UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒
x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, ~~2021~~

2022

☐
o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number 001-39029

MEDIACO HOLDING INC.

(Exact name of registrant as specified in its charter)

Indiana

(State of incorporation or organization)

84-2427771

(I.R.S. Employer Identification No.)

395 ~~HUDSON STREET, FLOOR~~Hudson Street, Floor 7

New ~~york~~, ~~new york~~York, New York 10014

(Address of principal executive offices)

(212) 229-9797

(Registrant’s Telephone Number, Including Area Code)

~~NOT APPLICABLE~~

Not Applicable

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Class A common stock, $0.01 par value	MDIA	Nasdaq Capital Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒x No ☐o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒x No ☐o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☒

Emerging growth company

☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐o

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐o No ☒x

The number of shares outstanding of each of MediaCo Holding Inc.’s classes of common stock, as of August ~~9, 2021,~~5, 2022, was:


~~3,019,518~~ 16,023,073						Shares of Class A Common Stock, $.01 Par Value
5,413,197						Shares of Class B Common Stock, $.01 Par Value
—						Shares of Class C Common Stock, $.01 Par Value

~~INDEX~~


	~~Page~~

Table of Contents

INDEX


			Page
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements			3
Condensed Consolidated Statements of Operations for the ~~three-month~~three -month and six-month periods ended June 30, ~~2020~~2022 and 2021			3
Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, ~~2020 and June 30,~~ 2021			4
Condensed Consolidated ~~Statement~~Statements of Changes in ~~Equity (Deficit)~~Retained Deficit for the three-month and six-month periods ended June ~~30, 2020~~ 3 0 , 2022 and 2021			5
Condensed Consolidated Statements of Cash Flows for the ~~three-month and six-month~~six -month periods ended June ~~30, 2020~~ 3 0 , 2022 and 2021			6
Notes to Condensed Consolidated Financial Statements			7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			20
Item 3. Quantitative and Qualitative Disclosures about Market Risk			27 25
Item 4. Controls and Procedures			27 25
PART II — OTHER INFORMATION
Item 1. Legal Proceedings			27 25
Item 6. Exhibits			28 26
~~Signatures~~SIGNATURES			29 27

Table of Contents

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MEDIACO HOLDING INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

~~(In thousands, except per share data)~~

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2021			2020			2021				Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except per share amounts)													(in thousands, except per share amounts)	2022		2021		2022		2021
NET REVENUES	$	6,996		$	14,376		$	18,781		$	24,119		NET REVENUES	$	16,152	$	14,376	$	27,687	$	24,119
OPERATING EXPENSES:													OPERATING EXPENSES:
Operating expenses excluding depreciation and amortization expense		6,484			7,818			15,863			15,579		Operating expenses excluding depreciation and amortization expense	13,916		7,818		23,248		15,579
Corporate expenses		932			1,845			2,097			3,486		Corporate expenses	1,339		1,845		3,826		3,486
Depreciation and amortization		1,163			978			2,190			1,959		Depreciation and amortization	904		978		1,834		1,959
Loss (gain) on disposal of assets		4			(72	)		82			(78	)	Loss (gain) on disposal of assets	27		(72)		45		(78)
Total operating expenses		8,583			10,569			20,232			20,946		Total operating expenses	16,186		10,569		28,953		20,946
OPERATING (LOSS) INCOME		(1,587	)		3,807			(1,451	)		3,173		OPERATING (LOSS) INCOME	(34)		3,807		(1,266)		3,173
OTHER EXPENSE:													OTHER EXPENSE:
Interest expense		(2,279	)		(2,701	)		(4,517	)		(5,239	)	Interest expense	(2,783)		(2,701)		(5,781)		(5,239)
Loss on debt extinguishment		—			(81	)		—			(81	)	Loss on debt extinguishment	—		(81)		—		(81)
(LOSS) INCOME BEFORE INCOME TAXES		(3,866	)		1,025			(5,968	)		(2,147	)	(LOSS) INCOME BEFORE INCOME TAXES	(2,817)		1,025		(7,047)		(2,147)
PROVISION FOR INCOME TAXES		14,493			82			13,876			163		PROVISION FOR INCOME TAXES	86		82		149		163
CONSOLIDATED NET (LOSS) INCOME		(18,359	)		943			(19,844	)		(2,310	)	CONSOLIDATED NET (LOSS) INCOME	(2,903)		943		(7,196)		(2,310)
PREFERRED STOCK DIVIDENDS		528			669			1,057			1,303		PREFERRED STOCK DIVIDENDS	780		669		1,618		1,303
NET (LOSS) INCOME	$	(18,887	)	$	274		$	(20,901	)	$	(3,613	)
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS													NET (LOSS) INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(3,683)	$	274	$	(8,814)	$	(3,613)

Basic net (loss) income per share attributable to common shareholders	$	(2.66	)	$	0.02		$	(2.95	)	$	(0.51	)	Basic net (loss) income per share attributable to common shareholders	$	(0.47)	$	0.02	$	(1.15)	$	(0.51)
Basic weighted average number of common shares outstanding		7,096			7,187			7,090			7,151		Basic weighted average number of common shares outstanding	7,808		7,187		7,687		7,151
Diluted net (loss) income per share attributable to common shareholders	$	(2.66	)	$	0.02		$	(2.95	)	$	(0.51	)	Diluted net (loss) income per share attributable to common shareholders	(0.47)		0.02		(1.15)		(0.51)
Diluted weighted average number of common shares outstanding		7,096			7,366			7,090			7,151		Diluted weighted average number of common shares outstanding	7,808		7,366		7,687		7,151

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

- ~~3 -~~

~~MEDIACO HOLDING INC.~~

~~CONDENSED CONSOLIDATED BALANCE SHEETS~~

~~(In thousands, except share data)~~

December 31,
2020

June 30,
2021

(Unaudited)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$
4,171

$
4,270

Accounts receivable, net

8,508

11,140

Prepaid expenses

1,247

1,553

Other current assets

1,274

1,664

Total current assets

15,200

18,627

PROPERTY AND EQUIPMENT, NET

27,650

27,483

INTANGIBLE ASSETS, NET

79,217

78,587

OTHER ASSETS:

Operating lease right of use assets

23,953

23,024

Deposits and other

331

331

Total other assets

24,284

23,355

Total assets

$
146,351

$
148,052

LIABILITIES AND DEFICIT

CURRENT LIABILITIES:

Accounts payable and accrued expenses

$
2,557

$
2,641

Current maturities of long-term debt

1,836

918

Accrued salaries and commissions

709

1,048

Deferred revenue

1,535

1,644

Operating lease liabilities

3,573

4,072

Other current liabilities

549

2,558

Total current liabilities

10,759

12,881

LONG TERM DEBT, NET OF CURRENT

93,918

95,890

OPERATING LEASE LIABILITIES, NET OF CURRENT

20,176

18,528

ASSET RETIREMENT OBLIGATIONS

6,316

6,776

DEFERRED INCOME TAXES

1,711

1,875

OTHER NONCURRENT LIABILITIES

221

93

Total liabilities

133,101

136,043

COMMITMENTS AND CONTINGENCIES

SERIES A CUMULATIVE CONVERTIBLE PARTICIPATING PREFERRED STOCK, $0.01 PAR VALUE, 10,000,000 SHARES AUTHORIZED; 220,000 SHARES ISSUED AND OUTSTANDING

24,258

25,561

DEFICIT:

Class A common stock, $0.01 par value; authorized 170,000,000 shares; issued and outstanding 1,785,880 shares and 2,828,344 shares at December 31, 2020, and June 30, 2021, respectively

18

28

Class B common stock, $0.01 par value; authorized 50,000,000 shares; issued and outstanding 5,413,197 shares at December 31, 2020, and June 30, 2021

54

54

Class C common stock, $0.01 par value; authorized 30,000,000 shares; NaN issued

—

—

Additional paid-in capital

20,772

21,831

Accumulated deficit

(31,852
)

(35,465
)
Total deficit

(11,008
)

(13,552
)
Total liabilities and deficit

$
146,351

$
148,052

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

- ~~4 -~~

~~MEDIACO HOLDING INC.~~

~~CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (DEFICIT)~~

~~(Unaudited)~~

~~(In thousands, except share data)~~

Class A Common Stock

Class B Common Stock

Shares

Amount

Shares

Amount

APIC

Accumulated Deficit

Total

BALANCE, DECEMBER 31, 2019

1,666,667

$
17

5,359,753

$
54

$
20,644

$
(2,951
)

$
17,764

Net loss

—

—

—

—

—

(1,485
)

(1,485
)
Adjustments related to distribution of common shares

16,596

—

53,444

—

—

—

Preferred stock dividends

—

—

—

—

—

(529
)

(529
)
BALANCE, MARCH 31, 2020

1,683,263

$
17

5,413,197

$
54

$
20,644

$
(4,965
)

$
15,750

Net loss

—

—

—

—

—

(18,359
)

(18,359
)
Net distributions to Emmis Communications Corp.

—

—

—

—

—

(528
)

(528
)
BALANCE, JUNE 30, 2020

1,683,263

$
17

5,413,197

$
54

$
20,644

$
(23,852
)

$
(3,137
)

BALANCE, DECEMBER 31, 2020

1,785,880

$
18

5,413,197

$
54

$
20,772

$
(31,852
)

$
(11,008
)
Net loss

—

—

—

—

—

(3,253
)

(3,253
)
Issuance of class A to employees, officers and directors

651,670

6

—

—

464

—

470

Preferred stock dividends

—

—

—

—

—

(634
)

(634
)
BALANCE, MARCH 31, 2021

2,437,550

$
24

5,413,197

$
54

$
21,236

$
(35,739
)

$
(14,425
)
Net income

—

—

—

—

—

943

943

Issuance of class A to employees, officers and directors

390,794

4

—

—

595

—

599

Preferred stock dividends

—

—

—

—

—

(669
)

(669
)
BALANCE, JUNE 30, 2021

2,828,344

$
28

5,413,197

$
54

$
21,831

$
(35,465
)

$
(13,552
)

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

- ~~5 -~~

~~MEDIACO HOLDING INC.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(Unaudited)~~

~~(Dollars in thousands)~~

Six Months Ended June 30,

2020

2021

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss

$
(19,844
)

$
(2,310
)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities -

Loss on debt extinguishment

—

81

Depreciation and amortization

2,190

1,959

Amortization of debt discount

291

303

Noncash interest expense

—

82

Noncash lease expense

1,351

1,345

Provision for bad debts

390

116

Accretion of asset retirement obligation

382

337

Provision for deferred income taxes

13,652

163

Noncash compensation

—

1,233

Loss (gain) on sale of property and equipment

82

(78
)
Changes in assets and liabilities -

Accounts receivable

3,921

(2,748
)
Prepaid expenses and other current assets

1,040

(696
)
Other assets

251

(416
)
Accounts payable and accrued liabilities

(3,873
)

423

Deferred revenue

(176
)

109

Other liabilities

(87
)

668

Net cash (used in) provided by operating activities

(430
)

571

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property and equipment

(246
)

(1,100
)
Proceeds from the sale of property and equipment

—

146

Net cash used in investing activities

(246
)

(954
)
CASH FLOWS FROM FINANCING ACTIVITIES:

Payments of long-term debt

(1,837
)

(3,000
)
Proceeds from long-term debt

5,181

4,000

Payments for debt-related costs

(181
)

(354
)
Settlement of tax withholding obligations

—

(164
)
Net cash provided by financing activities

3,163

482

INCREASE IN CASH AND CASH EQUIVALENTS

2,487

99

CASH AND CASH EQUIVALENTS:

Beginning of period

2,083

4,171

End of period

$
4,570

$
4,270

SUPPLEMENTAL DISCLOSURES:

Cash paid for interest

$
2,952

$
2,923

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

-3-

~~6 -~~Table of Contents

MEDIACO HOLDING INC.

CONDENSED CONSOLIDATED BALANCE SHEETS


	June 30, 2022		December 31, 2021
(in thousands, except share data)	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	6,531	$	6,121
Accounts receivable, net of allowance for doubtful accounts of $210 and $313, respectively	10,490		13,756
Prepaid expenses	1,661		1,238
Other current assets	145		526
Total current assets	18,827		21,641
PROPERTY AND EQUIPMENT, NET	26,448		26,533
INTANGIBLE ASSETS, NET	77,545		78,030
OTHER ASSETS:
Operating lease right of use assets	20,225		21,663
Deposits and other	344		343
Total other assets	20,569		22,006
Total assets	$	143,389	$	148,210
LIABILITIES AND DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	4,057	$	2,710
Current maturities of long-term debt	3,672		2,754
Accrued salaries and commissions	722		1,284
Deferred revenue	2,159		2,022
Operating lease liabilities	4,414		3,801
Other current liabilities	2,865		1,412
Total current liabilities	17,889		13,983
LONG TERM DEBT, NET OF CURRENT	96,679		97,527
OPERATING LEASE LIABILITIES, NET OF CURRENT	15,077		16,909
ASSET RETIREMENT OBLIGATIONS	7,634		7,267
DEFERRED INCOME TAXES	2,218		2,069
OTHER NONCURRENT LIABILITIES	4		16
Total liabilities	139,501		137,771
COMMITMENTS AND CONTINGENCIES	0		0
SERIES A CUMULATIVE CONVERTIBLE PARTICIPATING PREFERRED STOCK, $0.01 PAR VALUE, 10,000,000 SHARES AUTHORIZED; 220,000 SHARES ISSUED AND OUTSTANDING	28,628		27,010
RETAINED DEFICIT:
Class A common stock, $0.01 par value; authorized 170,000,000 shares; issued and outstanding 3,130,298 shares and 3,056,757 shares at June 30, 2022, and December 31, 2021, respectively	31		31
Class B common stock, $0.01 par value; authorized 50,000,000 shares; issued and outstanding 5,413,197 shares at June 30, 2022, and December 31, 2021	54		54
Class C common stock, $0.01 par value; authorized 30,000,000 shares; none issued	—		—
Additional paid-in capital	24,675		24,030
Accumulated deficit	(49,500)		(40,686)
Total deficit	(24,740)		(16,571)
Total liabilities and deficit	$	143,389	$	148,210

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

-4-

Table of Contents

MEDIACO HOLDING INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN RETAINED DEFICIT

(Unaudited)


	Class A Common Stock			Class B Common Stock			APIC		Accumulated Deficit		Total
(in thousands, except share data)	Shares	Amount		Shares	Amount
BALANCE, DECEMBER 31, 2021	3,056,757	$	31	5,413,197	$	54	$	24,030	$	(40,686)	$	(16,571)
Net loss	—	—		—	—		—		(4,293)		(4,293)
Issuance of class A to employees, officers and directors	100,276	1		—	—		343		—		344
Preferred stock dividends	—	—		—	—		—		(838)		(838)
BALANCE, MARCH 31, 2022	3,157,033	$	32	5,413,197	$	54	$	24,373	$	(45,817)	$	(21,358)
Net loss	—	—		—	—		—		(2,903)		(2,903)
Issuance of class A to employees, officers and directors	(26,735)	(1)		—	—		302		—		301
Preferred stock dividends	—	—		—	—		—		(780)		(780)
BALANCE, JUNE 30, 2022	3,130,298	$	31	5,413,197	$	54	$	24,675	$	(49,500)	$	(24,740)

