1 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 MARCH 31, 1999 OR [ ] 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 0-15392 REGENT COMMUNICATIONS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 31-1492857 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 50 EAST RIVERCENTER BOULEVARD SUITE 180 COVINGTON, KENTUCKY 41011 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) (606) 292-0030 (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE) ---------------------------------------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods 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 --- --- Indicate the number of shares outstanding of the issuer's classes of common stock, as of the latest practicable date. Common Stock - $.01 Par Value - 240,000 shares as of May 14, 1999. 2 REGENT COMMUNICATIONS, INC. FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1999 INDEX PART I - FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Statement of Operations for the three months ended March 31, 1999 (unaudited) and March 31, 1998 (unaudited) Condensed Consolidated Balance Sheets as of March 31, 1999 (unaudited) and December 31, 1998 Condensed Consolidated Statements of Cash Flows for three months ended March 31, 1999 (unaudited) and March 31, 1998 (unaudited) Notes to Condensed Consolidated Financial Statements (unaudited) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Item 3. Quantitative and Qualitative Disclosures About Market Risk PART II - OTHER INFORMATION Item 2. Changes in Securities and Use of Proceeds Item 6. Exhibits and Reports on Form 8-K -2- 3 PART I - FINANCIAL INFORMATION Item 1. Financial Statements REGENT COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended March 31, --------------------------------------------------------- 1999 1998 ---- ---- Gross broadcast revenues $4,825,924 $1,613,205 Less agency commissions (305,934) (148,128) ------------ ---------- Net broadcast revenues 4,519,990 1,465,077 Station operating expenses 3,788,465 1,098,911 Depreciation and amortization 771,709 290,648 Corporate general and administrative expense 615,021 113,528 ------------ ---------- Operating loss (655,205) (38,010) Interest expense 862,466 503,770 Other income, net 83,136 12,152 ------------ ---------- Loss before income taxes ($1,434,535) ($529,628) Income tax expense 0 12,000 ------------ ---------- Net loss ($1,434,535) ($541,628) ------------ ---------- Loss applicable to common shares: Net loss ($1,434,535) ($541,628) Preferred stock dividend requirements (1,000,060) 0 ------------ ---------- Loss applicable to common shares ($2,434,595) ($541,628) ------------ ---------- Basic and diluted loss per common share ($10.14) ($2.26) ------------ ---------- Weighted average number of common 240,000 240,000 shares used in basic and diluted calculations The accompanying notes are an integral part of the condensed consolidated financial statements. -3- 4 REGENT COMMUNICATIONS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS March 31, 1999 December 31, 1998 -------------- ----------------- (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 2,484,966 $ 478,545 Accounts receivable, less allowance for doubtful accounts of $263,000 in 1999 and $268,000 in 1998 3,041,846 3,439,372 Other current assets 250,998 200,828 Assets held for sale 6,000,000 7,500,000 ------------ ------------ Total current assets 11,777,810 11,618,745 Property and equipment, net 9,454,124 9,303,975 Intangibles, net 44,636,830 45,023,940 Other assets, net 1,863,764 1,671,210 ------------ ------------ Total assets $ 67,732,528 $ 67,617,870 ============ ============ LIABILITIES AND SHAREHOLDERS' DEFICIT Current liabilities: Accounts payable $ 1,265,323 $ 1,005,327 Accrued expenses 1,501,537 2,772,612 Interest payable 769,730 769,367 Notes payable 6,000,000 7,500,000 Current portion of long-term debt 65,000 980,000 ------------ ------------ Total current liabilities 9,601,590 13,027,306 ------------ ------------ Long-term debt, less current portion 34,601,250 34,617,500 Warrants and other long-term liabilities 2,643,579 2,643,579 ------------ ------------ Total liabilities 46,846,419 50,288,385 Commitments and contingencies Redeemable preferred stock: Series A convertible preferred stock, $5.00 stated value, 620,000 shares authorized; 620,000 shares issued and outstanding-liquidation value: $3,486,616 3,486,616 3,433,109 Series B senior convertible preferred stock, $5.00 stated value, 1,000,000 shares authorized; 1,000,000 shares issued and outstanding-liquidation value: $5,483,013 5,483,013 5,372,054 Series D convertible preferred stock, $5.00 stated value, 1,000,000 shares authorized; 1,000,000 shares issued and outstanding-liquidation value: $5,317,742 5,317,742 5,231,441 Series F convertible preferred stock, $5.00 stated value, 4,100,000 shares authorized; 3,083,652 shares issued and outstanding-liquidation value: $16,356,451 16,356,451 12,839,454 Series G convertible preferred stock, $5.00 stated value, 4,000,000 shares authorized; 372,406 shares issued and outstanding-liquidation value: $1,902,842 1,902,842 -0- ------------ ------------ Total redeemable preferred stock 32,546,664 26,876,058 Shareholders' deficit: Preferred stock: Series C convertible preferred stock, $5.00 stated value, 4,000,000 shares authorized; 3,720,620 shares issued and outstanding-liquidation value: $19,632,386 1,584,820 1,584,820 Series E convertible preferred stock, $5.00 stated value, 5,000,000 shares authorized; 447,842 shares issued and outstanding-liquidation value: $2,363,102 2,239,210 2,239,210 Common stock, $.01 par value, 30,000,000 shares authorized; 240,000 shares issued and outstanding 2,400 2,400 Additional paid-in capital 3,268,937 3,948,384 Retained deficit (18,755,922) (17,321,387) ------------ ------------ Total shareholders' deficit (11,660,555) (9,546,573) ------------ ------------ Total liabilities and shareholders' deficit $ 67,732,528 $ 67,617,870 ============ ============ The accompanying notes are an integral part of these financial statements. -4- 5 REGENT COMMUNICATIONS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended March 31. ---------------------------- 1999 1998 ---- ---- Cash flows from operating activities: Net loss ($1,434,535) ($541,628) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 771,709 290,548 Amortization of deferred rental income (8,502) (8,502) Provision for doubtful accounts 41,366 -0- Amortization of deferred financing costs 81,750 -0- Barter, net (27,017) -0- Increase(decrease) in cash flows from changes in operating assets and liabilities: Accounts receivable 362,489 271,796 Prepaid expenses and other assets (50,170) (31,805) Accounts payable 266,585 15,106 Accrued expenses (1,262,573) 191,145 Taxes payable -0- 18,473 Interest payable 363 195,413 ----------- ----------- Net cash (used in) provided by operating activities (1,258,535) 400,546 Cash flows from investing activities: Acquisitions of radio stations, net of cash acquired (104,035) (1,385,946) Capital expenditures (416,613) (46,898) Escrow deposit for acquisition of radio station -0- 100,000 ----------- ----------- Net cash used in investing activities (520,648) (1,332,844) Cash flows from financing activities: Proceeds from issuance of Series F and G Convertible Preferred Stock 5,030,290 -0- Proceeds from long-term debt -0- 1,100,000 Principal payments on and purchase of long-term debt (931,250) (95,002) Payments for deferred financing costs (274,304) (83,831) Payment of