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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

(Mark One)

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

For the quarterly period ended June 30, 2021

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 7

New york, new york 10014

(Address of principal executive offices)

(212) 229-9797

(Registrant’s Telephone Number, Including Area Code)

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       No  

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       No  

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.

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

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

 

 

 

3,019,518

 

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

PART I — FINANCIAL INFORMATION

 

Item 1. Financial Statements

3

Condensed Consolidated Statements of Operations for the three-month and six-month periods ended June 30, 2020 and 2021

3

Condensed Consolidated Balance Sheets as of December 31, 2020 and June 30, 2021

4

Condensed Consolidated Statement of Changes in Equity (Deficit) for the three-month and six-month periods ended June 30, 2020 and 2021

5

Condensed Consolidated Statements of Cash Flows for the three-month and six-month periods ended June 30, 2020 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

Item 4. Controls and Procedures

27

PART II — OTHER INFORMATION

 

Item 1. Legal Proceedings

27

Item 6. Exhibits

28

Signatures

29

 

 


 

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

 

NET REVENUES

 

$

6,996

 

 

$

14,376

 

 

$

18,781

 

 

$

24,119

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses excluding depreciation and amortization expense

 

 

6,484

 

 

 

7,818

 

 

 

15,863

 

 

 

15,579

 

Corporate expenses

 

 

932

 

 

 

1,845

 

 

 

2,097

 

 

 

3,486

 

Depreciation and amortization

 

 

1,163

 

 

 

978

 

 

 

2,190

 

 

 

1,959

 

Loss (gain) on disposal of assets

 

 

4

 

 

 

(72

)

 

 

82

 

 

 

(78

)

Total operating expenses

 

 

8,583

 

 

 

10,569

 

 

 

20,232

 

 

 

20,946

 

OPERATING (LOSS) INCOME

 

 

(1,587

)

 

 

3,807

 

 

 

(1,451

)

 

 

3,173

 

OTHER EXPENSE:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(2,279

)

 

 

(2,701

)

 

 

(4,517

)

 

 

(5,239

)

Loss on debt extinguishment

 

 

 

 

 

(81

)

 

 

 

 

 

(81

)

(LOSS) INCOME BEFORE INCOME TAXES

 

 

(3,866

)

 

 

1,025

 

 

 

(5,968

)

 

 

(2,147

)

PROVISION FOR INCOME TAXES

 

 

14,493

 

 

 

82

 

 

 

13,876

 

 

 

163

 

CONSOLIDATED NET (LOSS) INCOME

 

 

(18,359

)

 

 

943

 

 

 

(19,844

)

 

 

(2,310

)

PREFERRED STOCK DIVIDENDS

 

 

528

 

 

 

669

 

 

 

1,057

 

 

 

1,303

 

NET (LOSS) INCOME

 

$

(18,887

)

 

$

274

 

 

$

(20,901

)

 

$

(3,613

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic net (loss) income per share attributable to common shareholders

 

$

(2.66

)

 

$

0.02

 

 

$

(2.95

)

 

$

(0.51

)

Basic weighted average number of common shares outstanding

 

 

7,096

 

 

 

7,187

 

 

 

7,090

 

 

 

7,151

 

Diluted net (loss) income per share attributable to common shareholders

 

$

(2.66

)

 

$

0.02

 

 

$

(2.95

)

 

$

(0.51

)

Diluted weighted average number of common shares outstanding

 

 

7,096

 

 

 

7,366

 

 

 

7,090

 

 

 

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; none 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.

- 6 -


MEDIACO HOLDING INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(IN THOUSANDS UNLESS INDICATED OTHERWISE, EXCEPT SHARE DATA)

June 30, 2021

(Unaudited)

Note 1. Summary of Significant Accounting Policies

Organization

MediaCo Holding Inc. (“MediaCo” or the “Company”) is an Indiana corporation formed in 2019, focused on radio and outdoor advertising.

Our assets consist of two radio stations, WQHT-FM and WBLS-FM, which serve the New York City metropolitan area, as well as approximately 3,600 outdoor advertising displays in the Southeast (Georgia, Alabama and Tennessee) region and Mid-Atlantic (Kentucky) region of the United States. We derive our revenues primarily from radio and outdoor advertising sales, but we also generate revenues from events, including sponsorships and ticket sales.

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

Basis of Presentation

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 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 value is 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 (exit price). The Company utilizes 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 be readily observable, market corroborated 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 no 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 those described in Note 3, Intangible Assets, 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 3 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 reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as

- 7 -


of the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. 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 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 of the magnitude and duration of COVID-19, as well as other factors, could result in material changes to the estimates and material impacts to the Company’s condensed consolidated financial statements in future reporting periods.

Per 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 common shareholders:

 

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 were excluded from the calculation of diluted net loss 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

 

 

(In thousands)

 

Convertible Emmis promissory note

 

1,238

 

 

 

1,655

 

 

 

1,238

 

 

 

2,206

 

Convertible Standard General promissory notes

 

2,785

 

 

 

6,371

 

 

 

2,785

 

 

 

8,501

 

Series A convertible preferred stock

 

5,734

 

 

 

7,179

 

 

 

5,734

 

 

 

9,567

 

Restricted stock awards

 

 

 

 

10

 

 

 

 

 

 

176

 

Total

 

9,757

 

 

 

15,215

 

 

 

9,757

 

 

 

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 the adoption of the new standard will have on our condensed consolidated financial statements.

Note 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):

 

 

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