BALANCE, DECEMBER 31, 2020	1,785,880	$	18	5,413,197	$	54	$	20,772	$	(31,852)	$	(11,008)
Net loss	—	—		—	—		—		(3,253)		(3,253)
Issuance of class A to employees, officers and directors	651,670	6		—	—		464		—		470
Preferred stock dividends	—	—		—	—		—		(634)		(634)
BALANCE, MARCH 31, 2021	2,437,550	$	24	5,413,197	$	54	$	21,236	$	(35,739)	$	(14,425)
Net loss	—	—		—	—		—		943		943
Issuance of class A to employees, officers and directors	390,794	4		—	—		595		—		599
Preferred stock dividends	—	—		—	—		—		(669)		(669)
BALANCE, JUNE 30, 2021	2,828,344	$	28	5,413,197	$	54	$	21,831	$	(35,465)	$	(13,552)

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

-5-

Table of Contents

MEDIACO HOLDING INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Six Months Ended June 30,
(in thousands)	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(7,196)	$	(2,310)
Adjustments to reconcile net loss to net cash provided by operating activities -
Loss on debt extinguishment	—		81
Depreciation and amortization	1,834		1,959
Amortization of debt discount	324		303
Noncash interest expense	664		82
Noncash lease expense	1,609		1,345
Provision for bad debts	(13)		116
Accretion of asset retirement obligation	380		337
Provision for deferred income taxes	149		163
Noncash compensation	1,910		1,233
Loss (gain) on sale of property and equipment	45		(78)
Changes in assets and liabilities
Accounts receivable	3,279		(2,748)
Prepaid expenses and other current assets	(42)		(696)
Other assets	(183)		(416)
Accounts payable and accrued liabilities	781		423
Deferred revenue	137		109
Operating lease liabilities	(1,219)		(1,149)
Other liabilities	1,429		1,817
Net cash provided by operating activities	3,888		571
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(1,295)		(1,100)
Proceeds from the sale of property and equipment	—		146
Net cash used in investing activities	(1,295)		(954)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of long-term debt	(918)		(3,000)
Proceeds from long-term debt	—		4,000
Payments for debt-related costs	—		(354)
Settlement of tax withholding obligations	(1,265)		(164)
Net cash (used in) provided by financing activities	(2,183)		482
INCREASE IN CASH AND CASH EQUIVALENTS	410		99
CASH AND CASH EQUIVALENTS:
Beginning of period	6,121		4,171
End of period	$	6,531	$	4,270
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest	$	3,389	$	2,923

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

-6-

Table of Contents

MEDIACO HOLDING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(~~IN THOUSANDS UNLESS INDICATED OTHERWISE, EXCEPT SHARE DATA)~~

~~June 30, 2021~~

Dollars in Thousands Unless Indicated Otherwise)

(Unaudited)

~~Note~~

1. ~~Summary of Significant Accounting Policies~~

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

MediaCo Holding Inc. (“MediaCo” or the “Company”) is an owned and operated multi-media company formed in Indiana ~~corporation formed~~ in 2019, focused on radio, outdoor, and ~~outdoor~~digital advertising.

Our assets consist of 2 radio stations, WQHT-FM and WBLS-FM (the “Stations”), which serve the New York City ~~metropolitan~~demographic market area that primarily targets Black, Hispanic, and multi-cultural consumers, as well as approximately ~~3,600~~3,500 outdoor advertising displays in the Southeast (Georgia, Alabama, South Carolina and ~~Tennessee) region~~Florida) and the Mid-Atlantic ~~(Kentucky) region~~(Kentucky, West Virginia and Ohio) regions of the United States. We derive our revenues primarily from radio, outdoor, and ~~outdoor~~digital advertising sales, but we also generate revenues from events, including sponsorships and ticket ~~sales.~~

sales, licensing, and syndication.

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

Capital Structure Changes

On July 28, 2022, SG Broadcasting LLC ("SG Broadcasting") exercised its right to convert the outstanding principal and accrued but unpaid interest on the SG Broadcasting Promissory Notes (as defined in Note 10) of $28.0 million and $1.9 million, respectively, for 12.9 million of the Company's Class A common stock. See Note 5.

Basis of Presentation

and Consolidation

Our condensed 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.

Cash and Cash Equivalents

We consider time deposits, money market fund shares and all highly liquid debt investment instruments with original maturities of ~~three~~six months or less to be cash equivalents. At times, such deposits may be in excess of FDIC insurance limits.

Fair Value Measurements

~~As defined in Accounting Standards Codification (“ASC”) Topic 820, fair~~

Fair value is the exchange price ~~that would be received~~ to sell an asset or ~~paid to~~ transfer a liability (an exit price) in an orderly transaction between market participants at the measurement ~~date (exit price).~~date. The Company ~~utilizes~~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 ~~can~~may be readily observable, corroborated by market ~~corroborated~~data, or generally unobservable. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. ASC Topic 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). We have 0no 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 ~~under circumstances and events that include~~including those described in Note 3,2, 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 32 for more discussion).

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.

~~Use of~~

Estimates

The Company has been actively monitoring the COVID-19 situation and its impact globally, as well as domestically and in the markets we serve. Our priority has been the safety of our employees, as well as the informational needs of the communities that we serve. Through the first few months of calendar 2020, the disease became widespread around the world, and on March 11, 2020, the World Health Organization declared a pandemic. In an effort to mitigate the continued spread of COVID-19, many federal, state and local governments mandated various restrictions, including travel restrictions, restrictions on non-essential businesses and services, restrictions on public gatherings and quarantining of people who may have been exposed to the virus. These restrictions, in turn, caused the United States economy to decline and businesses to cancel or reduce amounts spent on advertising, negatively impacting our advertising-based businesses. Furthermore, some of our advertisers have seen a material decline in their businesses and may not be able to pay amounts owed to us when they come due. If the spread of COVID-19 continues, or is suppressed but later reemerges as a variant strain, and public and private entities continue to implement restrictive measures, we expect that our results of operations, financial condition and cash flows will continue to be negatively affected, the extent to which is difficult to estimate at this time.

The preparation of ~~condensed consolidated~~ financial statements ~~in conformity with GAAP~~ requires management to make estimates and assumptions that affect the amounts reported ~~amounts of assets and liabilities and disclosure of contingent assets and liabilities as~~

- 7 -

ofin the ~~date of the~~unaudited condensed consolidated financial statements ~~as well as the reported amounts of revenue~~ and ~~expenses during the reporting period.~~ accompanying notes. Due to the uncertain future impacts of the COVID-19 pandemic and the related economic disruptions, actual results could differ from those estimates particularly as it relates to estimates reliant on forecasts and other assumptions reasonably available to the Company. The extent to which the COVID-19 pandemic and related economic disruptions impact the Company’s business and financial results will depend on future developments including, but not limited to: (i) the continued spread, duration and severity of the COVID-19 pandemic, (ii) the occurrence, spread, duration and severity of any subsequent wave or waves of outbreaks after the initial outbreak has subsided, (iii) the actions taken by the U.S. and foreign governments to contain the COVID-19 pandemic, address its impact or respond to the reduction in global and local economic activity, (iv) the occurrence, duration and severity of a global, regional or national recession, depression or other sustained adverse market event, and (v) how quickly and to what extent normal economic and operating conditions can resume. The accounting matters assessed included, but were not limited to, allowance for doubtful accounts, our ability to realize our deferred tax assets, and the carrying value of goodwill, FCC licenses and other long-lived assets.

~~As discussed in Note 7, during the three-month period ended June 30, 2020, as a result of a sharp deterioration of business activity related~~ to the COVID-19 pandemic, the ~~Company determined that it was more likely than not that it would be unable to realize its deferred tax assets~~global economy and ~~recorded a $15.6 million valuation allowance against these assets through an increase to our provision for income taxes. The Company’s future assessment~~financial markets have been disrupted and there is uncertainty about the length and severity of the ~~magnitude~~consequences caused by the pandemic. The Company has considered information available to it as of the date of issuance of these financial statements and ~~duration~~is not aware of ~~COVID-19, as well as other factors, could result in material changes~~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 ~~material impacts to the Company’s condensed consolidated financial statements in future reporting periods.~~

additional information becomes available. Actual results could differ materially from these estimates.

-7-

Table of Contents

EarningsPer Share ~~Data~~

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 Series A preferred stock include rights to participate in dividends and distributions to common stockholders on an if-converted basis, and accordingly are considered participating securities. During periods of undistributed losses however, no effect is given to our participating securities since they are not contractually obligated to share in the losses. The following is a reconciliation of basic and diluted net loss per share attributable to Class A and Class B common shareholders:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net (loss) income	$	(2,903)	$	943	$	(7,196)	$	(2,310)
Preferred dividends	780		669		1,618		1,303
Undistributed earnings allocated to participating securities	—		136		—		—
Net (loss) income attributable to common shareholders	$	(3,683)	$	138	$	(8,814)	$	(3,613)

Basic weighted average common shares outstanding	7,808		7,187		7,687		7,151
Impact of restricted stock awards	—		179		—		—
Diluted weighted average common shares outstanding	7,808		7,366		7,687		7,151

Basic net (loss) income attributable to common shareholders	$	(0.47)	$	0.02	$	(1.15)	$	(0.51)
Diluted net (loss) income attributable to common shareholders	$	(0.47)	$	0.02	$	(1.15)	$	(0.51)

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. No shares were sold during the six-month period ended June 30, 2022.

For the Three Months
Ended June 30,

2020

2021

Net Income

Shares

Net Income Per Share

Net Income

Shares

Net Income Per Share

Basic net (loss) income per common share:

Net (loss) income
$
(18,359
)

—

$
943

—

Less:

—

—

Preferred dividends

528

—

669

—

Undistributed earnings allocated to participating securities

—

—

136

—

Net (loss) income attributable to common shareholders
$
(18,887
)

7,096

$
(2.66
)

$
138

7,187

$
0.02

Impact of restricted stock awards

—

—

—

179

Diluted net (loss) income per common share:

Net (loss) income attributable to common shareholders
$
(18,887
)

7,096

$
(2.66
)

$
138

7,366

$
0.02

For the Six Months
Ended June 30,

2020

2021

Net Income

Shares

Net Income Per Share

Net Income

Shares

Net Income Per Share

Basic and diluted net loss per common share:

Net loss
$
(19,844
)

—

$
(2,310
)

—

Less:

—

—

Preferred dividends

1,057

—

1,303

—

Net loss attributable to common shareholders
$
(20,901
)

7,090

$
(2.95
)

$
(3,613
)

7,151

$
(0.51
)

The following convertible equity shares and restricted stock awards were excluded from the calculation of diluted net ~~loss~~(loss) income per share because their effect would have been anti-dilutive. ~~The Company did not issue any restricted stock awards until the three months ended September 30, 2020.~~

- ~~8 -~~

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2020		2021		2020		2021			Three Months Ended June 30,		Six Months Ended June 30,
	(In thousands)
(in thousands)									(in thousands)	2022	2021	2022	2021
Convertible Emmis promissory note		1,238		1,655		1,238		2,206	Convertible Emmis promissory note	1,352	1,655	1,368	2,206
Convertible Standard General promissory notes		2,785		6,371		2,785		8,501	Convertible Standard General promissory notes	5,156	6,371	5,225	8,501
Series A convertible preferred stock		5,734		7,179		5,734		9,567	Series A convertible preferred stock	5,861	7,179	5,933	9,567
Restricted stock awards		—		10		—		176	Restricted stock awards	449	10	529	176
Total		9,757		15,215		9,757		20,450
Total anti-dilutive shares									Total anti-dilutive shares	12,818	15,215	13,055	20,450

Recent Accounting Pronouncements Not Yet Implemented

In June 2016, the Financial Accounting Standards Board issued Accounting Standards Update 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. This standard will be effective for us as of January 1, 2023. We ~~are currently evaluating the impact that~~do not expect the adoption of the new standard ~~will~~to have a significant impact on our condensed consolidated financial statements.

~~Note~~

-8-

Table of Contents

2. ~~Share Based Payments~~

The amounts recorded as share based compensation expense consist of restricted stock awards issued to employees and directors. Awards to officers are typically made pursuant to employment agreements. Restricted stock awards are granted out of the Company’s 2020 and 2021 Equity Compensation Plans.

The following table presents a summary of the Company’s restricted stock grants outstanding at June 30, 2021, and restricted stock activity during the six months ended June 30, 2021 (“Price” reflects the weighted average share price at the date of grant):

INTANGIBLE ASSETS AND GOODWILL

Awards

Price

Grants outstanding, beginning of period

102,617

$
5.41

Granted

1,109,605

3.20

Vested

141,412

3.17

Forfeited

15,916

3.11

Grants outstanding, end of period

1,054,894

3.42

~~Recognized Non-Cash Compensation Expense~~

The following table summarizes stock-based compensation expense recognized by the Company during the three and six months ended June 30, 2020 and 2021. The Company did not recognize any tax benefits related to stock-based compensation during the periods presented below.

For the Three Months Ended June 30,

For the Six Months Ended June 30,

2020

2021

2020

2021

Operating expenses, excluding depreciation and amortization

$
—

$
113

$
—

$
372

Corporate expenses

—

486

—

861

Share-based compensation expense

$
—

$
599

$
—

$
1,233

As of June 30, 2021, there was $2.7 million of unrecognized compensation cost, net of estimated forfeitures, related to nonvested share-based compensation arrangements. The cost is expected to be recognized over a weighted average period of approximately 1.2 years.

- ~~9 -~~

~~Note 3.~~ ~~Intangible Assets~~

~~As of~~2022 and December 31, ~~2020 and June 30,~~ 2021, intangible assets consisted of the following:


	As of December 31, 2020		As of June 30, 2021			June 30, 2022		December 31, 2021
Indefinite-lived intangible assets					Indefinite-lived intangible assets
FCC Licenses	$	63,266	$	63,266
Trade Name		733		733
FCC licenses					FCC licenses	$	63,266	$	63,266
Trade name					Trade name	733		733
Goodwill		13,102		13,102	Goodwill	13,102		13,102
Definite-lived intangible assets					Definite-lived intangible assets
Programming contract		220		73
Customer list		1,896		1,413	Customer list	444		929
Total	$	79,217	$	78,587	Total	$	77,545	$	78,030

Valuation of Indefinite-lived Broadcasting Licenses

In accordance with ASC Topic 350, “Intangibles—Goodwill and Other,” the Company’s FCC licenses are considered indefinite-lived intangibles; therefore, they are not subject to amortization, but are tested for impairment at least annually as discussed below.

