What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-15 compared with 2025-11-19 · 105 added, 101 removed, 141 unchanged (59% of the section changed)

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Such factors include, among others:

• Potential conflicts of interest with SG Broadcasting and our status as a “controlled company”;

• Our ability to continue as a going concern.

• Potential conflicts of interest with SG Broadcasting LLC (“SG Broadcasting”) and our status as a “controlled company”;

• Our ability to operate as a standalone public company and to execute on our business strategy;

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• Other factors mentioned in documents filed by the Company with the Securities and Exchange Commission.

For a more detailed discussion of these and other risk factors, see the Risk Factors section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2025 .

For a more detailed discussion of these and other risk factors, see the Risk Factors section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2026 .

MediaCo does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.

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and its subsidiaries (collectively, “MediaCo” or the “Company”).

We own and operate two radio stations located in New York City, which serve the New York City demographic market area that primarily target Black, Hispanic, and multi-cultural consumers and as a result of the Estrella Acquisition, Estrella’s network, content, digital, and commercial operations, including network affiliation and program supply agreements with Estrella for its 11 radio stations serving Los Angeles, CA, Houston, TX, and Dallas, TX and nine television stations serving Los Angeles, CA, Houston, TX, Denver, CO, 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 condensed consolidated financial statements included elsewhere in this report for additional information on the Estrella Acquisition.

We derive our revenues primarily from radio, television and digital advertising sales, but we also generate revenues from events, including sponsorships and ticket sales, licensing, and syndication.

Our revenues are mostly affected by the advertising rates our entities charge, as advertising sales are the primary component of our consolidated revenues.

These rates are in large part based on our stations’ ability to attract audiences in demographic groups targeted by their advertisers.

The Nielsen Company generally measures radio station ratings weekly for markets measured by the Portable People Meter™ as well as providing television programming ratings services for the EstrellaTV network and the Estrella variable interest entity (“VIE”) local television stations.

Because audience ratings in a station’s local market are critical to the station’s financial success, our strategy is to use market research, advertising and promotion to attract and retain audiences in each station’s chosen demographic target group.

Our revenues vary throughout the year.

Revenue and operating income are usually lowest in the first calendar quarter, partly because retailers cut back their advertising spending immediately following the holiday shopping season.

In addition to the sale of advertising time for cash, stations typically exchange advertising time for goods or services, which can be used by the station in its business operations.

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

We generally confine the use of such trade transactions to promotional items or services for which we would otherwise have paid cash.

In addition, it is our general policy not to preempt advertising spots paid for in cash with advertising spots paid for in trade.

The following table summarizes the sources of our revenues for the three and nine months ended September 30, 2025 and 2024.

MediaCo is a multimedia company focused on radio, television, digital advertising, premium programming, and events.

Our portfolio includes a national network, as well as digital and commercial operations.

Our broadcasting assets consist of thirteen radio stations, including two located in New York City, WQHT(FM) and WBLS(FM) (the “Stations”), which serve the New York City demographic market area and primarily target Black, Hispanic, and multicultural consumers.

The remaining eleven radio stations serve Los Angeles, CA, Houston, TX, and Dallas, TX.

Our assets also include nine television stations serving Los Angeles, CA, Houston, TX, Denver, CO, New York, NY, Chicago, IL, and Miami, FL.

Our portfolio includes the Estrella brands, including the EstrellaTV network, its linear and digital video content business, and its digital channels, including eight free ad-supported television (“FAST”) channels:

EstrellaTV, Estrella News, Cine EstrellaTV, Estrella Games, EstrellaTV Mexico, Curiosity Explora, Curiosity Motores, and Curiosity Animales.

We derive our revenues primarily from radio, television, and digital advertising sales.

We also generate revenues from events, including sponsorships and ticket sales, as well as from licensing and syndication.

Advertising sales represent the primary component of our consolidated revenues, and our results are largely influenced by the advertising rates we are able to charge.

These rates depend significantly on our ability to attract audiences within demographic groups targeted by advertisers.

Audience measurement services, such as those provided by Nielsen, supply radio and television ratings that are critical to our performance.

Accordingly, our strategy emphasizes market research, programming, promotion, and branding initiatives designed to attract and retain audiences in our target demographics.

