MediaCo (NASDAQ: MDIA) grows Q1 revenue but flags going-concern risk
Filing Impact
Filing Sentiment
Form Type
10-Q
MediaCo Holding Inc. reported higher net revenues but deeper losses and mounting liquidity pressure for the quarter ended March 31, 2026. Net revenues rose 12% to $31.4 million, driven by strong growth in digital revenue to $15.5 million, while traditional spot radio and TV advertising declined.
Operating expenses increased 19% to $38.9 million, including higher digital platform costs and a $0.8 million loss on disposal of assets, pushing operating loss to $7.5 million. Net loss widened to $9.4 million, and cash used in operating activities was $2.0 million compared with positive $2.1 million a year earlier.
MediaCo ended the quarter with $5.1 million of cash, cash equivalents and restricted cash and a working capital deficit of $54.5 million. With near‑term debt maturities, high leverage, and limited liquidity, management concluded that substantial doubt exists about the company’s ability to continue as a going concern absent successful refinancing, cost actions, or new capital.
Positive
- None.
Negative
- None.
Insights
Revenue is growing, but leverage, cash burn, and going‑concern risk dominate.
MediaCo showed a 12% revenue increase to $31.4 million, powered by digital growth, yet operating expenses climbed 19% and net loss reached $9.4 million. Adjusted EBITDA fell sharply to $0.2 million, indicating very thin underlying earnings power.
Liquidity is tight: cash, cash equivalents and restricted cash were $5.1 million against a working capital deficit of $54.5 million. The balance sheet carries first lien term loans of $45.0 million, a second lien loan of $31.1 million, and Series B preferred stock with a $60.0 million liquidation value.
Management explicitly states that, without executing refinancing, cost cuts, and potential capital raises, there is substantial doubt about the company’s ability to continue as a going concern within one year of issuance. Cash flows from operations turned negative in the quarter, so the ability to address the 2026 term loan maturity and ongoing obligations will be central to the company’s financial trajectory.
Key Figures
Net revenues: $31.4M
Net loss: $9.4M
Adjusted EBITDA: $0.2M
+5 more
8 metrics
Net revenues
$31.4M
Three months ended March 31, 2026; up from $28.0M in 2025
Net loss
$9.4M
Three months ended March 31, 2026; compared with $8.6M in 2025
Adjusted EBITDA
$0.2M
Three months ended March 31, 2026; down from $1.4M in 2025
Cash, cash equivalents and restricted cash
$5.1M
Balance at March 31, 2026
Working capital deficit
$54.5M
Deficit at March 31, 2026
Long-term debt
$64.1M
Long-term portion at March 31, 2026, excluding $10.0M current
Series B Preferred Stock liability
$42.9M
Carrying amount at March 31, 2026
Digital revenue
$15.5M
Three months ended March 31, 2026; compares with $9.5M in 2025
Key Terms
going concern, Adjusted EBITDA, Series B Preferred Stock, variable interest entity, +2 more
6 terms
going concern financial
"Management evaluated these conditions and determined that ... substantial doubt exists about the Company’s ability to continue as a going concern"
A going concern is a business that is expected to continue its operations and meet its obligations for the foreseeable future, rather than shutting down or selling off assets. This assumption matters to investors because it indicates stability and ongoing profitability, making the business a more reliable investment. Think of it as believing a restaurant will stay open and serve customers, rather than closing down suddenly.
Adjusted EBITDA financial
"Adjusted EBITDA for the three months ended March 31, 2026 was $0.2 million decreasing 86%"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
Series B Preferred Stock financial
"The Company has 60,000 shares of Series B Preferred Stock with an aggregate initial liquidation value of $60.0 million."
Series B preferred stock is a type of ownership share issued by a company that offers certain advantages over common stock, such as priority in receiving dividends or assets if the company is sold or liquidated. It is typically issued after an initial round of funding, making it a way for investors to support a company's growth while gaining some protections and benefits. This stock matters to investors because it often provides a more secure investment position with potential for future growth.
variable interest entity financial
"Prior to May 1, 2025, the Company consolidated certain entities as a variable interest entity (“VIE”)."
A variable interest entity (VIE) is a company structure where one party controls another company’s operations and economic outcomes through contracts or special arrangements instead of owning a majority of its voting shares. For investors, VIEs matter because the controlling party’s financial results, debts and risks can appear in the controller’s reports even though ownership looks separate, so understanding VIEs helps assess true exposure, governance limits and transparency—like spotting a puppet controlled by strings rather than direct ownership.
equity method investment financial
"The Company acquired an investment in Sigma ... and accounts for the investment under the equity method of accounting."
An equity method investment is an accounting way to report ownership in another company when an investor has significant influence (commonly around 20–50% of voting rights). Instead of listing the other company’s full assets and debts, the investor records its share of that company’s profits or losses on its own income statement—like keeping track of your share of a neighborhood bakery’s monthly earnings. Investors care because those shared profits, losses and changes in the investee’s value directly affect the investor’s reported earnings and balance sheet, so this method can materially change a company’s financial picture and valuation.
material weakness regulatory
"it was determined that the Company’s internal control over financial reporting was not effective due to the material weakness described below."
A material weakness is a significant flaw in the systems and checks a company uses to ensure its financial reports are accurate, meaning errors or fraud could happen and not be caught. For investors it matters because it raises the risk that reported results are unreliable—similar to finding a hole in a ship’s hull—potentially leading to corrected financials, regulatory action, reduced trust, and negative effects on stock value and borrowing costs.
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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 March 31, 2026
| 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
______________________________________
(Exact name of registrant as specified in its charter)
______________________________________
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
(Address of principal executive offices)
(Registrant’s Telephone Number, Including Area Code)
N/A
(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 | ||||||
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 x No o
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 x No o
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 | o | Accelerated filer | o | ||||||||
| x | 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. o
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
The number of shares outstanding of each of MediaCo Holding Inc.’s classes of common stock, as of May 13, 2026, was:
| Shares of Class A common stock, $.01 Par Value | ||||||||
| Shares of Class B common stock, $.01 Par Value | ||||||||
| Shares of Class C common stock, $.01 Par Value | ||||||||
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INDEX
| Page | |||||
PART I — FINANCIAL INFORMATION | |||||
Item 1. Financial Statements | 3 | ||||
Condensed Consolidated Statements of Operations for the three-month periods ended March 31, 2026 and 2025 | 3 | ||||
Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025 | 4 | ||||
Condensed Consolidated Statements of Changes in Equity for the three-month periods ended March 31, 2026 and 2025 | 5 | ||||
Condensed Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2026 and 2025 | 6 | ||||
Notes to Condensed Consolidated Financial Statements | 7 | ||||
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 19 | ||||
Item 3. Quantitative and Qualitative Disclosures about Market Risk | 26 | ||||
Item 4. Controls and Procedures | 26 | ||||
PART II — OTHER INFORMATION | |||||
Item 1. Legal Proceedings | 27 | ||||
Item 1A. Risk Factors | 27 | ||||
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities | 28 | ||||
Item 3. Defaults upon Senior Securities | 28 | ||||
Item 4. Mine Safety Disclosures | 28 | ||||
Item 5. Other Information | 28 | ||||
Item 6. Exhibits | 28 | ||||
SIGNATURES | 29 | ||||
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PART I — FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MEDIACO HOLDING INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands, except per share amounts) | 2026 | 2025 | |||||||||||||||||||||
| NET REVENUES | $ | $ | |||||||||||||||||||||
| OPERATING EXPENSES: | |||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Corporate expenses | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Loss on disposal of assets | |||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| OPERATING LOSS | ( | ( | |||||||||||||||||||||
| OTHER INCOME (EXPENSE): | |||||||||||||||||||||||
| Interest expense, net | ( | ( | |||||||||||||||||||||
| Other income, net | |||||||||||||||||||||||
| Total other expense | ( | ( | |||||||||||||||||||||
| LOSS BEFORE INCOME TAXES AND EQUITY METHOD INVESTMENTS | ( | ( | |||||||||||||||||||||
| PROVISION FOR INCOME TAXES | |||||||||||||||||||||||
| LOSS BEFORE EQUITY METHOD INVESTMENTS | ( | ( | |||||||||||||||||||||
| EQUITY LOSS IN INVESTMENTS | ( | ||||||||||||||||||||||
| NET LOSS | ( | ( | |||||||||||||||||||||
| Net income attributable to noncontrolling interest | |||||||||||||||||||||||
| NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | ( | $ | ( | |||||||||||||||||||
| Net loss per share attributable to common shareholders - basic and diluted | $ | ( | $ | ( | |||||||||||||||||||
| Weighted-average common shares outstanding - basic and diluted | |||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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MEDIACO HOLDING INC.