issuance costs (39,132) -0- ----------- ----------- Net cash provided by financing activities 3,785,604 921,167 ----------- ----------- Net increase (decrease) in cash and cash equivalents 2,006,421 (11,131) Cash and cash equivalents at beginning of period 478,545 535,312 ----------- ----------- Cash and cash equivalents at end of period $ 2,484,966 $ 524,181 =========== =========== The accompanying notes are an integral part of these financial statements. -5- 6 REGENT COMMUNICATIONS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. BASIS OF PRESENTATION Regent Communications, Inc. (including its wholly-owned subsidiaries, the "Company") was formed to acquire, own and operate radio stations in small and medium-sized markets in the United States. The Company acquired on June 15, 1998, pursuant to an agreement of merger, all of the outstanding common stock of Faircom Inc. ("Faircom") for 3,720,620 shares of the Company's Series C Convertible Preferred Stock. The acquisition has been treated for accounting purposes as the acquisition of the Company by Faircom under the purchase method of accounting, with Faircom as the accounting acquirer. Consequently, the historical financial statements prior to June 15, 1998 are those of Faircom. Faircom operated radio stations through its wholly-owned subsidiaries in Flint, Michigan and, in Mansfield, Ohio. As a result of the Faircom merger, Faircom's historical shareholder deficit and earnings per share information have been retroactively restated to reflect the number of common shares outstanding subsequent to the merger, with the difference between the par value of the Company's and Faircom's common stock recorded as an offset to additional paid-in capital. The condensed consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and, in the opinion of management, include all adjustments necessary for a fair presentation of the results of operations, financial position and cash flows for each period shown. All adjustments are of a normal and recurring nature except for those outlined in Notes 2 and 3. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to SEC rules and regulations. Results for interim periods may not be indicative of results for the full year. The December 31, 1998 condensed consolidated balance sheet was derived from audited financial statements but does not include all disclosures required by generally accepted accounting principles. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in the Company's Form 10-K filed March 31, 1999. 2. CONSUMMATED AND PENDING ACQUISITIONS AND DIVESTITURES On June 15, 1998, concurrent with the Faircom merger, the following acquisitions (the "June 15 Acquisitions") were consummated: The Company acquired all of the outstanding capital stock of The Park Lane Group ("Park Lane") for approximately $24,038,000 in cash and assumed liabilities. Park Lane owned 16 radio stations in California and Arizona. At the time of the acquisition, the Company entered into a one-year consulting and non-competition agreement with the President of Park Lane, providing for the payment of a fee of $200,000. The Company acquired the licenses issued by the Federal Communications Commission ("FCC") and related assets used in the operation of radio stations KIXW (AM) and KZWY (FM) in Apple Valley, California from Ruby Broadcasting, Inc. ("Ruby") for $5,985,000 in cash. The Company acquired the FCC licenses and related assets used in the operation of radio stations KFLG (AM) and KFLG (FM) in Bullhead City, Arizona from Continental Radio Broadcasting, L.L.C. for approximately $3,747,000 in cash. The Company separately acquired the accounts receivables of these stations for an additional purchase price of approximately $130,000. The Company acquired all of the outstanding capital stock of Alta California Broadcasting, Inc. ("Alta") for $2,635,000 in cash and assumed liabilities and 205,250 shares of the Company's Series E Convertible Preferred Stock. Alta owned four radio stations in California. The Company acquired all of the outstanding capital stock of Topaz Broadcasting, Inc. ("Topaz"), an affiliate of Ruby, for 242,592 shares of the Company's Series E Convertible Preferred Stock. Immediately following the acquisition of Topaz, the Company acquired the FCC licenses and operating assets of radio station KIXA (FM) in Lucerne Valley, California for $215,000 in cash and assumed liabilities, pursuant to an Asset Purchase Agreement between Topaz and RASA Communications Corp. The June 15 Acquisitions were accounted for under the purchase method of accounting and the fair value of the acquired assets were determined by independent valuations. -6- 7 The Company allocated the aggregate purchase price for the June 15 Acquisitions as follows: Accounts receivable $ 143,000 Broadcasting equipment and furniture and fixtures 6,503,000 FCC licenses 30,328,000 Goodwill 1,853,000 Other 360,000 ------------ $ 39,187,000 ============ Goodwill and FCC licenses related to the June 15 Acquisitions are being amortized over a 40-year period. The sources for the cash portion of the consideration paid by the Company for the June 15 Acquisitions and the Faircom merger, aggregating approximately $52,900,000 (including approximately $21,100,000 of assumed debt refinanced with borrowings under the Company's senior reducing revolving credit facility and $3,700,000 of transaction costs), were $34,400,000 borrowed under the Company's senior reducing revolving credit facility, $18,150,000 in additional equity from the sale of the Company's convertible preferred stock and approximately $350,000 of the Company's funds. On November 30, 1998, the Company purchased substantially all of the assets of radio station KOSS (FM) (formerly KAVC (FM)) located in Lancaster, California from Oasis Radio, Inc. for $1,600,000 in cash. The acquisition was financed through the issuance of additional shares of Series F convertible preferred stock. The acquisition was accounted for under the purchase method of accounting. The excess cost over the fair market value of net assets acquired and FCC licenses related to this acquisition are being amortized over a 40-year period. On March 1, 1999, the Company sold the FCC licenses and related assets used in the operations of WSSP (FM) in Charleston, South Carolina for approximately $1,600,000 in cash. The Company had previously issued a note for $1,500,000 to a third party which was collateralized by the assets of the station. Upon consummation of the sale, the note was repaid. The sale resulted in a $100,000 gain to the Company. On March 5, 1999, the Company entered into an agreement to sell the FCC licenses and related assets used in the operations of radio stations KAAA (AM) and KZZZ (FM) in Kingman, Arizona and KFLG (AM) and KFLG (FM) in Bullhead City, Arizona for approximately $5,400,000 in cash to an unrelated third party. The transaction is subject to FCC consent. On March 30, 1999, the Company entered into an agreement to sell the FCC licenses and related assets used in the operation of radio stations KZGL (FM), KVNA (AM) and KVNA (FM) in Flagstaff, Arizona for approximately $2,425,000 in cash to an unrelated third party. The transaction is subject to FCC consent. The results of operations of the acquired businesses are included in the Company's financial statements since the respective dates of acquisition. The following unaudited pro forma data summarizes the combined results of operations of the Company, Faircom, the June 15 Acquisitions and KOSS (FM) as though the acquisitions had occurred at the beginning of the three month period ended March 31, 1998. The Company's 1999 disposition of WSSP (FM) is not material to the results of the Company for the three months ended March 31, 1998. 