Our revenues fluctuate throughout the year, with revenue and operating income typically lowest in the first calendar quarter, in part due to reduced advertising spending following the holiday season.

In addition to cash advertising sales, we enter into barter transactions in which advertising time is exchanged for goods or services.

These transactions are recorded at the estimated fair value of the goods or services received.

We generally limit barter activity to items or services that we would otherwise purchase for cash and maintain a policy of not preempting paid advertising spots with barter advertising.

The following table summarizes the sources of our revenues for the three months ended March 31, 2026 and 2025.

The category “Other” includes, among other items, revenues related to network revenues and barter.

(dollars in thousands) Three Months Ended September 30, Nine Months Ended September 30,

2025 % of Total 2024 % of Total 2025 % of Total 2024 % of Total

(dollars in thousands) Three Months Ended March 31,

2026 % of Total 2025 % of Total

Net revenues:

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Roughly 20% of our expenses vary in connection with changes in revenue.

These variable expenses primarily relate to costs in our sales department, such as salaries, commissions and bad debt.

Our costs that do not vary as much in relation to revenue are mostly in our programming and general and administrative departments, such as talent costs, rating fees, rents, utilities and salaries.

Lastly, our costs that are highly discretionary are costs in our marketing and promotions department, which we primarily incur to maintain and/or increase our audience and market share.

These variable expenses primarily relate to costs in our sales department, such as salaries, commissions, and bad debt, as well as certain technical and engineering costs that fluctuate with operational activity.

Our costs that do not vary significantly with revenue are primarily in our programming and general and administrative departments, including talent costs, ratings fees, rent, utilities, engineering-related maintenance, and salaries.

Lastly, our costs that are highly discretionary are incurred in our marketing and promotions department, which we primarily use to maintain and/or increase our audience and market share.

KNOWN TRENDS AND UNCERTAINTIES

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As part of the Estrella Acquisition integration, we developed a plan to close and relocate certain studio and marketing operations.

In fulfilling this plan, we incurred involuntary termination costs of $0.2 million and $0.7 million in the three and nine months ended September 30, 2025, respectively, included in operating expenses on our condensed consolidated statements of operations included elsewhere in this report.

MediaCo has been impacted by the rising interest rate environment in the financial markets, driving the interest accrued and paid on the Emmis Convertible Promissory Note to increase prior to its maturity in November 2024 as well as providing uncertainty on our First Lien Term Loan and Second Lien Term Loan, which have variable interest rates.

Although the Federal Reserve cut its benchmark rate several times in 2024, it has indicated a slower pace of rate reductions in 2025 due to persistent inflationary pressures.

While the Federal Reserve has signaled a bias toward eventually lowering rates further it has also indicated that additional rate increases in the future may be necessary if inflation remains elevated, and there can be no assurance that the Federal Reserve will not make upwards adjustments to the federal funds rate, or that it will reduce the current rate, in the future.

In fulfilling this plan, we incurred no involuntary termination costs in the three months ended March 31, 2026 and 2025, included in operating expenses on our condensed consolidated statements of operations included elsewhere in this report.

CRITICAL ACCOUNTING ESTIMATES

During the nine months ended September 30, 2025, there were no material changes to our critical accounting policies and estimates from those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Estimates” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on April 15, 2025.

During the three months ended March 31, 2026, there were no material changes to our critical accounting policies and estimates from those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Estimates” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 31, 2026.

We have considered information available to us as of the date of issuance of these financial statements and are not aware of any specific e vents or circumstances that would require an update to our estimates or judgments, or a revision to the carrying value of our assets or liabilities.

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and its consolidated subsidiaries should be read in conjunction with our condensed consolidated financial statements and notes thereto included elsewhere herein.

The key developments in our business for the three and nine months ended September 30, 2025 are summarized below:

• Net revenues of $35.4 million increased $5.5 million, or 19%, during the three months ended September 30, 2025 compared to net revenues of $29.9 million during the three months ended September 30, 2024.

• Net revenues of $94.7 million increased $31.9 million, or 51%, during the nine months ended September 30, 2025 compared to net revenues of $62.8 million during the nine months ended September 30, 2024.

