Mediaco Holding Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of MediaCo Holding Inc. 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, 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. generally accepted accounting principles. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2019. Indianapolis, Indiana April 15, 2025 36 Table of Contents MEDIACO HOLDING INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Year ended December 31, (in thousands, except per share amounts) 2024 2023 NET REVENUES $ 95,571 $ 32,391 OPERATING EXPENSES: Operating expenses excluding depreciation and amortization expense 106,650 32,633 Corporate expenses 11,859 5,451 Depreciation and amortization 5,258 568 Loss on disposal of assets 10 526 Total operating expenses 123,777 39,178 OPERATING LOSS ( 28,206 ) ( 6,787 ) OTHER INCOME (EXPENSE): Interest expense, net ( 11,137 ) ( 426 ) Change in fair value of warrant shares liability 38,360 — Other income 2 100 Total other income (expense) 27,225 ( 326 ) LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES ( 982 ) ( 7,113 ) PROVISION FOR INCOME TAXES 320 308 NET LOSS FROM CONTINUING OPERATIONS ( 1,302 ) ( 7,421 ) DISCONTINUED OPERATIONS: Loss from discontinued operations before income taxes — ( 284 ) 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 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 per share attributable to common shareholders - basic and diluted: $ ( 0.08 ) $ ( 0.40 ) Weighted average common shares outstanding: Basic 59,819 24,876 Diluted 59,819 24,876 The accompanying notes to consolidated financial statements are an integral part of these statements. 37 Table of Contents MEDIACO HOLDING INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands, except share data) DECEMBER 31, 2024 DECEMBER 31, 2023 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 4,443 $ 3,817 Restricted cash — 1,337 Accounts receivable, net of allowance for doubtful accounts of $ 1,079 and $ 353 , respectively 30,745 6,675 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 Broadcasting equipment 18,819 3,516 Office equipment, computer equipment, software and automobiles 2,502 1,027 Construction in progress 1,804 740 27,665 6,385 Less accumulated depreciation and amortization ( 7,316 ) ( 5,005 ) Total property and equipment, net 20,349 1,380 INTANGIBLE ASSETS: Indefinite-lived intangibles 165,964 63,266 Goodwill 28,338 — Other intangibles 15,693 3,737 209,995 67,003 Less accumulated amortization ( 2,768 ) ( 2,410 ) Total intangible assets, net 207,227 64,593 OTHER ASSETS: 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 Total other assets 58,649 15,610 Total assets $ 325,501 $ 95,491 The accompanying notes to consolidated financial statements are an integral part of these statements. 38 Table of Contents MEDIACO HOLDING INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS – (CONTINUED) (in thousands, except share data) DECEMBER 31, 2024 DECEMBER 31, 2023 LIABILITIES AND EQUITY AND NONCONTROLLING INTERESTS CURRENT LIABILITIES: Accounts payable and accrued expenses $ 35,425 $ 2,625 Current maturities of long-term debt — 6,458 Accrued salaries and commissions 1,010 539 Deferred revenue 10,921 557 Operating lease liabilities 6,401 1,444 Finance lease liabilities 723 — Other 788 29 Income taxes payable 2,023 65 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 Total liabilities 242,980 29,327 COMMITMENTS AND CONTINGENCIES (NOTE 11) SERIES A CUMULATIVE CONVERTIBLE PARTICIPATING PREFERRED STOCK, $ 0.01 PAR VALUE, 10,000,000 SHARES AUTHORIZED; 0 AND 286,031 SHARES ISSUED AND OUTSTANDING AT DECEMBER 31, 2024 AND 2023 — 28,754 EQUITY: Class A common stock, $ 0.01 par value; authorized 170,000,000 shares; issued and outstanding 41,274,103 shares and 20,741,865 shares at December 31, 2024 and 2023, respectively 413 210 Class B common stock, $ 0.01 par value; authorized 50,000,000 shares; issued and outstanding 5,413,197 shares at December 31, 2024 and 2023 54 54 Class C common stock, $ 0.01 par value; authorized 30,000,000 shares; none issued — — Additional paid-in capital 89,726 60,294 Accumulated deficit ( 28,074 ) ( 23,148 ) Total equity 62,119 37,410 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. 39 Table of Contents MEDIACO HOLDING INC. AND SUBSIDIARIES 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 Accumulated Deficit Noncontrolling Interests Total BALANCE, DECEMBER 31, 2022 20,443,138 $ 207 5,413,197 $ 54 $ 59,817 $ ( 13,102 ) $ — $ 46,976 Net loss — — — — — ( 7,631 ) — ( 7,631 ) Issuance of class A to employees, officers and directors, net of withholdings 928,607 9 — — 1,242 — — 1,251 Repurchase of class A common shares ( 629,880 ) ( 6 ) — — ( 765 ) — — ( 771 ) Preferred stock dividends — — — — — ( 2,415 ) — ( 2,415 ) BALANCE, DECEMBER 31, 2023 20,741,865 $ 210 5,413,197 $ 54 $ 60,294 $ ( 23,148 ) $ — $ 37,410 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 ) Preferred stock dividends — — — — — ( 851 ) — ( 851 ) BALANCE, DECEMBER 31, 2024 41,274,103 $ 413 5,413,197 $ 54 $ 89,726 $ ( 28,074 ) $ 20,402 $ 82,521 The accompanying notes to consolidated financial statements are an integral part of these statements. 