What changed in this filing

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Item 1. Financial Statements

2025-08-11 compared with 2025-05-20 · 166 added, 76 removed, 617 unchanged (28% of the section changed)

3 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in thousands, except per share amounts) 2025 2024 2025 2024

9 unchanged sentences

Interest expense, net ( 3,855 ) ( 3,782 ) ( 7,609 ) ( 3,918 )

Change in fair value of warrant shares liability — ( 31,027 ) — ( 31,027 )

Other income 2,119 10 2,230 20

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Accounts payable and accrued expenses $ 41,508 $ 36,435

Current maturities of long-term debt 5,000 —

Deferred revenue 10,505 10,921

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authorized 170,000,000 shares;

issued and outstanding 41,227,520 shares and 41,274,103 shares at March 31, 2025, and December 31, 2024, respectively

issued and outstanding 48,253,005 shares and 41,274,103 shares at June 30, 2025, and December 31, 2024, respectively

Class B common stock, $ 0.01 par value;

authorized 50,000,000 shares;

issued and outstanding 5,413,197 shares at March 31, 2025, and December 31, 2024

issued and outstanding 5,413,197 shares at June 30, 2025, and December 31, 2024

Class C common stock, $ 0.01 par value;

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BALANCE, MARCH 31, 2025 41,227,520 $ 412 5,413,197 $ 54 $ 32,155 $ 89,708 $ ( 36,877 ) $ 20,599 $ 106,051

Net (loss) income — — — — — — ( 9,078 ) 278 ( 8,800 )

Issuance of class A to employees, officers and directors, net of withholdings ( 26,053 ) — — — — — — — —

Noncontrolling interest resulting from Estrella transaction 7,051,538 71 — — — 20,806 — ( 20,877 ) —

BALANCE, JUNE 30, 2025 48,253,005 $ 483 5,413,197 $ 54 $ 32,155 $ 110,514 $ ( 45,955 ) $ — $ 97,251

BALANCE, DECEMBER 31, 2023

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BALANCE, MARCH 31, 2024 20,578,568 $ 206 5,413,197 $ 54 $ — $ 60,578 $ ( 27,548 ) $ — $ 33,290

Net (loss) income — — — — — — ( 49,135 ) 828 ( 48,307 )

Issuance of class A to employees, officers and directors, net of withholdings ( 34,403 ) — — — — 22 — — 22

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

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

Preferred stock dividends — — — — — — ( 128 ) — ( 128 )

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

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

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31,

Six Months Ended June 30,

(in thousands) 2025 2024

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Consolidated net loss $ ( 17,406 ) $ ( 51,984 )

Adjustments to reconcile net loss to net cash provided by operating activities -

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

Depreciation and amortization 3,466 1,564

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Accretion of Preferred Series B Shares and Second Lien Term Loan 1,126 977

Noncash change in warrant shares — 31,027

Noncash interest expense 2,865 965

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Stock compensation expense 68 473

Loss on sale of property and equipment 139 —

Other noncash items 155 790

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Other liabilities ( 4,635 ) 650

Net cash provided by operating activities 2,057 412

Net cash used in operating activities ( 893 ) ( 24,711 )

CASH FLOWS FROM INVESTING ACTIVITIES:

1 unchanged sentence

Purchases of internally-created software — ( 146 )

Cash paid in acquisitions, net of cash acquired — ( 6,847 )

Other investing — 100

Net cash used in investing activities ( 277 ) ( 6,986 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from long-term debt — 38,800

Payments for debt-related costs — ( 1,618 )

Proceeds from issuance of class A common stock 8 —

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Settlement of tax withholding obligations ( 95 ) ( 163 )

Net cash used in financing activities ( 168 ) ( 80 )

Net cash (used in) provided by financing activities ( 320 ) 37,012

CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH ( 1,490 ) 5,315

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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.

MediaCo Holding Inc., and its subsidiaries (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.

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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 the requirements stated in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) paragraph 810-10-25-38A and paragraph 810-10-25-38B.

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 determined that the Estrella entities holding the Estrella Broadcast Assets (the “Estrella VIE”) were a VIE in which the Company held a controlling financial interest pursuant to the requirements stated in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) paragraph 810-10-25-38A and paragraph 810-10-25-38B.