• Operating loss of $7.1 million increased $0.2 million, or 3%, during the three months ended September 30, 2025 compared to operating loss of $6.9 million during the three months ended September 30, 2024.

• Operating loss of $18.6 million decreased $5.1 million, or 22%, during the nine months ended September 30, 2025 compared to operating loss of $23.7 million during the nine months ended September 30, 2024.

• Net loss of $17.9 million increased $72.8 million, or 133%, during the three months ended September 30, 2025 compared to net income of $54.9 million during the three months ended September 30, 2024.

• Net loss of $33.9 million decreased $36.8 million, or 1252%, during the nine months ended September 30, 2025 compared to net income of $2.9 million during the nine months ended September 30, 2024.

• Cash flows provided by operating activities increased by $32.7 million, or 106%, during the nine months ended September 30, 2025 to $1.9 million compared to cash flows used in operating activities of $30.7 million during the nine months ended September 30, 2024.

• Adjusted EBITDA for the three months ended September 30, 2025 was $2.1 million increasing 1971% compared to Adjusted EBITDA of $(0.1) million for the three months ended September 30, 2024.

• Adjusted EBITDA for the nine months ended September 30, 2025 was $5.0 million increasing 209% compared to Adjusted EBITDA of $(4.6) million for the nine months ended September 30, 2024.

The key developments in our business for the three months ended March 31, 2026 are summarized below:

• Net revenues of $31.4 million increased $3.4 million, or 12%, during the three months ended March 31, 2026 compared to net revenues of $28.0 million during the three months ended March 31, 2025.

• Operating loss of $7.5 million increased $2.8 million, or 61%, during the three months ended March 31, 2026 compared to operating loss of $4.7 million during the three months ended March 31, 2025.

• Net loss of $9.4 million increased $0.8 million, or 9%, during the three months ended March 31, 2026 compared to net loss of $8.6 million during the three months ended March 31, 2025.

• Cash flows used in operating activities of $2.0 million, represent a decrease of $4.1 million, or 199%, during the three months ended March 31, 2026 compared to cash flows provided by operating activities of $2.1 million during the three months ended March 31, 2025.

• Adjusted EBITDA for the three months ended March 31, 2026 was $0.2 million decreasing 86% compared to Adjusted EBITDA of $1.4 million for the three months ended March 31, 2025.

Consolidated Operating Data

The following table sets forth a summary of each of the Company’s components of operating expense as a percentage of net revenue for the three months and nine months ended September 30, 2025 and 2024:

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

2025 2024 2025 2024

(Dollars in thousands) Amount % Amount % Amount % Amount %

The following table sets forth a summary of each of the Company’s components of operating expense as a percentage of net revenue for the three months ended March 31, 2026 and 2025:

Three Months Ended March 31,

(Dollars in thousands) Amount % Amount %

NET REVENUES $ 31,386 100 $ 28,030 100

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OPERATING LOSS $ (7,530) $ (4,683)

Three-Month and Nine-Month Periods Ended September 30, 2025 compared to September 30, 2024

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

Three-Month Periods Ended March 31, 2026 compared to March 31, 2025

Three Months Ended March 31, Change

(Dollars in thousands) 2026 2025 $ %

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Depreciation and amortization 1,676 1,769 (93) (5)

Loss on disposal of assets — — — N/A 144 5 139 2780

Loss on disposal of assets 752 139 613 441

Total operating expenses 38,916 32,713 6,203 19

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Interest expense, net (3,940) (3,754) (186) 5

Change in fair value of warrant shares liability (7,333) 65,439 (72,772) N/A (5,923) 34,412 (40,335) N/A

Other income (expense) 746 (24) 770 (3208) 2,976 (4) 2,980 (74500)

Total other (expense) income (10,518) 62,141 (72,659) (117) (14,487) 27,216 (41,703) (153)

(LOSS) INCOME BEFORE INCOME TAXES (17,609) 55,268 (72,877) (132) (33,046) 3,550 (36,596) (1031)

Other income, net 3,679 111 3,568 3215

Total other expense (261) (3,643) 3,382 (93)

LOSS BEFORE INCOME TAXES AND EQUITY METHOD INVESTMENTS (7,791) (8,326) 535 (6)

PROVISION FOR INCOME TAXES 1,322 280 1,042 372

NET (LOSS) INCOME $ (17,891) $ 54,926 (72,817) (133) $ (33,887) $ 2,942 (36,829) (1252)

LOSS BEFORE EQUITY METHOD INVESTMENTS (9,113) (8,606) (507) 6

EQUITY LOSS IN INVESTMENTS (255) — (255) N/A

NET LOSS (9,368) (8,606) (762) 9

Net revenues:

Net revenues increased during the three months ended September 30, 2025 primarily due to increased Digital revenue, partially offset by a decrease in Spot revenue.

