lease liabilities 723 —

Income taxes payable 2,023 65

Current liabilities of discontinued operations — 659

Total current liabilities 57,291 11,717

LONG-TERM DEBT, NET OF CURRENT PORTION 70,172 —

WARRANT SHARES 32,155 —

SERIES B PREFERRED STOCK 35,553 —

OPERATING LEASE LIABILITIES, NET OF CURRENT 37,634 14,333

FINANCE LEASE LIABILITIES, NET OF CURRENT 2,038 —

ASSET RETIREMENT OBLIGATION 200 —

DEFERRED INCOME TAXES 2,935 2,775

NONCURRENT PROGRAM RIGHTS PAYABLE 4,547 —

OTHER NONCURRENT LIABILITIES 455 502

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

28,754 26,339

Class A common stock, $ 0.01 par value;

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Total equity 62,119 37,410

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

Noncontrolling interests 20,402 —

Total equity and noncontrolling interests 82,521 37,410

Total liabilities and equity and noncontrolling interests $ 325,501 $ 95,491

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

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AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN RETAINED EARNINGS (DEFICIT)

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY AND NONCONTROLLING INTERESTS

FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

Class A Common Stock Class B Common Stock

(in thousands, except share data) Shares Amount Shares Amount APIC Retained Earnings (Deficit) Total

(in thousands, except share data) Shares Amount Shares Amount APIC Accumulated Deficit Noncontrolling Interests Total

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

Net income — — — — — 30,914 30,914

Issuance of class A to employees, officers and directors 530,001 6 — — 1,275 — 1,281

Conversion of convertible promissory notes 13,714,730 138 — — 30,766 — 30,904

Conversion of preferred shares 3,328,728 34 — — 3,966 — 4,000

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

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

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

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

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

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

Net (loss) income — — — — — ( 4,075 ) 2,773 ( 1,302 )

Sale of class A common shares 62,441 1 — — 70 — — 71

Issuance of class A to employees, officers and directors, net of withholdings ( 252,768 ) ( 5 ) — — ( 28 ) — — ( 33 )

Noncontrolling interest resulting from Estrella transaction — — — — — — 17,629 17,629

Conversion of preferred series A shares 20,733,869 207 — — 29,397 — — 29,604

Repurchase of class A common shares ( 11,304 ) — — — ( 7 ) — — ( 7 )

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OPERATING ACTIVITIES:

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

Consolidated net loss $ ( 1,302 ) $ ( 7,631 )

Loss from discontinued operations, net of tax — 210

Adjustments to reconcile net loss to net cash used in operating activities from continuing operations:

Depreciation and amortization 5,258 568

Amortization of deferred financing costs, including original issue discount — 610

Amortization of debt discount 355 —

Amortization of fair value debt adjustments 1,288 —

Noncash change in warrant shares ( 38,360 ) —

Noncash interest expense 4,601 508

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Other liabilities ( 672 ) ( 219 )

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

Net cash used in continuing operating activities ( 19,862 ) ( 5,570 )

Net cash provided by discontinued operating activities — 255

Net cash used in operating activities ( 19,862 ) ( 5,315 )

INVESTING ACTIVITIES:

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Purchases of internally-created software ( 150 ) ( 597 )

Proceeds from sale of discontinued operations — 78,982

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

Cash paid in acquisitions, net of cash acquired ( 13,015 ) —

Proceeds from sale of property and equipment 100 —

Net cash used in continuing investing activities ( 14,178 ) ( 1,666 )

Net cash used in discontinued investing activities — —

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

Net cash used in investing activities ( 14,178 ) ( 1,666 )

FINANCING ACTIVITIES:

Payments on long-term debt ( 7,318 ) —

Proceeds from long-term debt 43,650 —

Proceeds of class A common stock issuances 71 —

Repurchases of class A common stock ( 7 ) ( 771 )

Payments for debt related costs ( 1,868 ) —

Finance lease principal payments ( 267 ) —

Settlement of tax withholding obligations ( 359 ) ( 440 )

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

Net cash provided by (used in) continuing financing activities 33,902 ( 1,211 )

Net cash used in discontinued financing activities — ( 38 )

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

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

Net cash provided by (used in) financing activities 33,902 ( 1,249 )

DECREASE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH ( 138 ) ( 8,230 )

CASH, CASH EQUIVALENTS AND RESTRICTED CASH:

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

MediaCo Holding Inc.

(“MediaCo” or the “Company”) is an owned and operated multi-media company formed in Indiana in 2019, focused on radio and digital advertising, premium programming and events.

Our assets consist of two radio stations, WQHT(FM) and WBLS(FM) (the “Stations”), which serve the New York City demographic market area that primarily targets Black, Hispanic, and multi-cultural consumers.

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”), pursuant to which we sold our Fairway outdoor advertising business to the Purchaser.

MediaCo Holding Inc., its subsidiaries, and a variable interest entity (“VIE”) (collectively, “MediaCo” or the “Company”) is an owned and operated multi-media company formed in Indiana in 2019, focused on television, radio and digital advertising, premium programming and events.

On April 17, 2024, MediaCo Holding Inc.

and its wholly-owned subsidiary MediaCo Operations LLC, a Delaware limited liability company (“Purchaser”), entered into an asset purchase agreement (the “Asset Purchase Agreement”) with Estrella Broadcasting, Inc., a Delaware corporation (“Estrella”), and SLF LBI Aggregator, LLC, a Delaware limited liability company (“Aggregator”) and affiliate of HPS Investment Partners, LLC (“HPS”), pursuant to which Purchaser purchased substantially all of the assets of Estrella and its subsidiaries (other than certain broadcast assets owned by Estrella and its subsidiaries (the “Estrella Broadcast Assets”)) (the “Purchased Assets”), and assumed substantially all of the liabilities (the “Assumed Liabilities”) of Estrella and its subsidiaries (such transactions, collectively, the “Estrella Acquisition”).

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 eleven radio stations serving Los Angeles, CA, Houston, TX, and Dallas, TX and nine television stations serving Los Angeles, CA, Houston, TX, Denver, CO, New York, NY, Chicago, IL 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 eight free ad-supported television (“FAST”) channels - EstrellaTV, Estrella News, Cine EstrellaTV, Estrella Games, EstrellaTV Mexico, Curiosity Explora, Curiosity Motores, and Curiosity Animales.

See Note 4 — Business Combinations in our 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.

On December 9, 2022, Fairway Outdoor LLC, FMG Kentucky, LLC and FMG Valdosta, LLC (collectively, “Fairway”), all of which were wholly owned direct and indirect subsidiaries of MediaCo, entered into an asset purchase agreement with The Lamar Company, L.L.C., a Louisiana limited liability company, pursuant to which we sold our Fairway outdoor advertising business to The Lamar Company, L.L.C.

The transactions contemplated by the purchase agreement closed as of the date of the purchase agreement.

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.

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 operations 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.

See Note 2 — Discontinued Operations for additional information.

Unless the context otherwise requires, references to “we”, “us” and “our” refer to MediaCo and its subsidiaries.

Unless the context otherwise requires, references to “we”, “us” and “our” refer to MediaCo, and its subsidiaries and the Estrella VIE (as defined below), collectively.

Basis of Presentation and Consolidation

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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.

The Company determined that the Estrella entities holding the Estrella Broadcast Assets (the “Estrella VIE”) are a VIE in which the Company holds a controlling financial interest.

Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) paragraph 810-10-25-38A and paragraph 810-10-25-38B, a reporting entity (in this case, the Company) is deemed to have a controlling financial interest in a VIE if it has both of the following characteristics:

The power to direct the activities of the VIE that most significantly impact the VIE’s economic performance;

The obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The Company determined that since the major factors in the economic performance of the Estrella VIE are the popularity of the programming provided by the Company to the Estrella VIE and the Company’s sale of advertising in that programming, the Company is the primary beneficiary of the VIE, and the remaining assets and liabilities of the Estrella VIE should be consolidated in the Company’s consolidated financial statements as of April 17, 2024.