The Company determined that since the major factors in the economic performance of the Estrella VIE were 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 was 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.

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to sell to such subsidiary, equity interests of certain broadcast assets (the “Put Right”).

See Note 12 — Subsequent Events for additional information.

On May 1, 2025, the Put Right was exercised by Estrella Media, Inc.

and MediaCo acquired 100 % of the equity interests of Estrella and certain subsidiaries of Estrella in exchange for 7,051,538 shares of Class A common stock.

As a result of the exercise of the Put Right, Estrella became a wholly owned subsidiary of the Company.

Emerging Growth Company

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

Restricted cash of $ 2.0 million as of March 31, 2025 and December 31, 2024 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 March 31, 2025 and December 31, 2024 was held for a collateral account related to merchant banking for the Company’s purchase card program and for an office lease security deposit, all included in the line item Deposits and Other in the condensed consolidated balance sheets.

Restricted cash of $ 2.0 million as of June 30, 2025 and December 31, 2024 was held as collateral for a letter of credit entered into in connection with the lease in New York City for our radio operations and corporate offices, which expires in October 2039, and restricted cash of $ 0.5 million as of June 30, 2025 and December 31, 2024 was held for a collateral account related to merchant banking for the Company’s purchase card program and for an office lease security deposit, all included in the line item Deposits and Other in the condensed consolidated balance sheets.

Fair Value Measurements

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

As a result of the Estrella Acquisition, the Company recorded $ 28.3 million of goodwill, which accounts for all goodwill on the condensed consolidated balance sheet as of March 31, 2025, and of which $ 8.4 million is allocated to our Video Segment and $ 19.9 million is allocated to our Audio Segment.

As a result of the Estrella Acquisition, the Company recorded $ 28.3 million of goodwill, which accounts for all goodwill on the condensed consolidated balance sheet as of June 30, 2025, 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.

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

The activity in the allowance for credit losses for the three months ended March 31, 2025 and 2024 was as follows:

Three Months Ended March 31,

The activity in the allowance for credit losses for the three and six months ended June 30, 2025 and 2024 was as follows:

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

2025 2024 2025 2024

Beginning Balance $ 872 $ 378 $ 1,079 $ 353

Additions Related to Estrella Acquisition — 496 — 496

Change in Provision 1,520 54 1,313 79

Write Offs — ( 249 ) — ( 249 )

Ending Balance $ 2,392 $ 679 $ 2,392 $ 679

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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 as of March 31, 2025.

Amortization expense for the three months ended March 31, 2025 and 2024 was $ 0.4 million and zero , respectively, which is included in operating expenses.

All program rights payable are included in accounts payable and accrued expenses as of June 30, 2025.

Amortization expense for the three and six months ended June 30, 2025 was $ 0.2 million and $ 0.6 million, respectively, which is included in operating expenses.

Amortization expense for both the three and six months ended June 30, 2024 was $ 0.8 million.

These programming rights were primarily related to one agreement which was terminated in February 2025.

Production Costs

MediaCo capitalizes costs for owned television content, including direct costs, production overhead and development costs.

Amortization for content predominantly monetized with other owned or licensed content is recorded based on estimated usage.

In determining the method of amortization and estimated life, we generally use the method and the life that most closely follow the individual film forecast computation method, in accordance with ASC 926, Entertainment - Films.

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

Amortization expense for both the three and six months ended June 30, 2025 was $ 0.6 million, which is included in operating expenses.

Amortization expense for both the three and six months ended June 30, 2024 was zero .

Advertising Costs

Advertising costs are expensed when incurred.

Advertising expenses were $ 0.1 million in each of the three months ended March 31, 2025 and 2024.

Advertising expenses were $ 0.1 million and $ 0.3 million in each of the three and six months ended June 30, 2025 and $ 0.5 million in each of the three and six months ended June 30, 2024, respectively.

Deferred Revenue and Barter Transactions

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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 March 31, 2025 and December 31, 2024, the makegood liability assumed in the Estrella Acquisition, which is associated with these network sales and contracts, was $ 9.4 million and $ 9.2 million, respectively, and is expected to be recognized at any time but likely not to exceed four years .

During the three months ended March 31, 2025, the Company recognized $ 0.5 million in Revenue which was previously recorded as deferred revenue at the acquisition date.