1998 ---- Net broadcast revenues 4,110,333 Net loss (1,665,382) Net loss per common share: Basic and diluted (11.06) These unaudited pro forma amounts do not purport to be indicative of the results that might have occurred if the foregoing transactions had been consummated on the indicated dates. -7- 8 On May 6, 1999, the Company purchased FCC licenses and related assets used in the operations of radio stations WJON (AM), WWJO (FM) and KMXK (FM) (the "St. Cloud Stations") in the St. Cloud, Minnesota market from WJON Broadcasting Company for approximately $12,700,000 in cash. The purchase was financed by approximately $5,082,000 in proceeds from the issuance of Series F Convertible Preferred Stock (See Note 3) and borrowings under the Company's senior reducing credit facility. On May 11, 1999 the Company entered into an agreement to sell the FCC licenses and related assets of KCBQ (AM) in San Diego, California for approximately $6,000,000 in cash to an unrelated third party. The transaction is subject to FCC consent. 3. CAPITAL STOCK In January 1999, the Company issued 372,406 shares of Series G Convertible Preferred Stock for $5.00 per share to certain executive officers of the Company and Blue Chip Capital Fund II Limited Partnership, an existing holder of Series C Convertible Preferred Stock. The proceeds were used to pay down existing debt under the Credit Agreement and fund working capital needs of the Company. In February 1999, the Company issued 633,652 shares of Series F Convertible Preferred Stock for $5.00 per share to existing Series F holders. The proceeds were used to finance certain capital improvements, fund deferred transaction costs related to the June 15 Acquisitions and the Faircom merger and fund working capital needs of the Company. In April 1999, the Company issued 1,016,348 shares of Series F Convertible Preferred Stock at $5.00 per share to fund the purchase by the Company of FCC licenses and other assets from WJON Broadcasting Company (See Note 2). In April 1999, the Company shareholders voted to increase the number of authorized shares of common stock from 30,000,000 to 60,000,000 and increase the number of authorized shares of preferred stock from 20,000,000 to 40,000,000. 4. EARNINGS PER SHARE SFAS 128 calls for the dual presentation of basic and diluted earnings per share ("EPS"). Basic EPS is based upon the weighted average common shares outstanding during the period. Diluted EPS reflects the potential dilution that would occur if common stock equivalents were exercised. The effects of the assumed conversion of the Company's convertible preferred stock and the assumed exercise of outstanding options and warrants would not be dilutive for all periods presented. Therefore, basic EPS and diluted EPS are the same for all periods presented. ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS The following discussion should be read in conjunction with the Condensed Consolidated Financial Statements. Results for the interim periods may not be indicative of the results for the full years. On June 15, 1998, Regent consummated a number of mergers, acquisitions, borrowings and issuances of additional equity (the "June 1998 Transactions"). See Notes 1 and 2 to the Company's Condensed Consolidated Financial Statements included as part of this Form 10-Q. The historical financial statements of Faircom Inc. ("Faircom"), which was deemed the "accounting acquirer" in the merger between Faircom and Regent completed June 15, 1998, became the historical financial statements of the Company, and accordingly, the results of operations of Regent and of the other entities which merged with or were acquired by Regent as part of the June 1998 Transactions have been included in the Company's Condensed Consolidated Financial Statements only from June 15, 1998. -8- 9 On the closing date of the June 1998 Transactions, the Company expanded from being a small broadcaster (represented, from an accounting standpoint, by Faircom's six stations in two markets) to a group broadcaster operating 33 stations in ten different markets. This significant change in size of the Company's operations led directly to substantial increases in revenue, operating expenses, depreciation and amortization, corporate general and administrative expenses, and interest expense in 1999 as compared to 1998. Because of the June 1998 Transactions, the results of the Company's operations in 1999 are not comparable to those of 1998, nor are they necessarily indicative of results in the future. The key focus from the consummation of the June 1998 Transactions into the first quarter of 1999 was developing the platform from which the Company could carry out its operating strategies as a much larger radio company. Development of the platform required significant expenditures. These costs are viewed by the Company as investment costs which will provide returns to the Company in future years. Operationally, the Company replaced general managers in eight of its markets and added or replaced general sales managers in six markets in order to implement aggressive sales programs. The Company invested significantly in the hiring and training of sales personnel and in increased promotional spending in all markets. While many of these changes took place prior to the first quarter of 1999, the operational improvements take some time to manifest even though the cost increases were immediate. In addition, the Company developed a corporate staff which it believes is capable of supporting a much larger operation and now maintains primary executive and administrative offices located in Covington, Kentucky, as well as the New York corporate office utilized by Faircom at the time of its merger with the Company. The cost of executive personnel and administrative expense amounted to approximately $615,000 in the three months ended March 31, 1999, versus approximately $114,000 in the comparable period in 1998. Consequently, operating loss of $655,000 in the three months ended March 31, 1999 compared unfavorably with operating loss of $38,000 in the comparable period for 1998. Interest expense was $862,000 in the three months ended March 31, 1999 as compared with $504,000 in the comparable period for 1998 principally due to debt incurred in connection with the June 1998 Transactions. In addition to developing the infrastructure to support a large radio group, the Company has decided to concentrate on markets which have a minimum of approximately $8,000,000 in market advertising revenue and where the Regent stations have the potential to generate at least $1,000,000 in annual broadcast cash flow. The Company has entered into agreements to sell its Flagstaff and Kingman/Bullhead City, Arizona radio stations (the "Arizona Stations"), which do not meet this strategic objective. Applications for FCC approval of these sales are pending. LIQUIDITY AND CAPITAL RESOURCES In three months ended March 31, 1999, net cash used in operating activities was $1,259,000 compared with net cash provided by operating activities of $401,000 for 1998. Approximately $1,200,000 of the cash used in operating activities during the 1999 period was used to pay deferred professional fees which were mostly incurred in connection