The Company accounts for noncontrolling interest in accordance with ASC 810, which requires companies with noncontrolling interests to disclose such interests as a portion of equity but separate from the Parent’s equity.

The noncontrolling interests’ portion of net income (loss) is presented on the consolidated statement of operations.

On March 6, 2025, the Company’s shareholders voted to approve the issuance of (i) up to 28,206,152 shares of MediaCo Class A Common Stock, par value $ 0.01 per share, upon the exercise of a warrant issued in connection with the Company’s acquisition of certain assets of Estrella Broadcasting, Inc.

and its subsidiaries, and (ii) 7,051,538 shares of MediaCo Class A Common Stock, par value $ 0.01 per share, upon the exercise of the option right held by a subsidiary of MediaCo to purchase, or the put right held by Estrella Media, Inc.

to sell equity interests of certain broadcast assets.

See Note 15 — Subsequent Events for additional information.

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.

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

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

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

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

Allowance for Doubtful Accounts

An allowance for doubtful accounts is recorded based on management’s judgment of the collectability of receivables.

When assessing the collectability of receivables, management considers, among other things, historical loss experience and existing economic conditions.

Allowance for Credit Losses

An allowance for credit losses is recorded based on management’s judgment of the collectability of trade receivables.

When assessing the collectability of receivables, management considers, among other things, customer type (agency versus non-agency), historical loss experience, existing and expected future economic conditions and aging category.

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

The activity in the allowance for doubtful accounts for the years ended December 31, 2023, and 2022, was as follows:

Balance At Beginning Of Period Provision Write-Offs Balance At End Of Period

The activity in the allowance for credit losses for the years ended December 31, 2024 and 2023, was as follows:

Balance At Beginning Of Period Additions related to Estrella Acquisition Change in Provision Write Offs Balance At End Of Period

Year ended December 31, 2023 $ 122 $ — 282 ( 51 ) $ 353

Year ended December 31, 2024 $ 353 292 683 ( 249 ) $ 1,079

Cash and Cash Equivalents

Cash, Cash Equivalents and Restricted Cash

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

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

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.

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 $ 2.0 million and $ 1.9 million, respectively, as of December 31, 2024 and 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 December 31, 2024 was held in 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 consolidated balance sheets.

Property and Equipment

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Depreciation expense for the years ended December 31, 2024 and 2023 was $ 2.7 million and $ 0.3 million, respectively.

Fair Value Measurements

Fair value is the exchange price to sell an asset or transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date.

The Company uses market data or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique.

These inputs may be readily observable, corroborated by market data, or generally unobservable.

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

(see Note 10 for additional information).

The Company’s Warrant Shares (as defined in Note 4) are classified as a liability for which the fair value is measured on a recurring basis using Level 1 inputs (see Note 7 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 10, 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 10 for additional information).

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

The Company believes the current carrying value of its long-term debt approximates its fair value as it is variable rate debt.

Intangible Assets

Indefinite-lived Intangibles

In accordance with ASC Topic 350, “ Intangibles—Goodwill and Other,” radio broadcasting licenses are not amortized, but are tested at least annually for impairment at the reporting unit level and unit of accounting level, respectively.

In accordance with ASC Topic 350, “ Intangibles—Goodwill and Other,” goodwill and radio and tv broadcasting licenses are not amortized, but are tested at least annually for impairment at the reporting unit level and unit of accounting level, respectively.

We test for impairment annually, on October 1 of each year, or more frequently when events or changes in circumstances or other conditions suggest impairment may have occurred.

Impairment exists when the asset carrying values exceed their respective fair values, and the excess is then recorded to operations as an impairment charge.

See Note 10 — Intangible Assets, for more discussion of our annual impairment tests performed during the years ended December 31, 2023, and 2022.

See Note 10 — Intangible Assets And Goodwill, for more discussion of our annual impairment tests performed during the years ended December 31, 2024 and 2023.

Definite-lived Intangibles

The Company’s definite-lived intangible assets consist of software developed internally and programming agreements related to our radio business.

The Company’s definite-lived intangible assets consist of software developed internally, customer relationships and programming agreements related to our radio business.

These are amortized over the period of time the intangible assets are expected to contribute directly or indirectly to the Company’s future cash flows.

Warrant Liabilities

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity (“ASC 480”), and ASC 815, Derivatives and Hedging (“ASC 815”).

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification.

This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance.

For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded as a liability at fair value on the date of issuance, and each balance sheet date thereafter.

Programming Rights

MediaCo has elected to record programming right assets and liabilities acquired from third parties at the gross amount at inception.

These programming rights are amortized based on the estimated number of future showings on a program by program basis over the license term, beginning in the period in which the license period begins and program becomes available for broadcast in accordance with ASC Topic 920, Entertainment - Broadcasters.

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 $ 4.5 million which is included in noncurrent program rights payable.

Amortization expense for the twelve months ended December 31, 2024 and 2023 was $ 2.7 million and zero , respectively, which is included in operating expenses excluding depreciation and amortization.

These programming rights are primarily related to one agreement which originally ended in February 2028, but was terminated in February 2025.

See Note 15 —Subsequent Events for further information.

Advertising Costs

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Deferred Revenue and Barter Transactions

Deferred revenue includes deferred barter and other transactions in which payments are received prior to the performance of services (e.g., cash-in-advance advertising).

Deferred revenue includes makegood liability, deferred barter and other transactions in which payments are received prior to the performance of services (e.g., cash-in-advance advertising).

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 deficiency units.

As of December 31, 2024, the makegood liability assumed in the Estrella Acquisition, which is associated with these network sales and contracts, was $ 9.2 million and is expected to be recognized over four years .

No such liability existed for the year ended December 31, 2023.

During the year ended December 31, 2024, the Company recognized $ 1.7 million into Revenue which was previously recorded as deferred revenue at the acquisition date.

Barter transactions are recorded at the estimated fair value of the product or service received.

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The appropriate expense or asset is recognized when merchandise or services are used or received.

Barter revenues were $ 0.8 million for the years ended December 31, 2023, and 2022.

Barter expenses were $ 0.8 million for the years ended December 31, 2023, and 2022.

Barter revenues were $ 2.6 million and $ 0.8 million for the years ended December 31, 2024 and 2023, respectively.

Barter expenses were $ 2.7 million and $ 0.8 million for the years ended December 31, 2024, and 2023, respectively.

Earnings Per Share

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.

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

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.

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 4) 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.

We have elected to determine the earnings allocation based on income (loss) from continuing operations.

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.

For periods with 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 income (loss) per share attributable to Class A and Class B common shareholders:

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Loss from continuing operations $ ( 1,302 ) $ ( 7,421 )

Net income attributable to noncontrolling interests ( 2,773 ) —

Preferred stock dividends ( 851 ) ( 2,415 )

Loss from continuing operations available to common shareholders ( 4,926 ) ( 9,836 )

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

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

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

Net loss attributable to common shareholders for basic and diluted earnings per share ( 4,926 ) ( 10,046 )

Weighted-average shares of common stock outstanding — basic and diluted 59,819 24,876

Earnings per share of common stock attributable to common shareholders:

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

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

Continuing operations $ ( 0.08 ) $ ( 0.39 )

Discontinued operations — ( 0.01 )

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

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

$ ( 0.08 ) $ ( 0.40 )

For the year ended December 31, 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.

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Convertible Emmis promissory note 8,865 4,902

Convertible Standard General promissory notes — 3,088

Option agreement shares 4,971 —

Series A convertible preferred stock 12,251 21,634

Restricted stock awards 842 641

Total 27,177 10,924

Total anti-dilutive shares 26,929 27,177

The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequence of events that have been recognized in the Company’s financial statements or income tax returns.

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If the Company determines that a deferred tax asset is not likely to be realized, a valuation allowance will be established against that asset to record it at its expected realizable value.

Definite-Lived Long-Lived Tangible Assets

Long-Lived Tangible Assets

The Company periodically considers whether indicators of impairment of definite-lived long-lived tangible assets are present.

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

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

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 our 2024 fiscal year annual reporting period, with early adoption permitted.

We have adopted this new standard effective December 31, 2024.

As a result, we have enhanced our segment disclosures.