As of June 30, 2025 and December 31, 2024, the makegood liability assumed in the Estrella Acquisition, which is associated with these network sales and contracts, was $ 8.8 million and $ 9.2 million, respectively, and is expected to be recognized at any time but likely not to exceed four years .

During the three and six months ended June 30, 2025, the Company recognized $ 1.2 million and $ 1.7 million, respectively in Revenue.

During the three and six months ended June 30, 2024, the Company recognized $ 0.8 million in Revenue.

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

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

Barter revenues were $ 0.4 million and $ 0.2 million for the three months ended March 31, 2025 and 2024, respectively.

Barter expenses were $ 0.4 million and $ 0.2 million for the three months ended March 31, 2025 and 2024, respectively.

Barter revenues were $ 0.8 million and $ 0.8 million for the three months ended June 30, 2025 and 2024, respectively.

Barter revenues were $ 1.2 million and $ 1.0 million for the six months ended June 30, 2025 and 2024, respectively Barter expenses were $ 0.8 million and $ 0.8 million for the three months ended June 30, 2025 and 2024, respectively.

Barter expenses were $ 1.2 million and $ 1.0 million for the six months ended June 30, 2025 and 2024, respectively

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.

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

The Company adopted this guidance for annual disclosures for the year ended December 31, 2024 and interim disclosures for the first quarter of 2025.

The Company adopted this guidance for annual disclosures for the year ended December 31, 2024 and interim disclosures for the second quarter of 2025.

As a result, we have enhanced our segment disclosures.

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Net loss $ ( 8,800 ) $ ( 48,307 ) $ ( 17,406 ) $ ( 51,984 )

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Three Months Ended

June 30, Six Months Ended

(in thousands) 2025 2024 2025 2024

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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.

Estrella exercised a put option on May 1, 2025.

See Note 12 — Subsequent Events for additional information.

On May 1, 2025, the Put Right was exercised by Estrella Media, Inc.

and MediaCo acquired 100 % of the equity interests of Estrella and certain subsidiaries of Estrella in exchange for 7,051,538 shares of Class A common stock.

Voting and Support Agreement

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Variable Interest Entity

As discussed in Note 1 — Summary of Significant Accounting Policies, 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.

As discussed in Note 1 — Summary of Significant Accounting Policies, the Company determined that the Estrella entities holding the Estrella Broadcast Assets represented a VIE in which the Company held a controlling financial interest, as MediaCo was the primary beneficiary of the VIE.

Estrella VIE’s assets could have been used only to settle obligations of the Estrella VIE until May 1, 2025 when the Put Right was exercised by Estrella Media, Inc.

and MediaCo acquired 100 % of the equity interests of Estrella and certain subsidiaries of Estrella in exchange for 7,051,538 shares of Class A common stock.

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

2025 December 31,

CURRENT ASSETS:

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Net assets $ 112,140

The summarized operating results of the VIE are as follows:

The summarized operating results of the VIE are through the date the Put Right was exercised and are as follows:

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Net revenues $ 672 $ 3,174 $ 2,654 $ 3,174

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Unaudited Pro Forma Financial Information

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

Three Months Ended March 31,

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

Three Months Ended June 30,

(unaudited) Six Months Ended June 30,

Net revenues $ 28,722 $ 54,649

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INTANGIBLE ASSETS AND GOODWILL

As of March 31, 2025 and December 31, 2024, intangible assets and goodwill consisted of the following:

March 31, 2025 December 31, 2024

As of June 30, 2025 and December 31, 2024, intangible assets and goodwill consisted of the following:

June 30, 2025 December 31, 2024

Indefinite-lived intangible assets

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Definite-lived intangibles

The following table presents the weighted-average useful life at March 31, 2025, and the gross carrying amount and accumulated amortization for each major class of definite-lived intangible assets at March 31, 2025 and December 31, 2024:

March 31, 2025 December 31, 2024

The following table presents the weighted-average useful life at June 30, 2025, and the gross carrying amount and accumulated amortization for each major class of definite-lived intangible assets at June 30, 2025 and December 31, 2024:

June 30, 2025 December 31, 2024

Weighted Average Remaining Useful Life

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

Total amortization expense from definite-lived intangible assets for each of the three months ended March 31, 2025 and 2024 and included in the depreciation and amortization line item in the condensed consolidated statements of operations was as follows:

