ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
General
We are a multi-platform media company whose primary business is operating radio stations throughout the United States. We offer local and
national advertisers integrated marketing solutions across audio, digital and event platforms. We own and operate radio stations in the following radio markets: Atlanta, GA, Augusta, GA, Boston, MA, Charlotte, NC, Detroit, MI, Fayetteville, NC, Fort
Myers-Naples, FL, Las Vegas, NV, Middlesex, NJ, Monmouth, NJ, Morristown, NJ, Philadelphia, PA, Tampa-Saint Petersburg, FL, West Palm Beach-Boca Raton, FL, and Wilmington, DE. We refer to each group of radio stations in each radio market as a market
cluster.
Recent Developments
As of
December 31, 2020, the financial statements included the accounts of the Company and its wholly owned subsidiaries and its investments in OutlawsXP, Inc. (Outlaws) and Renegades Holdings, Inc. (Renegades). We held an
approximately 90% economic interest in Outlaws and an approximately 51% economic interest in Renegades as of December 31, 2020. Renegades held an approximately 10% economic interest in Outlaws as of December 31, 2020. On March 12,
2021, we entered into an agreement to exchange our ownership interest in Renegades for the interest held by Renegades in Outlaws. As a result of the exchange, Outlaws is now a wholly owned subsidiary of the Company and we no longer hold an economic
interest in Renegades therefore the accounts of Renegades are no longer consolidated in our financial statements subsequent to the date of the exchange. Also, as a result of the exchange, we recorded a loss of approximately $3,000 attributable to
the difference between the estimated fair value of the economic interest held by Renegades in Outlaws and the carrying amount of our ownership interest in Renegades in the first quarter of 2021.
On March 1, 2021, we entered into a loan with Synovus Bank for $10.0 million pursuant to the Paycheck Protection Program (the
PPP) under the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act). The loan bears interest at a rate of 1.0% per annum and matures on March 1, 2026. Principal and interest payments will be deferred, with
interest accruing, until after the period in which we may apply for loan forgiveness pursuant to the PPP. After the deferral period, we will make monthly principal and interest payments, amortized over the remaining term of the loan. The loan may be
prepaid at any time prior to maturity with no prepayment penalties. The loan contains customary events of default relating to, among other things, payment defaults or breaches of the terms of the promissory note. Upon the occurrence of an event of
default, Synovus Bank may require immediate repayment of all amounts outstanding under the promissory note. Under the terms of the CARES Act, we can apply for and be granted forgiveness for all or a portion of the loan granted under the PPP. The
loan is subject to forgiveness to the extent proceeds are used for certain qualifying expenses pursuant to the terms and limitations of the PPP. We intend to use the loan for qualifying expenses. However, no assurance can be provided that we will
apply for or obtain forgiveness of the loan in whole or in part.
On February 2, 2021, we issued $300.0 million aggregate
principal amount of 8.625% senior secured notes due on February 1, 2026 (the Notes) under an indenture dated February 2, 2021 (the Indenture). Interest on the Notes accrues at the rate of 8.625% per annum and is
payable semiannually in arrears on February 1 and August 1 of each year, commencing on August 1, 2021. The Notes are secured on a first-lien priority basis by substantially all assets of the Company and its majority owned subsidiaries
and are guaranteed jointly and severally by the Company and its majority owned subsidiaries. We used the net proceeds from the Notes, to repay the credit facility, the promissory note, and loan from Mr. George Beasley (see Note 9 to the
accompanying financial statements) and to pay related accrued interest, fees and expenses. The Indenture contains restrictive covenants that limit the ability of the Company and its subsidiaries to, among other things, incur additional indebtedness,
guarantee indebtedness or issue disqualified stock or, in the case of such subsidiaries, preferred stock; pay dividends on, repurchase or make distributions in respect of our capital stock or make other restricted payments; make certain investments
or acquisitions; sell, transfer or otherwise convey certain assets; create liens; enter into agreements restricting certain subsidiaries ability to pay dividends or make other intercompany transfers; consolidate, merge, sell or otherwise
dispose of all or substantially all of our assets; enter into transactions with affiliates; prepay certain kinds of indebtedness; and issue or sell stock of our subsidiaries.
Cautionary Note Regarding Forward-Looking Statements
This report contains forward-looking statements about the Company within the meaning of the Private Securities Litigation Reform
Act of 1995, which relate to future, not past, events. All statements other than statements of historical fact included in this document are forward-looking statements. These forward-looking statements are based on the current beliefs and
expectations of the Companys management and are subject to known and unknown risks and uncertainties. Forward-looking statements, which address the Companys expected business and financial performance and financial condition, among other
matters, contain words such as: expects, anticipates, intends, plans, believes, estimates, may, will, plans, projects,
could, should, would, seek, forecast, or other similar expressions.
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