with the June 1998 Transactions. In the three months ended March 31, 1999, proceeds from the issuance of preferred stock provided substantially all of the funds used in operating activities, as well as funds used for capital expenditures, principal payments on long-term debt and other investing and financing activity cash requirements. As a result, there was a net increase in cash of $2,006,000 in the three months ended March 31, 1999 compared with a net decrease of $11,000 in the same period in 1998. The Company's borrowings are made under an agreement with a group of lenders (as amended through the latest amendment dated February 24, 1999, the "Credit Agreement") which provides for a senior reducing revolving credit facility with a commitment of up to $55,000,000 expiring March 31, 2005 (the "Revolver"). The Credit Agreement permits the borrowing of available credit for working capital and acquisitions, including related acquisition expenses. In addition, the Company may request from time to time that the lenders issue letters of credit in accordance with the same provisions as the Revolver. At March 31, 1999, the Company had borrowed $33,985,000 under the Credit Agreement and had approximately $2,485,000 in cash balances. The remaining unused portion of the Revolver of $21,015,000 was available to finance other acquisitions, subject to restrictions contained in the Credit Agreement. Beginning January 1, 1999, the Company is required to maintain an interest rate coverage ratio (EBITDA, defined as earnings before interest, taxes, depreciation and amortization, to annual interest rate cost); a fixed charge coverage ratio (EBITDA to annual fixed charges); and a financial leverage ratio (total debt to Adjusted EBITDA, as defined in the Credit Agreement). To maintain compliance with these covenants, the Company must reduce its outstanding borrowings during the second and third quarters of 1999. -9- 10 It intends to do this through proceeds from the sales of the Arizona Stations as well as the sale of the Company's operations in another non- strategic market. The sale of four of the seven Arizona Stations is expected to close during the second quarter of 1999, pending receipt of FCC consent. Sale of the other three could be delayed into the third quarter, depending on the timing of FCC consent. The Company is currently seeking a buyer for its other non-strategic market and expects to be able to consummate that sale during the third quarter of 1999. If these sales were to be delayed, the Company will request waivers from its lenders to allow more time for the sales to close or to raise additional equity to reduce its debt. Interest under the Credit Agreement is payable, at the option of the Company, at alternative rates equal to the LIBOR rate (established March 3, 1999 at 5.06% and effective at that same rate at March 31, 1999) plus 1.50% to 3.50%, or the base rate announced by the Bank of Montreal (7.75% at March 31, 1999) plus .25% to 2.25%. The spreads over the LIBOR rate and such base rate vary from time to time, depending upon the Company's financial leverage. The Company will pay quarterly commitment fees equal to 3/8% to 1/2% per annum, depending upon the Company's financial leverage, on the unused portion of the commitment under the Credit Agreement. The Company also is required to pay certain other fees to the agent and the lenders for the administration and use of the credit facility. In the first quarter of 1999, the Company received approximately $5,030,000 in gross proceeds from the issuance of shares of its Series F and G Convertible Preferred Stock at $5.00 per share. In the second quarter of 1999, the holders of the Series F Convertible Preferred Stock purchased an additional 1,016,348 shares of the Company's Series F Convertible Preferred Stock at $5.00 per share, to finance the acquisition of the St. Cloud Stations. In May 1999, the Company borrowed $8,500,000 in funds under the Credit Agreement to finance the balance of the purchase price of the St. Cloud Stations and related transaction fees. In addition, in May of 1999 three existing shareholders have expressed a willingness to purchase an additional $10,000,000 of a new series of convertible preferred stock ("Series H Convertible Preferred Stock"), with terms substantially the same as the Company's outstanding Series G Convertible Preferred Stock, at $5.50 per share. It is anticipated that approximately $2,500,000 of that amount will be funded in the second quarter of 1999 and will be used to reduce bank debt and fund working capital requirements. The remaining amount would be generally available to finance future acquisitions. Based on current interest rates and accrued interest expense as of March 31, 1999, the Company believes its interest payments for the remainder of 1999 will be approximately $2,400,000. Scheduled debt principal payments are expected to be $49,000 for the remainder of 1999. Corporate general and administrative expense and capital expenditures for the remainder of 1999 are estimated to be approximately $1,500,000 and $1,200,000, respectively. Most of the planned capital expenditures are required to be made in 1999 under the terms of the Credit Agreement. During the first quarter of 1999, the Company paid approximately $1,200,000 of deferred professional fees which were mostly incurred in connection with the June 1998 Transactions. The Company has paid an additional $171,000 in the second quarter of 1999 and intends to pay the remaining balance of approximately $115,000 in 1999. For these payments to be made over the balance of 1999, aggregating $5,435,000, the Company has used or will utilize net cash provided by operations, current cash balances, proceeds from the issuance of Series F and G Convertible Preferred Stock received in the first quarter of 1999 and the $2,500,000 of proceeds from the Series H Convertible Preferred Stock expected in the second quarter of 1999. The Company believes net cash from operations; cash balances; the proceeds from the sales of the Arizona Stations and the Company's other non-strategic property; and $2,500,000 of the proceeds from the contemplated issuance of the Series H Convertible Preferred Stock will be sufficient to reduce borrowings under the Credit Agreement to allow the Company to maintain compliance with all covenants and to meet the Company's interest expense and any required principal payments, corporate expenses and capital expenditures in the foreseeable future, based on its projected operations and indebtedness. The Company is actively pursuing a number of acquisitions of radio stations in a number of markets. Any such acquisitions would be financed from borrowings against the unused portion of the Credit Agreement (less any utilization of such portion for working capital needs), proceeds from the issuance of Series H Convertible Preferred Stock, and through additional equity or high yield debt offerings. There can be no assurance, however, that any of such acquisitions will be consummated or that all or any portion of such financing will be available. MARKET RISK The Company is exposed to the impact of interest rate changes because of borrowings under its Credit Agreement. It is the Company's policy to enter into interest rate transactions only to the extent considered necessary to meet its objectives and to comply with the requirements of its Credit Agreement. The Company has not entered into interest rate transactions for trading purposes. -10- 11 To