The carrying amounts of the Company’s FCC licenses were $63.3 million as of June 30, 2022 and December 31, ~~2020 and June 30,~~ 2021. Pursuant to our accounting policy, stations in a geographic market cluster are considered a single unit of accounting. The stations perform an annual impairment test of indefinite-lived intangibles as of October 1 of each year. When indicators of impairment are present, we will perform an interim impairment test. There have been no indicators of impairment since we performed our annual impairment assessment as of October 1, ~~2020~~2021 and therefore there has been no need to perform an interim impairment assessment. Future impairment tests may result in additional impairment charges in subsequent periods.

Fair value of our FCC licenses is estimated to be the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To determine the fair value of our FCC licenses, the Company considers both income and market valuation methods when it performs its impairment tests. 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, 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 then current economic conditions. Under the market method, the Company uses recent sales of comparable radio stations for which the sales value appeared to be concentrated entirely in the value of the license, to arrive at an indication of fair value. When evaluating our radio broadcasting licenses for impairment, the testing is performed at the unit of accounting level as determined by ASC Topic 350-30-35. In our case, radio stations in a geographic market cluster are considered a single unit of accounting.

Valuation of Goodwill

~~ASC Topic 350-20-35 requires~~

All goodwill on the condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021 is part of the Outdoor Advertising segment. The Company ~~to test~~tests goodwill for impairment at least annually. ~~Under ASC 350~~ Wwee 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. ~~Given the macroeconomic environment~~We perform this assessment annually as ~~a result~~ of ~~the COVID-19 pandemic, we have elected not to perform the qualitative assessment.~~ October 1, unless indicators of impairment exist at an interim period.

When performing a quantitative assessment for impairment, the Company uses a market approach to determine the fair value of the reporting unit. Management determines the fair value for the reporting unit by multiplying the cash flows of the reporting unit by an estimated market multiple. Management believes this methodology for valuing outdoor advertising businesses is a common approach and believes that the multiples used in the valuation are reasonable given our peer comparisons, analyst reports, and market transactions. To corroborate the fair values determined using the market approach described above, management also uses an income approach, which is a discounted cash flow method to determine the fair value of the reporting unit. If the carrying value of a reporting unit’s goodwill exceeds its fair value, the Company recognizes an impairment charge equal to the difference in the statement of operations. ~~All goodwill on the condensed consolidated balance sheets as~~

-9-

Table of ~~December 31, 2020 and June 30, 2021 is assigned to our Outdoor Advertising segment.~~ While the COVID-19 pandemic has negatively affected our outdoor operations, as of June 30, 2021, we don’t believe the long-term value of the outdoor business, and thus the associated goodwill, has been impaired. Contents~~The Company conducts its impairment test as of October 1 of each year, unless indications of impairment exist during an interim period.~~

- ~~10 -~~

Valuation of Trade Name

As a result of the purchase of our ~~outdoor advertising~~Outdoor Advertising segment, the Company acquired the trade name “Fairway”. The trade name is well known in the industry and is being retained for continued market use following the acquisition. This trade name favorably factors into customer purchasing decisions. For the purchase price allocation, the trade name was valued using the relief from royalty method. This method is based on what a company would be willing to pay for a royalty in order to exploit the related benefits of the trade name. The value of the trade name is determined by discounting the inherent after-tax royalty savings associated with ownership or possession of the trade name. The valuation assigned to the trade name as a result of the purchase price accounting was $0.7 million. ~~The trade name is an indefinite-lived intangible asset based on our intention to renew it when legally required and to utilize it going forward.~~ We assess the trade name annually for impairment ~~as of~~on October 1 of each year, unless indications of impairment exist during an interim period.

Definite-lived intangibles

The following table presents the weighted-average useful life at June 30, ~~2021,~~2022, and the gross carrying amount and accumulated amortization at June 30, 2022, and December 31, 2021, for our definite-lived intangible ~~assets at December 31, 2020, and June 30, 2021:~~

asset:

As of December 31, 2020

As of June 30, 2021

(in 000's, except years)

Gross Carrying
Amount

Accumulated
Amortization

Net Carrying
Amount

Gross Carrying
Amount

Accumulated
Amortization

Net Carrying
Amount

Weighted
Average
Remaining
Useful Life
(in years)
Programming agreement

$
2,154

$
1,934

$
220

$
2,154

$
2,081

$
73

0.3
Customer list

2,906

1,010

1,896

2,906

1,493

1,413

1.5


		June 30, 2022						December 31, 2021
	Weighted Average Remaining Useful Life (in years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer list	0.5	$	2,906	$	2,462	$	444	$	2,906	$	1,977	$	929

In accordance with ASC paragraph 360-10, the Company performs an analysis to (i) determine if indicators of impairment of a long-lived asset are present, (ii) test the long-lived asset for recoverability by comparing undiscounted cash flows

The customer list was acquired as part of the ~~long-lived asset~~purchase of our Outdoor Advertising segment and was valued as part of the purchase price allocation performed at closing. Customer relationships represent a source of repeat business. The information contained in such relationships usually includes the preferences of the customer, the buying patterns of the customer, and the history of purchases that have been made by the customer. In calculating the value of Fairway Outdoors’ customer relationships, we employed the multiperiod excess earnings method of the income approach, which estimates value based on the present value of future economic benefits. This methodology resulted in a valuation of $2.9 million. A useful life of three years was assigned to ~~its carrying value and (iii) measure any potential impairment by comparing~~ the ~~long-lived asset's fair value to its current carrying value.~~

customer list.

Total amortization expense from definite-lived ~~intangibles~~intangible assets for the three and six-month periods ended June 30, ~~2020~~2022 was ~~$0.5~~$0.2 million and ~~$0.9~~$0.5 million, respectively. Total amortization expense from definite-lived intangible assets for the three and six-month periods ended June 30, 2021 was $0.3 million and $0.6 million, respectively. The ~~following table presents the Company's estimate of future~~Company estimates amortization expense of $0.4 million for ~~definite-lived intangibles:~~

the remainder of the year ending December 31, 2022 and none thereafter.

Year ending December 31,

Expected Amortization Expense

Remainder of 2021

$
558

2022

928

~~Note 4.~~

3. REVENUE

~~Revenue~~

The Company generates revenue from the sale of services including, but not limited to: (i) on-air commercial broadcast time, (ii) display advertising on outdoor structures, (iii) non-traditional revenues including event-related revenues and event sponsorship revenues, and (iv) digital advertising. Payments received from advertisers before the performance obligation is satisfied are recorded as deferred revenue. Substantially all deferred revenue is recognized within twelve months of the payment date. We do not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. Advertising revenues presented in the condensed 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.

Radio 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 condensed consolidated balance sheets. Substantially all deferred revenue is recognized within twelve months of the payment date.

- 11 -

Outdoor Advertising

Our outdoor advertising business has approximately ~~3,600~~3,500 faces consisting of bulletins, posters, and digital billboards. Bulletins are generally large, illuminated advertising structures that are located on major highways and target vehicular traffic. Posters are generally smaller advertising structures that are located on major traffic arteries and city streets and target vehicular and pedestrian traffic. Digital billboards are computer controlled LED displays where six to eight advertisers rotate continuously, each one having seven to ten seconds to display a static image. Digital billboards are generally located on major traffic arteries and streets. A substantial portion of this revenue is lessor revenue derived from operating leases accounted for under ASC 842, “Leases.” Rental revenue is recognized on a straight-line basis over the term of the respective lease.

-10-

Table of Contents

Nontraditional

Nontraditional 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.

Digital

Digital revenue relates to revenue generated from the sale of digital marketing services (including display advertisements and video pre-roll and sponsorships, but excluding digital billboard advertisements) to ~~advertisers.~~advertisers on Company-owned websites and applications from revenue generated from content distributed across other digital platforms. Digital revenues are generally recognized as the digital advertising is delivered.

Other

Other revenue includes barter revenue, network revenue, and production 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. In connection with certain outdoor advertising arrangements, the customer may request that the Company produce the billboard wrap (commonly printed on a vinyl material) displaying the customer’s advertisement on our outdoor structure. This production revenue is recognized as the deliverable is made available to the customer or attached to our outdoor structure. Other revenue also includes the management fee received from Billboards LLC ~~(See~~(see Note ~~13)~~10).

Disaggregation of revenue

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


	For the Three Months Ended June 30,										For the Six Months Ended June 30,											Three Months Ended June 30,								Six Months Ended June 30,
	2020		% of Total			2021		% of Total			2020		% of Total			2021		% of Total				2022		% of Total		2021		% of Total		2022		% of Total		2021		% of Total
Revenue by Source:																					Revenue by Source:
Radio Advertising	$	2,628		37.6	%	$	8,913		62.0	%	$	9,008		48.0	%	$	13,868		57.5	%	Radio Advertising	$	6,819	42.2	%	$	8,913	62.0	%	$	12,996	46.9	%	$	13,868	57.5	%
Outdoor Advertising ⁽¹⁾		3,030		43.3	%		3,238		22.5	%		6,297		33.5	%		6,210		25.7	%	Outdoor Advertising (1)	3,337		20.7	%	3,238		22.5	%	6,461		23.3	%	6,210		25.7	%
Nontraditional		80		1.1	%		292		2.0	%		248		1.3	%		429		1.8	%	Nontraditional	3,189		19.7	%	292		2.0	%	3,357		12.1	%	429		1.8	%
Digital		340		4.9	%		665		4.6	%		1,014		5.4	%		1,150		4.8	%	Digital	1,588		9.8	%	665		4.6	%	2,318		8.4	%	1,150		4.8	%
Other		918		13.1	%		1,268		8.9	%		2,214		11.8	%		2,462		10.2	%	Other	1,219		7.6	%	1,268		8.9	%	2,555		9.3	%	2,462		10.2	%
Total net revenues	$	6,996				$	14,376				$	18,781				$	24,119				Total net revenues	$	16,152			$	14,376			$	27,687			$	24,119

(1) A substantial portion of this revenue is from lessor revenue derived from operating leases accounted for under ASC 842, “Leases.”

~~Note 5.~~ ~~Long Term Debt~~

4. LONG-TERM DEBT

Long-term debt was comprised of the following at June 30, 2022, and December 31, ~~2020, and June 30,~~ 2021:


	December 31, 2020			June 30, 2021				June 30, 2022		December 31, 2021
Senior credit facility	$	70,972		$	67,996		Senior credit facility	$	67,654	$	68,343
Notes payable to Emmis		5,535			5,535		Notes payable to Emmis	6,154		6,154
Notes payable to SG Broadcasting		21,400			25,400		Notes payable to SG Broadcasting	28,011		27,574
Less: Current maturities		(1,836	)		(918	)	Less: Current maturities	(3,672)		(2,754)
Less: Unamortized original issue discount		(2,153	)		(2,123	)	Less: Unamortized original issue discount	(1,468)		(1,790)
Total long-term debt, net of current portion and debt discount	$	93,918		$	95,890		Total long-term debt, net of current portion and debt discount	$	96,679	$	97,527

-11-

12Table of Contents -

Senior secured term loan agreement

The Company has a five-year senior secured term loan agreement (the “Senior Credit Facility”) with GACP Finance Co., LLC (“GACP”), a Delaware limited liability company, as administrative agent and collateral agent. The Senior Credit Facility bears interest at a rate equal to the London Interbank Offered Rate ("LIBOR"), plus 7.5%, with a 2.0% LIBOR floor and a 1%1.0% incremental interest rate paid in kind under certain circumstances (as discussed below). The Senior Credit Facility matures on November 25, 2024. Prior to subsequent amendments discussed below, the Senior Credit Facility required interest payments on the first business day of each calendar month, and quarterly payments on the principal in an amount equal to one and one quarter percent of the initial aggregate principal amount were due on the last day of each calendar quarter. At its inception, the Senior Credit Facility included covenants pertaining to, among other things, the ability to incur indebtedness, restrictions on the payment of dividends, minimum liquidity requirements, collateral maintenance, minimum Consolidated Fixed Charge Coverage Ratio of 1.10:1.00,, and other customary restrictions.

As of June 30, ~~2021,~~2022, a number of amendments had been entered into by the Company and GACP to modify, among other things, certain provisions relating to the repayment of the Term Loan (as defined in the Senior Credit Facility). OnMost recently, on May 19, 2021, the Company entered into Amendment No. 4 to its Senior Credit Facility. Under the terms of Amendment No. 4:

•

SG Broadcasting agreed to contribute up to $7.0 million to the Company in the form of subordinated debt, with $3.0 million contributed at closing, $1.0 million contributed on June 1, 2021, and up to an additional $3.0 million to be contributed through June 30, 2022, if necessary, to satisfy certain conditions described in Amendment No. 4;

•

~~the Company made a principal payment of $3.0 million to reduce borrowings outstanding under the Senior Credit Facility;~~

•

~~0 quarterly scheduled principal payments are required through and including the quarter ending March 31, 2022;~~

•

~~the Minimum Consolidated Fixed Charge Coverage Ratio (as defined in the Senior Credit Facility) was reduced to~~ ~~1.00:1.00~~ ~~from April 1, 2020 through and including December 31, 2022, with it increasing to~~ ~~1.10:1.00~~ ~~on and after January 1, 2023;~~

•

for purposes of calculating compliance with the Minimum Consolidated Fixed Charge Coverage Ratio, Consolidated EBITDA (as defined in the Senior Credit Facility) includes certain amounts contributed by SG Broadcasting in the form of subordinated debt or equity, including those described above;

•

for purposes of calculating the Company’s borrowing base under the Senior Credit Facility, the multiple applied to Billboard Cash Flow (as defined in the Senior Credit Facility) increased from 3.5 to 5.0 and the advance rate applied to the radio stations’ FCC licenses increased from 60% to 70%;

•

at any time the multiple applied to Billboard Cash Flow exceeds 3.5 or the advance rate applied to the radio stations’ FCC licenses exceeds 60%, an incremental annual interest rate of 1% applies and is paid in kind monthly;

•

~~certain specified events of default were waived; and~~

•

~~an amendment fee of $0.4 million was paid in cash.~~

~~As a result of the~~ $3.0 million contributed at closing, $1.0 million contributed on June 1, 2021, and up to an additional $3.0 million to be contributed through June 30, 2022, if necessary, to satisfy certain conditions described in Amendment No. 4;

•the Company made a principal payment ~~made~~of $3.0 million to reduce borrowings outstanding under the ~~amendment,~~Senior Credit Facility;

•no quarterly scheduled principal payments are required through and including the ~~Company recorded a loss on debt extinguishment of $81 thousand during the three-month period ended~~quarter ending June 30, ~~2021.~~

2022;

•the Minimum Consolidated Fixed Charge Coverage Ratio (as defined in the Senior Credit Facility) was reduced to 1.00:1.00 from April 1, 2020 through and including December 31, 2022, with it increasing to 1.10:1.00 on and after January 1, 2023;

•for purposes of calculating compliance with the Minimum Consolidated Fixed Charge Coverage Ratio, Consolidated EBITDA (as defined in the Senior Credit Facility) includes certain amounts contributed by SG Broadcasting in the form of subordinated debt or equity, including those described above;

•for purposes of calculating the Company’s borrowing base under the Senior Credit Facility, the multiple applied to Billboard Cash Flow (as defined in the Senior Credit Facility) increased from 3.5 to 5.0 and the advance rate applied to the radio stations’ FCC licenses increased from 60% to 70%;

•at any time the multiple applied to Billboard Cash Flow exceeds 3.5 or the advance rate applied to the radio stations’ FCC licenses exceeds 60%, an incremental annual interest rate of 1.0% applies and is paid in kind monthly;

•certain specified events of default were waived; and

•an amendment fee of $0.4 million was paid in cash.

