As previously disclosed, in connection with Cumulus Media Inc. (the “Company”) emerging from its chapter 11 bankruptcy reorganization on June 4, 2018, the Company entered into a warrant agreement (the “Warrant Agreement”) with Computershare Inc., a Delaware corporation, and its wholly-owned subsidiary, Computershare Trust Company, N.A., a federally chartered trust company, as warrant agent. Pursuant to the Warrant Agreement, the Company issued (i) Series 1 warrants (the “Series 1 warrants”) to purchase shares of Class A common stock, par value $0.0000001 per share (“Class A common stock”), or the Company’s Class B common stock, par value $0.0000001 per share (“Class B common stock” and, together with the Class A common stock, the “common stock”), on aone-for-one basis, and (ii) Series 2 warrants (the “Series 2 warrants” and, together with the Series 1 warrants, the “warrants”) to purchase shares of Class A common stock or Class B common stock on aone-for-one basis. Pursuant to the terms of the Warrant Agreement, on July 19, 2018, the Company applied for a declaratory ruling from the Federal Communications Commission (“FCC”) to permit an increase in the level of foreign ownership of the Company that was allowed under applicable FCC rules.
On May 29, 2020, the Media Bureau of the FCC issued a Declaratory Ruling (the “Declaratory Ruling”) granting the relief requested in the Company’s petition. The Declaratory Ruling permits up to 100% of the Company’s equity and voting stock to be owned bynon-U.S. persons, subject to the condition that the Company obtain specific FCC approval for anynon-U.S. individual, entity or group to hold, directly or indirectly, more than 5% (or in the case of certain institutional investors 10%) of the Company’s equity or voting stock, or a controlling interest in the Company.
Pursuant to Section 3.4(a)(i) of the Warrant Agreement, the Company notified its warrant holders of the Declaratory Ruling and commenced the required exchange process pursuant to a notice delivered to each warrant holder (the “Exchange Notice”). The Exchange Notice provided that the Company would effect an automatic exchange of all or a portion of the outstanding warrants into shares of Class A common stock or Class B common stock, and/or Series 1 warrants, all in accordance with the terms of the Warrant Agreement.
The exchange was completed on June 24, 2020. Pursuant to the exchange, the Company issued 1,723,253 shares of Class A common stock, and 686,315 shares of Class B common stock. Shares of the Company’s Class B common stock are not publicly traded, but they are convertible on ashare-for-share basis into Class A common stock. Shares of common stock issued pursuant to the Exchange Notice were issued in reliance upon exemptions from registration requirements of the Securities Act of 1933, as amended.
After giving effect to the completion of the exchange, as of June 25, 2020, the Company had 20,287,030 outstanding shares of common stock consisting of: (i) 17,712,430 shares of Class A common stock and (ii) 2,574,600 shares of Class B common stock, and no warrants issued and outstanding. In addition, the Company had 22,154 Series 1 warrants authorized to be issued.