CONDENSED CONSOLIDATED BALANCE SHEET
| March 31, 2026 | December 31, 2025 | ||||||||||
| (in thousands, except share data) | (Unaudited) | ||||||||||
| ASSETS | |||||||||||
| CURRENT ASSETS: | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net of allowance for credit losses of $ | |||||||||||
| Current programming rights | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Assets held for sale | |||||||||||
| Total current assets | |||||||||||
| PROPERTY AND EQUIPMENT, NET | |||||||||||
| GOODWILL | |||||||||||
| INTANGIBLE ASSETS, NET | |||||||||||
| OPERATING LEASE RIGHT OF USE ASSETS | |||||||||||
| OTHER NONCURRENT ASSETS | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND EQUITY | |||||||||||
| CURRENT LIABILITIES: | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Accrued expenses | |||||||||||
| Current maturities of long-term debt | |||||||||||
| Accrued salaries and commissions | |||||||||||
| Deferred revenue | |||||||||||
| Operating lease liabilities | |||||||||||
| Income taxes payable | |||||||||||
| Other current liabilities | |||||||||||
| Total current liabilities | |||||||||||
| LONG TERM DEBT, NET OF CURRENT | |||||||||||
| SERIES B PREFERRED STOCK | |||||||||||
| OPERATING LEASE LIABILITIES, NET OF CURRENT | |||||||||||
| UNRECOGNIZED TAX LIABILITY | |||||||||||
| OTHER NONCURRENT LIABILITIES | |||||||||||
| Total liabilities | |||||||||||
COMMITMENTS AND CONTINGENCIES (See Note 8) | |||||||||||
| EQUITY: | |||||||||||
Class A common stock, $ | |||||||||||
Class B common stock, $ | |||||||||||
Class C common stock, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated deficit | ( | ( | |||||||||
| Total equity | |||||||||||
| Total liabilities and equity | $ | $ | |||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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MEDIACO HOLDING INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
| Class A common stock | Class B common stock | Warrant Shares | Additional paid-in capital | Accumulated Deficit | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||||||||||||||
| (in thousands, except share data) | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE, DECEMBER 31, 2025 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of class A to employees, officers and directors, net of withholdings | ( | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Equity Clawback (Note 11) | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| BALANCE, MARCH 31, 2026 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
BALANCE, DECEMBER 31, 2024 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
| Sale of class A common shares | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation expense | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of class A to employees, officers and directors, net of withholdings | ( | ( | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Warrant shares | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| BALANCE, MARCH 31, 2025 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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MEDIACO HOLDING INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three Months Ended March 31, | |||||||||||
| (in thousands) | 2026 | 2025 | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
| Consolidated net loss | $ | ( | $ | ( | |||||||
| Adjustments to reconcile net loss to net cash (used in) provided by operating activities - | |||||||||||
| Depreciation and amortization | |||||||||||
| Amortization of debt discount | |||||||||||
| Amortization of fair value debt adjustments | |||||||||||
| Noncash interest expense | |||||||||||
| Noncash lease expense | |||||||||||
| Noncash Gain on remeasurement of lease | ( | ||||||||||
| Provision for bad debts | ( | ( | |||||||||
| Provision for deferred income taxes | |||||||||||
| Loss on equity method investment | |||||||||||
| Other noncash items | |||||||||||
| Changes in assets and liabilities | |||||||||||
| Accounts receivable | |||||||||||
| Prepaid expenses and other current assets | ( | ||||||||||
| Other assets | |||||||||||
| Accounts payable and accrued liabilities | ( | ||||||||||
| Deferred revenue | ( | ||||||||||
| Operating lease liabilities | ( | ( | |||||||||
| Other liabilities | ( | ( | |||||||||
| Net cash (used in) provided by operating activities | ( | ||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
| Purchases of property and equipment | ( | ( | |||||||||
| Investment in equity method investment | ( | ||||||||||
| Proceeds from the sale of property and equipment | |||||||||||
| Net cash provided by (used in) investing activities | ( | ||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
| Proceeds from issuance of class A common stock | |||||||||||
| Finance lease principal payments | ( | ( | |||||||||
| Settlement of tax withholding obligations | ( | ||||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH | ( | ||||||||||
| CASH, CASH EQUIVALENTS AND RESTRICTED CASH: | |||||||||||
| Beginning of period | |||||||||||
| End of period | $ | $ | |||||||||
| SUPPLEMENTAL DISCLOSURES: | |||||||||||
| Cash paid for interest | $ | $ | |||||||||
| Cash paid for income taxes | $ | $ | |||||||||
| SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING: | |||||||||||
| Capital expenditures received in exchange for liabilities included in deferred revenue | $ | $ | |||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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MEDIACO HOLDING INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands Unless Indicated Otherwise)
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
MediaCo Holding Inc., and its subsidiaries (collectively, “MediaCo” or the “Company”) is an owned and operated multi-media company formed in Indiana in 2019, focused on television, radio and digital advertising, premium programming and events.
Our portfolio includes a national network, as well as digital, and commercial operations. Our broadcasting assets consist of thirteen radio stations, including two located in New York City, WQHT(FM) and WBLS(FM) (the “Stations”), which serve the New York City demographic market area and primarily target Black, Hispanic, and multi-cultural consumers. The remaining eleven radio stations serve Los Angeles, CA, Houston, TX, and Dallas, TX. Our assets also include nine television stations serving Los Angeles, CA, Houston, TX, Denver, CO, New York, NY, Chicago, IL and Miami, FL. Our portfolio includes the Estrella brands including the EstrellaTV network, its linear and digital video content business, and its digital channels, including eight free ad-supported television (“FAST”) channels: EstrellaTV, Estrella News, Cine EstrellaTV, Estrella Games, EstrellaTV Mexico, Curiosity Explora, Curiosity Motores, and Curiosity Animales. We derive our revenues primarily from radio, television and digital advertising sales, and also generate revenues from events, including sponsorships and ticket sales, licensing, and syndication.
Unless the context otherwise requires, references to “we,” “us,” and “our” refer to MediaCo and its subsidiaries.
Basis of Presentation and Consolidation
The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. Accordingly, they do not include all disclosures required for annual financial statements.
In the opinion of management, all adjustments necessary for a fair presentation, consisting of normal recurring adjustments, have been included. All intercompany balances and transactions have been eliminated in consolidation.
Reclassifications
Certain amounts have been reclassified to conform to the current year presentation.
Summary of Significant Accounting Policies
The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete annual financial statements.
The significant accounting policies applied in preparing these condensed consolidated financial statements are consistent with those described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (“fiscal year 2025”), filed with the SEC on March 31, 2026, except as otherwise disclosed herein. There have been no significant changes to the Company’s significant accounting policies during the three months ended March 31, 2026.
Cash, Cash Equivalents and Restricted Cash
Restricted cash of $2.0
Allowance for Credit Losses
The activity in the allowance for credit losses for the three months ended March 31, 2026 and 2025 was as follows:
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| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Beginning Balance | $ | $ | |||||||||||||||||||||
| Change in Provision | ( | ( | |||||||||||||||||||||
| Write Offs | ( | ||||||||||||||||||||||
| Ending Balance | $ | $ | |||||||||||||||||||||
Fair Value Measurements
The Company’s fair value hierarchy classification of financial instruments measured at fair value on a recurring basis has not changed during the three months ended March 31, 2026. The carrying value of the Company’s long-term debt approximates fair value due to its variable interest rate structure. The Company did not have any material transfers between Levels 1, 2, or 3 of the fair value hierarchy during the period.
Goodwill and Indefinite-lived Intangibles
The Company evaluates goodwill and indefinite-lived intangible assets for impairment annually, or more frequently if events or changes in circumstances indicate potential impairment. No impairment charges were recorded during the three months ended March 31, 2026 and 2025.
Production Costs
Amortization expense for the three months ended March 31, 2026 and 2025 was $0.2 million and zero , respectively, which is included in operating expenses.
Advertising Costs
Deferred Revenue and Barter Transactions
The makegood liability account activity as of March 31, 2026 and 2025, and the barter revenue and barter expense transactions for the three months ended March 31, 2026 and 2025 are as follows:
| March 31, 2026 | March 31, 2025 | ||||||||||||||||||||||
| Beginning Makegood Liability Balance | $ | $ | |||||||||||||||||||||
| Makegood Revenue Recognized | |||||||||||||||||||||||
| New Makegood Obligations | |||||||||||||||||||||||
| Ending Makegood Liability Balance | $ | $ | |||||||||||||||||||||
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Barter Revenue | $ | $ | |||||||||||||||||||||
| Barter Expenses | $ | $ | |||||||||||||||||||||
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Variable Interest Entities
Estimates
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 of the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. The Company has considered information available to it as of the date of issuance of these financial statements and is not aware of any specific events or circumstances that would require an update to its estimates or judgments, or a revision to the carrying value of its assets or liabilities. These estimates may change as new events occur and additional information becomes available. Actual results could differ materially from these estimates.
Going Concern
The accompanying condensed consolidated financial statements are prepared in accordance with GAAP applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
As of March 31, 2026, the Company has near-term debt maturities, a working capital deficit, and liquidity constraints. Management evaluated these conditions in accordance with applicable accounting guidance and determined that, absent the successful execution of its plans, substantial doubt exists about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued.
Management has concluded that our ability to continue as a going concern is dependent on our ability to execute our business plan and/or implement other strategic options. Management is prepared to implement additional cost cutting measures, as necessary, intends to seek refinancing and to raise additional capital to meet its debt service and working capital obligations, if needed. However, while the Company has been successful in obtaining additional liquidity in the past, no assurances can be made that the Company will receive such liquidity in the future, or that the other actions described above will alleviate substantial doubt about our ability to continue as a going concern.
The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.
Recent Accounting Pronouncements Not Yet Implemented
In November 2024, the FASB issued ASU 2024-03, Accounting Standards Update 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods. This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. An entity may apply the amendments prospectively for reporting periods after the effective date or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating this guidance and its impact on the Company's condensed consolidated financial statements and financial statement disclosures.