For the period May 19, 2021 through ~~June 30, 2021,~~March 31, 2022, the multiple applied to billboard cash flow was in excess of 3.5x and the advance rate applied to the Company's FCC ~~Licenses~~licenses exceeded 60% in order for the Company to achieve minimal compliance with its loan to value covenant. Therefore, the incremental annual interest rate of 1%1.0% applied during this period and an additional interest ~~payment~~payments of ~~$24 thousand was~~$0.2 million were paid in kind ~~on June 1, 2021 and~~during the three-month period ended March 31, 2022, all of which were added to the principal balance outstanding. ~~$58 thousand of incremental interest was accrued for at~~For the period from April 1, 2022 to June 30, ~~2021 and~~2022, the incremental annual interest rate of 1.0% did not apply as the principal balance outstanding was ~~paid in kind after June 30, 2021.~~

less than the minimum borrowing base.

As of June 30, ~~2021,~~2022, there ~~is $68.0~~was $67.7 million outstanding under the Senior Credit Facility, ~~which is~~ carried net of a total unamortized discount of ~~$2.1~~$1.5 million.

MediaCo is in compliance with the debt covenants as of June 30, 2022 and anticipates being in compliance in future periods.

-12-

Table of Contents

Emmis Convertible Promissory Note

The Emmis Convertible Promissory Note (as defined below) carries interest at a base rate equal to the interest on any senior credit facility, including any applicable paid in kind rate, or if 0no senior credit facility is outstanding, of 6.0%, plus an additional 1.0% on any payment of interest in kind and, without regard to whether the Company pays such interest in kind, an additional increase of 1.0% following the second anniversary of the date of issuance and additional increases of 1.0% following each successive anniversary thereafter. Because the Senior Credit Facility prohibits the Company from paying interest in cash on the Emmis Convertible Promissory Note, the Company has been accruing interest since inception using the rate applicable if the interest will be paid in kind. The Emmis Convertible Promissory Note is convertible, in whole or in part, into MediaCo Class A common stock at the option of Emmis and at a strike price equal to the ~~thirty day~~thirty-day volume weighted average price of the MediaCo Class A common stock on the date of conversion. The Emmis Convertible Promissory Note matures on November 25, 2024. As of June 30, ~~2021,~~2022, the principal balance outstanding under the Emmis Convertible Promissory Note ~~is $5.5~~was $6.2 million.

Second Amended and Restated SG Broadcasting Promissory Note, Additional SG Broadcasting Promissory Note and May 2021 SG Broadcasting Promissory Note

The Second Amended and Restated SG Broadcasting Promissory Note~~carries~~ and Additional SG Broadcasting Promissory Note (the “SG Broadcasting Promissory Notes”) carry interest at a base rate equal to the interest on any senior credit facility, including any applicable paid in kind rate, or if 0no senior credit facility is outstanding, of 6.0%, and an additional increase of 1.0% following the second anniversary of the date of issuance and additional increases of 1.0% following each successive

- ~~13 -~~

anniversary thereafter. The ~~Second Amended and Restated~~ SG Broadcasting Promissory ~~Note matures~~Notes mature on May 25, 2025. Additionally, interest under the ~~Second Amended~~ SG Broadcasting Promissory ~~Note~~Notes is payable in kind through maturity, and is convertible into MediaCo Class A common stock at the option of SG Broadcasting 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 Additional SG Broadcasting Promissory Note carries interest at a base rate equal to the interest on any senior credit facility, including any applicable paid in kind rate, or if 0 senior credit facility is outstanding, of 6.0%, and 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 Additional SG Broadcasting Promissory Note matures on May 25, 2025. Additionally, interest under the Additional SG Broadcasting Promissory Note is payable in kind through maturity, and is convertible into MediaCo Class A common stock at the option of SG Broadcasting 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.

On May 19, 2021, the Company issued to SG Broadcasting a subordinated convertible promissory note (the “May 2021 SG Broadcasting Promissory Note”), in return for which SG Broadcasting contributed $3.0 million to the Company to make the prepayment of Senior Credit Facility debt required under Amendment No. 4. Up to $7.0 million may be borrowed pursuant to the May 2021 SG Broadcasting Promissory Note. The May 2021 SG Broadcasting Promissory Note carries interest at a base rate equal to the interest on any senior credit facility, including any applicable paid in kind rate, or if 0no senior credit facility is outstanding, of 6.0%, and an additional increase of 1.0% on November 25, 2021 and additional annual increases of 1.0% following each successive anniversary thereafter. The May 2021 SG Broadcasting Promissory Note matures on May 25, 2025 and interest is payable in kind through maturity. Subject to prior shareholder approval of the issuance of the shares, the May 2021 SG Broadcasting Promissory Note is convertible into MediaCo Class A common stock at the option of SG Broadcasting 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.

On June 1, 2021, SG Broadcasting contributed $1.0 million to the Company under the May 2021 SG Broadcasting Promissory Note as required by Amendment No. 4 to the Senior Credit Facility.

On March 18, 2022, the Company and SG Broadcasting agreed to amend the May 2021 SG Broadcasting Promissory Note to extend the Company’s ability to draw the remaining $3.0 million on the May 2021 SG Broadcasting Promissory Note from June 30, 2022 to June 30, 2023.

As of June 30, ~~2021,~~2022, there was a total of $~~25.4~~$28.0 million outstanding under the ~~Second Amended and Restated~~ SG Broadcasting Promissory ~~Note, the Additional SG Broadcasting Promissory Note~~Notes and the May 2021 SG Broadcasting Promissory Note.

On July 28, 2022, SG Broadcasting exercised its right to convert the outstanding principal and accrued but unpaid interest on the SG Broadcasting Promissory Notes of $28.0 million and $1.9 million, respectively, for 12.9 million of the Company's Class A common stock. See Note 5.

Based on amounts outstanding at June 30, ~~2021,~~2022, mandatory principal payments of long-term debt for the next five years and thereafter are summarized below:


Year ended December 31,	Senior Credit Facility		Emmis Note		SG Broadcasting Notes		Total Payments		Year ended December 31,	Senior Credit Facility		Emmis Note		SG Broadcasting Notes		Total Payments
Remainder of 2021	$	—	$	—	$	—	$	—
2022		2,754		—		—		2,754
Remainder of 2022									Remainder of 2022	$	1,836	$	—	$	—	$	1,836
2023		3,672		—		—		3,672	2023	3,672		—		—		3,672
2024		61,570		5,535		—		67,105	2024	62,146		6,154		—		68,300
2025		—		—		25,400		25,400	2025	—		—		28,011		28,011
2026									2026	—		—		—		—
Total	$	67,996	$	5,535	$	25,400	$	98,931	Total	$	67,654	$	6,154	$	28,011	$	101,819

~~Note 6.~~

-13-

~~Regulatory, Legal and Other Matters~~Table of Contents

5. REGULATORY, LEGAL AND OTHER MATTERS

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 0no legal proceedings pending against the Company that we believe are likely to have a material adverse effect on the Company.

- 14 -

~~Note 7.~~

On April 1, 2022, the Company received a deficiency letter (the “Nasdaq Letter”) from the Nasdaq Listing Qualifications Department, notifying the Company that the Company is not in compliance with Nasdaq Listing Rule 5550(b)(3), which requires the Company to maintain net income from continuing operations of $0.5 million from continuing operations in the most recently completed fiscal year, or in two of the three most recently completed fiscal years (the “Minimum Net Income ~~Taxes~~Requirement”), nor is it in compliance with either of the alternative listing standards, market value of listed securities or stockholders’ equity. The Company’s failure to comply with the Minimum Net Income Requirement was based on the Company’s filing of its Annual Report on Form 10-K for the year ended December 31, 2021, reporting net loss from continuing operations of $6.1 million.

Pursuant to the Nasdaq Letter, the Company had 45 calendar days from the date of the Nasdaq Letter to submit a plan to regain compliance, and submitted such a plan during this period. The plan was accepted and Nasdaq granted an extension of up to 180 calendar days from the date of the Nasdaq Letter to evidence compliance. In the event the Company fails to regain compliance within the plan period, the Company would have the right to a hearing before an independent panel. The hearing request would stay any suspension or delisting action pending the conclusion of the hearing process and the expiration of any additional extension period granted by the panel following the hearing.

The Company intends to take all reasonable measures available to regain compliance under the Nasdaq Listing Rules and remain listed on Nasdaq. One component of the Company's plan to evidence compliance, as accepted by Nasdaq, is the conversion by the holder of the SG Broadcasting Promissory Notes of the entire amount of outstanding principal and accrued but unpaid interest into shares of the Company's Class A common stock. On July 28, 2022, the holder exercised its right under the SG Broadcasting Promissory Notes to convert the outstanding principal and accrued but unpaid interest on the SG Broadcasting Promissory Notes of $28.0 million and $1.9 million, respectively, for

12.9 million shares of the Company's Class A common stock.

Neither the Nasdaq Letter nor the Company’s noncompliance have an immediate effect on the listing or trading of the Company’s common stock, which will continue to trade on The Nasdaq Capital Market under the symbol “MDIA.”

6. INCOME TAXES

The effective tax rate for the six months ended June 30, ~~2020~~2022, and 2021 was ~~233%~~2% and 8%, respectively. During the three-month period ended June 30, 2020, as a result of a sharp deterioration of business activity related to the COVID-19 pandemic and the significant operating losses expected in 2020, the Company determined that it was more likely than not that it would be unable to realize its deferred tax assets and recorded a $15.6 million valuation allowance against these assets through an increase to our provision for income taxes. Our effective tax rate for the six months ended June 30, ~~2021~~2022 differs from the statutory tax rate primarily due to the recognition of additional valuation allowance.

~~Note 8.~~ ~~Acquisitions~~

~~On May 25, 2021, the Company purchased 24 outdoor advertising structures consisting of 41 faces from DS Outdoor LLC dba Hotspots Outdoor for $0.4 million. The structures are located in Alabama.~~

~~On June 25, 2021 the Company purchased 8 outdoor advertising structures consisting of 26 faces from Carpenter Outdoor, LLC for $0.4 million. The structures are located in Georgia.~~

Both acquisitions are accounted for as asset purchases and our accounting for these transactions was finalized during the three months ended June 30, 2021. The assets associated with both acquisitions are assigned to our Outdoor Advertising segment. In connection with the two asset acquisitions, the Company recorded $0.9 million of property, plant and equipment, $0.3 million of right-of-use assets and corresponding operating lease liabilities and $0.1 million of additional asset retirement obligations.

~~Note 9.~~ ~~Leases~~

7. LEASES

We determine if an arrangement is a lease at inception. We have operating leases for office space, sites upon which advertising structures are built, tower space, equipment and automobiles expiring at various dates through October 2049. Some leases have options to extend and some have options to terminate. Operating leases are included in operating lease right-of-use assets, current operating lease liabilities, and noncurrent operating lease liabilities in our condensed consolidated balance sheets.

Operating lease assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. 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. Our ~~outdoor advertising~~Outdoor Advertising segment treats evergreen leases as though they will be automatically renewed at the end of each term.

Operating lease expense for operating lease assets is recognized on a straight-line basis over the lease term. Variable lease payments, which represent lease payments that vary due to changes in facts or circumstances occurring after the commencement date other than the passage of time, are expensed in the period in which the obligation for these payments was incurred. Variable lease expense ~~recognized in~~for the six months ended June 30, ~~2020~~2022 and 2021 was $0.1 million. Variable lease expense for the three months ended June 30, 2022 and 2021 was not material.

We elected not to apply the recognition requirements of ~~Accounting Standards Codification~~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 condensed 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 recognized in the three and six months ended June 30, ~~2020~~2022 and 2021 was not material.

-14-

Table of Contents

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

Six Months Ended
June 30,

Six Months Ended
June 30,

2020

2021

Lease Cost

Operating lease cost

$
2,493

$
2,504

Other Information

Operating cash flows from operating leases

2,572

2,586

Right-of-use assets obtained in exchange for new operating lease liabilities

—

314

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

9.2

9.8

Weighted average discount rate - operating leases

9.0
%

9.3
%


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Operating lease cost	$	1,271	$	1,257	$	2,568	$	2,504
Operating cash flows from operating leases	1,336		1,296		2,820		2,586
Right-of-use assets obtained in exchange for new operating lease liabilities	173		314		365		314

- 15 -


	June 30, 2022		December 31, 2021
Weighted average remaining lease term - operating leases (in years)	8.4		8.5
Weighted average discount rate - operating leases	9.6	%	9.4	%

As of June 30, ~~2021,~~2022, the annual minimum lease payments of our operating lease liabilities were as follows:


Year ending December 31,			Year ending December 31,
Remainder of 2021	$	2,607
2022		5,248
Remainder of 2022			Remainder of 2022	$	2,710
2023		4,256	2023	4,477
2024		2,841	2024	2,893
2025		2,827	2025	2,874
After 2025		15,974
2026			2026	2,743
After 2026			After 2026	12,924
Total lease payments		33,753	Total lease payments	28,621
Less imputed interest		11,153	Less imputed interest	(9,130)
Total recorded lease liabilities	$	22,600	Total recorded lease liabilities	$	19,491

Our outdoor advertising business generates lessor revenue derived from operating leases accounted for under ASC 842, “Leases.” Minimum fixed lease consideration under non-cancelable operating leases for each of the next five years and thereafter, excluding variable lease consideration, as of June 30, ~~2021,~~2022, is as follows:


Year ending December 31,			Year ending December 31,
Remainder of 2021	$	4,014
2022		1,672
Remainder of 2022			Remainder of 2022	$	3,884
2023		67	2023	1,885
2024		2	2024	136
2025		—	2025	26
After 2025		—
2026			2026	8
After 2026			After 2026	—

~~Note 10.~~ ~~Asset Retirement Obligations~~

8. ASSET RETIREMENT OBLIGATIONS

The Company’s asset retirement ~~obligation includes~~obligations include the costs associated with the removal of its structures, resurfacing of the land, and retirement cost, if applicable, related to the Company’s outdoor advertising portfolio. The following table reflects information related to our asset retirement obligations.