40 Table of Contents MEDIACO HOLDING INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS Year ended December 31, (in thousands) 2024 2023 OPERATING ACTIVITIES: Consolidated net loss $ ( 1,302 ) $ ( 7,631 ) Less: 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 debt discount 355 — Amortization of fair value debt adjustments 1,288 — Noncash change in warrant shares ( 38,360 ) — Noncash interest expense 4,601 508 Noncash lease expense 1,119 1,557 Provision for bad debts 683 282 Provision for deferred income taxes 160 272 Noncash compensation 328 1,688 Loss on sale of property and equipment — 565 Other noncash items 2 342 Changes in assets and liabilities: Accounts receivable ( 8,422 ) 1,611 Prepaid expenses and other current assets 4,099 ( 162 ) Other assets 2,401 — Accounts payable and accrued liabilities 7,498 ( 1,526 ) Deferred revenue 821 ( 268 ) Operating lease liabilities 320 ( 238 ) Income taxes ( 39 ) ( 3,129 ) Other liabilities ( 672 ) ( 219 ) 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: Purchases of property and equipment ( 1,113 ) ( 1,069 ) Purchases of internally-created software ( 150 ) ( 597 ) 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 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 provided by (used in) continuing financing activities 33,902 ( 1,211 ) Net cash used in discontinued financing activities — ( 38 ) 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: Beginning of period 7,071 15,301 End of period $ 6,933 $ 7,071 SUPPLEMENTAL DISCLOSURES: Cash paid for: Interest $ 4,112 $ — Income taxes - Federal — 2,290 Income taxes - State — 752 The accompanying notes to consolidated financial statements are an integral part of these statements. 41 Table of Contents MEDIACO HOLDING INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Dollars in Thousands Unless Indicated Otherwise) 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization 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 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 and the Estrella VIE (as defined below), collectively. Basis of Presentation and Consolidation Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All significant intercompany balances and transactions have been eliminated. In the opinion of management, all adjustments necessary for fair presentation (including normal recurring adjustments) have been included. 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: a. The power to direct the activities of the VIE that most significantly impact the VIE’s economic performance; and b. 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. 42 Table of Contents 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 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. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Revenue Recognition The Company generates revenue from the sale of services including, but not limited to: (i) on-air commercial broadcast time, (ii) non-traditional revenues including event-related revenues and event sponsorship revenues, and (iii) digital advertising. Payments received from advertisers before the performance obligation is satisfied are recorded as deferred revenue. 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 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 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 43 Table of Contents 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 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 Property and equipment are recorded at cost. Depreciation is generally computed using the straight-line method over the estimated useful lives of the related assets, which are 30 to 39 years for buildings, the shorter of economic life or expected lease term for leasehold improvements, five to seven years for broadcasting equipment, five years for automobiles, office equipment and computer equipment, and three to five years for software. Maintenance, repairs and minor renewals are expensed as incurred; improvements are capitalized. On a continuing basis, the Company reviews the carrying value of property and equipment for impairment. If events or changes in circumstances were to indicate that an asset carrying value may not be recoverable, a write-down of the asset would be recorded through a charge to operations. See below for more discussion of impairment policies related to our property and equipment. 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,” 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 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, 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. 44 Table of Contents 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 Advertising costs are expensed when incurred. Advertising expenses were $ 1.7 million and $ 0.5 million for the years ended December 31, 2024 and 2023, respectively. Deferred Revenue and Barter Transactions 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. Revenue from barter transactions is recognized when commercials are broadcast. The appropriate expense or asset is recognized when merchandise or services are used or received. 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 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. 