Mediaco Holding Acquires Audacy Assets, Appoints New Officer

TL;DR

Mediaco just bought stuff from Audacy, got a new exec, and changed some shareholder rights. Big moves!

AI Summary

Mediaco Holding Inc. announced on April 16, 2024, the completion of its acquisition of certain assets from Audacy, Inc. for an undisclosed amount. The company also entered into a material definitive agreement related to this transaction and incurred a direct financial obligation. Additionally, Mediaco Holding Inc. made modifications to the rights of its security holders and reported on the departure of a director and the appointment of a new officer.

Why It Matters

This filing indicates significant operational changes for Mediaco Holding Inc., including asset acquisition and executive changes, which could impact its market position and future performance.

Risk Assessment

Risk Level: medium — The filing details multiple significant events including an acquisition, financial obligations, and changes in corporate governance, which introduce a moderate level of risk and uncertainty.

Key Players & Entities

• Mediaco Holding Inc. (company) — Registrant
• Audacy, Inc. (company) — Seller of acquired assets
• April 16, 2024 (date) — Date of earliest event reported
• April 18, 2024 (date) — Date of report

FAQ

Key Financial Figures

• $0.01 — stered Class A Common Stock, par value $0.01 per share MDIA Nasdaq Capital Marke
• $30.0 million — A term loan in the principal amount of $30.0 million under the Second Lien Credit Agreement
• $0.00001 — rant, at an exercise price per share of $0.00001. Subject to certain limitations, the Wa
• $45.0 million — ect subsidiaries entered into a maximum $45.0 million first lien term loan credit facility, d
• $35.0 million — ediaCo received an initial term loan of $35.0 million on April 17, 2024 (the " Initial Loan "
• $10.0 million — bsequent delayed draw facility of up to $10.0 million that may be provided for additional wor
• $60.0 m — aggregate initial liquidation value of $60.0 million, which Series B Preferred Stock r
• $960,000 — z will receive an annual base salary of $960,000, with the term of her employment commen

Filing Documents

• ef20027147_8k.htm (8-K) — 83KB
• ef20027147_ex2-1.htm (EX-2.1) — 718KB
• ef20027147_ex3-1.htm (EX-3.1) — 105KB
• ef20027147_ex4-1.htm (EX-4.1) — 67KB
• ef20027147_ex10-1.htm (EX-10.1) — 62KB
• ef20027147_ex10-2.htm (EX-10.2) — 772KB
• ef20027147_ex10-3.htm (EX-10.3) — 783KB
• ef20027147_ex10-4.htm (EX-10.4) — 107KB
• ef20027147_ex10-5.htm (EX-10.5) — 143KB
• ef20027147_ex99-1.htm (EX-99.1) — 14KB
• 0001140361-24-020431.txt ( ) — 3637KB
• mdia-20240416.xsd (EX-101.SCH) — 4KB
• mdia-20240416_lab.xml (EX-101.LAB) — 23KB
• mdia-20240416_pre.xml (EX-101.PRE) — 17KB
• ef20027147_8k_htm.xml (XML) — 4KB

01. Entry into a Material Definitive Agreement

Item 1.01. Entry into a Material Definitive Agreement. Asset Purchase Agreement On April 17, 2024, MediaCo Holding Inc., an Indiana corporation (" MediaCo "), and its wholly-owned subsidiary MediaCo Operations LLC, a Delaware limited liability company (" Purchaser "), entered into an asset purchase agreement (the " Asset Purchase Agreement ") with Estrella Broadcasting, Inc., a Delaware corporation (" Estrella "), and SLF LBI Aggregator, LLC, a Delaware limited liability company (" Aggregator ") and affiliate of HPS Investment Partners, LLC (" HPS "), pursuant to which Purchaser purchased substantially all of the assets of Estrella and its subsidiaries (other than certain broadcast assets owned by Estrella and its subsidiaries (the " Estrella Broadcast Assets ")) (the " Purchased Assets "), and assumed substantially all of the liabilities (the " Assumed Liabilities ") of Estrella and its subsidiaries. MediaCo provided the following consideration for the Purchased Assets: i. A warrant (the " Warrant ") to purchase up to 28,206,152 shares of MediaCo's Class A Common Stock, par value $0.01 per share (" Class A Common Stock "); ii. 60,000 shares of a newly designated series of MediaCo's preferred stock designated as "Series B Preferred Stock" (the " Series B Preferred Stock "), the terms of which are described in Item 3.03 of this Current Report on Form 8-K; iii. A term loan in the principal amount of $30.0 million under the Second Lien Credit Agreement (as defined below) (the " Second Lien Term Loan "); and iv. An aggregate cash payment in the amount of approximately $30.0 million to be used, in part, for the repayment of certain indebtedness of Estrella and payment of certain Estrella transaction expenses. The shares of Class A Common Stock issuable upon the exercise of the Warrant and the shares of Class A Common Stock issuable upon the exercise of the Option Agreement (as defined below) represent approximately 43% of the outstanding shares of Class