In July 2025, the FASB issued ASU 2025‑05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendment provides a practical expedient for estimating expected credit losses on current accounts receivable and current contract assets arising from revenue transactions. Under the expedient, an entity may assume that current conditions at the balance‑sheet date remain constant over the remaining life of these assets, simplifying the application of the current expected credit loss model. ASU 2025‑05 is effective for annual periods beginning after December 15, 2025, and is to be applied on a prospective basis. Early adoption is permitted. The Company is evaluating whether to elect the practical expedient; however, based on the short‑term nature of its advertising receivables and historical collection patterns, the Company does not expect adoption of this guidance to have a material impact on its condensed consolidated financial statements.
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2. EARNINGS PER SHARE
Basic and diluted net loss per share is computed using the two-class method, which allocates earnings to each class of common stock and participating securities based on their respective rights to receive dividends and undistributed earnings. Certain warrants to purchase Class A common stock are considered participating securities because they have the right to participate in distributions with common shareholders on an as-exercised basis. During periods of net loss, participating securities are not allocated losses as they are not contractually obligated to share in such losses. The Company has elected to allocate earnings based on loss from operations. For periods in which the Company reports a net loss, all potentially dilutive securities are anti-dilutive. Accordingly, basic and diluted weighted-average shares outstanding are the same for the periods presented.
The following table presents a reconciliation of basic and diluted net loss per share attributable to Class A and Class B common shareholders:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net loss | $ | ( | $ | ( | |||||||||||||||||||
| Less: Net loss attributable to noncontrolling interests | ( | ||||||||||||||||||||||
| Net loss attributable to common shareholders for basic and diluted earnings per share | $ | ( | $ | ( | |||||||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted-average shares of common stock outstanding - basic and diluted | |||||||||||||||||||||||
| Earnings per share of common stock attributable to common shareholders: | |||||||||||||||||||||||
| Net loss per share attributable to common shareholders - basic and diluted | $ | ( | $ | ( | |||||||||||||||||||
The following items were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive.
| Three Months Ended March 31, | |||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | |||||||||||||||||||||
| Option agreement shares | |||||||||||||||||||||||
| Restricted stock awards | |||||||||||||||||||||||
| Total anti-dilutive shares | |||||||||||||||||||||||
On January 1, 2026, the Company acquired an investment in Sigma (“Investee”), a limited liability company operating an audio advertising and media network. The Company accounts for the investment under the equity method of accounting as it does not control the Investee.
Under the Investee’s operating agreement, eMedia serves as manager and controls the significant operating activities of the Investee.
Pursuant to the operating agreement, the Company is committed to fund up to $1.0 million of the Investee’s operating needs during the initial funding period. Contributions are accounted for as capital contributions and included in the carrying value of the investment. As of March 31, 2026, the Company has contributed $0.3 million to the Investee. The Company has remaining funding commitments of $0.7 million, under the agreement.
Under the operating agreement, the Company is allocated 100 % of the Investee’s profits and losses until recovery of its initial capital contributions, after which profits and losses are allocated 60 % to the Company and 40 % to eMedia.
During the three months ended March 31, 2026, the Company recognized losses of $0.3 million which is included in equity loss in investments in the condensed consolidated statements of operations. This has reduced the investment in the Investee balance to zero as of March 31, 2026. No cash distributions were received during the period.
Summarized financial information for equity method investees has not been presented as such information is not material to the Company’s condensed consolidated financial statements.
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4. INTANGIBLE ASSETS AND GOODWILL
As of March 31, 2026 and December 31, 2025, intangible assets and goodwill consisted of the following:
| March 31, 2026 | December 31, 2025 | ||||||||||
| Goodwill | $ | $ | |||||||||
| Indefinite-lived intangible assets: | |||||||||||
| FCC licenses | $ | $ | |||||||||
| Definite-lived intangible assets: | |||||||||||
| Customer relationships | $ | $ | |||||||||
| Software | |||||||||||
| Other | |||||||||||
| Total definite-lived intangible assets, net | $ | $ | |||||||||
| Total intangible assets, net and goodwill | $ | $ | |||||||||
Definite-lived intangibles
The following table presents the weighted-average useful life at March 31, 2026, and the gross carrying amount and accumulated amortization for each major class of definite-lived intangible assets at March 31, 2026 and December 31, 2025:
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||||||||||||||||||||
Weighted Average Remaining Useful Life (in years) | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | |||||||||||||||||||||||||||||||||||
| Customer relationships | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| Software | |||||||||||||||||||||||||||||||||||||||||
| Other | |||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
The software was developed internally by our radio operations and represents our updated website and mobile application, which offer increased functionality and opportunities to grow and interact with our audience. They cost $1.7 million to develop and useful lives of five years and seven years were assigned to the application and website, respectively. The customer relationships and time brokerage agreements (“Other”) were acquired as part of the Estrella acquisition.
Total amortization expense from definite-lived intangible assets for each of the three months ended March 31, 2026 and 2025 and included in the depreciation and amortization line item in the condensed consolidated statements of operations was as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Amortization expense | $ | $ | |||||||||||||||||||||
The Company estimates amortization expense for each of the next five years as follows:
| Amortization Expense | ||||||||
| 2026 (from April 1) | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| After 2030 | ||||||||
| Total | $ | |||||||
5. PROGRAMMING RIGHTS
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Program rights expected to be amortized to expense in the following 12-month period are classified as current assets and program rights payable within the following 12-month period are classified as current liabilities. Long-term program rights assets are classified as noncurrent acquired programming rights. The Company did not have any long-term program rights liabilities as of March 31, 2026 and December 31, 2025. All program rights payables are included in other current liabilities as of March 31, 2026 and December 31, 2025. Amortization expense for the three months ended March 31, 2026 and 2025, was $0.3 million and $0.4 million, respectively, which is included in operating expenses. The Company evaluates programming rights for impairment whenever indicators of loss are present. No impairment was recorded during the periods presented.
The Company estimates amortization expense as follows:
| Amortization Expense | ||||||||
| 2026 (from April 1) | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| Total | $ | |||||||
Sublicense Agreement
On July 3, 2025, the Company entered into a three-year sublicense agreement with a programming syndicate to obtain non-exclusive Spanish-language broadcast and distribution rights to certain live sporting events. The sublicense covers the 2025-26, 2026-27, and 2027-28 seasons within the United States and Canada. Under the agreement, the syndicate provides the live clean feeds of these sporting events and related highlights, and the Company is permitted to air and monetize such programming across its linear and digital platforms.
6. REVENUE
The Company generates revenue from the sale of services including, but not limited to: (i) on-air commercial broadcast time, (ii) non-traditional revenues including event-related revenues and event sponsorship revenues, and (iii) digital advertising. Payments received from advertisers before the performance obligation is satisfied are recorded as deferred revenue. Certain network sales contracts include a guaranteed number of units. If the guarantee is not met, the Company is obligated to provide additional units at no charge until the guaranteed number of units is met, referred to as a makegood liability. The liability for each contract is calculated by determining the cost per guarantee per the original contract, multiplied by the number of deficiency units. As of March 31, 2026, the makegood liability which is associated with these network sales and contracts was $6.3 million and is expected to be recognized at various times, but not anticipated to exceed four years and is included in Deferred revenue in the condensed consolidated financial statements. We do not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. Advertising revenues presented in the condensed consolidated financial statements are reflected on a net basis, after the deduction of advertising agency fees, usually at a rate of 15 % of gross revenues.
Spot Radio & TV Advertising
On-air broadcast revenue is recognized when or as performance obligations under the terms of a contract with a customer are satisfied. This typically occurs over the period of time that advertisements are provided, or as an event occurs. Revenues are reported at the amount the Company expects to be entitled to receive under the contract. Payments received from advertisers before the performance obligation is satisfied are recorded as deferred revenue in the condensed consolidated balance sheets.
Digital
Digital revenue relates to revenue generated from the sale of digital marketing services (including display advertisements and video pre-roll and sponsorships) to advertisers on Company-owned websites and from revenue generated from content distributed across other digital platforms. Digital revenues are generally recognized as the digital advertising is delivered.
Syndication
Syndication revenue relates to revenue generated from the sale of rights to broadcast shows we produce as well as revenues from syndicated shows we broadcast for a fee. Syndication revenues are generally recognized ratably over the term of the contract.
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Events and Sponsorships
Events and Sponsorships revenues principally consist of ticket sales and sponsorship of events our stations conduct in their local market. These revenues are recognized when our performance obligations are fulfilled, which generally coincides with the occurrence of the related event.
Other
Other revenue includes barter revenue, network revenue, talent fee revenue and other revenue. The Company provides advertising broadcast time in exchange for certain products and services, including on-air radio programming. These barter arrangements generally allow the Company to preempt such bartered broadcast time in favor of advertisers who purchase time for cash consideration. These barter arrangements are valued based upon the Company’s estimate of the fair value of the products and services received. Revenue is recognized on barter arrangements when we broadcast the advertisements. Advertisements delivered under barter arrangements are typically aired during the same period in which the products and services are consumed. The Company also sells certain remnant advertising inventory to third-parties for cash, and we refer to this as network revenue. The third-parties aggregate our remnant inventory with other broadcasters’ remnant inventory for sale to third parties, generally to large national advertisers. This network revenue is recognized as we broadcast the advertisements. Talent fee revenue are fees earned for appearances by our talent, which is recognized when our performance obligations are fulfilled, which generally coincides with the occurrence of the related appearance. Other revenue is comprised of brand integrations, custom on-air shows, or other amounts earned that do not fit in any other category and are recognized when our performance obligations are fulfilled.