Total amortization expense from definite-lived intangible assets for each of the three and six months ended June 30, 2025 and 2024 and included in the depreciation and amortization line item in the condensed consolidated statements of operations was as follows:

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Amortization expense $ 735 $ 852 $ 1,567 $ 932

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Year ending December 31, Amortization Expense

2025 (from April 1) $ 2,178

2025 (from July 1) $ 1,440

After 2029 3,121

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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 March 31, 2025, the makegood liability assumed in the Estrella Acquisition, which is associated with these network sales and contracts was $ 9.4 million and is expected to be recognized at any time but likely not to exceed four years and is included in Deferred revenue in the condensed consolidated financial statements.

As of June 30, 2025, the makegood liability which is associated with these network sales and contracts was $ 8.8 million and is expected to be recognized at any time but likely not to exceed four years and is included in Deferred revenue in the condensed consolidated financial statements.

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

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The following table presents the Company's revenues disaggregated by revenue source:

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

Audio Video Consolidated

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Total net revenues $ 15,236 $ 16,009 $ 31,245

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Audio Video Consolidated

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Total net revenues $ 17,213 $ 8,989 $ 26,202

Six Months Ended June 30, 2025

Audio Video Consolidated

Net revenues:

Spot Radio & TV Advertising $ 23,330 $ 11,779 $ 35,109

Digital 1,255 17,731 18,986

Syndication 1,314 — 1,314

Events and Sponsorships 637 50 687

Other 2,392 787 3,179

Total net revenues $ 28,928 $ 30,347 $ 59,275

Six Months Ended June 30, 2024

Audio Video Consolidated

Net revenues:

Spot Radio & TV Advertising $ 16,260 $ 5,800 $ 22,060

Digital 1,775 2,496 4,271

Syndication 1,286 — 1,286

Events and Sponsorships 2,172 63 2,235

Other 2,426 630 3,056

Total net revenues $ 23,919 $ 8,989 $ 32,908

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 March 31, 2025 and December 31, 2024:

March 31, 2025 December 31, 2024

Long-term debt, Warrant shares, and Series B Preferred Stock was comprised of the following at June 30, 2025 and December 31, 2024:

June 30, 2025 December 31, 2024

First Lien Term Loans $ 45,000 $ 45,000

Second Lien Term Loan 29,200 27,984

Current maturities ( 5,000 ) —

Unamortized original issue discount and deferred financing costs ( 2,502 ) ( 2,812 )

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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 Lien Credit Agreement consists of a $ 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, subject to compliance with certain debt covenants, 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.

As of June 30, 2025, there are no available borrowings on the Delayed Draw Term Loans.

In September 2024, the Company entered into the First Amendment of the First Lien Credit Agreement with White Hawk Capital Partners, LP, which provided for $ 7.5 million of additional delayed draw term loans (the “additional Delayed Draw Term Loans”), subject to compliance with certain debt covenants, 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 March 31, 2025.

The Initial Term 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.

As of June 30, 2025, there are no available borrowings on the Additional Delayed Draw Term Loans and no amounts have been drawn.

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

Loans under the First Lien Credit Agreement are subject to monthly interest payments at a rate of SOFR + 6.00 %.

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

For the three months ended March 31, 2025, the Company has reclassified the Warrant from a liability classification to equity classification.

For the three months ended March 31, 2025, the Company reclassified the Warrant from a liability classification to equity classification.

Subsequent to shareholder approval, the Warrant is now accounted for as permanent equity.

Based on amounts outstanding at March 31, 2025, mandatory principal payments of long-term debt and preferred stock for the next five years and thereafter are summarized below:

Based on amounts outstanding at June 30, 2025, 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

Remainder of 2025 (from April 1) $ — $ — $ — $ —

Remainder of 2025 (from July 1) $ — $ — $ — $ —

2026 10,000 — — 10,000

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

The effective tax rate for the three months ended March 31, 2025 and 2024 was ( 3 )% and ( 2 )%, respectively.

Our effective tax rate for the three months ended March 31, 2025 differs from the statutory tax rate primarily due to the recognition of additional valuation allowance.

The effective tax rate for the six months ended June 30, 2025 and 2024 was ( 3 )% and ( 1 )%, respectively.