Net revenues increased during the nine months ended September 30, 2025 primarily due to the new assets acquired in the Audio and Video segments as part of the Estrella Acquisition in April 2024 and due to increased Digital revenue.

Net revenues increased during the three months ended March 31, 2026 primarily due to increased digital revenue, partially offset by a decrease in spot revenue as the Company increased its focus on digital offerings.

Operating expenses:

Operating expenses increased during the three months ended September 30, 2025 primarily due to higher digital platform costs, which rose in line with growth in digital revenue.

These increases were partially offset by reductions in employee-related expenses, advertising and promotional spending, and professional services fees.

Operating expenses increased during the nine months ended September 30, 2025 primarily due to the new assets acquired in the Audio and Video segments as part of the Estrella Acquisition and higher digital platform costs.

Operating expenses increased during the three months ended March 31, 2026 primarily due to higher digital platform costs, which rose in line with growth in digital revenue.

These increases were partially offset by reductions in repairs and maintenance, utilities and rent.

Corporate expenses:

Corporate expenses decreased for the three and nine months ended September 30, 2025 primarily due to lower professional service fees driven by work related to the Estrella Acquisition in the prior year.

Corporate expenses increased for the three months ended March 31, 2026 primarily due to an increase in employee related costs, and corporate insurance charges.

Depreciation and amortization:

Depreciation and amortization expense decreased during the three months ended September 30, 2025 as certain assets became fully depreciated in the prior year, offset by new assets placed into service in 2025.

Depreciation and amortization expense increased during the nine months ended September 30, 2025 primarily related to the Estrella Acquisition.

Depreciation and amortization expenses excluding expenses related to the Estrella Acquisition, remained relatively flat due to certain assets becoming fully depreciated in the prior year offset by new assets placed into service in 2025.

Depreciation and amortization expense decreased during the three months ended March 31, 2026 as certain assets became fully depreciated in the prior year, partially offset by new assets placed into service.

Loss on disposal of assets:

Loss on disposal of assets increased for the nine months ended September 30, 2025 primarily due to the disposal of certain fixed assets, while there were no such disposals in 2024.

Loss on disposal of assets increased for the three months ended March 31, 2026 primarily due to the disposal of certain fixed assets due to the amendment for an existing lease agreement, while there were no such disposals in 2025.

Operating loss:

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Interest expense, net:

Interest expense increased during the three and nine months ended September 30, 2025 due to the additional long-term debt related to the Estrella Acquisition.

Change in fair value of warrant shares liability:

Warrant shares liability decreased during the three and nine months ended September 30, 2025 due to stock price changes during the respective periods.

Interest expense increased during the three months ended March 31, 2026 primarily due to higher outstanding debt balances, due to PIK and accretion on loans, partially offset by lower interest rates.

Equity loss in investments:

Equity loss in investments increased during the three months ended March 31, 2026 due to the investment in unconsolidated affiliates as of January 1, 2026.

Other income:

Other income increased during the three and nine months ended September 30, 2025 compared to the prior year primarily because of a one-time employee retention tax credit received, income from managed services agreements where the Company is providing accounting and other services, and subleasing income from one of our facilities which began in the first quarter of 2025.

Other income increased during the three months ended March 31, 2026 compared to the prior year primarily driven by a gain on a lease modification, interest and penalty income related to an equity clawback, income from managed services agreements under which the Company began providing accounting and other services on April 17, 2025, and sublease income from one of the Company’s facilities that commenced in the first quarter of 2025.

Provision for income taxes:

Provision for income taxes decreased during the three months ended September 30, 2025 compared to the prior year due to changes in the deferred tax liability.