The adoption of this ASU affects only our disclosures, with no impacts to our financial condition and results of operations.

Recent Accounting Pronouncements Not Yet Implemented

In November 2024, the FASB issued ASU 2024-03, Accounting Standards Update 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.

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.

An entity may apply the amendments prospectively for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements.

While this ASU will impact only our disclosures and not our financial condition and results of operations, we are currently evaluating when we will adopt the ASU.

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

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DISCONTINUED OPERATIONS

On December 9, 2022, Fairway entered into the Purchase Agreement with the Purchaser.

The transactions contemplated by the purchase agreement closed as of the date of the purchase agreement.

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Interest expense was allocated based on a ratio of net assets discontinued to the sum of consolidated net assets plus consolidated debt.

In addition, upon closing we entered into a transition service agreement with the Purchaser to support the operations after the divestiture for immaterial fees.

In addition, upon closing we entered into a transition service agreement with The Lamar Company, L.L.C.

to support the operations after the divestiture for immaterial fees.

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

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Year ended December 31,

2023 2022 (a)

Net revenues $ — $ —

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Total operating expenses — 284

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

Loss from operations of discontinued operations — ( 284 )

Interest and other, net — —

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Pre-tax gain on sale — —

(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.

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

December 31, 2023 December 31, 2022

Accounts receivable, net — 1,026

Total current assets of discontinued operations — 1,066

Accounts payable and accrued expenses — 659

Total current liabilities of discontinued operations — 659

Loss from discontinued operations, before income taxes — ( 284 )

Income tax benefit — 74

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

The aggregate carrying amounts of assets and liabilities of discontinued operations for Fairway in the consolidated balance sheets for the years ended December 31, 2024 and December 31, 2023 were zero .

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 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.

During the years ended December 31, 2024 and 2023, we repurchased under the Repurchase Plan 11,304 and 629,880 shares of Class A common stock for an immaterial amount and an aggregate of $ 0.8 million, respectively.

On August 20, 2021, MediaCo Holding Inc.

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During the years ended December 31, 2024 and 2023, no stock was sold under this agreement.

CONVERTIBLE PREFERRED STOCK

The Company issued to SG Broadcasting 220,000 shares of MediaCo Series A Convertible Preferred Stock, par value $ 0.01 (the “MediaCo Series A Preferred Shares”) in exchange for a cash contribution of $ 22.0 million (the “SG Broadcasting Contribution”).

This issuance of shares was issued in reliance upon an exemption from registration pursuant to Section 4(a)(2) under the Securities Act of 1933, as amended.

This issuance was not a “public offering” because no more than 35 non-accredited investors received securities of the Company, the Company did not engage in general solicitation or advertising with regard to the issuance and sale of shares of MediaCo Series A Preferred Shares and the Company did not make a public offering in connection with the sale of shares of MediaCo Series A Preferred Shares.

MediaCo Series A Preferred Shares rank senior in preference to the MediaCo Class A common stock, MediaCo Class B common stock, and the MediaCo Class C common stock.

Pursuant to the Articles of Amendment, the ability of the Company to make distributions with respect to, or make a liquidation payment on, any other class of capital stock in the Company designated to be junior to, or on parity with, the MediaCo Series A Preferred Shares, will be subject to certain restrictions, including that (i) the MediaCo Series A Preferred Shares shall be entitled to receive the amount of dividends per share that would be payable on the number of whole common shares of the Company into which each share of MediaCo Series A Preferred Share could be converted, and (ii) the MediaCo Series A Preferred Shares, upon any liquidation, dissolution or winding up of the Company, shall be entitled to a preference on the assets of the Company.

Issued and outstanding shares of MediaCo Series A Preferred Shares shall accrue cumulative dividends, payable in kind, at an annual rate equal to the interest rate on any senior debt of the Company (see Note 7), or if no senior debt is outstanding, 6 %, plus additional increases of 1 % on December 12, 2020 and each anniversary thereof.

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

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.

The Series A Preferred Shares are also convertible into shares of Class A common stock at the option of SG Broadcasting at any time after May 25, 2020, with the number of shares of common stock determined by dividing the original contribution, plus accrued dividends, by the 30-day volume weighted average share price of Class A common shares.

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.

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 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.

On December 12, 2024, the Company entered into an At-The-Market Sales Agreement with BTIG, LLC and Moelis & Company LLC (together, the “Agents”), pursuant to which the Company may offer and sell, from time to time through or to the Agents, as agents, shares of the Company’s Class A Common Stock, $ 0.01 par value per share, having an aggregate offering price of up to $ 2.0 million.

During the year ended December 31, 2024, 62,441 shares were sold under this agreement for net proceeds of $ 0.1 million.

BUSINESS COMBINATIONS

The Company accounts for acquisitions in accordance with guidance found in ASC 805, Business Combinations .

The guidance requires consideration given, including contingent consideration, assets acquired, and liabilities assumed to be valued at their fair values at the acquisition date.

The guidance further provides that:

(1) acquisition costs will generally be expensed as incurred, (2) restructuring costs associated with a business combination will generally be expensed subsequent to the acquisition date;

and (3) changes in deferred tax asset valuation allowances and income tax uncertainties after the acquisition date generally will affect income tax expense.

ASC 805 requires that any excess of purchase price over fair value of assets acquired, including identifiable intangibles and liabilities assumed, be recognized as goodwill.

Estrella Acquisition

On April 17, 2024, MediaCo consummated the Estrella Acquisition, pursuant to which it purchased substantially all of the assets of Estrella, other than the Estrella Broadcast Assets, and assumed substantially all of the liabilities of Estrella and its subsidiaries.

MediaCo provided the following consideration for the Estrella Acquisition (the “Transaction Consideration”):

a A warrant (the “Warrant”) to purchase up to 28,206,152 shares of MediaCo’s Class A common stock;

b 60,000 shares of a newly designated series of MediaCo’s preferred stock designated as “Series B Preferred Stock” (the “Series B Preferred Stock”),

c A term loan in the principal amount of $ 30.0 million under the Second Lien Credit Agreement (as defined below) (the “Second Lien Term Loan”);

d An aggregate cash payment in the amount of approximately $ 25.5 million to be used, in part, for the repayment of certain indebtedness of Estrella and payment of certain Estrella transaction expenses, financed through the First Lien Credit Agreement (as defined below).

Option Agreement

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

The Asset Purchase Agreement provides that MediaCo will prepare and file with the Securities and Exchange Commission (the “SEC”) a proxy statement to be sent to MediaCo shareholders relating to a special meeting of MediaCo shareholders (the “Shareholders Meeting”) to be held to consider approval of the issuance of shares of Class A Common Stock upon exercise of the Warrant and the issuance of shares of Class A Common Stock pursuant to the Option Agreement (the “Proposal”).

The Shareholders Meeting was held on March 6, 2025.

See Note 15 — Subsequent Events in our consolidated financial statements included elsewhere in this report for additional information on the Shareholders Meeting.

On April 17, 2024, in connection with the Estrella Acquisition, SG Broadcasting LLC (“SG Broadcasting”), the holder of shares of Class A common stock and Class B common stock, par value $ 0.01 per share (“Class B common stock”) representing a majority of the voting power of the shares of MediaCo, entered into a Voting and Support Agreement with MediaCo and Estrella (the “Voting and Support Agreement”), pursuant to which SG Broadcasting agreed to, among other things, and subject to the terms and conditions set forth therein, at any meeting of MediaCo shareholders (including the Shareholders Meeting), or at any adjournment or postponement thereof, vote in favor of the Proposal and against any action or proposal that would reasonably be expected to prevent or materially delay consummation of the Proposal.

The Voting Agreement also includes certain customary restrictions on SG Broadcasting’s ability to transfer its shares of MediaCo stock.

The Voting Agreement will automatically terminate upon the date on which the Proposal is approved.

In connection with the Estrella Acquisition, MediaCo issued a warrant which provides for the purchase of up to 28,206,152 shares of Class A common stock, subject to customary adjustments as set forth in the Warrant, at an exercise price per share of $ 0.00001 .

See Note 7 — Long-Term Debt, Warrants, And Series B Preferred Stock for further discussion.

First Lien Term Loan

In order to finance the Estrella Acquisition, MediaCo, as borrower and guarantor, and its direct and indirect subsidiaries, as guarantors, entered into a $ 45.0 million first lien term loan credit facility with White Hawk Capital Partners, LP, as administrative and collateral agent, and various lenders.

See Note 7 — Long-Term Debt, Warrants, And Series B Preferred Stock for further discussion.

Second Lien Term Loan

In connection with the consummation of the Estrella Acquisition, MediaCo as borrower and guarantor, and its direct and indirect subsidiaries, as guarantors, entered into a $ 30.0 million second lien term loan credit facility with HPS Investment Partners, LLC, as administrative and collateral agent, and various financial institutions.

The Second Lien Credit Agreement was recorded at is fair value of $ 26.5 million.

See Note 7 — Long-Term Debt, Warrants, And Series B Preferred Stock for further discussion.

Series B Preferred Stock

On April 17, 2024, MediaCo issued 60,000 shares of Series B Preferred Stock with an aggregate initial liquidation value of $ 60.0 million, recorded at its issuance date fair value of $ 32.0 million, which will be accreted up to the redemption value over the term.

See Note 7 — Long-Term Debt, Warrants, And Series B Preferred Stock for further discussion.

Network Affiliation and Supply Agreements

On April 17, 2024, in connection with the Estrella Acquisition, MediaCo entered into a Network Program Supply Agreement (the “Network Program Supply Agreement”) with certain subsidiaries of Estrella that operate radio broadcast stations (the “Radio Stations”).

Pursuant to the Network Program Supply Agreement, MediaCo has agreed to license certain programs and other material to the Radio Stations for distribution on the Radio Stations’ broadcast channels.

On April 17, 2024, in connection with the Estrella Acquisition, MediaCo entered into a Network Affiliation Agreement (the “Network Affiliation Agreement”) with certain subsidiaries of Estrella that operate television broadcast stations (the “TV Stations”).

Pursuant to the Network Affiliation Agreement, MediaCo has agreed to license certain programs and other material to the TV Stations for distribution on the TV Stations’ broadcast channels.

Purchase Price Allocation

On April 17, 2024, the Company completed the Estrella Acquisition, accounted for under the acquisition method of accounting in accordance with ASC 805.

During the measurement period, the Company identified adjustments to the provisional amounts initially recorded for the fair values of assets acquired and liabilities assumed.

These adjustments were made in accordance with the guidance on measurement period adjustments in ASC 805-10-25-13.

These measurement period adjustments included changes to the valuation of acquired assets which primarily consisted of a $ 9.5 million decrease in the fair value of the Estrella Acquisition’s FCC licenses, a $ 5.6 million decrease in favorable leasehold interests, and a $ 1.9 million decrease in the Estrella Acquisition’s intangible assets related to customer relationships.

These decreases were partially offset by a $ 1.9 million increase in property and equipment and a $ 1.1 million increase in other assumed liabilities.

Additionally the Company made certain reclassifications of amounts within this disclosure to conform to the year-end presentation in the consolidated balance sheet.

In the aggregate, we recorded a net increase of $ 13.5 million to goodwill for these measurement period adjustments to reflect the final determination of assets acquired and liabilities assumed as shown below.

Measurement period adjustments were recognized in the reporting period in which the adjustments were determined and calculated as if the accounting had been completed at the acquisition date.

The Company recognized additional depreciation and amortization expense of $ 0.7 million resulting from revised fair values of fixed assets and intangible assets.

The Company also recognized $ 0.6 million less of operating expense related to adjustments to the Company’s leases.

These adjustments are reflected in the Company’s consolidated statement of operations for the year ended December 31, 2024.

The following tables summarize the fair value of cash and noncash consideration transferred, assets acquired, and liabilities assumed as of the acquisition date:

Valuation as of

April 17, 2024

Cash Consideration 25,499

Noncash Consideration:

Series B Preferred Stock (2)

Second Lien Term Loan (2)

Total Noncash Consideration 129,024

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 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 .

Valuation as of

April 17, 2024

Cash and cash equivalents $ 12,484

Accounts receivable, net of allowance for doubtful accounts of $ 292

Prepaid expenses and other current assets 2,962

Current programming rights 3,445

Property and equipment, net 19,826

Intangible assets, net 116,658

Right of use assets 38,632

Goodwill 28,338

Noncurrent programming rights 6,852

Deposits and other 690

Assets acquired $ 246,217

Accounts payable and accrued expenses $ 25,254

Deferred revenue 9,543

Operating lease liabilities 27,938

Finance lease liabilities 3,029

Other Liabilities 8,301

Liabilities assumed $ 74,065

Fair value of noncontrolling interests (1)

Net assets acquired $ 154,523

(1) Fair value of noncontrolling interests based on 7,051,538 shares 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.

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 $ 13.7 million and will be amortized over the estimated remaining useful lives of fifteen years .

The amount allocated to indefinite-lived intangible assets represents the estimated fair values of the FCC licenses of $ 102.7 million and goodwill of $ 28.3 million.

Goodwill, which is derived from the expanded client base and our ability to provide broader advertising solutions through a comprehensive portfolio, is recorded based on the amount by which the purchase price exceeds the fair value of the net assets acquired and we expect it will be deductible for tax purposes.

Goodwill of $ 8.4 million and $ 19.9 million from this transaction is allocated to our Video Segment and Audio Segment, respectively.

As part of the acquisition, we incurred costs of $ 9.0 million for the year ended December 31, 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 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 long term debt, net of current on the consolidated balance sheet.

The Company recorded Revenues of $ 67.3 million and Net loss of $ 16.0 million for the year ended December 31, 2024 related to the Estrella Acquisition.

Variable Interest Entity

As discussed in Note 1, the Company determined that the Estrella entities holding the Estrella Broadcast Assets represented a VIE in which the Company holds a controlling financial interest, as MediaCo is the primary beneficiary of the VIE.

Estrella VIE’s assets can be used only to settle obligations of the Estrella VIE.

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

Cash and cash equivalents $ 159

Accounts receivable, net of allowance for doubtful accounts of $ 42

Prepaid expenses 351

Other current assets 28

Total current assets 3,396

Property and equipment, net 10,298

Other intangible assets, net 102,698

Other assets:

Operating lease right of use assets 3,171

Deposits and other 579

Total other assets 3,750

Total assets $ 120,142

Current liabilities:

Accounts payable and accrued expenses $ 3,072

Deferred revenue 53

Operating lease liabilities 370

Income taxes payable 2,025

Other current liabilities 49

Total current liabilities 5,569

Operating lease liabilities, net of current 2,427

Other noncurrent liabilities 6

Total liabilities $ 8,002

Net assets $ 112,140

The summarized operating results of the VIE are as follows:

Year ended December 31,

Net revenues 9,785 —

Operating Income 2,768 —

Net income 2,773 —

Unaudited Pro Forma Financial Information

The following table presents the estimated unaudited pro forma combined results of MediaCo and Estrella for the years ended December 31, 2024 and 2023 as if the acquisition had occurred on January 1, 2023:

Year ended December 31,

Net revenues $ 117,307 $ 122,589

Loss from continuing operations before income taxes ( 14,371 ) ( 47,402 )

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.

The supplemental pro forma financial information does not necessarily represent what the combined companies’ revenue or results of operations would have been had the Estrella Acquisition been completed on January 1, 2023, nor is it intended to be a projection of future operating results of the combined company.

It also does not reflect any operating efficiencies or potential cost savings that might be achieved from synergies of combining MediaCo and Estrella.

The unaudited supplemental pro forma financial information reflects primarily pro forma adjustments related to fair value estimates for intangibles, property and equipment, debt, preferred stock, interest expense and amortization of deferred financing costs for the debt and preferred stock issuances to finance the Estrella Acquisition.

The unaudited supplemental pro forma financial information includes transaction charges associated with the Estrella Acquisition.

There are no material, nonrecurring pro forma adjustments directly attributable to the Estrella Acquisition included in the reported pro forma revenue and loss from continuing operations before income taxes.