Balance at December 31, 2020

$
6,316

Additions to asset retirement obligations

130

Accretion expense

337

Liabilities settled

(7
)
Balance at June 30, 2021

$
6,776


Balance at December 31, 2021	$	7,267
Additions to asset retirement obligations	51
Accretion expense	380
Liabilities settled	(64)
Balance at June 30, 2022	$	7,634

~~Note 11.~~

-15-

~~Segment Information~~Table of Contents

9. SEGMENT INFORMATION

The Company’s operations are aligned into 2 business segments: ~~(i)~~ Radio and ~~(ii)~~ Outdoor ~~advertising.~~Advertising. Radio includes the operations and results of WQHT-FM and WBLS-FM, and ~~outdoor advertising~~Outdoor Advertising includes the operations and results of the Fairway businesses acquired in December 2019 and additional acquisitions thereafter. The Company groups activities that are not considered operating segments in the “All Other” category.

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’s segments operate exclusively in the United States.

The accounting policies as described in the summary of significant accounting policies included in the Company’s Annual Report filed on Form 10-K for the year ended December 31, ~~2020,~~2021, and in Note 1 to these condensed consolidated financial statements, are applied consistently across segments.

Three Months Ended June 30, 2021

Radio

Outdoor Advertising

All Other

Consolidated

Net revenues

$
10,851

$
3,525

$
—

$
14,376

Operating expenses excluding depreciation and amortization expense

5,739

2,079

—

7,818

Corporate expenses

—

—

1,845

1,845

Depreciation and amortization

183

795

—

978

Gain on disposal of assets

—

(72
)

—

(72
)
Operating income (loss)

$
4,929

$
723

$
(1,845
)

$
3,807

- 16 -

Three Months Ended June 30, 2020

Radio

Outdoor Advertising

All Other

Consolidated

Net revenues

$
3,829

$
3,167

$
—

$
6,996

Operating expenses excluding depreciation and amortization expense

4,005

2,479

—

6,484

Corporate expenses

—

—

932

932

Depreciation and amortization

232

931

—

1,163

Loss on disposal of assets

—

4

—

4

Operating loss

$
(408
)

$
(247
)

$
(932
)

$
(1,587
)

Six Months Ended June 30, 2021

Radio

Outdoor Advertising

All Other

Consolidated

Net revenues

$
17,353

$
6,766

$
—

$
24,119

Operating expenses excluding depreciation and amortization expense

11,030

4,549

—

15,579

Corporate expenses

—

—

3,486

3,486

Depreciation and amortization

374

1,585

—

1,959

Gain on disposal of assets

—

(78
)

—

(78
)
Operating income (loss)

$
5,949

$
710

$
(3,486
)

$
3,173

Six Months Ended June 30, 2020

Radio

Outdoor Advertising

All Other

Consolidated

Net revenues

$
12,168

$
6,613

$
—

$
18,781

Operating expenses excluding depreciation and amortization expense

10,936

4,927

—

15,863

Corporate expenses

—

—

2,097

2,097

Depreciation and amortization

481

1,709

—

2,190

Loss on disposal of assets

—

82

—

82

Operating income (loss)

$
751

$
(105
)

$
(2,097
)

$
(1,451
)

Total Assets

Radio

Outdoor Advertising

Consolidated

As of December 31, 2020

$
84,219

$
62,132

$
146,351

As of June 30, 2021

84,913

63,139

148,052

~~Note 12.~~ ~~Employee Retention Credits~~

The ~~Consolidated Appropriations Act, passed in December 2020, expanded~~following tables present the ~~employee retention credit program~~Company's segment results for the three and due to revenue declines we have experienced, we qualified for approximately $0.9 million of employee retention credits in the second quarter of 2021 and expect to qualify for a similar amount in the third quarter of 2021. We recognized a receivable of $0.9 million as ofsix months ended June 30, ~~2021. The credits cover 70%~~2022 and 2021:


Three Months Ended June 30, 2022	Radio		Outdoor Advertising		All Other		Consolidated
Net revenues	$	12,531	$	3,621	$	—	$	16,152
Operating expenses excluding depreciation and amortization expense	11,324		2,592		—		13,916
Corporate expenses	—		—		1,339		1,339
Depreciation and amortization	86		818		—		904
Loss on disposal of assets	—		27		—		27
Operating income (loss)	$	1,121	$	184	$	(1,339)	$	(34)


Three Months Ended June 30, 2021	Radio		Outdoor Advertising		All Other		Consolidated
Net revenues	$	10,851	$	3,525	$	—	$	14,376
Operating expenses excluding depreciation and amortization expense	5,739		2,079		—		7,818
Corporate expenses	—		—		1,845		1,845
Depreciation and amortization	183		795		—		978
Gain on disposal of assets	—		(72)		—		(72)
Operating income (loss)	$	4,929	$	723	$	(1,845)	$	3,807


Six Months Ended June 30, 2022	Radio		Outdoor Advertising		All Other		Consolidated
Net revenues	$	20,644	$	7,043	$	—	$	27,687
Operating expenses excluding depreciation and amortization expense	17,947		5,301		—		23,248
Corporate expenses	—		—		3,826		3,826
Depreciation and amortization	187		1,647		—		1,834
Loss on disposal of assets	—		45		—		45
Operating income (loss)	$	2,510	$	50	$	(3,826)	$	(1,266)


Six Months Ended June 30, 2021	Radio		Outdoor Advertising		All Other		Consolidated
Net revenues	$	17,353	$	6,766	$	—	$	24,119
Operating expenses excluding depreciation and amortization expense	11,030		4,549		—		15,579
Corporate expenses	—		—		3,486		3,486
Depreciation and amortization	374		1,585		—		1,959
Gain on disposal of assets	—		(78)		—		(78)
Operating income (loss)	$	5,949	$	710	$	(3,486)	$	3,173

-16-

Table of qualified wages, plus the cost to continue providing health benefits to our employees, subject to a $7 thousand cap per employee. The Company expects to receive the first $0.9 million of retention credits from the IRS following the filing of its Form 941 Employer's Quarterly Federal Tax Return for the second quarter of 2021.

~~Note 13.~~ ~~Related Party Transactions~~Contents


Total Assets	Radio		Outdoor Advertising		Consolidated
June 30, 2022	$	87,047	$	56,342	$	143,389
December 31, 2021	90,485		57,725		148,210

10. 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 10 votes per share and the common stock acquired by Emmis and distributed to Emmis’ shareholders is entitled to 1 vote per share. Emmis continues to provide management services to the Stations under a Management Agreement, subject to the direction of the MediaCo board of directors, which now consists of 5 directors appointed by Standard General and 3 directors appointed by Emmis. MediaCo pays Emmis an annual management fee of $1.25 million, plus reimbursement of certain expenses directly related to the operation of MediaCo’s business.

The sale closed on November 25, 2019, at which time MediaCo and Emmis also entered into ~~the~~a management agreement (the “Management Agreement”), an employee leasing agreement (the “Employee Leasing Agreement”) and certain other ancillary agreements.

- 17 -

The Management Agreement with Emmis Operating Company was for an initial term of two years (cancellable by MediaCo after 18 months) under which Emmis provided various services to us, including accounting, human resources, information technology, legal, public reporting and tax. The Management Agreement was terminated in November 2021 at the expiration of the initial term. For the six months ended June 30, ~~2020 and~~ 2021, MediaCo recorded $~~0.6~~$0.6 million of management fee expense, which is included in corporate expenses in the accompanying condensed consolidated statements of operations. ~~$0.1 million was unpaid as of June 30, 2021 and December 31, 2020, and is included in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheets.Emmis has given formal notice that it does not intend to extend the Management Agreement beyond the initial term which expires in~~ ~~November 2021~~.

Under the Employee Leasing Agreement, the employees of the Stations remained employees of Emmis and we reimbursed Emmis for the cost of these employees, including health and benefit costs. Expense related to the Employee Leasing Agreement, which is included in operating expenses, was $4.5 million for the six months ended June 30, 2020. NaN amount of expense related to the Employee Leasing Agreement remained unpaid as of December 31, 2020. Effective January 1, 2021, the Employee Leasing Agreement was terminated, and the Company hired all of the leased employees and assumed the employment and collective bargaining agreements related to leased employees. The Employee Leasing Agreement was terminated in January 2021 at the expiration of the initial ~~term, so no early termination penalties were incurred.~~

term.

Convertible Promissory Notes

As a result of the transaction described above, on November 25, 2019, we issued convertible promissory notes to both Emmis (such note, the "Emmis Convertible Promissory Note") and SG Broadcasting (such note, the "November 2019 SG Broadcasting Promissory Note") in the amounts of $5.0 million and $6.3 million, respectively. On February 28, 2020, the Company and SG Broadcasting amended and restated the November 2019 SG Broadcasting Promissory Note such that the maximum aggregate principal amount issuable under the note was increased from $6.3 million to $10.3 million. Also on February 28, 2020, SG Broadcasting loaned an additional $2.0 million to the Company pursuant to the ~~amended note~~November 2019 SG Broadcasting Promissory Note for working capital purposes.

On March 27, 2020, the Company and SG Broadcasting further amended and restated the November 2019 SG Broadcasting Promissory Note (as so amended and restated, the "Second Amended and Restated SG Broadcasting Promissory Note") such that the maximum aggregate principal amount issuable under the note was increased from $10.3 million to $20.0 million. On March 27, 2020, SG Broadcasting loaned an additional $3.0 million to the Company pursuant to the Second Amended and Restated SG Broadcasting Promissory Note for working capital purposes.

On August 28, 2020, SG Broadcasting loaned an additional $8.7 million to the Company pursuant to the Second Amended and Restated SG Broadcasting Promissory Note for working capital purposes, bringing the total principal amount outstanding to $20.0 million.

On September 30, 2020, SG Broadcasting loaned an additional $0.3 million to the Company pursuant to ~~the Additional~~an additional promissory note (the "Additional SG Broadcasting Promissory ~~Note~~Note") for working capital purposes.

On November 25, 2020, annual interest of $0.5 million and $1.1 million was paid in kind and added to the principal balances of the Emmis Convertible Promissory Note and the November 2019 and Additional SG Broadcasting Promissory ~~Note,~~Notes, respectively.

On May 19, 2021, the Company issued to SG Broadcasting ~~the May~~an additional promissory note (the "May 2021 SG Broadcasting Promissory ~~Note,~~Note" and, collectively with the November 2019 and Additional SG Broadcasting Promissory Notes, the "SG Broadcasting Promissory Notes"), in return for which SG Broadcasting loaned $3.0 million to the Company to make the prepayment of Senior Credit Facility debt required under Amendment No. 4. Up to $7.0 million may be borrowed pursuant to the May 2021 SG Broadcasting Promissory Note.

On June 1, 2021, SG Broadcasting loaned $1.0 million to the Company under the May 2021 SG Broadcasting Promissory Note as required by Amendment No. 4 to the Senior Credit Facility.

On September 30, 2021, annual interest of $25 thousand on the November 2019 and Additional SG Broadcasting Promissory Notes was paid in kind and added to the principal balance outstanding.

On November 25, 2021, annual interest of $0.6 million and $2.2 million was paid in kind and added to the principal balances of the Emmis Convertible Promissory Note and the SG Broadcasting Promissory Notes, respectively.

-17-

Table of Contents

On May 19, 2022, annual interest of $0.4 million was paid in kind and added to the principal balance of the SG Broadcasting Promissory Notes.

Consequently, the principal amount outstanding as of June 30, 2022 under the Emmis Convertible Promissory Note and the SG Broadcasting Promissory Notes ~~as of June 30, 2021~~ was ~~$5.5~~$6.2 million and ~~$25.4~~$28.0 million, respectively.

The Company recognized interest expense of $0.4 million and $0.3 million related to the Emmis Convertible Promissory Note for the six months ended June 30, ~~2020~~2022, and ~~June 30, 2021.~~

2021, respectively. The Company recognized interest expense of ~~$0.4~~$1.5 million and ~~$1.1~~$1.1 million related to the SG Broadcasting Promissory Notes for the six months ended June 30, ~~2020~~2022, and ~~June 30,~~ 2021, respectively.

The terms of these notes are described in Note 4.

On July 28, 2022, SG Broadcasting exercised its right under the SG Broadcasting Promissory Notes to convert the outstanding principal and accrued but unpaid interest on the SG Broadcasting Promissory Notes. See Note 5.

Convertible Preferred Stock

On December 13, 2019, in connection with the purchase of our ~~outdoor advertising~~Outdoor Advertising segment, the Company issued to SG Broadcasting 220,000 shares of MediaCo Series A Convertible Preferred Stock.

MediaCo Series A Preferred Shares rank senior in preference to the MediaCo Class A common stock, MediaCo Class B common stock, and the MediaCo Class C common stock. Pursuant to the Articles of Amendment, the ability of the Company to make distributions with respect to, or make a liquidation payment on, any other class of capital stock in the Company designated to be junior to, or on parity with, the MediaCo Series A Preferred Shares, will be subject to certain restrictions, including that (i) the MediaCo Series A Preferred Shares shall be entitled to receive the amount of dividends per share that would be payable on the number of whole common shares of the Company into which each share of MediaCo Series A Preferred ~~Shares~~Share could be converted, and (ii) the MediaCo Series A Preferred Shares, upon any liquidation, dissolution or winding up of the Company, shall be entitled to a preference on the assets of the Company. Issued and outstanding shares of MediaCo Series A Preferred Shares shall accrue cumulative dividends, payable in kind, at an annual rate equal to the interest rate on any senior debt of the Company ~~including any applicable paid in kind rate~~ (see Note 5)4), or if 0no senior debt is outstanding, 6%, plus additional increases of 1% on December 12, 2020 and each anniversary thereof. On December 13, 2021, dividends of $2.7 million were paid in kind. The ~~current rate~~payment in ~~effect at June 30, 2021 is 11.5%.~~

- ~~18 -~~kind increased the accrued value of the preferred stock and no additional shares were issued as part of this payment.

MediaCo Series A Preferred Shares are redeemable for cash at the option of SG Broadcasting at any time on or after June 12, 2025, and so the shares are classified outside of permanent equity. The Series A Preferred Shares are also convertible into shares of Class A common stock at the option of SG Broadcasting, ~~at any time after May 25, 2020,~~ with the number of shares of common stock determined by dividing the original contribution, plus accrued dividends, by the 30-day volume weighted average share price of Class A common shares. The Series A Preferred Shares are ~~considered~~ participating securities ~~for the purposes of calculating~~and we calculate earnings per share ~~under~~using the two-class method.