Our effective tax rate for the six months ended June 30, 2025 differs from the statutory tax rate primarily due to the recognition of additional valuation allowance.

ASC Subtopic 740-10 clarified the accounting for uncertainty in income taxes by prescribing a recognition threshold and measurement attribute of the financial statement recognition and measurement of a tax position taken or expected to be taken within a tax return.

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

As of March 31, 2025, the amount of interest accrued was approximately $ 73 thousand, which did not include the federal tax benefit of interest deductions.

As of June 30, 2025, the amount of interest accrued was approximately $ 82 thousand, which did not include the federal tax benefit of interest deductions.

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

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We elected this policy for all classes of underlying assets.

Short-term lease expense recognized during both the three months ended March 31, 2025 and 2024 was not material.

Short-term lease expense recognized during both the three months ended June 30, 2025 and 2024 was not material.

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

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Operating lease cost $ 1,983 $ 1,773 $ 4,022 $ 2,407

Operating cash flows from operating leases 1,645 1,263 3,359 1,543

March 31, 2025 December 31, 2024

Right-of-use assets obtained in exchange for additional operating lease liabilities from lease modification 457 — 457 —

June 30, 2025 December 31, 2024

Weighted average remaining lease term - operating leases (in years) 12.5 12.8

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Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

Finance lease cost $ 226 $ 199 $ 456 $ 199

Cash flows from finance leases 193 124 380 124

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Weighted average remaining lease term - finance leases (in years) 3.8 4.2

Weighted average discount rate - finance leases 11.3 % 11.3 %

As of March 31, 2025, the annual minimum lease payments of our operating lease liabilities were as follows:

As of June 30, 2025, the annual minimum lease payments of our operating lease liabilities were as follows:

Year ending December 31,

2025 (from April 1)

2025 (from July 1)

After 2029 56,569

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Total recorded operating lease liabilities $ 43,629

As of March 31, 2025, the annual minimum lease payments of our finance lease liabilities were as follows:

As of June 30, 2025, the annual minimum lease payments of our finance lease liabilities were as follows:

Year ending December 31,

2025 (from April 1) $ 582

2025 (from July 1) $ 389

Total lease payments 3,101

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On March 6, 2025, the shareholders of MediaCo approved the Proposal and the Put Right became exercisable for 7,051,538 shares of Class A common stock.

See Note 1 — Summary of Significant Accounting Policies and Note 12 — Subsequent Events for additional information.

On May 1, 2025, the Put Right was exercised by Estrella Media, Inc.

and MediaCo acquired 100 % of the equity interests of Estrella and certain subsidiaries of Estrella.

As a result of the exercise of the Put Right, Estrella became a wholly owned subsidiary of the Company.

See Note 1 — Summary of Significant Accounting Policies.

Transaction Agreement with Emmis and SG Broadcasting

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

The Company recognized interest expense of $ 0.2 million related to the Emmis Convertible Promissory Note for the three months ended March 31, 2024.

No such amount was recognized for the three months ended March 31, 2025.

The Company recognized interest expense of $ 0.2 million and $ 0.4 million related to the Emmis Convertible Promissory Note for the three and six months ended June 30, 2024.

Convertible Preferred Stock

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Pursuant to the Articles of Amendment that established the terms of the Series A preferred stock, issued and outstanding shares of 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, or if no senior debt is outstanding, 6 %, plus additional increases of 1 % on December 12, 2020 and each anniversary thereof.

Dividends on Series A preferred stock held by SG Broadcasting were $ 0.7 million for the three months ended March 31, 2024.

Dividends on Series A preferred stock held by SG Broadcasting were $ 0.1 million and $ 0.9 million for the three and six months ended June 30, 2024.

Consulting Agreements & Other Activity

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

For the three months ended March 31, 2024, $ 0.2 million of fees were incurred related to these agreements.

For the three and six months ended June 30, 2024, $ 0.1 million and $ 0.3 million of fees were incurred related to these agreements.

These agreements were terminated as of September 30, 2024.

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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 three months ended March 31, 2025, $ 0.2 million of fees were incurred related to this agreement and $ 0.3 million was unpaid as of March 31, 2025.

For the three and six months ended June 30, 2025, $ 0.2 million and $ 0.3 million of fees were incurred related to this agreement and $ 0.3 million was unpaid for both the three and six months ended June 30, 2025.