SHARE BASED PAYMENTS

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The following table summarizes stock-based compensation expense recognized by the Company for the years ended December 31, 2024 and 2023.

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.

Tax benefit related to stock compensation for the year ended December 31, 2024 was $ 0.1 million and tax expense related to stock compensation was $ 0.2 million for the year ended December 31, 2023.

Year Ended December 31,

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Corporate expenses 204 680

Loss from discontinued operations before income taxes — 232

Stock-based compensation expense $ 328 $ 1,688

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

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

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 deficiency units.

As of December 31, 2024, the makegood liability assumed in the Estella Acquisition, which is associated with these network sales and contracts was $ 9.2 million and 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.

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 .

Spot Radio Advertising

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

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

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.

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Year Ended December 31, 2024

Audio Video Consolidated

Net revenues:

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

Spot Radio & TV Advertising $ 40,824 $ 20,334 $ 61,158

Digital 4,444 15,847 20,291

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Total net revenues $ 57,534 $ 38,037 $ 95,571

LONG-TERM DEBT

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.

Year Ended December 31, 2023

Audio Video Consolidated

Net revenues:

Spot Radio & TV Advertising $ 18,650 $ — $ 18,650

Digital 3,677 — 3,677

Syndication 2,427 — 2,427

Events and Sponsorships 5,766 — 5,766

Other 1,871 — 1,871

Total net revenues $ 32,391 $ — $ 32,391

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 December 31, 2024 and 2023:

December 31, 2024 December 31, 2023

Emmis Convertible Promissory Note — 6,458

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.

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

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 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.

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.

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.

First Lien Term Loans 45,000 —

Second Lien Term Loan 27,984 —

Current maturities — ( 6,458 )

Unamortized original issue discount and deferred financing costs ( 2,812 ) —

Total long-term debt $ 70,172 $ —

Warrant Shares $ 32,155 $ —

Series B Preferred Stock $ 35,553 $ —

Emmis Convertible Promissory Note

The Emmis Convertible Promissory Note (as defined in Note 13) 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 was outstanding, of 6.0 %, plus an additional 1.0 % on any payment of interest in kind and, without regard to whether the Company paid 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 accrued interest since inception using the rate applicable if the interest would have been paid-in-kind (“PIK”).

The Emmis Convertible Promissory Note was 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 matured on November 25, 2024 and was settled in cash.

First Lien Term Loans

On April 17, 2024, MediaCo, as borrower and guarantor, and its direct and indirect subsidiaries, as guarantors, entered into a $ 45.0 million first lien term loan credit facilities (the “First Lien Credit Agreement”) with White Hawk Capital Partners, LP, as administrative and collateral agent, and various lenders from time-to-time party thereto.

The First Lien Credit Agreement consists of an $ 35.0 million initial term loan (the “Initial Term Loan”) and delayed draw term loans in an aggregate amount up to $ 10.0 million (the “Delayed Draw Term Loans”).

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.

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 waived 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 December 31, 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.

The proceeds of the Delayed Draw Term Loans were used to provide additional working capital needs.

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.

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

The effective interest rates of the Initial Term Loan and Delayed Draw Term Loan were 12.15 % and 12.11 %, respectively, as of December 31, 2024.

Beginning May 2027, monthly amortization payments are required equal to 0.8333 % of the initial principal amount of the First Lien Term Loans.

The Company may voluntarily repay outstanding loans under the First Lien Credit Agreement at any time, potentially subject to an exit fee if certain conditions are met.

The First Lien Credit Agreement is guaranteed by the Company and each of the Company’s direct and indirect subsidiaries, subject to certain exceptions.

All obligations under the First Credit Agreement, and the guarantees of those obligations, are secured, subject to permitted liens and other exceptions, by a first priority lien in substantially all of the assets of MediaCo and all of the guarantors’ assets, including a lien on the capital stock of MediaCo.

The First Lien Credit Agreement contains negative covenants that limit the ability of the Company and its subsidiaries, to, among other things:

• create liens on certain assets;

• sell certain assets, including capital stock of MediaCo’s subsidiaries;

• merge or consolidate with another person, lease or sell or otherwise dispose of all or substantially all of MediaCo’s assets;

• make certain investments;

• create, incur, assume, permit to exist, or otherwise become or remain directly or indirectly liable with respect to, any indebtedness;

• enter into certain transactions with affiliates;

• restrict the use of Initial Term Loan proceeds;

• create, incur, assume or suffer to exist any contingent obligations;

• pay dividends, redeem or repurchase capital stock or make other restricted payments;

• create restrictions on the payment of dividends or other amounts from MediaCo’s restricted subsidiaries;

• engage in sale leaseback, synthetic lease or similar transactions involving any of its assets;

• guarantee additional debt.

The First Lien Credit Agreement contains financial covenants including a minimum liquidity, minimum borrowing base and maintaining certain cash flow levels associated with various segments of the business.

As of December 31, 2024, the Company was in compliance with all covenants.

Second Lien Term Loan

On April 17, 2024, in connection with the consummation of the Estrella Acquisition, the Company, as borrower and guarantor, and its direct and indirect subsidiaries, as guarantors, entered into a $ 30.0 million second lien term loan credit facilities (the “Second Lien Credit Agreement” or the “2L Term Loan”) with HPS Investment Partners, LLC, as administrative and collateral agent, and various financial institutions from time-to-time party thereto.

The Second Lien Credit Agreement was recorded at is fair value of $ 26.5 million as of April 17, 2024.

This amount will be accreted up to the principal balance over the term of the loan.

The 2L Term Loan will mature on April 17, 2029 and will be subject to monthly interest payments at a rate of SOFR + 6.00 %, of which the 6.00 % may be PIK at the Company’s election.

During the second quarter of 2024, the Company elected to PIK the 6.00 % spread monthly.

The effective interest rate of the 2L Term Loan was 14.14 % as of December 31, 2024.

Beginning May 2027, monthly amortization payments are required equal to 0.8333 % of the initial principal amount of the 2L Term Loan.

The Company may voluntarily repay outstanding loans under the Second Lien Credit Agreement at any time, without prepayment premium or penalty.

The Second Lien Credit Agreement is guaranteed by the Company and each of the Company’s direct and indirect subsidiaries, subject to certain exceptions.

All obligations under the Second Lien Credit Agreement, and the guarantees of those obligations, are secured, subject to permitted liens and other exceptions, by a second priority lien in substantially all of the assets of MediaCo and all of the guarantors’ assets, including a lien on the capital stock of MediaCo.

The Second Lien Credit Agreement contains negative covenants that limit the ability of the Company and its subsidiaries, to, among other things:

• create liens on certain assets;

• sell certain assets, including capital stock of MediaCo’s subsidiaries;

• merge or consolidate with another person, lease or sell or otherwise dispose of all or substantially all of MediaCo’s assets;

• make certain investments;

• create, incur, assume, permit to exist, or otherwise become or remain directly or indirectly liable with respect to, any indebtedness;

• enter into certain transactions with affiliates;

• restrict the use of Initial Term Loan proceeds;

• create, incur, assume or suffer to exist any contingent obligations;

• pay dividends, redeem or repurchase capital stock or make other restricted payments;

• create restrictions on the payment of dividends or other amounts from MediaCo’s restricted subsidiaries;

• engage in sale leaseback, synthetic lease or similar transactions involving any of its assets;

• guarantee additional debt.

The Second Lien Credit Agreement contains financial covenants including a minimum liquidity, minimum borrowing base and maintaining certain cash flow and adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”) levels associated with various segments of the business.

As of December 31, 2024, the Company was in compliance with all covenants.

The Second Lien Credit Agreement includes certain customary representations and warranties, affirmative covenants and events of default, including but not limited to, payment defaults, breach of representations and warranties, covenant defaults, cross defaults to certain indebtedness, certain bankruptcy-related events, certain events under ERISA, material judgments and a change of control.

If an event of default occurs, the lenders under the Second Lien Credit Agreement are entitled to take various actions, including the acceleration of all amounts due under the Second Lien Credit Agreement and all actions permitted to be taken under the loan documents relating thereto or applicable law.