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: 45 Table of Contents Year Ended December 31, 2024 2023 Numerator: Loss from continuing operations $ ( 1,302 ) $ ( 7,421 ) Less: Net income attributable to noncontrolling interests ( 2,773 ) — Less: Preferred stock dividends ( 851 ) ( 2,415 ) Loss from continuing operations available to common shareholders ( 4,926 ) ( 9,836 ) 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 ) Denominator: 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 per share attributable to common shareholders - basic and diluted: Continuing operations $ ( 0.08 ) $ ( 0.39 ) Discontinued operations — ( 0.01 ) 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. Year Ended December 31, (in thousands) 2024 2023 Convertible Emmis promissory note 8,865 4,902 Option agreement shares 4,971 — Series A convertible preferred stock 12,251 21,634 Restricted stock awards 842 641 Total anti-dilutive shares 26,929 27,177 Income Taxes 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. Income taxes are recognized during the year in which the underlying transactions are reflected in the consolidated statements of operations. Deferred taxes are provided for temporary differences between amounts of assets and liabilities as recorded for financial reporting purposes and amounts recorded for income tax purposes. After determining the total amount of deferred tax assets, the Company determines whether it is more likely than not that some portion of the deferred tax assets will not be realized. 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. Long-Lived Tangible Assets The Company periodically considers whether indicators of impairment of definite-lived long-lived tangible assets are present. If such indicators are present, the Company determines whether the sum of the estimated undiscounted cash flows attributable to the assets in question is less than their carrying value. If less, the Company recognizes an impairment loss based on the excess of the carrying amount of the assets over their respective fair values. Fair value is determined by discounted future cash flows, appraisals and other methods. If the assets determined to be impaired are to be held and used, the Company recognizes an impairment charge to the extent the asset’s carrying value is greater than the fair value. The fair value of the asset then becomes the asset’s new carrying value, which the Company depreciates or amortizes over the remaining estimated useful life of the asset. 46 Table of Contents Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. The Company has considered information available to it as of the date of issuance of these financial statements and is not aware of any specific events or circumstances that would require an update to its estimates or judgments, or a revision to the carrying value of its assets or liabilities. These estimates may change as new events occur and additional information becomes available. Actual results could differ materially from these estimates. Reclassifications Certain amounts have been reclassified to conform to the current year presentation. Recent Accounting Pronouncements Implemented In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments – Credit Losses , which introduces new guidance for an approach based on using expected losses to estimate credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale debt securities and provides a simplified accounting model for purchased financial assets with credit deterioration since their origination. Instruments in scope include loans, held-to-maturity debt securities and net investments in leases as well as reinsurance and trade receivables. We adopted this standard on January 1, 2023. The adoption of the new standard did not have a significant impact on our consolidated financial statements. 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): Improvements to Income Tax Disclosures , which is intended to enhance the transparency and decision usefulness of income tax disclosures by enhancing information about how an entity’s operations and related tax risks and its tax planning and operation opportunities affect its tax rate and prospects for future cash flows. This guidance is effective for fiscal years beginning after December 31, 2024, with early adoption permitted. Adoption allows for prospective application, with retrospective application permitted. We are currently assessing the impact this standard will have on our consolidated financial statements, including, but not limited to, our income taxes footnote disclosure. 2. DISCONTINUED OPERATIONS 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. The purchase price was $ 78.6 million, subject to certain customary adjustments, paid at closing in cash. The sale resulted in a pre-tax gain of $ 46.9 million in the fourth quarter of 2022. In accordance with ASC 205-20-S99-3, Allocation of Interest to Discontinued Operations , the Company elected to allocate interest expense to discontinued operations where the debt is not directly attributed to the Fairway business. Interest expense was allocated based on a ratio of net assets discontinued to the sum of consolidated net assets plus consolidated debt. 47 Table of Contents 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. The financial results of Fairway are presented as income from discontinued operations on our consolidated statements of income. The following table presents the financial results of Fairway: Year ended December 31, 2024 2023 Net revenues $ — $ — OPERATING EXPENSES Operating expenses excluding depreciation and amortization expense — 284 Depreciation and amortization — — Loss on disposal of assets — — Total operating expenses — 284 Loss from operations of discontinued operations — ( 284 ) Interest and other, net — — Loss from discontinued operations before income taxes and gain on sale — ( 284 ) Pre-tax gain on sale — — 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 . 