Provision for income taxes increased during the nine months ended September 30, 2025 compared to the prior year due to tax amortization of the Company’s historical and newly acquired indefinite-lived intangibles, along with the impact of filing in additional state jurisdictions as a result of the Estrella Acquisition.

See Note 10 — Income Taxes in our condensed consolidated financial statements included elsewhere in this report for additional details.

Provision for income taxes decreased during the three months ended March 31, 2026 compared to the prior year due to changes in the deferred tax liability and additional interest and penalties accrued.

Consolidated net (loss) income:

The decrease in consolidated net (loss) income was primarily due to the Estrella Acquisition.

See “Net revenues,” “Operating expenses,”, “Corporate expenses,” “Depreciation and amortization,” “Loss on disposal of assets,” “Interest expense, net,” “ Provision for income taxes,” and “Other income” above for additional details.

The increase in consolidated net loss was primarily due to the increase in digital platform costs partially offset by the increase in digital revenue.

See “Net revenues,” “Operating expenses,”, “Corporate expenses,” “Depreciation and amortization,” “Loss on disposal of assets,” “Interest expense, net,” “Equity loss in investments,” “Other income” and “ Provision for income taxes,” above for additional details.

Performance by Business Segment

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Audio Segment

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

Three Months Ended March 31,

(Dollars in thousands) 2026 2025

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(1) Operating expenses comprise several line items, including operating costs, depreciation and amortization, and other segment-specific items, as detailed in the Segment Information disclosures in Note 12.

Revenue and operating expenses from our Audio Segment decreased $3.2 million and $1.2 million, respectively, during the three months ended September 30, 2025 compared to the same period in 2024, driven primarily as a result of the decrease in Spot revenue and decreases in employee related expenses.

Revenue and operating expenses from our Audio Segment increased $1.8 million and $2.3 million, respectively, during the nine months ended September 30, 2025 compared to the same period in 2024, driven primarily as a result of the new assets acquired in the Audio segment as part of the Estrella Acquisition.

Revenue from our Audio Segment decreased $3.9 million and operating expenses increased $1.5 million, respectively, during the three months ended March 31, 2026 compared to the same period in 2025, driven primarily as a result of the decrease in spot revenue and increases in operating expenses such as loss on disposal of assets and other departmental costs.

Video Segment

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Video Segment

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

Three Months Ended March 31,

(Dollars in thousands) 2026 2025

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Revenue and operating expenses from our Video Segment increased $8.7 million and $8.0 million, respectively, during the three months ended September 30, 2025 compared to the same period in 2024.

Revenue and operating expenses from our Video Segment increased $7.3 million and $4.6 million, respectively, during the three months ended March 31, 2026 compared to the same period in 2025.

These increases were primarily in digital revenue and increases in impression expense, partially offset by decreases in employee related expenses.

Revenue and operating expenses from our Video Segment increased $30.1 million and $29.2 million, respectively, during the nine months ended September 30, 2025 compared to the same period in 2024, were due to the new assets acquired as part of the Estrella Acquisition, increases in digital revenue and increases in digital impression expense.

Corporate and other

Operating expenses related to Corporate and other decreased to $1.3 million for the three months ended September 30, 2025 compared to $2.3 million for the three months ended September 30, 2024, primarily due to lower professional service fees driven by work related to the Estrella Acquisition in the prior year.

Operating expenses related to Corporate and other decreased to $4.5 million for the nine months ended September 30, 2025 compared to $9.2 million for the nine months ended September 30, 2024, primarily due to lower professional service fees driven by work related to the Estrella Acquisition in the prior year.

Operating expenses related to Corporate and other increased to $1.7 million for the three months ended March 31, 2026 compared to $1.6 million for the three months ended March 31, 2025, primarily due to an increase in employee related costs, and corporate insurance charges.