Series B Preferred Stock

On April 17, 2024, MediaCo issued 60,000 shares of Series B Preferred Stock with an aggregate initial liquidation value of $ 60.0 million, recorded at its fair value at that time of $ 32.0 million, which will be accreted up to the redemption value balance over the term.

The Series B Preferred Stock rank senior and in priority of payment to all other equity securities of MediaCo, including with respect to any repayment, redemption, distributions, bankruptcy, insolvency, liquidation, dissolution or winding-up.

Pursuant to the Series B Articles of Amendment, the ability of MediaCo to make distributions with respect to, or make a liquidation payment on, any other class of capital stock in the Company designated to be junior to, or on parity with, the Series B Preferred Stock, will be subject to certain restrictions.

The holders of the Series B Preferred Stock are not entitled to voting rights on any matters submitted to the shareholders of the Company.

Each Holder of Series B Preferred Stock will have one vote per share on any matter on which Holders of Series B Preferred Stock are entitled to vote separately as a class.

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 not convertible into any other equity securities of the Company.

As the Series B Preferred Stock is mandatorily redeemable after seven years and does not contain an equity conversion option, it is classified as a long-term liability.

Warrant Shares

On April 17, 2024, in connection with the Estrella Acquisition, MediaCo issued the Warrant, which provides for the purchase of up to 28,206,152 shares of Class A common stock, subject to customary adjustments as set forth in the Warrant, at an exercise price per share of $ 0.00001 .

Subject to certain limitations, the Warrant also provides that the Warrant holder has the right to participate in distributions on Class A common stock on an as-exercised basis.

The Warrant further provides that in no event shall the aggregate number of Warrant Shares issuable to the Warrant holder upon exercise of the Warrant exceed 19.9 % of the aggregate number of shares of common stock of MediaCo outstanding, or the voting power of such outstanding shares of common stock, on the business day immediately preceding the issue date for such Warrant Shares, calculated in accordance with the applicable rules of the Nasdaq, unless and until shareholder approval.

As such, all Warrant Shares are classified as a liability at their fair value based on the closing price of MediaCo Class A common stock unless and until shareholder approval is obtained.

Such approval was obtained on March 6, 2025.

See Note 15 — Subsequent Events for additional information.

Changes in fair value are recorded in change in fair value of warrant shares liability in the consolidated statements of operations.

The Warrant terminates six months from the date shareholder approval was obtained, March 6, 2025, at which point, to the extent not fully exercised, the Warrant shall be deemed automatically exercised.

Based on amounts outstanding at December 31, 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, First Lien Term Loans Second Lien Term Loan Series B Preferred Stock Total Payments

2025 $ — $ — $ — $ —

2026 10,000 — — 10,000

2027 2,625 2,250 — 4,875

2028 3,500 3,000 — 6,500

2029 28,875 24,750 — 53,625

After 2029 — — 60,000 60,000

Total $ 45,000 $ 30,000 $ 60,000 $ 135,000

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.

The following hierarchy classifies the inputs used to determine fair value into three levels:

Level 1 – quoted prices in active markets for identical assets or liabilities.

Level 2 – inputs, other than quoted prices, observable by a marketplace participant either directly or indirectly.

Level 3 – unobservable inputs significant to the fair value measurement.

Recurring Fair Value Measurements

The Company has no financial assets and liabilities that were accounted for at fair value on a recurring basis as of December 31, 2023 or 2022.

The Class A common stock underlying the Warrant Shares are publicly traded on the Nasdaq Capital Market under the symbol MDIA, and the fair value of the Warrant Shares at a specific date is determined by the closing price of the common stock as of that date.

Therefore, the Warrant Shares are classified as Level 1 of the fair value hierarchy.

Level 1 Level 2 Level 3 Total Carrying Value at

December 31, 2024

Warrant shares $ 32,155 $ — $ — $ 32,155

Non-Recurring Fair Value Measurements

The Company has certain assets that are measured at fair value on a non-recurring basis including those described in Note 10 —Intangible Assets, and are adjusted to fair value only when the carrying values are more than the fair values.

The Company has certain assets that are measured at fair value on a non-recurring basis including those described in Note 10 — Intangible Assets And Goodwill, and are adjusted to fair value only when the carrying values are more than the fair values.

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The use of different market assumptions may have a material effect on the estimated fair value amounts.

The following methods and assumptions were used to estimate the fair value of financial instruments:

• Cash and cash equivalents :

The carrying amount of these assets approximates fair value because of the short maturity of these instruments.

• Other long-term debt :

The Emmis Convertible Promissory Note is not actively traded and is considered a Level 3 instrument.

The Company believes the current carrying value of this debt approximates its fair value.

The Company estimates that the carrying amount of cash and cash equivalents approximates fair value because of the short maturity of these instruments.

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 October 2039.

We have operating leases for office space, studio space and tower space, expiring at various dates through December 2047 and finance leases for broadcast tower space expiring in March 2029.

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

Operating leases are included in operating lease right-of-use assets, current operating lease liabilities, and noncurrent operating lease liabilities in our consolidated balance sheets.

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 the commencement date based on the present value of lease payments over the lease term.

Operating leases are included in lease right-of-use assets, current operating lease liabilities, and noncurrent operating lease liabilities in our consolidated balance sheets.

Finance leases are included in lease right-of-use assets, current finance lease liabilities, and noncurrent finance lease liabilities in our consolidated balance sheets.

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.

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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Our lease terms may include options to extend or terminate the lease, which we treat as exercised when it is reasonably certain and there is a significant economic incentive to exercise that option.

Operating lease expense for operating lease assets is recognized on a straight-line basis over the lease term.

Variable lease payments, which represent lease payments that vary due to changes in facts or circumstances occurring after the commencement date other than the passage of time, are expensed in the period in which the obligation for these payments was incurred.

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.

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We elected this policy for all classes of underlying assets.

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.

Short-term lease expense for the year ended December 31, 2024 was not material and was $ 0.1 million for the year ended December 31, 2023.

Operating lease expense for operating lease assets is recognized on a straight-line basis over the lease term.

Finance lease expense is composed of the depreciation of the lease asset and accretion of the lease liability and presented as part of Depreciation and amortization expense and Interest expense, respectively, in the consolidated statements of operations.

Variable lease payments for the years ended December 31, 2024 and 2023 were 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.

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.

On April 17, 2024, as part of the acquisition of certain assets of Estrella, the Company received favorable leaseholds interests of $ 7.4 million that were included in the Operating lease right of use assets acquired.

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

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Operating lease cost $ 6,446 $ 3,468

Other Information

Operating cash flows from operating leases 4,857 2,061

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

Weighted average remaining lease term - operating leases (in years) 12.8 14.0

Weighted average discount rate - operating leases 11.6 % 11.4 %

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

Year Ended December 31,

Finance lease cost $ 667 $ —

Cash flows from finance leases 497 —

Weighted average remaining lease term - finance leases (in years) 4.2 0.0

Weighted average discount rate - finance leases 11.3 % — %

As of December 31, 2024, the annual minimum lease payments of our operating lease liabilities were as follows:

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imputed interest ( 46,037 )

Total recorded lease liabilities $ 15,777

INTANGIBLE ASSETS

Total recorded operating lease liabilities $ 44,035

As of December 31, 2024, the annual minimum lease payments of our finance lease liabilities were as follows:

Year ended December 31,

Total lease payments 3,481

imputed interest ( 720 )

Total recorded financing lease liabilities $ 2,761

INTANGIBLE ASSETS AND GOODWILL

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

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FCC Licenses $ 165,964 $ 63,266

Goodwill 28,338 —

Definite-lived intangible assets:

Customer relationships 11,675 —

Software 1,138 1,327

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In connection with any such review, if the recorded value of intangible assets is greater than its fair value, they are written down and charged to results of operations.

Our FCC licenses were successfully renewed in 2022 through June 2030.

FCC licenses are renewed every eight years at a nominal cost, and historically both of our FCC licenses have been renewed at the end of their respective eight-year periods.