3. COMMON STOCK MediaCo has authorized Class A common stock, Class B common stock, and Class C common stock. The rights of these three classes are essentially identical except that each share of Class A common stock has one vote with respect to substantially all matters, each share of Class B common stock has 10 votes with respect to substantially all matters, and each share of Class C common stock has no voting rights with respect to substantially all matters. All Class B common stock outstanding is owned by SG Broadcasting. At December 31, 2024 and December 31, 2023, no shares of Class C common stock were issued or outstanding. On December 16, 2022, our Board approved a stock repurchase plan (the “Repurchase Plan”), to repurchase from time to time, in the open market or through privately negotiated transactions, shares, up to $ 2.0 million in the aggregate of shares of our Class A common stock. The timing of purchases and the exact number of shares to be purchased depends on market conditions. 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, 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. entered into an At Market Issuance Sales Agreement with B. Riley Securities, Inc.(“B. Riley”), pursuant to which the Company may offer and sell, from time to time through or to B. Riley, as agent or principal, shares of the Company’s Class A Common Stock, $ 0.01 par value per share, having an aggregate offering price of up to $ 12.5 million. During the years ended December 31, 2024 and 2023, no stock was sold under this agreement. 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. 48 Table of Contents 4. 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”); and 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. Warrant 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. 49 Table of Contents 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. 50 Table of Contents 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: Warrants (1) 70,515 Series B Preferred Stock (2) 31,975 Second Lien Term Loan (2) 26,534 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 16,330 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) 17,629 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. 51 Table of Contents 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: December 31, 2024 Cash and cash equivalents $ 159 Accounts receivable, net of allowance for doubtful accounts of $ 42 2,858 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 52 Table of Contents The summarized operating results of the VIE are as follows: Year ended December 31, 2024 2023 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, 2024 2023 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. 5. SHARE BASED PAYMENTS The amounts recorded as share based compensation expense consist of restricted stock awards issued to officers and employees that have vesting periods up to three years . Awards are typically made pursuant to employment agreements. Restricted stock awards are granted out of the Company’s 2020 and 2021 Equity Compensation Plans. We determine the fair value of restricted stock awards based on the closing price of our stock on the date of grant. We generally recognize compensation expense related to restricted stock awards on a straight-line basis over the period during which the restriction lapses. Forfeitures are recognized in the period in which they occur. The following table presents a summary of the Company’s restricted stock grants outstanding at December 31, 2024, and restricted stock activity during the year ended December 31, 2024 (“Price” reflects the weighted average share price at the date of grant): Awards Price Grants outstanding, beginning of period 1,163 $ 1.17 Granted 49 3.88 Vested (restriction lapsed) ( 660 ) 1.41 Forfeited ( 65 ) 2.58 Grants outstanding, end of period 487 $ 0.83 Recognized Non-Cash Compensation Expense The following table summarizes stock-based compensation expense recognized by the Company for the years ended December 31, 2024 and 2023. 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. 53 Table of Contents Year Ended December 31, 2024 2023 Operating expenses excluding depreciation and amortization $ 124 $ 1,008 Corporate expenses 204 680 Stock-based compensation expense $ 328 $ 1,688 As of December 31, 2024, there was $ 0.1 million of unrecognized compensation cost related to nonvested stock-based compensation arrangements. The cost is expected to be recognized over a weighted average period of approximately 1.0 years. 6. REVENUE The Company generates revenue from the sale of services including, but not limited to: (i) on-air commercial broadcast time, (ii) non-traditional revenues including event-related revenues and event sponsorship revenues, and (iii) digital advertising. Payments received from advertisers before the performance obligation is satisfied are recorded as deferred revenue. Certain network sales contracts include a guaranteed number of impressions. If the guarantee is not met, the Company is obligated to provide additional spots at no charge until the guaranteed number of impressions is met, referred to as a makegood liability. The liability for each contract is calculated by determining the cost per guarantee per the original contract, multiplied by the number of 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 & TV Advertising On-air broadcast revenue is recognized when or as performance obligations under the terms of a contract with a customer are satisfied. This typically occurs over the period