Non-GAAP Financial Measures

Reconciliations of Net Loss to EBITDA and Adjusted EBITDA (1)

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

Reconciliations of Net Loss to Adjusted EBITDA (1)

Three Months Ended March 31,

(Dollars in thousands) 2026 2025

Net (Loss) Income $ (17,891) $ 54,926 $ (33,887) $ 2,942

Net Loss $ (9,368) $ (8,606)

Provision for income taxes 1,322 280

Equity loss in investments 255 —

Interest expense, net 3,940 3,754

Depreciation and amortization 1,676 1,769

EBITDA $ (11,994) $ 60,283 $ (16,356) $ 14,047

Loss on disposal of assets 752 139

Change in fair value of warrant shares liability 7,333 (65,439) 5,923 (34,412)

Other income (3,679) (111)

Other adjustments 7,502 5,020 18,278 15,745

Acquisition, integration and synergy services 2,277 2,859

Mergers and acquisitions transaction costs 576 833

Office exit facility consolidation 282 290

Expansion related costs 1,967 161

Other non-cash adjustments (1)

Adjusted EBITDA (2)

$ 203 $ 1,406

(1) We define Adjusted EBITDA as consolidated Operating loss adjusted to exclude restructuring expenses, business combination transaction costs, unusual and non-recurring expenditures, non-cash items and non-cash compensation included within operating expenses, as well as the following line items presented in our Statements of Operations:

Depreciation and amortization, Loss on disposal of assets, change in fair value of warrant shares liability and Other income.

Alternatively, Adjusted EBITDA is calculated as Net loss, adjusted to exclude Provision for income taxes, Interest expense, net, Depreciation and amortization, Loss on disposal of assets, Change in fair value of warrant shares liability, Other income, and Other adjustments.

(1) Other non-cash adjustments include compensation adjustments, non-cash rent charges and other non-cash expenses.

(1) We define Adjusted EBITDA as consolidated net loss adjusted to exclude restructuring expenses, business combination transaction costs, unusual and non-recurring expenditures, non-cash items and non-cash compensation included within operating expenses, as well as the following line items presented in our Statements of Operations:

Equity loss in investments, Depreciation and amortization, Loss on disposal of assets, and Other income.

Alternatively, Adjusted EBITDA is calculated as Net loss, adjusted to exclude Provision for income taxes, Equity loss in investments, Interest expense, net, Depreciation and amortization, Loss on disposal of assets, Other income, and Other adjustments.

We use Adjusted EBITDA, among other measures, to evaluate the Company’s operating performance.

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LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity are cash provided by operations.

Our primary uses of capital have been, and are expected to continue to be, capital expenditures, working capital, and acquisitions.

Management anticipates the Company will be able to meet its liquidity needs for the next twelve months with cash and cash equivalents on hand, and projected cash flows from operations.

At September 30, 2025 , the Company had cash, cash equivalents and restricted ca sh of $8.2 million an d negative working capital of $43.3 million.

Our primary sources of liquidity are cash flows generated from operations.

Our primary uses of capital have been, and are expected to continue to be, capital expenditures, working capital requirements, and strategic acquisitions.

As of March 31, 2026, the Company’s liquidity position is constrained by its working capital deficit and upcoming debt maturities.

While management is actively implementing plans to improve liquidity, including enhancing operating performance, managing working capital, and pursuing refinancing and additional capital, there can be no assurance that these efforts will be successful.

At March 31, 2026, the Company had cash, cash equivalents and restricted cash of $5.1 million and negative working capital of $54.5 million.

At December 31, 2025, the Company had cash, cash equivalents and restricted cash of $7.1 million and negative working capital of $49.0 million.

The increase in negative working capital was driven by the cancellation of certain programming rights contracts reducing the current portion of programming rights as well as increased accounts payable and accrued expenses, partially offset by increased accounts receivable.

Despite net losses, management is actively managing liquidity by closely monitoring working capital and implementing disciplined payment practices, including deferring certain payments where appropriate to support business growth.

The Company is also increasing efforts on collections to accelerate cash inflows and further enhance liquidity.

Our focus on working capital optimization and expense control has reduced cash burn for the period.

Importantly, the Company maintains a positive equity position.

Additionally, regarding the $5.0 million in Delayed Draw Term Loans due May 2026 and $5.0 million Delayed Draw Term Loans due July 2026, the Company intends to refinance on a long term basis, pay down using cash flow from operations, or receive additional investment from the support letter obtained.

Despite net losses, management continues to actively manage liquidity through close monitoring of working capital and disciplined cash management practices.

These efforts include extending payment terms with vendor partners, enhancing collection efforts to accelerate cash inflows, and maintaining a focus on expense control.