Since we expect that both of our FCC licenses will continue to be renewed in the future, we believe they have indefinite lives.

Given that our radio stations operate in the same geographic market they are considered a single unit of accounting.

Our WQHT(FM) and WBLS(FM) FCC licenses were successfully renewed in 2022 through June 2030.

FCC licenses are renewed every eight years at a nominal cost, and historically our FCC licenses have been renewed at the end of their respective eight-year periods.

Since we expect that our FCC licenses will continue to be renewed in the future, we believe they have indefinite lives.

Impairment Testing

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Fair value of our FCC licenses is estimated to be the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

To determine the fair value of our FCC licenses, the Company considers both income and market valuation methods when it performs its impairment tests.

To determine the fair value of our FCC licenses, the Company uses the income approach methods when it performs its impairment tests.

Under the income method, the Company projects cash flows that would be generated by its unit of accounting assuming the unit of accounting was commencing operations in its market at the beginning of the valuation period.

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In doing so, the Company extracts the value of going concern and any other assets acquired, and strictly values the FCC license.

Major assumptions involved in this analysis include market revenue, market revenue growth rates, unit of accounting audience share, unit of accounting revenue share and discount rate.

Major assumptions involved in this analysis include market revenue, market revenue growth rates, EBITDA margin, unit of accounting audience share, unit of accounting revenue share and discount rate.

Each of these assumptions may change in the future based upon changes in general economic conditions, audience behavior, consummated transactions, and numerous other variables that may be beyond our control.

The projections incorporated into our license valuations take into consideration the current economic conditions.

Under the market method, the Company uses recent sales of comparable radio stations for which the sales value appeared to be concentrated entirely in the value of the license, to arrive at an indication of fair value.

When evaluating our radio broadcasting licenses for impairment, the testing is performed at the unit of accounting level as determined by ASC Topic 350-30-35.

In our case, radio stations in a geographic market cluster are considered a single unit of accounting.

Below are some of the key assumptions used in our income method annual impairment assessments.

The long-term growth rates in the New York market in which we operate are based on recent industry trends and our expectations for the market going forward.

Under the market method, the Company uses recent sales of comparable radio and television stations for which the sales value appeared to be concentrated entirely in the value of the license, to arrive at an indication of fair value.

The market method is only utilized by the Company when it is determined that recent sales of comparable stations provide an accurate market comparison.

When evaluating our radio and television broadcasting licenses for impairment, the testing is performed at the unit of accounting level as determined by ASC Topic 350-30.

The Company performed a qualitative assessment of impairment as of October 1, 2024 for the FCC licenses associated with the Estrella Acquisition and determined that there were no material changes to any of the factors considered in the April 2024 valuation that would trigger an impairment charge.

Below are some of the key assumptions used in our income method annual impairment assessments for our WQHT(FM) and WBLS(FM) FCC licenses.

The long-term growth rates in the markets in which we operate are based on recent industry trends and our expectations for the market going forward.

October 1, 2024 October 1, 2023

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22.9 - 29.0 %

As of both December 31, 2023 and 2022, the carrying amount of the Company’s FCC licenses was $ 63.3 million.

As of December 31, 2024 and 2023, the carrying amount of the Company’s FCC licenses was $ 166.0 million and $ 63.3 million, respectively.

Valuation of Goodwill

As a result of the Estrella Acquisition, the Company recorded $ 28.3 million of goodwill, which accounts for all goodwill on the consolidated balance sheet as of December 31, 2024, and of which $ 8.4 million is allocated to our Video Segment and $ 19.9 million is allocated to our Audio Segment.

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

Under ASC 350 we have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value as a basis for determining whether it is necessary to perform an annual quantitative goodwill impairment test.

We perform this assessment annually as of October 1, or more frequently whenever events or changes in circumstances indicate the carrying value of goodwill may be impaired.

Such events or changes in circumstances may include a significant deterioration in overall economic conditions, changes in the business climate of our industry, a decline in our market capitalization, operating performance indicators, competition, reorganizations of our business, U.S.

Government budget restrictions or the disposal of all or a portion of a reporting unit.

Our goodwill has been allocated to and is tested for impairment at a level referred to as the reporting unit, which is our business segment level or a level below the business segment.

The level at which we test goodwill for impairment requires us to determine whether the operations below the business segment constitute a self-sustaining business for which discrete financial information is available and segment management regularly reviews the operating results.

In the current period, it was not more likely than not that the fair value of each reporting unit was less than its carrying amount.

When performing a quantitative assessment for impairment, the Company first uses an income approach by projecting net free cash flows and discounting them to present value.

To corroborate the fair values determined using the income approach, we also use the market approach by multiplying the cash flows of the reporting unit by an estimated market multiple.

We believe this methodology for valuing our reporting units is a common approach and the multiples we use are based on our peer comparisons, analyst reports, and market transactions.

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.

Definite-lived Intangibles

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Amortization Net

Customer relationships 14.3 $ 13,704 $ 2,029 $ 11,675 $ — $ — $ —

Software 3.4 1,733 595 1,138 1,583 256 1,327

Other 1.9 256 144 112 — — —

Total $ 15,693 $ 2,768 $ 12,925 $ 1,583 $ 256 $ 1,327

The software was developed internally by our radio operations and represents our updated websites and mobile applications, which offer increased functionality and opportunities to grow and interact with our audience.

They cost $ 1.7 million to develop and useful lives of five years and seven years were assigned to the application and website, 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.

Assets related to our websites placed in service during 2022 were disposed in the year ended December 31, 2023 resulting in a loss of $ 0.3 million, included in Loss on disposal of assets in the consolidated statements of operations.

The customer relationships and time brokerage agreements (Other) were acquired as part of the Estrella Acquisition.

Total amortization expense from definite-lived intangibles for the years ended December 31, 2024 and 2023, was $ 2.5 million and $ 0.3 million, respectively.

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Year ended December 31, Amortization Expense

After 2029 3,121

Total $ 12,925

OTHER COMMITMENTS AND CONTINGENCIES

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

The Company has various commitments under contracts that include purchase obligations and employment agreements with annual commitments.

The Company enters into purchase obligations related to contracts for television and radio advertising sales, software development, and cloud-based services, as well as employment agreements for on-air talent.

As of December 31, 2024, the Company's future minimum payments under non-cancelable contracts in excess of one year and employment/talent contracts consist of the following:

Year ended December 31, Non-Cancelable Contracts Employment/Talent Contracts

2025 $ 8,229 $ 3,097

2026 5,081 1,363

2027 2,552 764

Thereafter — —

Total $ 18,351 $ 5,224

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In the opinion of management of the Company, however, there are no legal proceedings pending against the Company that we believe are likely to have a material adverse effect on the Company.

On April 1, 2022, the Company received a deficiency letter (the “Nasdaq Letter”) from the Nasdaq Listing Qualifications Department, notifying the Company that the Company is not in compliance with Nasdaq Listing Rule 5550(b)(3), which requires the Company to maintain net income from continuing operations of $ 0.5 million in the most recently completed fiscal year, or in two of the three most recently completed fiscal years (the “Minimum Net Income Requirement”), nor is it in compliance with either of the alternative listing standards, market value of listed securities or stockholders’ equity.

The Company’s failure to comply with the Minimum Net Income Requirement was based on the Company’s filing of its Annual Report on Form 10-K for the year ended December 31, 2021, reporting net loss from continuing operations of $ 6.1 million.

Pursuant to the Nasdaq Letter, the Company had 45 calendar days from the date of the Nasdaq Letter to submit a plan to regain compliance, and submitted such a plan during this period.

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

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

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

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

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

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 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, 2024 and 2023, consisted of the following:

12 unchanged sentences

State tax rate change 1,889 —

Mark-to-market change on warrants ( 8,056 ) —

Nondeductible interest 811 —

Other nondeductible expenses 161 —

Equity based compensation ( 97 ) 230

25 unchanged sentences

The Company has considered future taxable income and ongoing prudent and feasible tax-planning strategies in assessing the need for the valuation allowance.