of time that advertisements are provided, or as an event occurs. Revenues are reported at the amount the Company expects to be entitled to receive under the contract. Payments received from advertisers before the performance obligation is satisfied are recorded as deferred revenue in the consolidated balance sheets. Digital Digital revenue relates to revenue generated from the sale of digital marketing services (including display advertisements and video pre-roll and sponsorships) to advertisers on Company-owned websites and from revenue generated from content distributed across other digital platforms. Digital revenues are generally recognized as the digital advertising is delivered. Syndication Syndication revenue relates to revenue generated from the sale of rights to broadcast shows we produce as well as revenues from syndicated shows we broadcast for a fee. Syndication revenues are generally recognized ratably over the term of the contract. Events and Sponsorships Events and Sponsorships revenues principally consist of ticket sales and sponsorship of events our stations conduct in their local market. These revenues are recognized when our performance obligations are fulfilled, which generally coincides with the occurrence of the related event. Other Other revenue includes barter revenue, network revenue, talent fee revenue and other revenue. The Company provides advertising broadcast time in exchange for certain products and services, including on-air radio programming. These barter arrangements generally allow the Company to preempt such bartered broadcast time in favor of advertisers who purchase time for cash consideration. These barter arrangements are valued based upon the Company’s estimate of the fair value of the products and services received. Revenue is recognized on barter arrangements when we broadcast the advertisements. Advertisements delivered under barter arrangements are typically aired during the same period in which the products and services are consumed. The Company also sells certain remnant advertising inventory to third-parties for cash, and we refer to this as network revenue. The third-parties aggregate our remnant inventory with other broadcasters’ remnant inventory for sale to third parties, generally to large national advertisers. This network revenue is recognized as we broadcast the advertisements. Talent fee revenue are fees earned for appearances by our talent, which is recognized when our performance obligations are fulfilled, which generally coincides with the occurrence of the related appearance. Other revenue is comprised of brand integrations, custom on-air shows, or other amounts earned that do not fit in any other category and are recognized when our performance obligations are fulfilled. 54 Table of Contents Disaggregation of revenue The following table presents the Company's revenues disaggregated by revenue source: Year Ended December 31, 2024 Audio Video Consolidated Net revenues: Spot Radio & TV Advertising $ 40,824 $ 20,334 $ 61,158 Digital 4,444 15,847 20,291 Syndication 2,571 346 2,918 Events and Sponsorships 3,450 167 3,617 Other 6,245 1,343 7,588 Total net revenues $ 57,534 $ 38,037 $ 95,571 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 7. 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 First Lien Term Loans 45,000 — Second Lien Term Loan 27,984 — Less: Current maturities — ( 6,458 ) Less: 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. 55 Table of Contents 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; and • 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. 56 Table of Contents 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; and • 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. 57 Table of Contents 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 8. 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 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. 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. 58 Table of Contents Recurring Fair Value Measurements 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 Goodwill, 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 more discussion). Fair Value of Other Financial Instruments Certain nonfinancial assets and liabilities are measured at fair value on a non-recurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. The estimated fair value of financial instruments is determined using the best available market information and appropriate valuation methodologies. Considerable judgment is necessary, however, in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented are not necessarily indicative of the amounts that the Company could realize in a current market exchange, or the value that ultimately will be realized upon maturity or disposition. The use of different market assumptions may have a material effect on the estimated fair value amounts. The Company estimates that the carrying amount of cash and cash equivalents approximates fair value because of the short maturity of these instruments. 9. LEASES We determine if an arrangement is a lease at inception. 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 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. We use the implicit rate if it is readily determinable. 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. 