~~On December 13, 2020, $2.1 million of dividends were paid in kind. The payment in kind increased the accrued value of the preferred stock and 0 additional shares were issued as part of this payment.~~

Dividends on Series A Convertible Preferred Stock held by SG Broadcasting were ~~$1.1~~$1.6 million and $1.3 million, respectively, for the six months ended June 30, ~~2020~~2022, and ~~2021, respectively.~~2021. As of June 30, 2022, and December 31, ~~2020, and June 30,~~ 2021, unpaid cumulative dividends were ~~$0.1~~$1.8 million and ~~$1.4~~$0.2 million, respectively, and included in the balance of preferred stock in the accompanying condensed consolidated balance sheets.

Loan Proceeds Participation Agreement

On April 22, 2020, MediaCo and Emmis entered into a certain Loan Proceeds Participation Agreement (the “LPPA”) pursuant to which (i) Emmis agreed to use certain of the proceeds of the loan Emmis received pursuant to the Paycheck Protection Program (“PPP”) under Division A, Title I of the CARES Act to pay certain wages of employees leased to MediaCo pursuant to the Employee Leasing Agreement, between Emmis and MediaCo, (ii) Emmis agreed to waive up to $1.5 million in reimbursement obligations of MediaCo to Emmis under the Employee Leasing Agreement to the extent that the PPP Loan is forgiven, and (iii) MediaCo agreed to promptly pay Emmis an amount equal to 31.56% of the amount of the PPP Loan, if any, that Emmis is required to repay, up to the amount of the reimbursement obligations forgiven under (ii) above. Standard General L.P., on behalf of all of the funds for which it serves as an investment advisor, agreed to guaranty MediaCo’s obligations under the LPPA. During ~~the three months ended June 30,~~ 2021, Emmis received notification ~~that~~ the full amount of the loan ~~has been~~was forgiven.

-18-

Table of Contents

Management Agreement for Billboards LLC

On August 11, 2020, the board of directors of the Company unanimously authorized the entry into a certain Management Agreement (the “Billboard Agreement”) between Fairway Outdoor LLC (a subsidiary of the Company, “Fairway”) and Billboards LLC (an affiliate of Standard General, “Billboards”). Under the Billboard Agreement, Fairway will manage the billboard business of Billboards in exchange for payments of $25 thousand per quarter and reimbursement of all out-of-pocket expenses incurred by Fairway in the performance of its duties under the Billboard Agreement. The Billboard Agreement has an effective date of August 1, 2020, ~~has~~ a term of three years, and ~~has~~ customary provisions on limitation of liability and indemnification. $50 thousand of income was recognized inand $105 thousand of out-of-pocket expenses were incurred for the six months ended June 30, ~~2021~~2022 in relation to the Billboard Agreement, ~~all~~$16 thousand of which was outstanding ~~as of~~at June 30, ~~2021. Additionally, Fairway incurred $83 thousand~~2022.

11. SUBSEQUENT EVENTS

-19-

Table of ~~out-of-pocket expenses for the period, NaN of which has~~Contents ~~been reimbursed as of June 30, 2021.~~

- ~~19 -~~

~~Item~~

ITEM 2. ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Note: Certain statements included in this report or in the financial statements contained herein which are not statements of historical fact, including but not limited to those identified with the words “expect,” “should,” “will” or “look” are intended to be, and are, by this Note, identified as “forward-looking statements,” as defined in the Securities and Exchange Act of 1934, as amended. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future result, performance or achievement expressed or implied by such forward-looking statement. Such factors include, among others:

•

~~Our relationship with Emmis and Emmis Operating Company’s ability to effectively manage our operations;~~

•

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

•

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

•

Our ability to compete with, and integrate into our operations, new media channels, such as digital video, live video streaming, YouTube, and other real-time media delivery;

•

Our ability to continue to exchange advertising time for goods or services;

•

Our ability to use market research, advertising and promotions to attract and retain audiences;

•

U.S. regulatory requirements for owning and operating media broadcasting channels and our ability to maintain regulatory licenses granted by the FCC;

•Pending U.S. regulatory requirements for paying royalties to performing artists;•

~~Industry and economic trends within the U.S. radio industry, generally, and the New York City radio industry, in particular;~~

•Industry and economic trends within the U.S. radio industry, generally, and the New York City radio industry, in particular;•

~~Our ability to finance our operations or to obtain financing on terms that are favorable to MediaCo;~~

•Our ability to finance our operations or to obtain financing on terms that are favorable to MediaCo;•

~~Our ability to successfully complete and integrate any future acquisitions;~~

•Our ability to successfully complete and integrate any future acquisitions;•

~~The impact of COVID-19 and other pandemics;~~

•The impact of COVID-19 and other pandemics;•

~~The accuracy of management’s estimates and assumptions on which the Company’s financial projections are based; and~~

•The accuracy of management’s estimates and assumptions on which the Company’s financial projections are based; and

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

•

~~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, ~~and the Risk Factors included in Exhibit 99.1 on Form 8-K,~~ filed with the Securities and Exchange Commission on March ~~30, 2021 and May 21, 2021, respectively~~24, 2022. MediaCo does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.

GENERAL

We own and operate two radio stations located in New York City and outdoor advertising businesses geographically focused in the Southeast (Georgia, Alabama, South Carolina and ~~Tennessee)~~Florida) and ~~Eastern Kentucky.~~the Mid-Atlantic (Kentucky, West Virginia and Ohio) regions. 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 radio stations’ ability to attract audiences in demographic groups targeted by their advertisers and the number of persons exposed to our billboards. The Nielsen Company generally measures radio station ratings weekly for markets measured by the Portable People Meter™, which includes ~~all~~both of our radio ~~stations.~~stations, while Geopath Insight Suite is the annual audience location measurement used for our billboards. Because audience ratings in a radio 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 for both our radio and outdoor advertising segments, 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.

-20-

~~20 -~~Table of Contents

The following table summarizes the sources of our revenues for the three and six months ended June 30, ~~2020~~2022 and 2021. The category ~~“Non Traditional”~~“Nontraditional” principally consists of ticket sales and sponsorships of events our stations conduct in their local market. The category “Other” includes, among other items, revenues related to network revenues, production of billboard advertisements and barter.


(dollars in thousands)	Three Months Ended June 30,								Six Months Ended June 30,
	2022		% of Total		2021		% of Total		2022		% of Total		2021		% of Total
Net revenues:
Radio Advertising	$	6,819	42.2	%	$	8,913	62.0	%	$	12,996	46.9	%	$	13,868	57.5	%
Outdoor Advertising (1)	3,337		20.7	%	3,238		22.5	%	6,461		23.3	%	6,210		25.7	%
Nontraditional	3,189		19.7	%	292		2.0	%	3,357		12.1	%	429		1.8	%
Digital	1,588		9.8	%	665		4.6	%	2,318		8.4	%	1,150		4.8	%
Other	1,219		7.6	%	1,268		8.9	%	2,555		9.3	%	2,462		10.2	%
Total net revenues	$	16,152			$	14,376			$	27,687			$	24,119

(1)

For the Three Months Ended June 30,

For the Six Months Ended June 30,

2020

% of Total

2021

% of Total

2020

% of Total

2021

% of Total

(Amounts in thousands)

Revenue by Source:

Radio Advertising

$
2,628

37.6
%

$
8,913

62.0
%

$
9,008

48.0
%

$
13,868

57.5
%
Outdoor Advertising ⁽¹⁾

3,030

43.3
%

3,238

22.5
%

6,297

33.5
%

6,210

25.7
%
Nontraditional

80

1.1
%

292

2.0
%

248

1.3
%

429

1.8
%
Digital

340

4.9
%

665

4.6
%

1,014

5.4
%

1,150

4.8
%
Other

918

13.1
%

1,268

8.9
%

2,214

11.8
%

2,462

10.2
%
Total net revenues

$
6,996

$
14,376

$
18,781

$
24,119

⁽¹⁾ A substantial portion of this revenue is from lessor revenue derived from operating leases accounted for under ASC 842, “Leases.”

Roughly 20% of our expenses varies in connection with changes in revenue. These variable expenses primarily relate to costs in our sales department, such as salaries, commissions and bad debt. Our costs that do not vary as much in relation to revenue are mostly in our programming and ~~general and~~ administrative departments, such as talent costs, ratings fees, rent, utilities and salaries. Lastly, our costs that are highly discretionary are costs in our marketing and promotions department, which we primarily incur to maintain and/or increase our audience and market share.

KNOWN TRENDS AND UNCERTAINTIES

The U.S. radio industry is a mature industry and its growth rate has ~~stalled.~~slowed considerably. Management believes this is principally the result of two factors: (1) new media, such as various media distributed via the Internet, telecommunication companies and cable interconnects, as well as social networks, which have gained advertising share against radio and other traditional media and created a proliferation of advertising inventory and (2) the fragmentation of the radio audience and time spent listening caused by satellite radio, audio streaming services and podcasts has led some investors and advertisers to conclude that the effectiveness of radio advertising has diminished.

Along with ~~a large portion~~the rest of the radio industry, our stations have deployed HD ~~Radio~~^®Radio®. HD Radio offers listeners advantages over standard analog broadcasts, including improved sound quality and additional digital channels. In addition to offering secondary channels, the HD Radio spectrum allows broadcasters to transmit other forms of data. We are participating in a joint venture with other broadcasters to provide the bandwidth that a third party uses to transmit location-based data to hand-held and in-car navigation devices. The number of radio receivers incorporating HD Radio has increased in the past year, particularly in new automobiles. It is unclear what impact HD Radio will have on the ~~market~~markets in which we operate.

Our stations have also aggressively worked to harness the power of broadband and mobile media distribution in the development of emerging business opportunities by developing highly interactive websites with content that engages our listeners, deploying mobile applications and streaming our content, and harnessing the power of digital video on our websites, YouTube channels and ~~YouTube channels.~~

other third-party social media outlets.

The results of our broadcast radio operations are solely dependent on the results of our stations in the New York market. Some of our competitors that operate larger station clusters in the New York market are able to leverage their market share to extract a greater percentage of available advertising revenue through packaging a variety of advertising inventory at discounted unit rates. Market revenues in New York as measured by Miller Kaplan Arase LLP (“Miller Kaplan”), an independent public accounting firm used by the radio industry to compile revenue information, were up 13.3% and 37.9%for the six months ended June 30, 2022 and 2021, respectively, as compared to the same ~~period~~periods of the prior year. During ~~this period, as measured by Miller Kaplan,~~these periods, revenues for our ~~stations~~New York cluster were up 16.0% and 46.1%. ~~Our outperformance was~~, respectively. These increases for our New York Cluster were largely driven by ~~market share gains~~ticket sales and broadcast and streaming sponsorships of our annual outdoor concert, Summer Jam, which was held in ~~both local and national radio advertising revenues. Due to our audience demographics, our stations secured a disproportionate share~~the third quarter of ~~spending by various state and local departments of health promoting COVID-19 vaccination efforts.~~the prior year.

As part of our business strategy, we continually evaluate potential acquisitions of businesses that we believe hold promise for long-term appreciation in value and leverage our strengths. However, MediaCo’s long-term debt agreements substantially limit our ability to make acquisitions. We also regularly review our portfolio of assets and may opportunistically dispose of or otherwise monetize assets when we believe it is appropriate to do so.

-21-

~~21 -~~Table of Contents

~~The Company has been actively monitoring~~Throughout 2021 and into 2022, with the ~~COVID-19 situation and its impact globally,~~increased availability of vaccines, the U.S. experienced an easing of restrictions on travel as well as ~~domestically~~social gatherings and inbusiness activities. However, the ~~markets we serve. Our priority has been the safety of our employees, as well as the informational needs~~broad economic impact of the ~~communities that we serve. Through the first few months of calendar 2020, the disease became widespread around the world,~~COVID-19 pandemic remains across multiple sectors, specifically disrupting logistics and on March 11, 2020, the World Health Organization declared a pandemic. In an effort to mitigate the continued spread of COVID-19, many federal, state and local governments mandated various restrictions, including travel restrictions, restrictions on non-essential businesses and services, restrictions on public gatherings and quarantining of people who may have been exposed to the virus. These restrictions, in turn, caused the United States economy to decline and businesses to cancel or reduce amounts spent on advertising, negatively impacting our advertising-based businesses. Furthermore, some of our advertisers have seen a material decline in their businesses and may not be able to pay amounts owed to us when they come due.global supply chains. If the spread of COVID-19 ~~continues,~~reaccelerates, or ~~is suppressed but later reemerges, and public and private entities continue~~if supply chain disruptions persist, causing certain advertising categories (e.g., automotive dealers) to ~~implement restrictive measures,~~advertise less, we expect that our results of operations, financial condition and cash flows will continue to be negatively affected, the extent to which is difficult to estimate at this time.

~~CRITICAL ACCOUNTING POLICIES~~

Critical accounting policies are defined as those that encompass significant judgments and uncertainties, and potentially lead to materially different results under different assumptions and conditions. We believe that our critical accounting policies are those described below.

~~Revenue Recognition~~

~~Broadcasting revenue~~

MediaCo is recognized as advertisements are aired and outdoor revenue is recognized over the life of the applicable lease of each billboard. Both broadcasting revenue and outdoor advertising revenue recognition is subject to meeting certain conditions such as persuasive evidence that an arrangement exists and collection is reasonably assured. These criteria are generally met at the time the advertisement is aired for broadcasting revenue or displayed for outdoor advertising revenue. Broadcasting 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.~~

~~FCC Licenses~~

~~As of December 31, 2020 and June 30, 2021, we have recorded approximately $63.3 million in FCC licenses, which represents approximately~~ ~~43%~~ of our total assets. We would not be able to operate our radio stations without the related FCC license for each property. FCC licenses are renewed every eight years; consequently, we continually monitor our stations’ compliance with the ~~various regulatory requirements. Historically, each~~debt covenants as of ~~our FCC licenses has~~June 30, 2022 and anticipates being in compliance in future periods. MediaCo’s business units are highly correlated to the economic environment, which recently have been ~~renewed at the end~~impacted by macroeconomic uncertainty, inflationary and labor market pressures, as well as continued COVID-19 concerns. If some or all of ~~its respective period, and we expect that each FCC license will~~these factors continue to influence the economic environment, then MediaCo's liquidity, financial condition or results of operations may be ~~renewed in~~adversely affected.

CRITICAL ACCOUNTING ESTIMATES

Due to the ~~future.~~COVID-19 pandemic, the global economy and financial markets have been disrupted and there is uncertainty about the length and severity of the consequences caused by the pandemic. We ~~consider our FCC licenses~~have considered information available to ~~be indefinite-lived intangibles.~~

~~We do~~us as of the date of issuance of these financial statements and are not ~~amortize indefinite-lived intangible assets, but rather test for impairment at least annually or more frequently if~~aware of any specific events or circumstances indicate that an asset may be impaired. When evaluating our radio broadcasting licenses for impairment, the testing is performed at the unit of accounting level as determined by ASC Topic 350-30-35. In our case, radio stations in a geographic market cluster are considered a single unit of accounting, provided that they are not being operated under a Local Marketing Agreement by another broadcaster. Consequently, our two radio stations in New York are considered a single unit of accounting.