Disaggregation of revenue
The following table presents the Company's revenues disaggregated by revenue source:
| Three Months Ended March 31, 2026 | |||||||||||||||||||||||
| Audio | Video | Consolidated | |||||||||||||||||||||
| Net revenues: | |||||||||||||||||||||||
| Spot Radio & TV Advertising | $ | $ | $ | ||||||||||||||||||||
| Digital | |||||||||||||||||||||||
| Syndication | |||||||||||||||||||||||
| Events and Sponsorships | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total net revenues | $ | $ | $ | ||||||||||||||||||||
| Three Months Ended March 31, 2025 | |||||||||||||||||||||||
| Audio | Video | Consolidated | |||||||||||||||||||||
| Net revenues: | |||||||||||||||||||||||
| Spot Radio & TV Advertising | $ | $ | $ | ||||||||||||||||||||
| Digital | |||||||||||||||||||||||
| Syndication | |||||||||||||||||||||||
| Events and Sponsorships | |||||||||||||||||||||||
| Other | |||||||||||||||||||||||
| Total net revenues | $ | $ | $ | ||||||||||||||||||||
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7. LONG-TERM DEBT, WARRANTS, AND SERIES B PREFERRED STOCK
Long-term debt, and Series B Preferred Stock was comprised of the following at March 31, 2026 and December 31, 2025:
| March 31, 2026 | December 31, 2025 | ||||||||||
| First Lien Term Loans | $ | $ | |||||||||
| Second Lien Term Loan | |||||||||||
| Less: Current maturities | ( | ( | |||||||||
| Less: Unamortized original issue discount and deferred financing costs | ( | ( | |||||||||
| Total long-term debt | $ | $ | |||||||||
| Series B Preferred Stock | $ | $ | |||||||||
First Lien Term Loans
The Company has a first lien term loan credit facility (the “First Lien Credit Agreement”) of $45.0 million with WhiteHawk Capital Partners, LP, as administrative and collateral agent, and various lenders from time-to-time party thereto.
The term loans under the First Lien Credit Agreement bear interest at a rate of SOFR + 6.00 %.and require monthly interest payments. The First Lien Credit Agreement consists of an $35.0 million initial term loan (the “Initial Term Loan”) and delayed draw term loans in an aggregate amount up to $10.0 million (the “Delayed Draw Term Loans”). The first of such Delayed Draw Term Loans of $5.0 million was made on May 2, 2024 and the second of such Delayed Draw Term Loans of $5.0 million was made on July 17, 2024. The Initial Term Loan matures on April 17, 2029. During the first quarter of 2026, the Company obtained an amendment that extended the maturity of its First Lien Credit Agreement debt previously due in May 2026 to July 30, 2026 and waived certain covenant requirements. As of March 31, 2026, the Company was in compliance with all applicable financial covenants.
Second Lien Term Loan
The Company has a $30.0 million second lien term loan credit facility (the “Second Lien Credit Agreement” or the “2L Term Loan”) with HPS Investment Partners, LLC (“HPS”), as administrative and collateral agent, and various financial institutions from time-to-time party thereto. The Second Lien Credit Agreement was initially recorded at a discount and is accreted to its redemption value over its term, with such accretion recognized in Interest expense, net in the condensed consolidated financial statements.
The 2L Term Loan will mature on April 17, 2029 and is subject to monthly interest payments at a rate of SOFR + 6.00 %, of which the 6.00 % may be paid-in-kind (“PIK”) at the Company’s election. In 2024, the Company elected to PIK the 6.00 % spread monthly.
During the first quarter of 2026, the Company entered into an amendment to its Second Lien Credit Agreement that waived certain covenant requirements. As of March 31, 2026, the Company was in compliance with all applicable financial covenants.
Series B Preferred Stock
The Company has 60,000 shares of Series B Preferred Stock with an aggregate initial liquidation value of $60.0 million. The Series B Preferred Stock was initially recorded at a discount and is accreted to its redemption value over its term, with such accretion recognized in Interest expense, net in the condensed consolidated financial statements.
The Series B Preferred Stock was issued in April 2024 and accrues dividends at an annual rate of 6.00 % of its liquidation value, payable in kind, and is mandatorily redeemable after seven years from issuance in April 2031. The Series B Preferred Stock is not convertible into other equity securities and is classified as a long-term liability.
The Series B Preferred Stock ranks senior to the Company’s common stock and restricts the Company’s ability to make certain distributions to junior or pari passu equity holders.
Warrant Shares
The Company issued a warrant to purchase up to 28,206,152 shares of Class A common stock, at an exercise price per share of $0.00001 . The warrant provided the holder with the right to participate in distributions on an as-exercised basis.
Shareholder approval required for full exercise of the warrant was obtained on March 6, 2025. On September 5, 2025 the warrant issued in connection with the Company’s acquisition of certain assets of Estrella and its subsidiaries was exercised in exchange for 28,205,938 shares of MediaCo Class A Common Stock, par value $0.01 per share.
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Based on amounts outstanding at March 31, 2026, mandatory principal payments of long-term debt and preferred stock for the next five years and thereafter are summarized below:
| Year ended | First Lien Term Loans | Second Lien Term Loan | Series B Preferred Stock | Total Payments | |||||||||||||||||||||||||
| Remainder of 2026 (from April 1) | $ | $ | $ | $ | |||||||||||||||||||||||||
| 2027 | |||||||||||||||||||||||||||||
| 2028 | |||||||||||||||||||||||||||||
| 2029 | |||||||||||||||||||||||||||||
| Thereafter | |||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||||||||
8. COMMITMENTS AND CONTINGENCIES
Commitments
The Company is subject to certain contingent liabilities arising in the normal course of business. These include guarantees, indemnifications, and other arrangements that could require the Company to make payments to third parties under certain circumstances.
As of March 31, 2026, management has evaluated all known contingent matters and believes that any potential losses that may arise from such arrangements are not probable or are not reasonably estimable. Accordingly, no liability has been recorded in the accompanying financial statements.
Legal Matters
From time to time, our stations are parties to various legal proceedings arising in the ordinary course of business. In the opinion of management of the Company, however, there are no legal proceedings pending against the Company that we believe are likely to have a material adverse effect on the Company.
9. INCOME TAXES
The effective tax rate for the three months ended March 31, 2026 and 2025 was (17 )% and (3 )%, respectively. Our effective tax rate for the three months ended March 31, 2026 differs from the statutory tax rate primarily due to the recording of additional interest and penalties on an uncertain tax position as well as the continued recognition of additional valuation allowance.
10. LEASES
We have operating leases for office space and tower space expiring at various dates through December 2047 and finance leases for broadcast tower space expiring in March 2029. Some leases have options to extend and some have options to terminate. Operating leases are included in lease right-of-use assets, current operating lease liabilities, and noncurrent operating lease liabilities in our condensed consolidated balance sheets. Finance leases are included in deposits and other, other current liabilities, and other noncurrent liabilities in our condensed consolidated balance sheet.
We elected not to apply the recognition requirements of ASC 842, Leases, to short-term leases, which are deemed to be leases with a lease term of 12 months or less. Instead, we recognized lease payments in the condensed consolidated statements of operations on a straight-line basis over the lease term and variable payments in the period in which the obligation for these payments was incurred. We elected this policy for all classes of underlying assets. Short-term lease expense recognized during both the three months ended March 31, 2026 and 2025 was not material.
On February 27, 2026, the Company entered into an amendment to an existing lease agreement. The amendment resulted in a remeasurement of the related lease liability and right-of-use (“ROU”) asset. As a result of the remeasurement, both the lease liability and the ROU asset decreased; however, the reduction in the lease liability exceeded the decrease in the ROU asset.
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During the period, the Company remeasured and modified its lease, which resulted in a reduction of lease liabilities of $7.0 million, including a $1.0 million reduction in current lease liabilities and a $6.0 million reduction in non-current lease liabilities, and a reduction of the ROU asset of $5.4 million. As a result, the Company recognized a remeasurement gain of $1.6 million, representing the excess of the reduction in the lease liability over the reduction in the ROU asset. This gain is included in other income in the Company’s condensed consolidated statements of operations.
The impact of operating leases to our condensed consolidated financial statements was as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Operating lease cost | $ | $ | |||||||||||||||||||||
| Operating cash flows from operating leases | $ | $ | |||||||||||||||||||||
| March 31, 2026 | December 31, 2025 | ||||||||||
| Weighted average remaining lease term - operating leases (in years) | |||||||||||
| Weighted average discount rate - operating leases | % | % | |||||||||
The impact of finance leases to our condensed consolidated financial statements was as follows:
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Finance lease cost | $ | $ | |||||||||||||||||||||
| Cash flows from finance leases | $ | $ | |||||||||||||||||||||
| March 31, 2026 | December 31, 2025 | ||||||||||
| Weighted average remaining lease term - finance leases (in years) | |||||||||||
| Weighted average discount rate - finance leases | % | % | |||||||||
As of March 31, 2026, the annual minimum lease payments of our operating and finance lease liabilities were as follows:
| Operating Leases | Finance Leases | |||||||
2026 (from April 1) | $ | $ | ||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total lease payments | ||||||||
| Less imputed interest | ( | ( | ||||||
| Total recorded operating lease liabilities | $ | $ | ||||||
11. RELATED PARTY TRANSACTIONS
Estrella Put Right and Equity Clawback
In connection with the Company’s acquisition of Estrella, the Company entered into agreements with HPS, that contain equity clawback provisions. Under these provisions, the Company may require the return or forfeiture of equity interests under specified circumstances.