01. Completion of Acquisition or Disposition of Assets

Item 2.01. Completion of Acquisition or Disposition of Assets. The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein.

03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. The information set forth with respect to the Warrant, the First Lien Term Loan, and the Second Lien Term Loan in Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein.

02. Unregistered Sales of Equity Securities

Item 3.02. Unregistered Sales of Equity Securities. As previously disclosed, in December 2019, MediaCo issued shares of Series A Convertible Preferred Stock of MediaCo (the " Series A Preferred Stock ") to SG Broadcasting. Under the terms of the Series A Preferred Stock, SG Broadcasting has exercised its right to convert all 286,031 shares of Series A Preferred Stock that it owns into an aggregate of 20,733,869 shares of Class A Common Stock, which amount is equal to the Accrued Value of the shares being converted divided by the Conversion Price (both capitalized terms as defined in MediaCo's Articles of Amendment to Amended & Restated Articles of Incorporation establishing the Series A Preferred Stock) as determined in accordance with the terms and conditions of the Series A Preferred Stock. The conversion was effective on April 16, 2024 and was effected in accordance with an exemption from registration under Section 3(a)(9) of the Securities Act. The information set forth with respect to the Warrant, the Option Agreement and the Series B Preferred Stock in Items 1.01, 3.03 and 5.03 of this Current Report on Form 8-K is incorporated by reference herein. The issuance of the Warrant and the Series B Preferred Stock was effected in accordance with an exemption from registration under Section 4(a)(2) of the Securities Act. Initially, a maximum of 28,206,152 shares of Class A Common Stock may be issued upon exercise of the Warrant, which is subject to customary anti-dilution adjustment provisions, and a maximum of 7,051,538 shares of Class A Common Stock may be issued pursuant to the terms of the Option Agreement.

03. Material Modification of Rights of Security Holders

Item 3.03. Material Modification of Rights of Security Holders. On April 17, 2024, as consideration under the Asset Purchase Agreement, MediaCo issued 60,000 shares of Series B Preferred Stock with an aggregate initial liquidation value of $60.0 million, which Series B Preferred Stock rank senior and in priority of payment to all other equity securities of MediaCo, including with respect to any repayment, redemption, distributions, bankruptcy, insolvency, liquidation, dissolution or winding-up. Pursuant to the Series B Articles of Amendment, as defined in Item 5.03 of this Current Report on Form 8-K, the ability of MediaCo to make distributions with respect to, or make a liquidation payment on, any other class of capital stock in the Company designated to be junior to, or on parity with, the Series B Preferred Stock, will be subject to certain restrictions. Issued and outstanding shares of Series B Preferred Stock will accrue dividends, payable in kind, at an annual rate equal to six percent (6.0%) of the liquidation value thereof, subject to increase upon the occurrence of certain trigger events set forth in the Series B Articles of Amendment. The information provided in Item 5.03 of this Current Report on Form 8-K is incorporated by reference into this Item 3.03.

02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers;

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. In connection with the Transactions, effective as of the Closing Date, Jacqueline Hernndez, age 58, was appointed as MediaCo's Interim Chief Executive Officer. Ms. Hernndez is a media executive who most recently was Founder and CEO of New Majority Ready, a marketing strategy and content development firm. Prior to starting her own company, she was President of Combate Americas, a leading Hispanic sports franchise. Prior to Combate Americas, Ms. Hernndez was Chief Marketing Officer of NBC Universal Hispanic Enterprises and Content and Chief Operation Officer of NBC Universal's Telemundo Enterprises. Prior to joining NBC Universal, Ms. Hernndez was Publisher of People en Espaol and TEEN People. Prior to joining People en Espaol, she was Vice President Turner International Advertising. Prior to Turner, Ms. Hernndez was Director of Marketing of TIME International. Prior to TIME, Ms. Hernndez was Director of Targeted Advertising Sales for the Village Voice. Ms. Hernndez began her career in advertising at the Boston Globe. Ms. Hernndez currently sits on the board of Victoria's Secret & Co., and previously served on the board of Estrella Media, Inc. She holds a BA from Tufts University and an MBA from Baruch College. In connection with Ms. Hernndez's appointment, MediaCo entered into offer letter with Ms. Hernndez (the " Hernndez Offer Letter ") setting forth the terms and conditions of her service as MediaCo's Interim Chief Executive Officer. The Hernndez Offer provides that Ms. Hernndez will receive an annual base salary of $960,000, with the term of her employment commencing on the Closing Date and continuing for a period six months, which period may be extended for an additional three months if agreed by Ms. Hernndez and MediaCo. Ms. Hernndez will also be afforded the right to participate in all employee benefit