As of December 31, 2023, and 2022, the Company recorded a valuation allowance against its deferred tax assets, because the Company's management determined that it was more likely than not that certain assets would not be fully realized, as a result of a sharp deterioration of business activity related to the COVID-19 pandemic.

As of December 31, 2024 and 2023, the Company recorded a valuation allowance against its DTAs, because the Company's management determined that it was more likely than not that certain assets would not be fully realized.

The Company records certain deferred tax liabilities (“DTLs”) related to indefinite-lived intangibles that are not expected to reverse during the carry-forward period.

1 unchanged sentence

With this consideration, the total valuation allowance recorded at December 31, 2024 and 2023, was $ 33.0 million and $ 16.6 million, respectively, resulting in a net $ 2.9 million and $ 2.8 million DTL, respectively.

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 change in valuation allowance from $ 16.6 million to $ 33.0 million includes tax expense related to the valuation allowance of $ 7.8 million and a valuation allowance recorded in the opening balance sheet of the Estrella Acquisition of $ 8.6 million.

As of December 31, 2024, the Company has $ 41.7 million of federal NOLs and $ 46.8 million of state NOLs available to offset future taxable income.

The federal NOLs do not expire.

21 unchanged sentences

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.

Convertible Promissory Notes

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.

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.

On November 25, 2022, annual interest of $ 0.8 million was paid in kind and added to the principal balance of the Emmis Convertible Promissory Note.

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

Consequently, the principal amount outstanding as of December 31, 2022 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

Convertible Promissory Note

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

Through December 31, 2023, there were annual interest amounts paid in kind on the Emmis Convertible Promissory Note such that the principal balance outstanding as of December 31, 2023 was $ 6.5 million.

The Emmis Convertible Promissory Note matured on November 25, 2024 and was settled in cash.

The Company recognized interest expense of $ 0.8 million and $ 0.6 million related to the Emmis Convertible Promissory Note for the years ended December 31, 2024 and 2023, 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.

The terms of the Emmis Convertible Promissory Note are described in Note 7.

Convertible Preferred Stock

On December 13, 2019, in connection with the purchase of Fairway, the Company issued to SG Broadcasting 220,000 shares of MediaCo Series A Convertible Preferred Stock.

In April 2024, all outstanding shares of Series A preferred stock were converted in accordance with their terms into 20.7 million shares of MediaCo Class A common stock.

Prior to being converted, the MediaCo Series A preferred stock ranked senior in preference to the MediaCo Class A common stock, MediaCo Class B common stock, and the MediaCo Class C common stock.

Pursuant to the Articles of Amendment that established the terms of the Series A preferred stock, issued and outstanding shares of MediaCo Series A preferred stock accrued cumulative dividends, payable in kind, at an annual rate equal to the interest rate on any senior debt of the Company (see Note 7), or if no senior debt is outstanding, 6 %, plus additional increases of 1 % on December 12, 2020 and each anniversary thereof.

On December 13, 2023, dividends of $ 2.4 million were paid in kind.

The payment in kind increased the accrued value of the preferred stock and 26,031 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 $ 2.4 million for the years ended December 31, 2024 and 2023.

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 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.

See Note 4 for a description of the Preferred Stock.

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 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.

Additionally, Fairway incurred $ 0.2 million of out-of-pocket expenses for the period, substantially all of which has been reimbursed as of December 31, 2022.

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.

Consulting Agreements & Other Activity

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 of the agreements had a term that expired on February 1, 2024 and was billed at an hourly rate of $ 125 per hour.

One of the agreements, billed at a rate of $ 8,400 per month expired on May 31, 2024.

Two of the agreements billed at rates of $ 6,000 and $ 12,000 per month were extended through September 30, 2024.

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.

For the years ended December 31, 2024 and 2023, $ 0.4 million and $ 49 thousand, respectively, 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.

For the year ended December 31, 2024, $ 0.2 million of fees were incurred related to this agreement, none of which were paid as of December 31, 2024.

SEGMENT INFORMATION

The Company revised its segment information to reflect the adoption of ASU 2023-07 and certain changes resulting from our periodic review of factors relevant to how the chief operating decision maker (“CODM”) assesses performance and allocates resources in accordance with FASB ASC 280, Segment Reporting.

The Company’s CODM is the Chief Executive Officer.

The CODM primarily uses operating income (loss) to evaluate the financial performance of each segment and make resource allocation decisions.

We currently manage our operations through two business segments:

(i) Audio, and (ii) Video.

The Company’s Audio Segment includes both MediaCo’s and Estrella’s radio stations serving New York City, NY, Los Angeles, CA, Houston, TX, and Dallas, TX demographic market area that primarily targets Black, Hispanic, and multi-cultural consumers.

The Audio Segment derives revenues primarily from radio and digital advertising sales, but also generates revenues from events, including sponsorships and ticket sales, licensing, and syndication.

The Company’s Video Segment includes Estrella’s television stations offering a unique aggregation of Spanish-language programming, including originals, topical entertainment, reality, news, and comedy.

The Video Segment’s revenue is primarily derived from television and digital advertising.

The Company’s television stations serve Los Angeles, CA, Houston, TX, Denver, CO, New York, NY, Chicago, IL and Miami, FL.

These business segments are consistent with the Company’s management of these businesses and its financial reporting structure.

Corporate expenses, including transaction costs are not allocated to reportable segments.

The Company groups activities that are not considered operating segments in the “Other” category.

The Company’s segments operate exclusively in the United States.

The accounting policies as described in the Summary Of Significant Accounting Policies included in Note 1 to these consolidated financial statements, are applied consistently across segments.

Year Ended December 31, 2024 Audio Video Corporate

and other (1)

Net revenues $ 57,534 $ 38,037 $ — $ 95,571

Operating expenses excluding depreciation and amortization expense 55,963 50,687 — 106,650

Depreciation and amortization 3,036 2,223 — 5,258

Other segment items (2)

10 — 11,859 11,869

Operating loss $ ( 1,475 ) $ ( 14,873 ) $ ( 11,859 ) $ ( 28,206 )

Year Ended December 31, 2023 Audio Video Corporate

and other (1)

Net revenues $ 32,391 $ — $ — $ 32,391

Operating expenses excluding depreciation and amortization expense 32,633 — — 32,633

Depreciation and amortization 568 — — 568

Other segment items (2)

526 — 5,451 5,977

Operating loss $ ( 1,336 ) $ — $ ( 5,451 ) $ ( 6,787 )

Total Assets Audio Video Corporate

and other (3)

December 31, 2024 198,310 122,748 4,443 $ 325,501

December 31, 2023 91,674 — 3,817 95,491

(1) Corporate and other is not an operating segment.

Corporate expenses include expenses related to infrastructure and support, including information technology, human resources, legal, finance and administrative functions of the Company, as well as overall executive, administrative and support functions.

(2) Audio’s other segment items include gain/loss on disposal of assets.

Corporate other segment items include corporate expenses including expenses related to infrastructure and support, including information technology, human resources, legal, finance and administrative functions of the Company, as well as overall executive, administrative and support functions.

(3) Corporate and other is not an operating segment.

Corporate and other assets primarily include cash and cash equivalents.

SUBSEQUENT EVENTS

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

The Company evaluated subsequent events from December 31, 2024 through the date these financial statements were issued and except for those noted below has noted no subsequent events after December 31, 2024 for which disclosure is required.

On February 7, 2025, the Company terminated a program licensing agreement which contributed $ 2.1 million to Current programming rights, $ 4.5 million to Noncurrent acquired programming rights, $ 5.9 million to Accounts payable and accrued expenses and $ 4.5 million to Noncurrent program rights payable, on the consolidated balances sheets as of December 31, 2024.

On March 6, 2025, the Company held a special meeting of shareholders by means of remote communications via a live interactive webcast on the internet.

At the Shareholders Meeting, the Company’s shareholders voted to approve the issuance of (i) up to 28,206,152 shares of MediaCo Class A Common Stock, par value $ 0.01 per share, upon the exercise of a warrant issued in connection with the Company’s acquisition of certain assets of Estrella Broadcasting, Inc.

to sell equity interests of certain broadcast assets.

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