The potential exercise of these clawback provisions could result in the reduction or cancellation of equity interests held by such related party investors and the repayment or forfeiture of related debt obligations. The magnitude and timing of any such clawback would depend on the occurrence and amount of qualifying losses or obligations as defined in the applicable agreements and could be material to the Company’s consolidated financial statements. At March 31, 2026 as a result of the increase in the uncertain tax position and corresponding interest and penalties, the Company reduced equity by an additional $1.1 million pursuant to the equity clawback feature. At March 31, 2026 and December 31, 2025, $9.0 million and $7.9 million, respectively, of equity interests were subject to clawback, while no debt instruments have been subject to clawback.
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Second Lien Term Loan
The Company entered into a $30.0 million Second Lien Credit Agreement with HPS, as administrative and collateral agent, and certain financial institutions affiliated with HPS. HPS is a significant shareholder of the Company and, as such, the Second Lien Credit Agreement constitutes a related-party transaction.
The 2L Term Loan bears interest at a rate of SOFR + 6.00 %, which may be paid-in-kind (“PIK”) at the Company’s election. During 2024, the Company elected to PIK the 6.00 % spread monthly. Interest expense recognized on the 2L Term Loan, including both cash and PIK interest, totaled approximately $0.8 31.1 million, inclusive of PIK interest accreted to principal.
Additional details regarding the Second Lien Credit Agreement are provided in Note 7 — Long-Term Debt, Warrants, and Series B Preferred Stock
Consulting Agreements & Other Activity
On October 29, 2024, the Company and Standard Media Group LLC (“SMG”) a wholly owned subsidiary of Standard General, entered into an Employee Leasing Agreement, effective as of October 1, 2024 (the “Leasing Agreement”). Under the Leasing Agreement, the Company will obtain the services of several SMG employees to serve various roles for the Company, including with respect to the legal, digital products, broadcast IT, and news operations function. The Leasing Agreement is an at-cost arrangement, with the Company paying only for a percentage of the actual cost of employing each leased employee, with no markup or service fees above the Company’s share of the actual fully-loaded cost of each leased employee. For the three months ended March 31, 2026 and 2025, $0.2 0.2 million and $0.7 million, respectively.
On April 17, 2025, the Company and Paducah Television Operations LLC (“PTO”), a subsidiary of SMG, entered into a Support Agreement, effective as of April 17, 2025 (the “PTO Support Agreement”) and continues for a term of six months unless terminated earlier by either party with 30 days written notice. On November 5, 2025, an amendment was entered into to extend the term of this agreement for an additional 12 months. Under the PTO Support Agreement, the Company will provide operational support to PTO, including, but not limited to, finance and legal assistance, human resources, sales, and production of certain marketing materials. In return for providing these services, the Company will receive payment at the mutually agreed upon rate. For the three months ended March 31, 2026 and 2025, $2.4 million and zero fees were earned related to this agreement and is recorded in other income on the condensed consolidated statements of operations. $1.8 million and $0.8 million fees were still owed to the Company as of March 31, 2026 and December 31, 2025.
12. SEGMENT INFORMATION
The Company and the chief operating decision maker (“CODM”) assesses performance and allocates resources in accordance with FASB ASC 280, Segment Reporting. The Company’s CODM is the Chief Executive Officer. The CODM primarily uses operating income (loss) to evaluate the financial performance of each segment, assess operating efficiency and profitability, and compare across segments. This measure is also used by the CODM to make decisions regarding the allocation of resources, including capital expenditures, programming and content investments, marketing initiatives, and headcount. We currently manage our operations through two
The Company’s Audio Segment includes both MediaCo’s and Estrella’s radio stations serving the New York City, NY, Los Angeles, CA, Houston, TX, and Dallas, TX demographic market areas that primarily target Black, Hispanic, and multi-cultural consumers. The Audio Segment derives revenues primarily from radio and digital advertising sales, but also generates revenues from events, including sponsorships and ticket sales, licensing, and syndication.
The Company’s Video Segment includes Estrella’s television stations offering a unique aggregation of Spanish-language programming, including originals, topical entertainment, reality, news, and comedy. The Video Segment’s revenue is primarily derived from television and digital advertising. The Company’s television stations serve Los Angeles, CA, Houston, TX, Denver, CO, New York, NY, Chicago, IL and Miami, FL.
These business segments are consistent with the Company’s management of these businesses and its financial reporting structure. Corporate expenses, including transaction costs, are not allocated to reportable segments. The Company’s segments operate exclusively in the United States.
The accounting policies as described in the Summary of Significant Accounting Policies included in Note 1 to these condensed consolidated financial statements are applied consistently across segments.
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| Three Months Ended March 31, 2026 | Audio | Video | Consolidated | |||||||||||||||||||||||
| Net revenues | $ | $ | $ | |||||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||
Other segment items(2) | ( | |||||||||||||||||||||||||
| Segment operating loss | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||
Corporate and other (1) | ||||||||||||||||||||||||||
| Interest expense, net | ||||||||||||||||||||||||||
| Other income | ( | |||||||||||||||||||||||||
| Loss before equity method investments and income taxes | $ | ( | ||||||||||||||||||||||||
| Three Months Ended March 31, 2025 | Audio | Video | Consolidated | |||||||||||||||||||||||
| Net revenues | $ | $ | $ | |||||||||||||||||||||||
| Operating expenses | ||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||
Other segment items(2) | ||||||||||||||||||||||||||
| Segment operating income (loss) | $ | $ | ( | $ | ( | |||||||||||||||||||||
Corporate and other (1) | ||||||||||||||||||||||||||
| Interest expense, net | ||||||||||||||||||||||||||
| Other income | ( | |||||||||||||||||||||||||
| Loss before income taxes | $ | ( | ||||||||||||||||||||||||
(1) Corporate and other is not an operating segment. Corporate expenses include expenses related to infrastructure and support, including information technology, human resources, legal, finance and administrative functions of the Company, as well as overall executive, administrative and support functions. | ||||||||||||||||||||||||||
(2) Audio’s other segment items consist of loss on disposal of assets. | ||||||||||||||||||||||||||
Assets by reportable segment were as follows:
| Total Assets | Audio | Video | Corporate and other(3) | Consolidated | ||||||||||||||||||||||
| March 31, 2026 | $ | $ | $ | $ | ||||||||||||||||||||||
| December 31, 2025 | $ | $ | $ | $ | ||||||||||||||||||||||
(3) Corporate and other is not an operating segment. Corporate and other assets primarily include cash and cash equivalents. | ||||||||||||||||||||||||||
13. SUBSEQUENT EVENTS
On April 3, 2026, the Company filed a Registration Statement on Form S-8 with the Securities and Exchange Commission to register shares of its common stock issuable under the Company’s equity compensation plans. The filing was made to facilitate the grant and issuance of equity-based awards, including stock options and restricted stock units, to eligible employees, directors, and consultants. The Company believes that the availability of registered shares under the Form S-8 will support its ongoing compensation strategy and align the interests of its personnel with those of its stockholders.
There were no other material subsequent events requiring disclosure through the date these financial statements were issued.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Special Note on Forward-Looking Information: You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q. Certain statements included in this Quarterly Report or in the financial statements contained herein that are not statements of historical fact, including but not limited to those identified with the words “expect,” “believes,” “should,” “will” or “look” are intended to be, and are, by this Note, identified as “forward-looking statements,” as defined in the Securities Exchange Act of 1934, as amended. Such statements are based upon current expectations that involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future result, performance or achievement expressed or implied by such forward-looking statement. Such factors include, among others:
•Our ability to continue as a going concern.
•Potential conflicts of interest with SG Broadcasting LLC (“SG Broadcasting”) and our status as a “controlled company”;
•Our ability to operate as a standalone public company and to execute on our business strategy;
•Our ability to compete with, and integrate into our operations, new media channels, such as digital video, live video streaming, YouTube, and other real-time media delivery;
•Our ability to continue to sell advertising time or exchange advertising time for goods or services;
•Our ability to use market research, advertising and promotions to attract and retain audiences;
•U.S. regulatory requirements for owning and operating media broadcasting channels and our ability to maintain regulatory licenses granted by the FCC;
•Pending U.S. regulatory requirements for paying royalties to performing artists;
•Inflation and interest rate risk;
• A potential recession, economic downturn, and stagflation;
• The impact of a potential temporary federal government shutdown and other political developments, including
immigration, political protests or unrest, boycotts, or other social and political developments;
• Increased technology costs and supply chain issues;
•Industry and economic trends within the U.S. radio and television industry, generally, and in the markets in which we operate, in particular;
•Changes in U.S. and global economies and financial markets, including economic activity, employment levels, global trade relations, new or increased tariffs imposed by the U.S. and foreign governments and other factors driving trade uncertainty;
• The effect of such economic conditions on advertising activity;
•Our ability to successfully attract and retain on-air talent;
•Our ability to successfully produce and distribute on-air programming;
•Our ability to maintain and expand distribution platforms and station affiliations;
•Our ability to finance our operations or to obtain financing on terms that are favorable to MediaCo;
•Our ability to successfully complete and integrate acquisitions, including the recent transactions with Estrella Broadcasting, Inc. and any future acquisitions;
•The accuracy of management’s estimates and assumptions on which the Company’s financial projections are based; and
•Other factors mentioned in documents filed by the Company with the Securities and Exchange Commission.