satisfy the requirements of its Credit Agreement, the Company entered into a two-year collar agreement with the Bank of Montreal effective August 17, 1998 for a notional amount of $34,400,000 to mitigate the risk of increasing interest rates created by the borrowing under its Credit Agreement. This agreement is based on the three-month LIBOR rate, has a Cap Rate, as defined, of 6.50% and a Floor Rate, as defined, of 5.28%. These rates are exclusive of additional spreads over the LIBOR rate depending upon the Company's financial leverage. Based on the $33,985,000 principal amount outstanding under the Company's credit facility at March 31, 1999, the annual interest expense would fluctuate by a maximum of $415,000. YEAR 2000 COMPUTER SYSTEM COMPLIANCE The "Year 2000" ("Y2K") issue results from the fact that many computer programs were written with date-sensitive codes that utilize only the last two digits (rather than all four digits) to refer to a particular year. As the year 2000 approaches, these computer programs may be unable to process accurately certain date-based information, as the program may interpret the year 2000 as 1900. The Company utilizes various information technology (IT) systems in the operation of its business, including accounting and financial reporting systems and local and wide area networking infrastructure. In addition to IT systems, the Company is also reliant on several non-information technology (non-IT) systems, which could potentially pose Y2K issues, including traffic scheduling and billing systems and digital audio systems providing automated broadcasting. Finally, in addition to the risks posed by Y2K issues involving its own IT and non-IT systems, the Company could also be affected by any Y2K problems experienced by its key business partners, which include local and national advertisers, suppliers of communications services, financial institutions and suppliers of utilities. The Company's plans to address the Y2K issue involve four phases: (a) assessment of the existence, nature and risk of Y2K problems affecting the Company's systems; (b) remediation of the Company's systems, whether through repair, replacement or upgrade, based on the findings of the assessment phase; (c) testing of the enhanced or upgraded systems; and (d) contingency planning. In the fourth quarter of 1998, the Company engaged the services of an independent Y2K consultant in order to analyze the scope of the Company's Y2K compliance issues and to initiate formal communications with its advertisers, suppliers, lenders and other key business partners to determine their exposure to the Y2K issue. During the first quarter of 1999, the assessment phase was completed with respect to the IT-systems and non-IT systems. Based on the findings of the assessment phase, a detailed plan was developed for the remaining phases (remediation, testing and contingency planning). A summary of the status of the Company's Y2K plans in the IT and non-IT areas follows. IT Systems During the assessment phase, the Company evaluated the level of Y2K compliance of IT systems and hardware in its executive offices and all markets. All financial and networking systems which have been determined to be non-compliant will be upgraded in the second quarter of 1999 and tested by the end of the third quarter of 1999. Costs associated with the upgrades are expected to be immaterial. The Company has assessed several of its personal computers ("PCs") to be non-compliant. Several of the non-compliant PCs are either upgradable at a minimal cost or are used for tasks where non-compliance will not impact their functionality. There are PCs which will need to be replaced in 1999 and the cost of replacement is included in the Company's capital plan. All necessary upgrades will occur by the end of the third quarter of 1999. Most of the replacements will take place by the end of the third quarter; however, a portion will occur in the fourth quarter. Non-IT Systems The Company acquired all but one of its radio stations on or after June 15, 1998 from several independent operators. As part of the Company's ongoing plan to provide its stations with a standardized digital audio broadcast system and, thus, to realize certain of the efficiencies of operating as a larger broadcast group, the Company has been systematically upgrading the broadcast systems and other technical equipment at its stations. Although this upgrading plan has had a business purpose independent of the Y2K compliance issue, the Company has required, as a matter of course, written assurance from its suppliers that the new broadcast systems are Y2K compliant. With respect to those properties which the Company expects to own on January -11- 12 1, 2000, the upgrading project is 70% complete, with the installation of new Y2K compliant broadcast systems having been completed for the Company's stations in all of its markets except the Chico, California, Mansfield, Ohio and Redding, California markets. The costs of the upgrade project have been included in capital expenditures. Upgrades in the Chico, California and the Mansfield, Ohio markets commenced during the first quarter of 1999 and are expected to be completed by the end of the second quarter of 1999. The upgrade in Redding will occur in the third quarter in conjunction with an expansion of the Company's facility in the market. The Company plans to conduct and complete its own testing of the broadcast systems at all of its stations by the end of the third quarter of 1999. The cost associated with this testing is expected to be immaterial. The traffic scheduling and billing systems currently utilized at the Company's stations are provided by two suppliers on a Y2K compliant basis, with the exception of the Company's stations located in the Victorville, California market. To confirm Y2K compliance of its traffic and billing systems, the Company intends to conduct and complete tests of these systems during the second quarter of 1999. By the third quarter of 1999, the Company intends to have replaced its traffic and billing systems at the Victorville stations with a system provided by suppliers utilized by the Company's other stations. During the first quarter of 1999, the Company compiled a detailed inventory of key business partners and prioritized the list based on potential impact to the Company in the event that the business partners experienced severe operational or financial hardship as a result of Y2K non-compliance. Each business partner was contacted and asked to fill out a detailed questionnaire regarding its own Y2K assessment. Follow-up on responses will occur in the second quarter of 1999 and action steps will be developed based on the responses. The Company has budgeted $100,000 in 1999 for capital expenditures and $50,000 for expenses involved in Y2K remediation. The Company does not expect total expenditures to exceed the total budgeted amount. Although the Company has not received any information to date that would lead it to believe its internal Y2K compliance issues will not be able to be resolved on a timely basis or that the related costs will have a material adverse effect on the Company's operations, cash flows or financial condition, the assessment phase of the Company's plans relative to its business partner interfaces will continue through the second quarter of 1999. The remediation phase is also not complete with respect to the broadcast systems at the Company's Chico, Redding and Mansfield stations, and