On April 17, 2025, the Company and Paducah Television Operations LLC (“PTO”), a subsidiary of SMG, entered into a Support Agreement, effective as of April 17, 2025 (the “PTO Support Agreement”) and continues for a term of six months unless terminated earlier by either party with 30 days written notice.

Under the PTO Support Agreement, the Company will provide operational support to PTO, including, but not limited to, finance and legal assistance, human resources, sales, and production of certain marketing materials.

In return for providing these services, the Company will receive payment at the mutually agreed upon rate.

For the three and six months ended June 30, 2025, $ 0.6 million of fees were earned related to this agreement and is recorded in other income on the condensed consolidated statements of operations.

$ 0.6 million of these fees were still owed to the Company as of June 30, 2025.

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 revised its segment information as of December 31, 2024 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.

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

Three Months Ended March 31, 2025 Audio Video Corporate and other (1)

Three Months Ended June 30, 2025 Audio Video Corporate and other (1)

Net revenues $ 15,236 $ 16,009 $ — $ 31,245

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Operating income (loss) $ ( 1,549 ) $ ( 3,682 ) $ ( 1,554 ) $ ( 6,785 )

Three Months Ended March 31, 2024 Audio Video Corporate and other (1)

Three Months Ended June 30, 2024 Audio Video Corporate and other (1)

Net revenues $ 17,213 $ 8,989 $ — $ 26,202

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Operating loss $ ( 2,286 ) $ ( 7,595 ) $ ( 3,445 ) $ ( 13,326 )

Six Months Ended June 30, 2025 Audio Video Corporate and other (1)

Net revenues $ 28,928 $ 30,347 $ — $ 59,275

Operating expenses 27,844 36,142 — 63,986

Depreciation and amortization 1,796 1,670 — 3,466

Other segment items (2)

142 2 3,147 3,291

Operating income (loss) $ ( 854 ) $ ( 7,467 ) $ ( 3,147 ) $ ( 11,468 )

Six Months Ended June 30, 2024 Audio Video Corporate and other (1)

Net revenues $ 23,919 $ 8,989 $ — $ 32,908

Operating expenses 25,727 15,570 — 41,297

Depreciation and amortization 550 1,014 — 1,564

Other segment items (2)

5 — 6,835 6,840

Operating loss $ ( 2,363 ) $ ( 7,595 ) $ ( 6,835 ) $ ( 16,793 )

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

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Assets by reportable segment were as follows:

Total Assets Audio Video Corporate and other(3) Consolidated

March 31, 2025 $ 195,404 $ 115,981 $ 6,270 $ 317,655

Total Assets Audio Video Corporate and other (3)

June 30, 2025 $ 186,465 $ 125,749 $ 2,936 $ 315,150

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

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SUBSEQUENT EVENTS

Put Right Exercise

On May 1, 2025, the Put Right was exercised by Estrella Media, Inc.

and MediaCo acquired 100 % of the equity interests of Estrella and certain subsidiaries of Estrella in exchange for 7,051,538 shares of Class A common stock.

As a result of the exercise of the Put Right, Estrella became a wholly owned subsidiary of the Company and will no longer contain a noncontrolling interest in the Estrella VIE.

Since the exercise of the Put Right occurred subsequent to the balance sheet date the Put Right is not reflected in the condensed consolidated balance sheets included herein.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted and includes a variety of changes to U.S.

income tax and related laws.

Among other things, the OBBBA makes changes to certain business-related exclusions, deductions and credits.

The effect of the OBBBA will be recorded in the third quarter of fiscal 2025, as a change in tax law is accounted for in the period of enactment.

The new legislation has multiple effective dates, with certain provisions effective in 2025 and others in the future.

While the Company continues to assess the impact of the tax provisions of the OBBBA on its condensed consolidated financial statements, the Company currently believes that the tax provisions of the legislation are not expected to have a material impact on the Company’s financial position or statement of operations.

On August 8, 2025, the Company’s shareholders approved the 2025 Equity Incentive Plan (“Plan”), authorizing the issuance of up to five million shares of Class A common stock.

The Plan replaces the 2020 and 2021 Equity Incentive Plans.

The new Plan includes provisions for stock options, restricted stock units, and performance-based awards.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements