|
Item 1.01 |
Entry into a Material Definitive Agreement.
|
Amendment No. 4 to Senior Credit Facility
On May 19, 2021, MediaCo Holding Inc. (“MediaCo” or “the Company”)
entered into Amendment No. 4 and Waiver (“Amendment No. 4”) to its
amended and restated term loan agreement (such agreement, as so
amended, the “Senior Credit Facility”). Under the terms of
Amendment No. 4:
| |
• |
|
the Company’s majority shareholder, SG Broadcasting LLC (“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 to be contributed by 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;
|
| |
• |
|
no 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,
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.
|
Convertible Promissory Note
Also 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, or if no 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.
As of May 19, 2021, SG Broadcasting is the controlling shareholder
of the Company, beneficially owning more than 91.03% of the
outstanding common stock of the Company, including 100% of the
outstanding Class B Common Stock, par value $0.01 per share (the
“Class B Stock”), of the Company, which percentages of Class A
Stock and Class B Stock collectively represent approximately 97.42%
of the combined voting power of the outstanding voting securities
of the Company.
The foregoing descriptions are qualified in their entireties by
reference to the complete terms and conditions of Amendment No. 4
and the May 2021 SG Broadcasting Promissory Note, which are filed
as Exhibits 10.1 and 10.2 hereto, respectively, and which are
incorporated by reference herein.
|
Item 2.03 |
Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
|
The information provided with respect to Amendment No. 4 and the
May 2021 SG Broadcasting Promissory Note under Item 1.01 of this
Current Report on Form 8-K is incorporated by reference into this
Item 2.03.
|
Item 5.02. |
Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers;
Compensatory Arrangement of Certain Officers.
|
On May 21, 2021, the Compensation Committee of the board of
directors of the Company increased the annual base salary for Brad
A. Tobin, our Chief Operating Officer, from $200,000 to
$350,000.
The Company is filing this Current Report on Form 8-K to present in
modified form certain information in its Annual Report on Form 10-K
for the fiscal year ended December 31, 2020, filed with the
Securities and Exchange Commission (the “SEC”) on March 30,
2021 (the “2020 Form 10-K”). The modified information includes the
risk factors included in the 2020 Form 10-K, the Company’s
consolidated balance sheet as of December 31, 2020, and the
notes to consolidated and combined financial statements (the
“Notes”). In addition, the Company is presenting in modified form
its Management’s Discussion and Analysis of Financial Condition and
Results of Operations.
The modifications are being presented in light of the fact that
since the date of completion by the Company’s Independent
Registered Public Accounting Firm of the audit of the Company’s
consolidated and combined financial statements, and the initial
issuance of the Independent Registered Public Accounting Firm’s
report thereon dated March 30, 2021, which contained an
explanatory paragraph regarding the Company’s ability to continue
as a going concern, the Company, as discussed in Notes 1, 6 and 16
of the Notes, has completed an amendment of its senior credit
facility and obtained additional capital contributions from its
majority stockholder. Therefore, the conditions described in the
2020 Form 10-K that raised substantial doubt about whether the
Company will continue as a going concern no longer exist.
The following information included in the 2020 Form 10-K has been
modified from the previous presentation:
| |
• |
|
Part I, Item 1A. Risk Factors
|
| |
• |
|
Part II, Item 7. Management Discussion’s and Analysis of Financial
Condition and Results of Operations
|
| |
• |
|
Part II, Item 8. Financial Statements and Supplementary Data
|
The modified consolidated financial information contained in the
exhibit hereto does not represent a restatement of MediaCo’s
previously issued consolidated and combined financial statements
that were included in the 2020 Form 10-K.
Except as specifically noted herein and in the attached exhibits,
this Current Report on Form 8-K does not reflect events or
developments that occurred after March 30, 2021, the date on which
MediaCo filed the 2020 Form 10-K with the SEC, and does not modify
or update the disclosures in any way other than as described above
and set forth in the exhibits hereto. Without limiting the
foregoing, this filing does not purport to update or amend the
information contained in the 2020 Form 10-K for any information,
uncertainties, transactions, risks, events or trends occurring or
known to management. More current information is or will be
contained in MediaCo’s Quarterly Report on Form 10-Q for the period
ended March 31, 2021 and other filings with the SEC. The
information in this Current Report on Form 8-K should be read in
conjunction with the 2020 Form 10-K. Revisions to the 2020 Form
10-K included in this Current Report on Form 8-K as noted above
supersede the corresponding portions of the 2020 Form 10-K.
|
Item 9.01 |
Financial Statements and Exhibits.
|
(d) Exhibits.
See the Exhibit Index below, which is incorporated by reference
herein.
|
|
|
| Exhibit No. |
|
Description
|
|
|
| 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. |
|
|
| 10.2 |
|
Unsecured Convertible
Promissory Note, dated as of May 19, 2021, by MediaCo Holding Inc.
in favor of SG Broadcasting LLC. |
|
|
| 23.1 |
|
Consent of Ernst
& Young LLP |
|
|
| 99.1 |
|
Updates, where
applicable, to Part I, Item 1A. Risk Factors; Part II, Item 7.
“Management’s Discussion and Analysis of Financial Condition and
Results of Operations”; and Part II, Item 8. “Financial Statements
and Supplementary Data” of the Company’s Annual Report on Form 10-K
for the year ended December 31, 2020, as filed with the Securities
and Exchange Commission on March 30, 2021. |