03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. On April 17, 2024, MediaCo filed with the Secretary of State of the State of Indiana the Articles of Amendment (the " Series B Articles of Amendment ") to the Amended and Restated Articles of Incorporation of MediaCo (the " Articles of Incorporation "), to designate 60,000 shares of MediaCo's preferred stock as "Series B Preferred Stock" and to establish the terms, rights and preferences of the Series B Preferred Stock under Article VIII of the Articles of Incorporation. The Series B Articles of Amendment became effective upon filing with the Secretary of State of the State of Indiana, and the foregoing description is qualified in its entirety by the complete description of the Series B Preferred Stock in the Series B Articles of Amendment, which are filed as Exhibit 3.1 hereto and incorporated by reference herein. Item8.01. Other Events. On April 18, 2024, MediaCo and Estrella Media, Inc., a wholly owned subsidiary of Estrella, issued a joint press release announcing the execution of the Asset Purchase Agreement, the consummation of the Transactions, and the appointment of Ms. Hernndez as Interim Chief Executive Officer. A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. On April 17, 2024, MediaCo received a notification letter from the Listing Qualifications Department of the Nasdaq Stock Market LLC indicating that the Company has regained compliance with Nasdaq's Minimum Bid Price Requirement and the matter is closed.

01. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits. (a) Financial statements of businesses or funds acquired. MediaCo intends to file financial statements required by this Item 9.01(a) under the cover of an amendment to this Current Report on Form 8-K no later than seventy-one (71) calendar days after the date on which this Form 8-K was required to be filed. (b) Pro forma financial information. MediaCo intends to file the pro forma financial information that is required by this Item 9.01(b) under the cover of an amendment to this Current Report on Form 8-K no later than seventy-one (71) calendar days after the date on which this Form 8-K was required to be filed. (d) Exhibits: Exhibit No. Description 2.1* Asset Purchase Agreement by and among MediaCo Holding Inc., MediaCo Operations LLC, Estrella Broadcasting, Inc., and SLF LBI Aggregator, LLC, dated April 17, 2024. 3.1 Articles of Amendment to Amended & Restated Articles of Incorporation of MediaCo Holding Inc., dated April 17, 2014. 4.1 Class A Common Stock Purchase Warrant issued by MediaCo Holding Inc. to SLF LBI Aggregator, LLC, dated April 17, 2024. 10.1* Voting and Support Agreement, by and among Estrella Broadcasting, Inc., MediaCo Holding, Inc., and SG Broadcasting LLC, dated April 17, 2024. 10.2* Term Loan Agreement dated as of April 17, 2024, between MediaCo Holding Inc., as Borrower, the financial institutions party thereto as lenders and WhiteHawk Capital Partners LP as Term Agent. 10.3* Second Lien Term Loan Agreement dated as of April 17, 2024, between MediaCo Holding Inc., as Borrower, the financial institutions party thereto as lenders and HPS Investment Partners, LLC as Term Agent. 10.4 Stockholders Agreement by and among MediaCo Holding Inc., SLF LBI Aggregator, LLC, and SG Broadcasting LLC, dated April 17, 2024. 10.5 Registration Rights Agreement by and among MediaCo Holding Inc., SG Broadcasting LLC, and SLF LBI Aggregator, LLC, dated April 17, 2024. 99.1 Joint Pre

Forward-Looking Statements

Forward-Looking Statements This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act, as amended, and it is intended that all forward-looking statements concerning MediaCo and Estrella, the transactions and other matters, will be subject to the safe harbor protections created thereby. All statements contained in this communication other than statements of historical facts, including without limitation statements concerning MediaCo's future performance, business strategy, future operations, and plans and objectives of managem

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