For a more detailed discussion of these and other risk factors, see the Risk Factors section of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2026. MediaCo does not undertake any obligation to publicly update or revise any forward-looking statements because of new information, future events or otherwise.
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GENERAL
The following discussion pertains to MediaCo Holding Inc. and its subsidiaries (collectively, “MediaCo” or the “Company”).
MediaCo is a multimedia company focused on radio, television, digital advertising, premium programming, and events. Our portfolio includes a national network, as well as digital and commercial operations. Our broadcasting assets consist of thirteen radio stations, including two located in New York City, WQHT(FM) and WBLS(FM) (the “Stations”), which serve the New York City demographic market area and primarily target Black, Hispanic, and multicultural consumers. The remaining eleven radio stations serve Los Angeles, CA, Houston, TX, and Dallas, TX. Our assets also include nine television stations serving Los Angeles, CA, Houston, TX, Denver, CO, New York, NY, Chicago, IL, and Miami, FL.
Our portfolio includes the Estrella brands, including the EstrellaTV network, its linear and digital video content business, and its digital channels, including eight free ad-supported television (“FAST”) channels: EstrellaTV, Estrella News, Cine EstrellaTV, Estrella Games, EstrellaTV Mexico, Curiosity Explora, Curiosity Motores, and Curiosity Animales.
We derive our revenues primarily from radio, television, and digital advertising sales. We also generate revenues from events, including sponsorships and ticket sales, as well as from licensing and syndication. Advertising sales represent the primary component of our consolidated revenues, and our results are largely influenced by the advertising rates we are able to charge. These rates depend significantly on our ability to attract audiences within demographic groups targeted by advertisers. Audience measurement services, such as those provided by Nielsen, supply radio and television ratings that are critical to our performance. Accordingly, our strategy emphasizes market research, programming, promotion, and branding initiatives designed to attract and retain audiences in our target demographics.
Our revenues fluctuate throughout the year, with revenue and operating income typically lowest in the first calendar quarter, in part due to reduced advertising spending following the holiday season.
In addition to cash advertising sales, we enter into barter transactions in which advertising time is exchanged for goods or services. These transactions are recorded at the estimated fair value of the goods or services received. We generally limit barter activity to items or services that we would otherwise purchase for cash and maintain a policy of not preempting paid advertising spots with barter advertising.
The following table summarizes the sources of our revenues for the three months ended March 31, 2026 and 2025. The category “Other” includes, among other items, revenues related to network revenues and barter.
| (dollars in thousands) | Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | % of Total | 2025 | % of Total | ||||||||||||||||||||||||||||||||||||||||||||
| Net revenues: | |||||||||||||||||||||||||||||||||||||||||||||||
| Spot Radio & TV Advertising | $ | 14,197 | 45 | $ | 16,031 | 57 | |||||||||||||||||||||||||||||||||||||||||
| Digital | 15,539 | 50 | 9,537 | 34 | |||||||||||||||||||||||||||||||||||||||||||
| Syndication | 332 | 1 | 668 | 2 | |||||||||||||||||||||||||||||||||||||||||||
| Events and Sponsorships | 155 | 1 | 239 | 1 | |||||||||||||||||||||||||||||||||||||||||||
| Other | 1,163 | 3 | 1,555 | 6 | |||||||||||||||||||||||||||||||||||||||||||
| Total net revenues | $ | 31,386 | $ | 28,030 | |||||||||||||||||||||||||||||||||||||||||||
Roughly 20% of our expenses vary in connection with changes in revenue. These variable expenses primarily relate to costs in our sales department, such as salaries, commissions, and bad debt, as well as certain technical and engineering costs that fluctuate with operational activity. Our costs that do not vary significantly with revenue are primarily in our programming and general and administrative departments, including talent costs, ratings fees, rent, utilities, engineering-related maintenance, and salaries. Lastly, our costs that are highly discretionary are incurred in our marketing and promotions department, which we primarily use to maintain and/or increase our audience and market share.
KNOWN TRENDS AND UNCERTAINTIES
The U.S. traditional radio and television broadcasting industries are mature industries and their growth rates have stalled. Management believes this is principally the result of two factors: (i) new media, such as various media distributed via the Internet, telecommunication companies and cable interconnects, as well as social networks, have gained advertising share against radio, television and other traditional media and created a proliferation of advertising inventory and (ii) the fragmentation of the radio and television audiences and time spent listening and viewing caused by satellite radio, audio and video streaming services, and podcasts has led some investors and advertisers to conclude that the effectiveness of broadcast advertising has diminished.
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Our network and stations have aggressively worked to harness the power of broadband and mobile media distribution in the development of emerging business opportunities by capitalizing on the rapidly growing FAST marketplace through several operated channels, creating highly interactive direct-to-consumer (“D2C”) apps and websites with content that engages our audience and harnessing the power of digital video on our D2C platforms, YouTube, and connected TV publishers, vMVPDs and OEMs.
As part of our business strategy, we continually evaluate potential acquisitions of businesses that we believe hold promise for long-term appreciation in value and leverage our strengths. We also regularly review our portfolio of assets and may opportunistically dispose of or otherwise monetize assets when we believe it is appropriate to do so. As part of the Estrella Acquisition integration, we developed a plan to close and relocate certain studio and marketing operations. In fulfilling this plan, we incurred no involuntary termination costs in the three months ended March 31, 2026 and 2025, included in operating expenses on our condensed consolidated statements of operations included elsewhere in this report.
CRITICAL ACCOUNTING ESTIMATES
During the three months ended March 31, 2026, there were no material changes to our critical accounting policies and estimates from those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Estimates” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the SEC on March 31, 2026.
We have considered information available to us as of the date of issuance of these financial statements and are not aware of any specific events or circumstances that would require an update to our estimates or judgments, or a revision to the carrying value of our assets or liabilities. Our estimates may change as new events occur and additional information becomes available, and our actual results may differ materially from our previously disclosed estimates.
RESULTS OF OPERATIONS
Executive Summary
The following discussion and analysis of the financial condition and results of operations of MediaCo Holding Inc. and its consolidated subsidiaries should be read in conjunction with our condensed consolidated financial statements and notes thereto included elsewhere herein.
The key developments in our business for the three months ended March 31, 2026 are summarized below:
•Net revenues of $31.4 million increased $3.4 million, or 12%, during the three months ended March 31, 2026 compared to net revenues of $28.0 million during the three months ended March 31, 2025.
•Operating loss of $7.5 million increased $2.8 million, or 61%, during the three months ended March 31, 2026 compared to operating loss of $4.7 million during the three months ended March 31, 2025.
•Net loss of $9.4 million increased $0.8 million, or 9%, during the three months ended March 31, 2026 compared to net loss of $8.6 million during the three months ended March 31, 2025.
•Cash flows used in operating activities of $2.0 million, represent a decrease of $4.1 million, or 199%, during the three months ended March 31, 2026 compared to cash flows provided by operating activities of $2.1 million during the three months ended March 31, 2025.
•Adjusted EBITDA for the three months ended March 31, 2026 was $0.2 million decreasing 86% compared to Adjusted EBITDA of $1.4 million for the three months ended March 31, 2025.
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Consolidated Operating Data
The following table sets forth a summary of each of the Company’s components of operating expense as a percentage of net revenue for the three months ended March 31, 2026 and 2025:
| Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Amount | % | Amount | % | ||||||||||||||||||||||||||||||||||||||||||||||
| NET REVENUES | $ | 31,386 | 100 | $ | 28,030 | 100 | ||||||||||||||||||||||||||||||||||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating expenses | 34,822 | 111 | 29,212 | 104 | ||||||||||||||||||||||||||||||||||||||||||||||
| Corporate expenses | 1,666 | 5 | 1,593 | 6 | ||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 1,676 | 5 | 1,769 | 6 | ||||||||||||||||||||||||||||||||||||||||||||||
| Loss on disposal of assets | 752 | 2 | 139 | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Total operating expenses | 38,916 | 32,713 | ||||||||||||||||||||||||||||||||||||||||||||||||
| OPERATING LOSS | $ | (7,530) | $ | (4,683) | ||||||||||||||||||||||||||||||||||||||||||||||
Three-Month Periods Ended March 31, 2026 compared to March 31, 2025
| Three Months Ended March 31, | Change | |||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | 2026 | 2025 | $ | % | ||||||||||||||||||||||||||||||||||||||||||||||
| NET REVENUES | $ | 31,386 | $ | 28,030 | 3,356 | 12 | ||||||||||||||||||||||||||||||||||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating expenses | 34,822 | 29,212 | 5,610 | 19 | ||||||||||||||||||||||||||||||||||||||||||||||
| Corporate expenses | 1,666 | 1,593 | 73 | 5 | ||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 1,676 | 1,769 | (93) | (5) | ||||||||||||||||||||||||||||||||||||||||||||||
| Loss on disposal of assets | 752 | 139 | 613 | 441 | ||||||||||||||||||||||||||||||||||||||||||||||
| Total operating expenses | 38,916 | 32,713 | 6,203 | 19 | ||||||||||||||||||||||||||||||||||||||||||||||
| OPERATING LOSS | (7,530) | (4,683) | (2,847) | 61 | ||||||||||||||||||||||||||||||||||||||||||||||
| OTHER INCOME (EXPENSE): | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense, net | (3,940) | (3,754) | (186) | 5 | ||||||||||||||||||||||||||||||||||||||||||||||
| Other income, net | 3,679 | 111 | 3,568 | 3215 | ||||||||||||||||||||||||||||||||||||||||||||||
| Total other expense | (261) | (3,643) | 3,382 | (93) | ||||||||||||||||||||||||||||||||||||||||||||||
| LOSS BEFORE INCOME TAXES AND EQUITY METHOD INVESTMENTS | (7,791) | (8,326) | 535 | (6) | ||||||||||||||||||||||||||||||||||||||||||||||
| PROVISION FOR INCOME TAXES | 1,322 | 280 | 1,042 | 372 | ||||||||||||||||||||||||||||||||||||||||||||||
| LOSS BEFORE EQUITY METHOD INVESTMENTS | (9,113) | (8,606) | (507) | 6 | ||||||||||||||||||||||||||||||||||||||||||||||
| EQUITY LOSS IN INVESTMENTS | (255) | — | (255) | N/A | ||||||||||||||||||||||||||||||||||||||||||||||
| NET LOSS | (9,368) | (8,606) | (762) | 9 | ||||||||||||||||||||||||||||||||||||||||||||||
Net revenues:
Net revenues increased during the three months ended March 31, 2026 primarily due to increased digital revenue, partially offset by a decrease in spot revenue as the Company increased its focus on digital offerings.
