Mediaco Holding Inc. current report, 19 May 2021

Abrir documento

MediaCo Holding Inc. Form 8-K Summary

Business Context and Reporting Period

MediaCo Holding Inc. filed a Current Report on Form 8-K dated May 19, 2021, with certain actions occurring on May 21, 2021. The filing primarily reports amendments to the Company’s senior credit facility, new subordinated financing from its controlling shareholder, an executive compensation change, and modified disclosures from the 2020 Form 10-K.

Financial Metrics, Debt and Liquidity

  • SG Broadcasting LLC contributed $3.0 million at closing through a subordinated convertible promissory note to fund a required prepayment of senior debt.
  • SG Broadcasting agreed to provide up to an additional $4.0 million, consisting of $1.0 million by June 1, 2021 and up to $3.0 million through June 30, 2022, subject to specified conditions. Total potential subordinated funding under the arrangement is up to $7.0 million.
  • MediaCo made a $3.0 million principal payment on its Senior Credit Facility.
  • No quarterly scheduled principal payments are required through the quarter ending March 31, 2022.
  • The borrowing-base multiple applied to Billboard Cash Flow increased from 3.5 to 5.0, and the advance rate applied to radio-station FCC licenses increased from 60% to 70%.
  • An incremental annual interest rate of 1%, payable in kind monthly, applies while the borrowing-base multiple exceeds 3.5 or the FCC-license advance rate exceeds 60%.
  • The Minimum Consolidated Fixed Charge Coverage Ratio was reduced to 1.00:1.00 through December 31, 2022, increasing to 1.10:1.00 beginning January 1, 2023.
  • The filing does not provide current-period revenue, profit, cash flow, margin, total debt, or liquidity balances.

Material Changes Versus Prior Comparable Period

  • The Senior Credit Facility was amended and certain specified events of default were waived.
  • SG Broadcasting’s subordinated convertible note matures May 25, 2025, bears interest at the applicable senior facility rate or 6.0% if no senior facility is outstanding, and includes additional 1.0% annual increases beginning November 25, 2021. Interest is payable in kind through maturity.
  • Subject to prior shareholder approval, SG Broadcasting may convert the note into Class A common stock at a strike price based on the 30-day volume-weighted average share price on the conversion date.
  • An amendment fee of $0.4 million was paid in cash.
  • On May 21, 2021, the Compensation Committee increased Chief Operating Officer Brad A. Tobin’s annual base salary from $200,000 to $350,000.
  • SG Broadcasting beneficially owned more than 91.03% of outstanding common stock and approximately 97.42% of combined voting power as of May 19, 2021.

Guidance, Outlook, Risks and Unusual Items

The Company stated that the amended credit facility and additional capital contributions eliminated the conditions that had raised substantial doubt about its ability to continue as a going concern in the 2020 Form 10-K. The filing does not provide operating guidance or a forecast.

The financing remains dependent on contributions from the controlling shareholder, compliance with amended financial covenants, and the Company’s ability to meet debt obligations. The note is subordinated, interest compounds through payment in kind, and conversion could dilute existing shareholders. The filing also notes that its modified 2020 disclosures do not update the Form 10-K for subsequent events other than those specifically described; more current information is expected in the March 31, 2021 Form 10-Q and later filings.

Important Facts for Investors to Verify

  • Whether the additional $1.0 million and potential $3.0 million SG Broadcasting contributions were made when required.
  • The Company’s March 31, 2021 financial statements, cash position, total debt, covenant compliance, and liquidity outlook.
  • The detailed terms and outstanding balance of the amended Senior Credit Facility and convertible promissory note.
  • The impact of the higher borrowing-base advance rates and 1% payment-in-kind interest premium.
  • Any required shareholder approval and potential dilution from conversion of the SG Broadcasting note.
  • The updated risk factors, financial statements, and going-concern disclosures included as Exhibit 99.1.