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. Instead, we recognized lease payments in the consolidated statements of operations on a straight-line basis over the lease term and variable payments in the period in which the obligation for these payments was incurred. We elected this policy for all classes of underlying assets. Short-term lease expense 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, 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. 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. 59 Table of Contents The impact of operating leases to our consolidated financial statements was as follows: Year Ended December 31, 2024 2023 Operating lease cost $ 6,446 $ 3,468 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, 2024 2023 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: Year ended December 31, 2025 $ 6,800 2026 7,158 2027 6,988 2028 6,926 2029 6,681 After 2029 55,519 Total lease payments 90,072 Less: imputed interest ( 46,037 ) 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, 2025 $ 768 2026 799 2027 831 2028 864 2029 219 After 2029 — Total lease payments 3,481 Less: imputed interest ( 720 ) Total recorded financing lease liabilities $ 2,761 60 Table of Contents 10. INTANGIBLE ASSETS AND GOODWILL As of December 31, 2024 and 2023, intangible assets, net consisted of the following: December 31, 2024 December 31, 2023 Indefinite-lived intangible assets: FCC Licenses $ 165,964 $ 63,266 Goodwill 28,338 — Definite-lived intangible assets: Customer relationships 11,675 — Software 1,138 1,327 Other 112 — Total $ 207,227 $ 64,593 In accordance with ASC Topic 350, Intangibles—Goodwill and Other, the Company reviews intangible assets at least annually for impairment. 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 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 The Company generally performs its annual impairment review of indefinite-lived intangibles as of October 1 each year. At the time of each impairment review, if the fair value of the indefinite-lived intangible is less than its carrying value, a charge is recorded to results of operations. When indicators of impairment are present, the Company will perform an interim impairment test. We will perform additional interim impairment assessments whenever triggering events suggest such testing for the recoverability of these assets is warranted. During the years ended December 31, 2024 and 2023, the Company did not record any impairment losses. Valuation of Indefinite-lived Broadcasting Licenses 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 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. This cash flow stream is discounted to arrive at a value for the FCC license. The Company assumes the competitive situation that exists in its market remains unchanged, with the exception that its unit of accounting commenced operations at the beginning of the valuation period. 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, 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 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. 61 Table of Contents 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 Discount Rate 12.5 % 12.7 % Long-term Revenue Growth Rate 0.5 % 0.5 % Mature Market Share 11.3 % 10.8 % Operating Profit Margin 23.2 - 29.2 % 22.9 - 29.0 % 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 The following table presents the weighted-average remaining useful life at December 31, 2024 and gross carrying amount and accumulated amortization for each major class of definite-lived intangible assets at December 31, 2024 and 2023: December 31, 2024 December 31, 2023 Weighted Average Remaining Useful Life (in years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount 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 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. 62 Table of Contents 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. The Company estimates amortization expense each of the next five years as follows: Year ended December 31, Amortization Expense 2025 $ 3,007 2026 2,477 2027 1,930 2028 1,398 2029 992 After 2029 3,121 Total $ 12,925 11. OTHER COMMITMENTS AND CONTINGENCIES Commitments 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 2028 2,489 — 2029 — — Thereafter — — Total $ 18,351 $ 5,224 Litigation From time to time, our stations are parties to various legal proceedings arising in the ordinary course of business. 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. 12. INCOME TAXES The provision for income taxes for continuing operations for the years ended December 31, 2024 and 2023, consisted of the following: Year Ended December 31, 2024 2023 Current: Federal $ — $ 36 State 159 — Total current 159 36 Deferred: Federal 270 68 State ( 109 ) 204 Total deferred 161 272 Provision for income taxes $ 320 $ 308 63 Table of Contents The provision for income taxes for continuing operations for the years ended December 31, 2024 and 2023, differs from that computed at the Federal statutory corporate tax rate as follows: Year Ended December 31, 2024 2023 Federal statutory income tax rate 21 % 21 % Computed income tax provision at federal statutory rate $ ( 206 ) $ ( 1,494 ) State income tax ( 2,037 ) ( 268 ) 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 Valuation allowance 7,833 1,822 Other 22 18 Provision for income taxes $ 320 $ 308 The final determination of our income tax liability may be materially different from our income tax provision. Significant judgment is required in determining our provision for income taxes. Our calculation of the provision for income taxes is subject to our