no actual testing of the Company's enhanced or upgraded systems has been conducted. Accordingly, unexpected costs associated with the remediation of the Company's systems or with interruption of operation of the Company's stations could occur and, if significant, could have a material adverse effect on the Company's operations, cash flows and financial condition. The most reasonably likely worst-case scenarios include loss of power and communications links. The impact of these uncertainties on the Company's results of operations, liquidity and financial condition, is not determinable. Based on the assessment of external and non-IT system risks and the testing to be undertaken by the Company, contingency plans will be developed for all critical systems by the end of the third quarter of 1999. Testing of contingency plans will occur in the third and fourth quarters of 1999. CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS This Form 10-Q includes certain forward-looking statements with respect to the Company that involve risks and uncertainties. Such statements are influenced by the Company's financial position, business strategy, budgets, projected costs, and plans and objectives of management for future operations, and are expressed with words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "project" and other similar expressions. Although the Company believes its expectations reflected in such forward-looking statements are based on reasonable assumptions, readers are cautioned that no assurance can be given that such expectations will prove correct and that actual results and developments may differ materially from those conveyed in such forward-looking statements. For these statements, the Company claims the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements herein include changes in general economic, business and market conditions, as well as changes in such conditions that may affect the radio broadcast industry or the markets in which the Company operates, including, in particular, increased competition for attractive radio properties and advertising dollars, fluctuations in the cost of operating radio properties, and changes in the regulatory climate affecting radio broadcast companies. -12- 13 Such forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this Form 10-Q. If the Company does update or correct one or more forward-looking statements, readers should not conclude that the Company will make additional updates or corrections with respect thereto or with respect to other forward-looking statements. ITEM 3. Quantitative and Qualitative Disclosures About Market Risk The information required by this Item 3 is presented above under Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, and is incorporated herein by this reference. PART II - OTHER INFORMATION ITEM 2. Changes in Securities and Use of Proceeds (c) During the first quarter of 1999, the Company issued additional shares of its preferred stock as follows: On January 5, 1999, the Company issued 372,406 shares of its Series G Convertible Preferred Stock for a cash purchase price of $5.00 per share to certain executive officers of the Company and Blue Chip Capital Fund II Limited Partnership, an existing holder of the Company's Series C Convertible Preferred Stock. The proceeds were used to pay down existing debt under the Credit Agreement and to fund working capital needs of the Company. On February 23, 1999, the Company issued 633,652 shares of its Series F Convertible Preferred Stock for a cash purchase price of $5.00 per share to existing Series F holders. The proceeds were used to finance certain capital improvements, fund deferred transaction costs related to the June 1998 Transactions and to fund working capital needs of the Company. These issuances of securities were privately-negotiated transactions based upon exemptions from registration under the Securities Act of 1933, as amended (the "1933 Act"), claimed pursuant to Section 4(2) of the 1933 Act and the rules and regulations promulgated thereunder. Both the Series G Convertible Preferred Stock and the Series F Convertible Preferred Stock are convertible into shares of the Company's common stock on a one-for-one basis at any time at the option of the holder and under certain circumstances at the option of the Company. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits The following is filed herewith as an exhibit to Part I of this Form 10-Q: Exhibit No. 27 Financial Data Schedule The exhibits identified as Part II Exhibits in the following Exhibit Index, which is incorporated herein by this reference, are filed or incorporated by reference as exhibits to Part II of this Form 10-Q. (b) Reports of Form 8-K On March 30, 1999, the Company filed an Amendment No. 2 to its Form 8-K initially filed June 30, 1998 and amended on September 30, 1998. The Amendment No. 2 reported under Item 4 a change in the accounting firm for Faircom's financial statements effective June 15, 1998, the date of the merger between Faircom and the Company. -13- 14 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 hereunto duly authorized. REGENT COMMUNICATIONS, INC. Date: May 17, 1999 By: /s/ TERRY S. JACOBS --------------------------------------- Terry S. Jacobs, Chairman of the Board and Chief Executive Officer Date: May 17, 1999 By: /s/ ANTHONY A. VASCONCELLOS --------------------------------------- Anthony A. Vasconcellos, Chief Financial Officer and Vice President (Chief Accounting Officer) S-1 15 EXHIBIT INDEX The following exhibits are filed, or incorporated by reference where indicated, as part of Part II of this Quarterly Report on Form 10-Q: EXHIBIT NUMBER EXHIBIT DESCRIPTION 2(a)* Asset Purchase Agreement dated January 5, 1999 by and among WJON Broadcasting Company, Regent Broadcasting of St. Cloud, Inc., Regent Licensee of St. Cloud, Inc. and Regent Communications, Inc. (previously filed as Exhibit 2(a) to the Registrant's Form 10-K for the year ended December 31, 1998 and incorporated herein by this reference) The following exhibits and schedules to the foregoing Asset Purchase Agreement are omitted as not material; however, copies will be provided to the Securities and Exchange Commission upon request: Schedules: 1.2 Miscellaneous Excluded Assets 3.4 Allocation of Purchase Price 6.4 Third Party Consents 7.4 Stations Licenses, Etc. 7.7 Tangible Personal Property 7.8 Real Property 7.9 Contracts (including identification of Material Contracts) 7.11 Environmental Matters 7.12 Intellectual Property 7.13 Financial Statements 7.14 Personnel Information 7.15 Litigation 7.16 Compliance With Laws 7.17 Employee Benefit Plans Exhibits: A Form of Indemnification Escrow Agreement B Form of Deposit Escrow Agreement C Form of Assignment and Assumption Agreement D Form of Non-Competition Agreement E Form of Lease Agreement F Form of FCC Counsel Opinion G Form of Buyers' Counsel Opinion H Form of Seller's Counsel Opinion 2(b)* Asset Purchase Agreement dated March 4, 1999 by and among Mag Mile Media, L.L.C., Regent Broadcasting of Kingman, Inc. and Regent Licensee of Kingman, Inc. (previously filed as Exhibit 2(b) to the Registrant's Form 10-K for the year ended December 31, 1998 and incorporated herein by this reference) The following exhibits and schedules to the foregoing Asset Purchase Agreement are omitted as not material; however, copies will be provided to the Securities and Exchange Commission upon request: Schedules: A Licenses B Contracts C Tangible Property