~~We perform the annual impairment test of our FCC Licenses as of October 1 of each year and perform additional interim impairment testing whenever triggering events suggest such testing is warranted.~~

~~Valuation of Indefinite-lived Broadcasting Licenses~~

~~Fair value of our FCC licenses is estimated to be the price~~ that would ~~be received~~require an update to ~~sell an asset~~our estimates or ~~paid~~judgments, or a revision to transfer a liability in an orderly transaction between market participants at the measurement date. To determine the fair value of our FCC licenses, the Company considers both income and market valuation methods when it performs its impairment tests. 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 respective 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 the unit of accounting’s market remains unchanged, with the exception that the 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, 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 then current economic conditions into consideration. Under the market method, the Company uses recent sales of comparable radio stations for which the sales value appeared to be concentrated entirely in the value of the license, to arrive at an indication of fair value.

- ~~22 -~~

~~Valuation of Goodwill~~

~~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. Given the macroeconomic environment as a result of the COVID-19 pandemic, we have elected not to perform the qualitative assessment. When performing a quantitative assessment for impairment, the Company uses a market approach to determine the fair value of the reporting unit. Management determines the fair value for the reporting unit by multiplying the cash flows of the reporting unit by an estimated market multiple. Management believes this methodology for valuing outdoor advertising businesses is a common approach and believes that the multiples used in the valuation are reasonable given our peer comparisons, analyst reports, and market transactions. To corroborate the fair values determined using the market approach described above, management also uses an income approach, which is a discounted cash flow method to determine the fair value of the reporting unit. If the carrying value of ~~a reporting unit’s goodwill exceeds its fair value,~~our assets or liabilities. Our estimates may change as new events occur and additional information becomes available. Our actual results may differ materially from these estimates.

A complete description of our critical accounting estimates is contained in our Annual Report on Form 10-K for the ~~Company recognizes an impairment charge equal to the difference in the statement of operations. All goodwill on the condensed consolidated balance sheets as of~~fiscal year ended December 31, ~~2020~~2021, filed with the Securities and ~~June 30, 2021 is assigned to our Outdoor Advertising segment.~~ While the COVID-19 pandemic has negatively affected our outdoor operations, as of June 30, 2021, we don’t believe the long-term value of the outdoor business, and thus the associated goodwill, has been impaired. ~~The Company conducts its impairment test as of October 1 of each fiscal year, unless indications of impairment exist during an interim period.~~

~~Deferred 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 recorded for financial reporting purposes as compared to 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.

~~Results of Operations for the~~ Exchange Commission on March 24, 2022.

RESULTS OF OPERATIONS

Three-Month and Six-Month Periods Ended June 30, ~~2021~~, ~~Compared~~2022 compared to June 30, ~~2020~~

2021

Net revenues:

	For the Three Months Ended June 30,									For the Six Months Ended June 30,
	2020		2021		$ Change		% Change			2020		2021		$ Change		% Change				Three Months Ended June 30,								Six Months Ended June 30, 2022
	(As reported, amounts in thousands)
Net revenues:
(dollars in thousands)																			(dollars in thousands)	2022		2021		$ Change		% Change		2022		2021		$ Change		% Change
Radio	$	3,829	$	10,851	$	7,022		183.4	%	$	12,168	$	17,353	$	5,185		42.6	%	Radio	$	12,531	$	10,851	$	1,680	15.5	%	$	20,644	$	17,353	$	3,291	19.0	%
Outdoor Advertising		3,167		3,525		358		11.3	%		6,613		6,766		153		2.3	%	Outdoor Advertising	3,621		3,525		96		2.7	%	7,043		6,766		277		4.1	%
Total net revenues	$	6,996	$	14,376	$	7,380		105.5	%	$	18,781	$	24,119	$	5,338		28.4	%	Total net revenues	$	16,152	$	14,376	$	1,776	12.4	%	$	27,687	$	24,119	$	3,568	14.8	%

Net radio revenues increased for ~~both~~ the three-month and ~~six-month~~six-month periods ended June 30, ~~2021,~~2022, as a result ticket sales, and broadcast and streaming sponsorships of our annual outdoor concert, Summer Jam, which was held in the third quarter of the prior year, partially offset by softer overall advertising revenues rebounding from the COVID-19 pandemic. In addition, various state and local departments of health increased their advertising to drive education and awareness surrounding vaccination efforts. Our stations benefited more than stations serving the general population due to the targeted nature of the awareness campaigns.

revenues.

We typically monitor the performance of our stations against the aggregate performance of the market in which we operate based on reports for the period prepared by Miller Kaplan. Miller Kaplan reports are generally prepared on a gross revenues basis and exclude revenues from barter and syndication arrangements. Miller Kaplan reported gross revenues for the New York radio market increased ~~37.9%~~13.3% for the six-month period ended June 30, ~~2021,~~2022, as compared to the same period of the prior year. Our gross revenues reported to Miller Kaplan were up ~~46.1%~~16.0% for the ~~six-month~~six-month period ended June 30, ~~2021,~~2022, as compared to the same period of the prior year.

Outdoor advertising revenues increased for the three-month and ~~six-month~~six-month periods ended June 30, ~~2021,~~2022, attributable to slight increases in bulletin occupancy and rates as overall advertising revenues ~~rebounding~~continued to rebound from the COVID-19 ~~pandemic, which didn’t meaningfully impact our performance until the second calendar quarter of 2020.~~pandemic. Revenues in our outdoor advertising business have been less volatile than our radio business due to greater geographic diversification and longer duration advertising contracts with customers.

-22-

~~23 -~~Table of Contents

Operating expenses excluding depreciation and amortization expense:

	For the Three Months Ended June 30,										For the Six Months Ended June 30,
	2020		2021		$ Change			% Change			2020		2021		$ Change			% Change
	(As reported, amounts in thousands)
Operating expenses excluding depreciation and amortization expense
(dollars in thousands)																					(dollars in thousands)	Three Months Ended June 30,								Six Months Ended June 30, 2022
(dollars in thousands)																					(dollars in thousands)	2022		2021		$ Change		% Change		2022		2021		$ Change		% Change
Radio	$	4,005	$	5,739	$	1,734			43.3	%	$	10,936	$	11,030	$	94			0.9	%	Radio	$	11,324	$	5,739	$	5,585	97.3	%	$	17,947	$	11,030	$	6,917	62.7	%
Outdoor Advertising		2,479		2,079		(400	)		(16.1	)%		4,927		4,549		(378	)		(7.7	)%	Outdoor Advertising	2,592		2,079		513		24.7	%	5,301		4,549		752		16.5	%
Total operating expenses excluding depreciation and amortization expense	$	6,484	$	7,818	$	1,334			20.6	%	$	15,863	$	15,579	$	(284	)		(1.8	)%	Total operating expenses excluding depreciation and amortization expense	$	13,916	$	7,818	$	6,098	78.0	%	$	23,248	$	15,579	$	7,669	49.2	%

Radio operating expenses excluding depreciation and amortization expense increased during the three-month ~~period~~and six-month periods ended June 30, ~~2021~~2022 due to ~~revenue-related~~ expenses ~~such~~associated with Summer Jam as ~~commission expense,~~well as investment in our labor force with a higher focus on sales and ~~a nonrecurring benefit~~digital as well as increases in costs that are commensurate with revenue. Additionally, in the ~~second quarter of 2020. In the three months ended June 30, 2020,~~prior year, we ~~recognized a reduction in expenses of $1.5 million related to the Loan Proceeds Participation Agreement with Emmis. In the three months ended June 30, 2021, we~~ recorded ~~approximately $0.5 million of~~ employee retention credits that reduced operating expenses, which ~~reduce operating expenses. For~~we did not receive in the six months ended June 30, 2021, the increase described above for the second quarter was offset by personnel and non-personnel cost reductions implemented in response to the decline in revenues caused by the COVID-19 pandemic.

current year.

Outdoor advertising operating expenses excluding depreciation and amortization are largely fixed in nature; however, in the prior year, we recorded ~~approximately $0.3 million of~~ employee retention credits ~~during the three months ended June 30, 2021, which~~that reduced operating expenses, ~~when compared to~~which we did not receive in the ~~three and six-month periods~~current year.

Corporate expenses:


(dollars in thousands)	Three Months Ended June 30,								Six Months Ended June 30, 2022
(dollars in thousands)	2022		2021		$ Change		% Change		2022		2021		$ Change		% Change
Corporate expenses	$	1,339	$	1,845	$	(506)	(27.4)	%	$	3,826	$	3,486	$	340	9.8	%

The decrease in corporate expenses for the three-month period ended June 30, ~~2020.~~

~~Corporate expenses~~

2022 was primarily due to fees from the Emmis Management Agreement that ended in November 2021.

For the Three Months
Ended June 30,

For the Six Months
Ended June 30,

2020

2021

$ Change

% Change

2020

2021

$ Change

% Change

(As reported, amounts in thousands)

Corporate expenses

$
932

$
1,845

$
913

98.0
%

$
2,097

$
3,486

$
1,389

66.2
%

The increase in corporate expenses for ~~both~~ the ~~three and six-month periods~~six-month period ended June 30, ~~2021 relate~~2022 relates primarily to personnel ~~hires in advance~~costs for the entire period associated with the build out of the corporate functions that were previously part of the management agreement between the Company and Emmis ~~ending~~which ended in November 2021, as well as noncash compensation expense associated with restricted stock grants. These increases were partially offset by approximately $0.1 million of employee retention credits recorded in the three months ended June 30, 2021.

Depreciation and amortization:

	For the Three Months Ended June 30,										For the Six Months Ended June 30,
	2020		2021		$ Change			% Change			2020		2021		$ Change			% Change
	(As reported, amounts in thousands)
Depreciation and amortization
(dollars in thousands)																					(dollars in thousands)	Three Months Ended June 30,								Six Months Ended June 30, 2022
(dollars in thousands)																					(dollars in thousands)	2022		2021		$ Change		% Change		2022		2021		$ Change		% Change
Radio	$	232	$	183	$	(49	)		(21.1	)%	$	481	$	374	$	(107	)		(22.2	)%	Radio	$	86	$	183	$	(97)	(53.0)	%	$	187	$	374	$	(187)	(50.0)	%
Outdoor Advertising		931		795	$	(136	)		(14.6	)%		1,709		1,585		(124	)		(7.3	)%	Outdoor Advertising	$	818	$	795	$	23	2.9	%	$	1,647	$	1,585	$	62	3.9	%
Total depreciation and amortization	$	1,163	$	978	$	(185	)		(15.9	)%	$	2,190	$	1,959	$	(231	)		(10.5	)%	Total depreciation and amortization	$	904	$	978	$	(74)	(7.6)	%	$	1,834	$	1,959	$	(125)	(6.4)	%

Radio depreciation and amortization expense decreased due to certain assets becoming fully depreciated in the prior year. Outdoor advertising depreciation and amortization ~~declined~~increased due to ~~revisions to~~depreciation expense associated with two small asset acquisitions that closed in the ~~preliminary purchase price allocation recorded during 2020 and associated adjustments to depreciation and amortization.~~

- ~~24 -~~

May of the prior year.

Loss (gain) on sale of assets:

	For the Three Months Ended June 30,									For the Six Months Ended June 30,
	2020		2021			$ Change			% Change	2020		2021			$ Change			% Change
	(As reported, amounts in thousands)
Loss (gain) on sale of assets
Radio	$	—	$	—		$	—		N/A	$	—	$	—		$	—		N/A
(dollars in thousands)																			(dollars in thousands)	Three Months Ended June 30,								Six Months Ended June 30, 2022
(dollars in thousands)																			(dollars in thousands)	2022		2021		$ Change		% Change		2022		2021		$ Change		% Change
Outdoor Advertising		4		(72	)	$	(76	)	N/M		82		(78	)		(160	)	N/M	Outdoor Advertising	$	27	$	(72)	$	99	(137.5)	%	$	45	$	(78)	$	123	(157.7)	%
Total loss (gain) on sale of assets	$	4	$	(72	)	$	(76	)	N/M	$	82	$	(78	)	$	(160	)	N/M	Total loss (gain) on sale of assets	$	27	$	(72)	$	99	(137.5)	%	$	45	$	(78)	$	123	(157.7)	%

The ~~gain~~loss (gain) on sale of assets ~~in the six months ended June 30, 2021 principally~~ relates to the disposal of certain outdoor advertising ~~assets during the second quarter. The loss on disposal of assets in the six months ended June 30, 2020 relates to the disposal of three outdoor advertising~~ structures in the ~~first quarter~~normal course of ~~the prior year.~~

business.

-23-

Table of Contents

Operating ~~income~~ (loss):

income:

For the Three Months
Ended June 30,

For the Six Months
Ended June 30,

2020

2021

$ Change

% Change

2020

2021

$ Change

% Change

(As reported, amounts in thousands)

Operating income (loss)

   Radio

$
(408
)

$
4,929

$
5,337

(1308.1
)%

$
751

$
5,949

$
5,198

692.1
%
   Outdoor Advertising

(247
)

723

970

(392.7
)%

(105
)

710

815

(776.2
)%
   All Other

(932
)

(1,845
)

(913
)

98.0
%

(2,097
)

(3,486
)

(1,389
)

66.2
%
Total operating income (loss)

$
(1,587
)

$
3,807

$
5,394

(339.9
)%

$
(1,451
)

$
3,173

$
4,624

(318.7
)%


(dollars in thousands)	Three Months Ended June 30,								Six Months Ended June 30, 2022
	2022		2021		$ Change		% Change		2022		2021		$ Change		% Change
Radio	$	1,121	$	4,929	$	(3,808)	(77.3)	%	$	2,510	$	5,949	$	(3,439)	(57.8)	%
Outdoor Advertising	184		723		(539)		(74.6)	%	50		710		(660)		(93.0)	%
All other	$	(1,339)	$	(1,845)	$	506	(27.4)	%	$	(3,826)	$	(3,486)	$	(340)	9.8	%
Total operating (loss) income	$	(34)	$	3,807	$	(3,841)	(100.9)	%	$	(1,266)	$	3,173	$	(4,439)	(139.9)	%

~~Radio~~

See “Net revenues,” “Operating expenses excluding depreciation and ~~outdoor advertising operating income increase in the three~~amortization,” "Depreciation and ~~six- month periods ended June 30, 2021, due to advertising revenues rebounding from the impact~~amortization," "Loss (gain) on sale of ~~the pandemic in the prior year. In addition, the Company qualified for employee retention credits of $0.9 million under the CARES Act for the three months ended June 30, 2021,~~ assets," and ~~recorded the benefit as a reduction to operating expenses during this period.~~

“Corporate expenses” above.