Operating expenses:
Operating expenses increased during the three months ended March 31, 2026 primarily due to higher digital platform costs, which rose in line with growth in digital revenue. These increases were partially offset by reductions in repairs and maintenance, utilities and rent.
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Corporate expenses:
Corporate expenses increased for the three months ended March 31, 2026 primarily due to an increase in employee related costs, and corporate insurance charges.
Depreciation and amortization:
Depreciation and amortization expense decreased during the three months ended March 31, 2026 as certain assets became fully depreciated in the prior year, partially offset by new assets placed into service.
Loss on disposal of assets:
Loss on disposal of assets increased for the three months ended March 31, 2026 primarily due to the disposal of certain fixed assets due to the amendment for an existing lease agreement, while there were no such disposals in 2025.
Operating loss:
See “Net revenues,” “Operating expenses,” “Corporate expenses,” “Depreciation and amortization,” and “Loss on disposal of assets” above.
Interest expense, net:
Interest expense increased during the three months ended March 31, 2026 primarily due to higher outstanding debt balances, due to PIK and accretion on loans, partially offset by lower interest rates.
Equity loss in investments:
Equity loss in investments increased during the three months ended March 31, 2026 due to the investment in unconsolidated affiliates as of January 1, 2026.
Other income:
Other income increased during the three months ended March 31, 2026 compared to the prior year primarily driven by a gain on a lease modification, interest and penalty income related to an equity clawback, income from managed services agreements under which the Company began providing accounting and other services on April 17, 2025, and sublease income from one of the Company’s facilities that commenced in the first quarter of 2025.
Provision for income taxes:
Provision for income taxes decreased during the three months ended March 31, 2026 compared to the prior year due to changes in the deferred tax liability and additional interest and penalties accrued.
Consolidated net (loss) income:
The increase in consolidated net loss was primarily due to the increase in digital platform costs partially offset by the increase in digital revenue. See “Net revenues,” “Operating expenses,”, “Corporate expenses,” “Depreciation and amortization,” “Loss on disposal of assets,” “Interest expense, net,” “Equity loss in investments,” “Other income” and “Provision for income taxes,” above for additional details.
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Performance by Business Segment
Audio Segment
The Company’s Audio Segment includes the Estrella MediaCo radio, digital and events operations as well as two New York radio stations that predate the Estrella Acquisition. Revenue, Operating expenses and Segment Operating (Loss) Income for our Audio Segment were as follows:
| Audio Segment | ||||||||||||||||||||||||||
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| (Dollars in thousands) | 2026 | 2025 | ||||||||||||||||||||||||
| Net Revenues | $ | 9,763 | $ | 13,692 | ||||||||||||||||||||||
Operating Expenses(1) | 14,547 | 12,997 | ||||||||||||||||||||||||
| Segment Operating (Loss) Income | $ | (4,784) | $ | 695 | ||||||||||||||||||||||
(1) Operating expenses comprise several line items, including operating costs, depreciation and amortization, and other segment-specific items, as detailed in the Segment Information disclosures in Note 12. | ||||||||||||||||||||||||||
Revenue from our Audio Segment decreased $3.9 million and operating expenses increased $1.5 million, respectively, during the three months ended March 31, 2026 compared to the same period in 2025, driven primarily as a result of the decrease in spot revenue and increases in operating expenses such as loss on disposal of assets and other departmental costs.
Video Segment
The Company’s Video Segment includes the results of the EstrellaTV network and all of the Estrella MediaCo television operations, including digital. Revenue, Operating expenses and Segment Operating Loss for our Video Segment were as follows:
| Video Segment | ||||||||||||||||||||||||||
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| (Dollars in thousands) | 2026 | 2025 | ||||||||||||||||||||||||
| Net Revenues | $ | 21,623 | $ | 14,338 | ||||||||||||||||||||||
Operating Expenses(1) | 22,703 | 18,123 | ||||||||||||||||||||||||
| Segment Operating Loss | $ | (1,080) | $ | (3,785) | ||||||||||||||||||||||
(1) Operating expenses comprise several line items, including operating costs, depreciation and amortization, and other segment-specific items, as detailed in the Segment Information disclosures in Note 12. | ||||||||||||||||||||||||||
Revenue and operating expenses from our Video Segment increased $7.3 million and $4.6 million, respectively, during the three months ended March 31, 2026 compared to the same period in 2025. These increases were primarily in digital revenue and increases in impression expense, partially offset by decreases in employee related expenses.
Corporate and other
Operating expenses related to Corporate and other increased to $1.7 million for the three months ended March 31, 2026 compared to $1.6 million for the three months ended March 31, 2025, primarily due to an increase in employee related costs, and corporate insurance charges.
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Non-GAAP Financial Measures
Reconciliations of Net Loss to Adjusted EBITDA(1)
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| (Dollars in thousands) | 2026 | 2025 | ||||||||||||||||||||||||
| Net Loss | $ | (9,368) | $ | (8,606) | ||||||||||||||||||||||
| Provision for income taxes | 1,322 | 280 | ||||||||||||||||||||||||
| Equity loss in investments | 255 | — | ||||||||||||||||||||||||
| Interest expense, net | 3,940 | 3,754 | ||||||||||||||||||||||||
| Depreciation and amortization | 1,676 | 1,769 | ||||||||||||||||||||||||
| Loss on disposal of assets | 752 | 139 | ||||||||||||||||||||||||
| Other income | (3,679) | (111) | ||||||||||||||||||||||||
| Acquisition, integration and synergy services | 2,277 | 2,859 | ||||||||||||||||||||||||
| Mergers and acquisitions transaction costs | 576 | 833 | ||||||||||||||||||||||||
| Office exit facility consolidation | 282 | 290 | ||||||||||||||||||||||||
| Expansion related costs | 1,967 | 161 | ||||||||||||||||||||||||
Other non-cash adjustments (1) | 203 | 38 | ||||||||||||||||||||||||
Adjusted EBITDA(2) | $ | 203 | $ | 1,406 | ||||||||||||||||||||||
(1) Other non-cash adjustments include compensation adjustments, non-cash rent charges and other non-cash expenses. | ||||||||||||||||||||||||||
| (1) | We define Adjusted EBITDA as consolidated net loss adjusted to exclude restructuring expenses, business combination transaction costs, unusual and non-recurring expenditures, non-cash items and non-cash compensation included within operating expenses, as well as the following line items presented in our Statements of Operations: Equity loss in investments, Depreciation and amortization, Loss on disposal of assets, and Other income. Alternatively, Adjusted EBITDA is calculated as Net loss, adjusted to exclude Provision for income taxes, Equity loss in investments, Interest expense, net, Depreciation and amortization, Loss on disposal of assets, Other income, and Other adjustments. We use Adjusted EBITDA, among other measures, to evaluate the Company’s operating performance. This measure is among the primary measures used by management for the planning and forecasting of future periods, as well as for measuring performance for compensation of executives and other members of management. We believe this measure is an important indicator of our operational strength and performance of our business because it provides a link between operational performance and operating income. It is also a primary measure used by management in evaluating companies as potential acquisition targets. We believe the presentation of this measure is relevant and useful for investors because it allows investors to view performance in a manner similar to the method used by management. We believe it helps improve investors’ ability to understand our operating performance and makes it easier to compare our results with other companies that have different capital structures or tax rates. In addition, we believe this measure is also among the primary measures used externally by our investors, analysts and peers in our industry for purposes of valuation and comparing our operating performance to other companies in our industry. Since Adjusted EBITDA is not a measure calculated in accordance with GAAP, it should not be considered in isolation of, or as a substitute for, operating loss or net loss as an indicator of operating performance and may not be comparable to similarly titled measures employed by other companies. Adjusted EBITDA is not necessarily a measure of our ability to fund our cash needs. Because it excludes certain financial information compared with operating loss and compared with consolidated net loss, the most directly comparable GAAP financial measures, users of this financial information should consider the types of events and transactions which are excluded. | |||||||||||||||||||||||||
LIQUIDITY AND CAPITAL RESOURCES
Our primary sources of liquidity are cash flows generated from operations. Our primary uses of capital have been, and are expected to continue to be, capital expenditures, working capital requirements, and strategic acquisitions. As of March 31, 2026, the Company’s liquidity position is constrained by its working capital deficit and upcoming debt maturities. While management is actively implementing plans to improve liquidity, including enhancing operating performance, managing working capital, and pursuing refinancing and additional capital, there can be no assurance that these efforts will be successful.