C-1 Leased Personal Property D Copyrights, Logos, Jingles, Service Marks, Trademarks and Other Intangible Rights E Real Property F Allocation of Purchase Price G Evidence of Sources of Funds H Excluded Employees Exhibits: A Form of Deposit Escrow Agreement B Form of Time Brokerage Agreement C Form of Assignment and Assumption Agreement D Form of Opinion - Sellers' Counsel E Form of Opinion - Sellers' Commission Counsel F Form of Opinion - Buyer's Counsel 2(c)* Asset Purchase Agreement dated March 30, 1999 by and among The Guyann Corporation, Regent Broadcasting of Flagstaff, Inc. and Regent Licensee of Flagstaff, Inc. (previously filed as Exhibit 2(c) to the Registrant's Form 10-K for the year ended December 31, 1998 and incorporated herein by this reference) The following exhibits and schedules to the foregoing Asset Purchase Agreement are omitted as not material; however, copies will be provided to the Securities and Exchange Commission upon request: Schedules: 1.2.9 Miscellaneous Excluded Assets 6.3 Buyer Qualifications 7.4 Stations Licenses, Etc. 7.7 Tangible Personal Property 7.8 Leased Real Estate 7.9 Contracts (including identification of Material Contracts) 7.11 Environmental Matters 7.12 Intellectual Property 7.13 Financial Statements 7.14 Employees 7.17 Employee Benefit Plans Exhibits: A Form of Indemnity Escrow Agreement B Form of Deposit Escrow Agreement C Form of Allocation of Purchase Price D Form of Agreement Not to Compete E Form of General Conveyance, Bill of Sale, Assignment and Assumption Agreement F Form of Seller's Counsel Opinion G Form of Seller's FCC Counsel Opinion H Form of Buyer's Counsel Opinion 2(d) Agreement of Purchase and Sale of Assets dated as of January 15, 1999 among Concord Media Group, Inc., Regent Broadcasting of South Carolina, Inc. and Regent Licensee of South Carolina, Inc. The following schedules and exhibits to the foregoing Agreement of Purchase and Sale of Assets are omitted as not material; however, copies will be provided to the Securities and Exchange Commission upon request: Schedule 1.2 Excluded Property Schedule 1.4 Permitted Liens Schedule 4.2(b) Leases, Contracts Schedule 5.3(b) Capital Stock of Seller Schedule 5.4 Conflicts or Consents Schedule 5.6 Exceptions to Title or Condition Schedule 5.7 Litigation Schedule 5.8(a) Compliance with Laws Schedule 5.8(b) Commission Authorizations Schedule 5.9 Property, Contracts and Leases Schedule 5.10 Certain Changes and Events Schedule 5.11 Environmental Matters Schedule 5.12 Undisclosed Liabilities Schedule A Form of Deposit Escrow Agreement Exhibit 2.5 Form of Liabilities Undertaking Exhibit 4.5(e)(i) Form of Opinion of Seller's Counsel Exhibit 4.5(e)(ii) Form of Opinion of Seller's Communications Counsel 3(a)* Amended and Restated Certificate of Incorporation of Regent Communications, Inc., as amended by a Certificate of Designation, Number, Powers, Preferences and Relative, Participating, Optional and Other Special Rights and the Qualifications, Limitations, Restrictions, and Other Distinguishing Characteristics of Series G Preferred Stock of Regent Communications, Inc., filed January 21, 1999. (previously filed as Exhibit 3(a) to the Registrant's Form 10-K for the year ended December 31, 1998 and incorporated herein by this reference) 3(b)* Amended and Restated By-Laws of Regent Communications, Inc. (previously filed as Exhibit 3(b) to the Registrant's Form S-4 Registration Statement No. 333-46435 effective May 7, 1998 and incorporated herein by this reference). 4(a)* Second Amended and Restated Stockholders' Agreement dated as of June 15, 1998 among Regent Communications, Inc., Terry S. Jacobs, William L. Stakelin, Waller-Sutton Media Partners, L.P., William H. Ingram, WGP Corporate Development Associates V, L.L.C., WGP Corporate Development Associates (Overseas) V, L.P., River Cities Capital Fund Limited Partnership, BMO Financial, Inc., General Electric Capital Corporation, Joel M. Fairman, Miami Valley Venture Fund II Limited Partnership, and Blue Chip Capital Fund II Limited Partnership (excluding exhibits not deemed material or filed separately in executed form) (previously filed as Exhibit 4(c) to the Registrant's Form 8-K filed June 30, 1998 and incorporated herein by this reference). 4(b)* Stock Purchase Agreement dated June 15, 1998 among Regent Communications, Inc., Waller-Sutton Media Partners, L.P., WPG Corporate Development Associates V, L.C.C., WPG Corporate Development Associates (Overseas) V, L.P., General Electric Capital Corporation, River Cites Capital Fund Limited Partnership and William H. Ingram (excluding exhibits not deemed material or filed separately in executed form) (previously filed as Exhibit 4(d) to the Registrant's Form 8-K filed June 30, 1998 and incorporated herein by this reference). 4(c)* Registration Rights Agreement dated June 15, 1998 among Regent Communications, Inc., PNC Bank, N.A., Trustee, Waller-Sutton Media Partners, L.P., WPG Corporate Development Associates V, L.C.C., WPG Corporate Development Associates (Overseas) V, L.P., BMO Financial, Inc., General Electric Capital Corporation, River Cites Capital Fund Limited Partnership, Terry S. Jacobs, William L. Stakelin, William H. Ingram, Blue Chip Capital Fund II Limited Partnership, Miami Valley Venture Fund L.P. and Thomas Gammon (excluding exhibits not deemed material or filed separately in executed form) (previously filed as Exhibit 4(e) to the Registrant's Form 8-K filed June 30, 1998 and incorporated herein by this reference). E-1 16 4(d)* Warrant for the Purchase of 650,000 Shares of Common Stock issued by Regent Communications, Inc. to Waller-Sutton Media Partners, L.P. dated June 15, 1998 (See Note 1 below) (previously filed as Exhibit 4(f) to the Registrant's Form 8-K filed June 30, 1998 and incorporated herein by this reference). 4(e)* Warrant for the Purchase of 50,000 Shares of Common Stock issued by Regent Communications, Inc. to General Electric Capital Corporation dated June 15, 1998 (previously filed as Exhibit 4(g) to the Registrant's Form 8-K filed June 30, 1998 and incorporated herein by this reference). 4(f)* Agreement to Issue Warrant dated as of June 15, 1998 between Regent Communications, Inc. and General Electric Capital Corporation (excluding exhibits not deemed material or filed separately in executed form) (previously filed as Exhibit 4(h) to the Registrant's Form 8-K filed June 30, 1998 and incorporated herein by this reference). 4(g)* Warrant for the Purchase of 80,000 Shares of Common Stock issued by Regent Communications, Inc. to River Cities Capital Fund Limited Partnership dated June 15, 1998 (previously filed as Exhibit 4(k) to the Form 10-Q for the Quarter Ended June 30, 1998, as amended, and incorporated herein by this reference). 4(h)* Stock Purchase Agreement dated as of May 20, 1997 between Terry S. Jacobs and Regent Communications, Inc. (previously filed as Exhibit 4(b) to the Registrant's Form S-4 Registration Statement No. 333-46435 effective May 7, 1998 and incorporated herein by this reference). 4(i)* Stock Purchase Agreement dated as of May 20, 1997 between River Cities Capital Fund Limited Partnership and Regent Communications, Inc. (previously filed as Exhibit 4(c) to the Registrant's Form S-4 Registration Statement No. 333-46435 effective May 7, 1998 and incorporated herein by this reference). 4(j)* Stock Purchase Agreement dated as of November 26, 1997 and Terry S. Jacobs and Regent Communications, Inc. (previously filed as Exhibit 4(d) to the Registrant's Form S-4 Registration Statement No. 333-46435 effective May 7, 1998 and incorporated herein by this reference). 