Interest ~~expense~~

expense:

For the Three Months
Ended June 30,

For the Six Months
Ended June 30,

2020

2021

$ Change

% Change

2020

2021

$ Change

% Change

(As reported, amounts in thousands)

Interest expense

$
(2,279
)

$
(2,701
)

$
(422
)

18.5
%

$
(4,517
)

$
(5,239
)

$
(722
)

16.0
%


(dollars in thousands)	Three Months Ended June 30,								Six Months Ended June 30, 2022
(dollars in thousands)	2022		2021		$ Change		% Change		2022		2021		$ Change		% Change
Interest expense	$	(2,783)	$	(2,701)	$	(82)	3.0	%	$	(5,781)	$	(5,239)	$	(542)	10.3	%

Interest expense increased due to (i) the additional funding from SG Broadcasting during 2021, which took the form of additional loans, (ii) accrued interest on the Emmis Promissory Note ~~and~~being paid in kind in the fourth quarter of 2021, (iii) accrued interest on the SG Broadcasting Promissory Notes being paid in kind in the ~~final~~fourth quarter of ~~2020,~~2021 and ~~(iii)~~the second quarter of 2022, and (iv) an additional 1% paid in kind interest rate applicable beginning May 19, 2021 as a result of Amendment No. 4 to the senior credit facility.

~~Loss on debt extinguishment~~

For the Three Months
Ended June 30,

For the Six Months
Ended June 30,

2020

2021

$ Change

% Change

2020

2021

$ Change

% Change

(As reported, amounts in thousands)
Loss on debt extinguishment

$
—

$
(81
)

$
(81
)

N/A

$
—

$
(81
)

$
(81
)

N/A

The loss on debt extinguishment recorded during the three months ended June 30, 3021 relates to the unscheduled principal payment of $3 million required under Amendment No. 4 to the senior credit facility. In connection with this principal payment, we wrote-off a pro rata portion of the unamortized debt discount and recognized this as a loss on debt extinguishment.

- ~~25 -~~

Provision for income taxes:

For the Three Months
Ended June 30,

For the Six Months
Ended June 30,

2020

2021

$ Change

% Change

2020

2021

$ Change

% Change

(As reported, amounts in thousands)

Provision for income taxes

$
14,493

$
82

$
(14,411
)

(99.4
)%

$
13,876

$
163

$
(13,713
)

(98.8
)%


(dollars in thousands)	Three Months Ended June 30,								Six Months Ended June 30, 2022
(dollars in thousands)	2022		2021		$ Change		% Change		2022		2021		$ Change		% Change
Provision for income taxes	$	86	$	82	$	4	4.9	%	$	149	$	163	$	(14)	(8.6)	%

Given the uncertainty in the economy due to the ongoing COVID-19 pandemic, particularly in the New York market, the Company concluded it could not reasonably estimate pre-tax income for the year ended December 31, 2021, so the Company is calculating its

Our provision for income taxes ~~on a discrete basis until there~~tax is greater clarity. During the three months ended June 30, 2020, the Company concluded that it was more likely than not that it would be unable to realize its deferred tax assets and recorded a valuation allowance against these assets.

~~Consolidated net loss:~~

For the Three Months
Ended June 30,

For the Six Months
Ended June 30,

2020

2021

$ Change

% Change

2020

2021

$ Change

% Change

(As reported, amounts in thousands)

Consolidated net income (loss)

$
(18,887
)

$
274

$
19,161

(101.5
)%

$
(20,901
)

$
(3,613
)

$
17,288

(82.7
)%

~~Net income increased for the three-month period ended June 30, 2021 and net loss decreased for the six-month period ended June 30, 2021,~~ primarily due to ~~an increase in operating income~~the recognition of additional valuation allowance.

Consolidated net loss:


(dollars in thousands)	Three Months Ended June 30,								Six Months Ended June 30, 2022
(dollars in thousands)	2022		2021		$ Change		% Change		2022		2021		$ Change		% Change
Consolidated net (loss) income	$	(2,903)	$	943	$	(3,846)	(407.8)	%	$	(7,196)	$	(2,310)	$	(4,886)	211.5	%

See “Net revenues,” “Operating expenses excluding depreciation and ~~a decrease in provision for income taxes, partially offset~~amortization,” "Depreciation and amortization," "Loss (gain) on sale of assets," “Corporate expenses,” and “Interest expense” above.

LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity are cash provided by ~~an increase in interest expense.~~

~~Liquidity~~operations, cash available through borrowings under the SG Broadcasting Promissory Note, and ~~Capital Resources~~

our At Market Issuance Sales Agreement. Our primary uses of capital have been, and are expected to continue to be, capital expenditures, working capital, debt service requirements and acquisitions.

At June 30, ~~2021,~~2022, we had cash and cash equivalents of ~~$4.3~~$6.5 million and net working capital of ~~$5.7~~ ~~million~~.$0.9 million. At December 31, ~~2020,~~2021, we had cash and cash equivalents of ~~$4.2~~$6.1 million and net working capital of ~~$4.4~~$7.7 million. The ~~increase~~decrease in net working capital is mostly due to an increase in accounts receivable resulting from the increase in radio advertising revenues and a decrease in current maturities of debt due to the timing of scheduled principal payments as of June 30, 2021. The impact of this is partially offsetwas primarily driven by an increase in accrued interest due to the timing of annual interest paid in kind on the Emmis Convertible Promissory Note and the SG Broadcasting Promissory Notes, an increase in the current portion of long-term debt, cash paid for capital expenditures, principal payments on long term debt, and cash paid for the settlement of tax withholding obligations.

At June 30, 2022, we had $67.7 million of borrowings outstanding under the Senior Credit Facility, of which $3.7 million was current. The borrowing rate under our Senior Credit Facility was 9.5% at June 30, 2022. Additionally, at June 30, 2022, we had $6.2 million and $28.0 million of promissory notes ~~due~~outstanding to Emmis and SG ~~Broadcasting.~~Broadcasting, respectively, all of which was classified as long-term.

-24-

Table of Contents

The debt service requirements of MediaCo over the next twelve-month period are expected to be $10.1 million related to our Senior Credit Facility ($3.7 million of principal repayments and $6.4 million of interest payments). The Senior Credit Facility bears interest at a variable rate. The Company estimates interest payments by using the amounts outstanding as of June 30, 2022 and then-current interest rates. There are no debt service requirements over the next twelve months for either the Emmis Convertible Promissory Note or the SG Broadcasting Promissory Notes.

MediaCo is in compliance with the debt covenants as of June 30, 2022 and anticipates being in compliance in future periods. MediaCo’s business units are highly correlated to the economic environment, which recently have been impacted by macroeconomic uncertainty, inflationary and labor market pressures, as well as continued COVID-19 concerns. If some or all of these factors continue to influence the economic environment, then MediaCo's liquidity, financial condition or results of operations may be adversely affected.

On July 28, 2022, SG Broadcasting opted to convert $28.0 million plus $1.9 million of accrued interest into 12.9 million of Class A Common Shares. This event reduced the amount of accrued interest and long-term debt on the July 2022 balance sheet and increased the number of outstanding shares of Class A common stock to 16 million. We will continue to assess opportunities that will help transform our capital structure.

Cash flows provided by operating activities were $3.9 million and $0.6 million for the six months ended June 30, 2022 and 2021, ~~versus cash~~respectively. The increase was mainly attributable to significant collections in accounts receivable and increased revenues as we recover from the COVID-19 pandemic.

Cash flows used in ~~operating~~investing activities ~~of $0.4~~were $1.3 million for the six months ended June 30, ~~2020. The increase was mainly~~2022, attributable to ~~an increase in operating income largely due~~capital expenditures related to ~~the net revenue recovery from the COVID-19 pandemic, which was partially offset by net investments in working capital.~~

a new digital platform project. Cash flows used in investing activities were $1.0 million for the six months ended June 30, 2021, attributable to ~~the acquisition of billboard structures and routine~~ capital expenditures, ~~partially offset by the~~net of proceeds from the sale of ~~certain outdoor advertising assets.~~ property and equipment.

Cash flows used in ~~investing~~financing activities were ~~$0.2~~$2.2 million for the six months ended June 30, ~~2020,~~2022, attributable to ~~capital expenditures.~~

settlement of tax withholding obligations. Cash flows ~~provided by~~used in financing activities were $0.5 million for the six months ended June 30, 2021, ~~due~~attributable to net debt proceeds of $4.0 million, net of debt payments and debt-related costs of $3.4 million. Cash flows provided by financing activities were $3.2 million for the six months ended June 30, 2020, due to $5.2 million of debt proceeds, partially offset by debt payments and debt-related costs of $2.0 million.

Our primary sources of liquidity are cash provided by operations and cash available through borrowings from Standard General. Our primary uses of capital have been, and are expected to continue to be, capital expenditures, working capital, debt service requirements and acquisitions.

~~The Company continually projects its anticipated cash needs, which include its operating needs, capital needs, and principal and interest payments on its indebtedness.~~

~~Intangibles~~

~~As of June 30, 2021, approximately~~43% of our total assets consisted of FCC broadcast licenses, the values of which depend significantly upon various factors including, among other things, market revenues, market growth rates and the operational results of our businesses. We would not be able to operate the properties without the related FCC license for each property. FCC licenses are renewed every eight years; consequently, we continually monitor our stations’ compliance with the various regulatory requirements. Historically, substantially all FCC licenses have been renewed at or after the end of their respective periods, and we expect that our FCC licenses will be renewed in the future.

- ~~26 -~~

~~Regulatory, Legal and Other Matters~~

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.

proceeds.

~~Item~~

ITEM 3. ~~Quantitative and Qualitative Disclosures About Market Risk~~

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As an emerging growth company, we are not required to provide this information.

~~Item~~

ITEM 4. ~~Controls and Procedures~~

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, the Company evaluated the effectiveness of the design and operation of its “disclosure controls and procedures” (“Disclosure Controls”). This evaluation (the “Controls Evaluation”) was performed under the supervision and with the participation of management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”).

Based upon the Controls Evaluation, our CEO and CFO concluded that as of June 30, ~~2021,~~2022, our Disclosure Controls are effective to ensure that information relating to MediaCo Holding Inc. and Subsidiaries that is required to be disclosed by us in the reports that we file or submit is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, and is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting.

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f)) that occurred during the quarter ended June 30, ~~2021~~2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

~~Item~~

ITEM 1. ~~Legal Proceedings~~

~~Refer to Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.~~ LEGAL PROCEEDINGS

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

-25-

Table of Contents

- ~~27 -~~

~~Item~~

ITEM 6. ~~Exhibits~~

EXHIBITS

(a)

Exhibits.

The following exhibits are filed or incorporated by reference as a part of this report:

Exhibit

Incorporated by Reference
Number

Exhibit Description

Filed Herewith

Form

Period Ending

Exhibit

Filing Date
3.1

Amended and Restated Articles of Incorporation of MediaCo Holding Inc., as amended

10-KT

12/31/2019

3.1

3/27/2020
3.2

Amended and Restated Code of Bylaws of MediaCo Holding Inc.

10-K

12/31/2020

3.2

3/30/2021
10.1

Amendment No. 4 and Waiver to Amended and Restated Term Loan Agreement, dated as of May 19, 2021, by and among MediaCo Holding Inc., the other parties designated as borrowers thereto, the financial institutions from time to time party thereto, and GACP Finance Co., LLC, a Delaware limited liability company, as administrative agent and collateral agent.

8-K

10.1

5/21/2021
10.2

Unsecured Convertible Promissory Note, dated as of May 19, 2021, by MediaCo Holding Inc. in favor of SG Broadcasting LLC.

8-K

10.2

5/21/2021
31.1

Certification of Principal Executive Officer of MediaCo Holding Inc. pursuant to Rule 13a-14(a) under the Exchange Act

X

31.2

Certification of Principal Financial Officer of MediaCo Holding Inc. pursuant to Rule 13a-14(a) under the Exchange Act

X

32.1

Certification of Principal Executive Officer of MediaCo Holding Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

X

32.2

Certification of Principal Financial Officer of MediaCo Holding Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

X

101.INS

Inline XBRL Instance Document

X

101.SCH

Inline XBRL Taxonomy Extension Schema Document

X

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

X

101.LAB

Inline XBRL Taxonomy Extension Labels Linkbase Document

X

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

X

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

X

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

Exhibit
Number

Exhibit Description

Filed Herewith

Incorporated by Reference

Form

Period Ending

Exhibit

Filing Date

31.1

Certification of Principal Executive Officer of MediaCo Holding Inc. pursuant to Rule 13a-14(a) under the Exchange Act

31.2

Certification of Principal Financial Officer of MediaCo Holding Inc. pursuant to Rule 13a-14(a) under the Exchange Act

32.1

Certification of Principal Executive Officer of MediaCo Holding Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2

Certification of Principal Financial Officer of MediaCo Holding Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS

Inline XBRL Instance Document

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Labels Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

28
-

-26-

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	MEDIACO HOLDING INC.

Date: August ~~13, 2021~~ 12, 2022	By:	/s/ ~~RYAN A. HORNADAY~~ Ann C. Beemish
		~~Ryan A. Hornaday~~ Ann C. Beemish
		Executive Vice President, Chief Financial Officer and
		Treasurer

- 29 -

-27-

	Awards		Price
Grants outstanding, beginning of period		102,617	$	5.41
Granted		1,109,605		3.20
Vested		141,412		3.17
Forfeited		15,916		3.11
Grants outstanding, end of period		1,054,894		3.42

	As of December 31, 2020						As of June 30, 2021
	(in 000's, except years)
	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Weighted Average Remaining Useful Life (in years)
Programming agreement	$	2,154	$	1,934	$	220	$	2,154	$	2,081	$	73	0.3
Customer list		2,906		1,010		1,896		2,906		1,493		1,413	1.5

Year ending December 31,	Expected Amortization Expense
Remainder of 2021	$	558
2022		928

Balance at December 31, 2020	$	6,316
Additions to asset retirement obligations		130
Accretion expense		337
Liabilities settled		(7	)
Balance at June 30, 2021	$	6,776

Three Months Ended June 30, 2020	Radio			Outdoor Advertising			All Other			Consolidated
Net revenues	$	3,829		$	3,167		$	—		$	6,996
Operating expenses excluding depreciation and amortization expense		4,005			2,479			—			6,484
Corporate expenses		—			—			932			932
Depreciation and amortization		232			931			—			1,163
Loss on disposal of assets		—			4			—			4
Operating loss	$	(408	)	$	(247	)	$	(932	)	$	(1,587	)

Six Months Ended June 30, 2020	Radio		Outdoor Advertising			All Other			Consolidated
Net revenues	$	12,168	$	6,613		$	—		$	18,781
Operating expenses excluding depreciation and amortization expense		10,936		4,927			—			15,863
Corporate expenses		—		—			2,097			2,097
Depreciation and amortization		481		1,709			—			2,190
Loss on disposal of assets		—		82			—			82
Operating income (loss)	$	751	$	(105	)	$	(2,097	)	$	(1,451	)