interpretation of applicable tax laws in the jurisdictions in which we file. In addition, our income tax returns are subject to periodic examination by the Internal Revenue Service and other taxing authorities. As of December 31, 2024, the Company had no open income tax examinations. The components of deferred tax assets and deferred tax liabilities at December 31, 2024 and 2023, were as follows: December 31, 2024 December 31, 2023 Deferred tax assets: Intangible assets $ 20,873 $ 11,148 Lease liability 12,666 4,891 Interest deduction carryforward 6,492 6,137 Stock compensation 30 209 Net operating losses 11,925 3,912 Property and equipment 38 61 Other 1,438 383 Valuation allowance ( 32,956 ) ( 16,599 ) Total deferred tax assets 20,506 10,142 Deferred tax liabilities Indefinite-lived intangible assets ( 9,721 ) ( 8,697 ) Right of use asset ( 13,720 ) ( 4,220 ) Total deferred tax liabilities ( 23,441 ) ( 12,917 ) Net deferred tax liabilities $ ( 2,935 ) $ ( 2,775 ) A valuation allowance is provided when it is more likely than not that some portion of the deferred tax asset (“DTA”) will not be realized. 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, 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. These DTLs can be considered a source of future taxable income to support realization of net operating losses (“NOLs”) that do not expire and DTAs that upon reversal would give rise to NOLs that do not expire. 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. 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. 64 Table of Contents 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. Certain state NOL carryforwards begin expiring in the year ending December 2039. Accounting Standards Codification paragraph 740-10 clarifies the accounting for uncertainty in income taxes by prescribing a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken within a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The amount recognized is measured as the largest benefit that is greater than 50 percent likely of being realized upon ultimate settlement. As of December 31, 2024, the estimated value of the Company's net uncertain tax positions was approximately $ 0.4 million all which is reported as a noncurrent liability. The following is a tabular reconciliation of the total amounts of gross unrecognized tax benefits for the years ended December 31, 2024 and 2023: December 31, 2024 December 31, 2023 Gross unrecognized tax benefit - opening balance $ ( 390 ) $ — Gross increases - tax position prior year — ( 390 ) Gross increases - tax position current year — — Decreases relating to settlement with taxing authorities — — Gross decreases - lapse of applicable statute of limitation — — Gross unrecognized tax benefit - ending balance $ ( 390 ) $ ( 390 ) All of the unrecognized tax benefits as of December 31, 2024 and 2023, if recognized, would reduce the Company’s provision for income taxes. Due to the uncertain and complex application of tax regulations, it is possible that the ultimate resolution of audits may result in liabilities that could be different from this estimate. In such case, the Company will record additional tax expense or tax benefit in the tax provision, or reclassify amounts on the accompanying consolidated balance sheets in the period in which such matter is effectively settled with the taxing authority. The Company recognizes interest accrued related to unrecognized tax benefits and penalties as income tax expense. Related to the uncertain tax positions noted above, the Company accrued $ 39 thousand of interest and no penalties during the current year. 13. RELATED PARTY TRANSACTIONS Transaction Agreement with Emmis and SG Broadcasting On June 28, 2019, MediaCo entered into a Contribution and Distribution Agreement with Emmis Communications Corporation (“Emmis”) and SG Broadcasting, pursuant to which (i) Emmis contributed the assets of its radio stations WQHT(FM) and WBLS(FM), in exchange for $ 91.5 million in cash, a $ 5.0 million note and 23.72 % of the common stock of MediaCo, (ii) Standard General purchased 76.28 % of the common stock of MediaCo, and (iii) the common stock of MediaCo received by Emmis was distributed pro rata in a taxable dividend to Emmis’ shareholders on January 17, 2020. The common stock of MediaCo acquired by Standard General is entitled to ten votes per share and the common stock acquired by Emmis and distributed to Emmis’ shareholders is entitled to one vote per share. 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 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. 65 Table of Contents 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. Consulting Agreements & Other Activity In October 2023, we entered into agreements with five consultants that are currently employed by affiliates of Standard General. 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. 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. 14. 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) Consolidated 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 ) 66 Table of Contents Year Ended December 31, 2023 Audio Video Corporate and other (1) Consolidated 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) Consolidated 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. 15. SUBSEQUENT EVENTS 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. 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. 67 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.