4(k)* Stock Purchase Agreement dated as of December 1, 1997 between William L. Stakelin and Regent Communications, Inc. (previously filed as Exhibit 4(e) to the Registrant's Form S-4 Registration Statement No. 333-46435 effective May 7, 1998 and incorporated herein by this reference). 4(l)* Stock Purchase Agreement dated as of December 8, 1997 between Regent Communications, Inc. and General Electric Capital Corporation (previously filed E-2 17 as Exhibit 4(f) to the Registrant's Form S-4 Registration Statement No. 333-46435 effective May 7, 1998 and incorporated herein by this reference). 4(m)* Stock Purchase Agreement dated as of December 8, 1997 between Regent Communications, Inc. and BMO Financial, Inc. (previously filed as Exhibit 4(g) to the Registrant's Form S-4 Registration Statement No. 333-46435 effective May 7, 1998 and incorporated herein by this reference). 4(n)* Credit Agreement dated as of November 14, 1997 among Regent Communications, Inc., the lenders listed therein, as Lenders, General Electric Capital Corporation, as Documentation Agent and Bank of Montreal, Chicago Branch, as Agent (excluding exhibits not deemed material or filed separately in executed form) (previously filed as Exhibit 4(j) to the Registrant's Form S-4 Registration Statement No. 333-46435 effective May 7, 1998 and incorporated herein by this reference). 4(o)* Revolving Note issued by Regent Communications, Inc. to Bank of Montreal, Chicago Branch dated November 14, 1997 in the principal amount of $20,000,000 (See Note 2 below) (previously filed as Exhibit 4(k) to the Registrant's Form S-4 Registration Statement No. 333-46435 effective May 7, 1998 and incorporated herein by this reference). 4(p)* Agreement to Issue Warrant dated as of March 25, 1998 between Regent Communications, Inc. and River Cities Capital Fund Limited Partnership (previously filed as Exhibit 4(1) to the Registrant's Form S-4 Registration Statement No. 333-46435 effective May 7, 1998 and incorporated herein by this reference). 4(q)* First Amendment to Credit Agreement dated as of February 16, 1998 among Regent Communications, Inc., the financial institutions listed therein, as lenders, General Electric Capital Corporation, as Documentation Agent, and Bank of Montreal, Chicago Branch as Agent (previously filed as Exhibit 4(w) to the Registrant's Form 8-K/A (date of report June 15, 1998) filed September 3, 1998 and incorporated herein by reference). 4(r)* Second Amendment and Limited Waiver to Credit Agreement dated as of June 10, 1998 among Regent Communications, Inc., the financial institutions listed therein, as lenders, General Electric Capital corporation, as Documentation Agent, and Bank of Montreal, Chicago Branch, as Agent (previously filed as E-3 18 Exhibit 4(x) to the Registrant's Form 8-K/A (date of report June 15, 1998) filed September 3, 1998 and incorporated herein by reference). 4(s)* Third Amendment to Credit Agreement dated as of August 14, 1998 among Regent Communications, Inc., the financial institutions listed therein, as lenders, General Electric Capital Corporation, as Documentation Agent, and Bank of Montreal, Chicago Branch, as Agent (previously filed as Exhibit 4(y) to the Registrant's Form 10-Q for the Quarter Ended September 30, 1998, as amended, and incorporated herein by this reference). 4(t)* Amendment to Second Amended and Restated Stockholders' Agreement, dated as of January 11, 1999, among Regent Communications, Inc., Terry S. Jacobs, William L. Stakelin, Waller-Sutton Media Partners, L.P., William H. Ingram, WGP Corporate Development Associates V, L.L.C., WGP Corporate Development Associates (Overseas) V, L.P., River Cities Capital Fund Limited Partnership, BMO Financial, Inc., General Electric Capital Corporation, Joel M. Fairman, Miami Valley Venture Fund II Limited Partnership, and Blue Chip Capital Fund II Limited Partnership (excluding exhibits not deemed material or filed separately in executed form) (previously filed as Exhibit 4(t) to the Registrant's Form 10-K for the year ended December 31, 1998 and incorporated herein by this reference) 4(u)* Stock Purchase Agreement dated January 11, 1999 between Regent Communications, Inc. and Blue Chip Capital II Limited Partnership relating to the purchase of 315,887 shares of Regent Communications, Inc. Series G Convertible Preferred Stock (excluding exhibits not deemed material or filed separately in executed form) (previously filed as Exhibit 4(u) to the Registrant's Form 10-K for the year ended December 31, 1998 and incorporated herein by this reference) 4(v)* Stock Purchase Agreement dated January 11, 1999 between Regent Communications, Inc. and Terry S. Jacobs relating to the purchase of 50,000 shares of Regent Communications, Inc. Series G Convertible Preferred Stock (See Note 3) (excluding exhibits not deemed material or filed separately in executed form) (previously filed as Exhibit 4(v) to the Registrant's Form 10-K for the year ended December 31, 1998 and incorporated herein by this reference) 4(w)* Fourth Amendment, Limited Consent and Limited Waiver to Credit Agreement, First Amendment to Subsidiary Guaranty and First Amendment to Pledge and Security Agreement, dated as of October 16, 1998 among Regent Communications, Inc., the financial institutions listed therein, as lenders, General Electric Capital Corporation, as Documentation Agent, and Bank of Montreal, Chicago Branch, as Agent. (previously filed as Exhibit 4(w) to the Registrant's Form 10-K for the year ended December 31, 1998 and incorporated herein by this reference) 4(x)* Fifth Amendment to Credit Agreement, dated as of November 23, 1998, among Regent Communications, Inc., the financial institutions listed therein, as lenders, General Electric Capital Corporation, as Documentation Agent, and Bank of Montreal, Chicago Branch, as Agent. (previously filed as Exhibit 4(x) to the Registrant's Form 10-K for the year ended December 31, 1998 and incorporated herein by this reference) 4(y)* Sixth Amendment and Limited Consent to Credit Agreement, dated as of February 24, 1999, among Regent Communications, Inc., the financial institutions listed therein, as lenders, General Electric Capital Corporation, as Documentation Agent, and Bank of Montreal, Chicago Branch, as Agent. (previously filed as Exhibit 4(y) to the Registrant's Form 10-K for the year ended December 31, 1998 and incorporated herein by this reference) The following exhibit is filed as part of Part I of this Quarterly Report on Form 10-Q: 27 Financial Data Schedule - -------------------------------------------------------------------------------- * Incorporated by reference. 1. Six substantially identical Warrants for the purchase of shares of Registrant's common stock were issued as follows: Waller-Sutton Media Partners, L.P. 650,000 WPG Corporate Development Associates V, L.P. 112,580 WPG Corporate Development Associates (Overseas) V, L.P. 17,420 General Electric Capital Corporation 50,000 River Cities Capital Fund Limited Partnership 20,000 William H. Ingram 10,000 2. Two substantially identical notes were issued to Bank of Montreal, Chicago Branch, in the principal amounts of $15,000,000 and $20,000,000. 3. Two substantially identical Stock Purchase Agreements were entered into for the purchase of Series G Convertible Preferred Stock as follows: Joel M. Fairman 3,319 shares William L. Stakelin 3,200 shares E-4