As a result of these actions, the Company has reduced its cash burn during the period.

Additionally, regarding the $10.0 million in Delayed Draw Term Loans due July 2026, the Company intends to refinance on a long term basis, pay down using cash flow from operations, or receive additional investments.

As part of its business strategy, the Company continually evaluates potential acquisitions of businesses it believes hold promise for long-term appreciation and that can leverage our strengths.

While any such acquisitions could impact our liquidity position, management is committed to maintaining appropriate liquidity levels and managing cash resources prudently as the business grows.

In addition to its short-term liquidity constraints, the Company expects to have ongoing cash requirements beyond the next twelve months.

These longer-term liquidity needs relate primarily to capital expenditures required to maintain and upgrade broadcasting and digital infrastructure, contractual commitments for content and programming, and potential strategic investments or acquisitions that support long-term growth.

The Company may seek to fund these longer-term requirements through a combination of cash flows from operations, existing cash and cash equivalents, and access to external financing sources, including potential borrowings under existing or future credit facilities or other capital-raising alternatives.

However, given the Company’s current liquidity position and the conditions described above, there can be no assurance that sufficient cash flows will be generated or that external financing will be available on acceptable terms, or at all.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.

Based on current operating plans and assumptions, management is pursuing various initiatives to improve the Company’s liquidity position, including enhancing operating performance, managing working capital, refinancing existing debt, and raising additional capital.

However, these plans are subject to inherent risks and uncertainties, and there can be no assurance that they will be successfully implemented or will generate sufficient liquidity to meet the Company’s obligations as they become due.

Accordingly, substantial doubt about the Company’s ability to continue as a going concern remains.

Subsequent to year-end, the Company entered into amendments to its First Lien Credit Agreement and Second Lien Credit Agreement that waived certain covenant requirements.

As of March 31, 2026, the Company was in compliance with all applicable financial covenants.

Future liquidity and capital requirements will depend on a number of factors, including operating performance, macroeconomic conditions, changes in working capital, and the timing and extent of discretionary investments.

The Company will continue to evaluate its liquidity position and capital structure and may adjust its financing strategy as conditions warrant.

Operating Activities

Cash flows provided in operating activities were $1.9 million for the nine months ended September 30, 2025, compared to cash flows used in of $30.7 million for the nine months ended September 30, 2024 .

The increase in cash from operating activities was mainly attributable to increases in accounts payable, partially offset by better collections.

Cash flows used in operating activities were $2.0 million for the three months ended March 31, 2026, compared to cash flows provided by operating activities of $2.1 million for the three months ended March 31, 2025 .

The decline in operating cash flow was primarily driven by a higher net loss and unfavorable changes in working capital, including decreases in deferred revenue and other liabilities and smaller increases in accounts payable, partially offset by improved collections on accounts receivable.

Investing Activities

Cash flows used in investing activities were $0.3 million for the nine months ended September 30, 2025, primarily attributable to cash paid for various capital projects.

Cash flows used in investing activities were $7.6 million for the nine months ended September 30, 2024, primarily attributable to the Estrella acquisition, capital expenditures related to a new digital platform project, and the build out of our new space for corporate offices.

Cash flows provided by investing activities were $0.2 million for the three months ended March 31, 2026, primarily attributable to the proceeds from the sale of land.

Cash flows used in investing activities were $0.1 million for the three months ended March 31, 2025, primarily attributable to the purchases of equipment.

Financing Activities

Cash fl ows used in financi ng activities were $0.4 million f or the nine months ended September 30, 2025, attributable to finance lease principal payments and settlement of tax withholding obligations.

Cash flows provided by financing activities were $41.4 million for the nine months ended September 30, 2024, attributable to proceeds from the First Lien Term Loan, partially offset by payments of debt issuance costs and settlement of tax withholding obligations.

Cash flows used in financing activities were $0.1 million for the three months ended March 31, 2026, attributable to finance lease principal payments.

Cash flows provided by financing activities were $0.2 million for the three months ended March 31, 2025, attributable to finance lease principal payments and settlement of tax withholding obligations.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

1 unchanged sentence

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What changed 10-Q

Item 2. Management’s Discussion and Analysis