At March 31, 2026, the Company had cash, cash equivalents and restricted cash of $5.1 million and negative working capital of $54.5 million. At December 31, 2025, the Company had cash, cash equivalents and restricted cash of $7.1 million and negative working capital of $49.0 million. The increase in negative working capital was driven by the cancellation of certain programming rights contracts reducing the current portion of programming rights as well as increased accounts payable.
Despite net losses, management continues to actively manage liquidity through close monitoring of working capital and disciplined cash management practices. These efforts include extending payment terms with vendor partners, enhancing collection efforts to accelerate cash inflows, and maintaining a focus on expense control. As a result of these actions, the Company has reduced its cash burn during the period.
Additionally, regarding the $10.0 million in Delayed Draw Term Loans due July 2026, the Company intends to refinance on a long term basis, pay down using cash flow from operations, or receive additional investments.
As part of its business strategy, the Company continually evaluates potential acquisitions of businesses it believes hold promise for long-term appreciation and that can leverage our strengths. While any such acquisitions could impact our liquidity position, management is committed to maintaining appropriate liquidity levels and managing cash resources prudently as the business grows.
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In addition to its short-term liquidity constraints, the Company expects to have ongoing cash requirements beyond the next twelve months. These longer-term liquidity needs relate primarily to capital expenditures required to maintain and upgrade broadcasting and digital infrastructure, contractual commitments for content and programming, and potential strategic investments or acquisitions that support long-term growth. The Company may seek to fund these longer-term requirements through a combination of cash flows from operations, existing cash and cash equivalents, and access to external financing sources, including potential borrowings under existing or future credit facilities or other capital-raising alternatives. However, given the Company’s current liquidity position and the conditions described above, there can be no assurance that sufficient cash flows will be generated or that external financing will be available on acceptable terms, or at all.
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. Based on current operating plans and assumptions, management is pursuing various initiatives to improve the Company’s liquidity position, including enhancing operating performance, managing working capital, refinancing existing debt, and raising additional capital. However, these plans are subject to inherent risks and uncertainties, and there can be no assurance that they will be successfully implemented or will generate sufficient liquidity to meet the Company’s obligations as they become due. Accordingly, substantial doubt about the Company’s ability to continue as a going concern remains. Subsequent to year-end, the Company entered into amendments to its First Lien Credit Agreement and Second Lien Credit Agreement that waived certain covenant requirements. As of March 31, 2026, the Company was in compliance with all applicable financial covenants. Future liquidity and capital requirements will depend on a number of factors, including operating performance, macroeconomic conditions, changes in working capital, and the timing and extent of discretionary investments. The Company will continue to evaluate its liquidity position and capital structure and may adjust its financing strategy as conditions warrant.
Operating Activities
Cash flows used in operating activities were $2.0 million for the three months ended March 31, 2026, compared to cash flows provided by operating activities of $2.1 million for the three months ended March 31, 2025. The decline in operating cash flow was primarily driven by a higher net loss and unfavorable changes in working capital, including decreases in deferred revenue and other liabilities and smaller increases in accounts payable, partially offset by improved collections on accounts receivable.
Investing Activities
Cash flows provided by investing activities were $0.2 million for the three months ended March 31, 2026, primarily attributable to the proceeds from the sale of land. Cash flows used in investing activities were $0.1 million for the three months ended March 31, 2025, primarily attributable to the purchases of equipment.
Financing Activities
Cash flows used in financing activities were $0.1 million for the three months ended March 31, 2026, attributable to finance lease principal payments. Cash flows provided by financing activities were $0.2 million for the three months ended March 31, 2025, attributable to finance lease principal payments and settlement of tax withholding obligations.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company, we are not required to provide this information.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
The Company has established disclosure controls and procedures to ensure that information required to be disclosed in this quarterly report on Form 10-Q is properly recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. The Company's controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is accumulated and communicated to the Company's management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) at March 31, 2026. Based on such evaluation, our CEO and CFO concluded that, at March 31, 2026, our disclosure controls and procedures were not effective as a result of the previously identified material weaknesses disclosed below.
Limitations on Effectiveness of Controls and Procedures and Internal Control over Financial Reporting
In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
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Internal Control over Financial Reporting
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). The internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.
Management conducted an evaluation of the effectiveness of the internal control over financial reporting based on the Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on the assessment by management, it was determined that the Company’s internal control over financial reporting was not effective due to the material weakness described below.
We did not design and maintain effective controls over the accounting for the Company’s business combination with Estrella, along with subsequent accounting considerations. This included lack of appropriate oversight of third-party valuation specialists and insufficient design and implementation of controls over the completeness and accuracy of data and certain assumptions used in the valuation of goodwill and intangible assets and other acquired assets and assumed liabilities. We also did not maintain sufficiently competent resources with an appropriate level of accounting knowledge and experience commensurate with the accounting for business combinations and subsequent accounting considerations.
Remediation Plan for Material Weakness
Management, with the oversight of the Audit Committee, is currently taking actions to remediate the material weakness and is designing and will implement additional processes and controls to address the underlying causes associated with the material weakness described above. The Company began remediation efforts to address the material weakness and continued those efforts throughout the three months ended March 31, 2026. The remediation efforts include:
•Hiring additional competent and qualified technical accounting and financial reporting personnel with appropriate knowledge and experience of U.S. GAAP and SEC financial reporting requirements;
•Training of new personnel and existing personnel in new roles on proper execution of designed control procedures;
•Designing and implementing controls over nonroutine and complex transactions, including reviews of third-party specialist work and information used in the operation of the controls; and
•Engaging third party experts to assist in analyzing and concluding on complex accounting matters.
The material weakness identified above will not be considered fully remediated until these additional controls and procedures have operated effectively for a sufficient period of time and management has concluded, through testing, that these controls are effective. Our management will monitor the effectiveness of our remediation plans and will make changes management determines to be appropriate. If not remediated, the material weakness could result in material misstatements to our annual or interim consolidated financial statements that may not be prevented or detected on a timely basis or result in a delayed filing of required periodic reports. If we are unable to assert that our internal control over financial reporting is effective, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be adversely affected, and we could become subject to litigation or investigations by Nasdaq, the SEC, or other regulatory authorities, which could require additional financial and management resources.
While these changes are intended to improve the Company’s internal control over financial reporting and are reasonably likely to materially affect such controls, the material weakness described above was not fully remediated as of March 31, 2026. The additional controls and procedures have not yet operated for a sufficient period of time for management to conclude, through testing, that they are effective.
Changes in Internal Control Over Financial Reporting
Other than the ongoing remediation activities listed above, there has been no change in our internal control over financial reporting during the quarter ended March 31, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II — OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In the opinion of management of the Company there are no legal proceedings pending against the Company that we believe are likely to have a material adverse effect on the Company.
ITEM 1A. RISK FACTORS
In addition to the information set forth in this report, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025, which could materially affect our business,
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financial condition or future results. There have been no material changes to the risk factors described in such Annual Report on Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, USE OF PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
None of the Company's directors and officers adopted terminated
ITEM 6. EXHIBITS
(a)Exhibits.
The following exhibits are filed or incorporated by reference as a part of this report (unless otherwise indicated, the file number with respect to each filed document is 001-39029):
| Exhibit Number | Exhibit Description | Filed Herewith | Incorporated by Reference | |||||||||||||||||||||||||||||||||||
| Form | Period Ending | Exhibit | Filing Date | |||||||||||||||||||||||||||||||||||
| 31.1 | Certification of Principal Executive Officer of MediaCo Holding Inc. pursuant to Rule 13a-14(a) under the Exchange Act | X | ||||||||||||||||||||||||||||||||||||
| 31.2 | Certification of Principal Financial Officer of MediaCo Holding Inc. pursuant to Rule 13a-14(a) under the Exchange Act | X | ||||||||||||||||||||||||||||||||||||
| 32.1 | Certification of Principal Executive Officer of MediaCo Holding Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||||||||||||||||||||||||||||||||||
| 32.2 | Certification of Principal Financial Officer of MediaCo Holding Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | X | ||||||||||||||||||||||||||||||||||||
| 101.INS | Inline XBRL Instance Document | X | ||||||||||||||||||||||||||||||||||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | X | ||||||||||||||||||||||||||||||||||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
| 101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | X | ||||||||||||||||||||||||||||||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | X | ||||||||||||||||||||||||||||||||||||
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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 thereunto duly authorized.
| MEDIACO HOLDING INC. | ||||||||
Date: May 15, 2026 | By: | /s/ Debra DeFelice | ||||||
| Debra DeFelice | ||||||||
| Executive Vice President, Chief Financial Officer and Treasurer | ||||||||
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