UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 18, 2024 (April 16, 2024)

Mediaco Holding Inc.

(Exact name of registrant as specified in its charter)

Indiana	001-39029	84-2427771
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

48 West 25th Street, Third Floor New York New York		10010
(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: 1 (212) 229-9797

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A Common Stock, par value $0.01 per share		MDIA		Nasdaq Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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 provided pursuant to Section 13(a) of the Exchange Act. ☐

Introductory Note

This Amendment No. 1 to Current Report on Form 8-K (this “Amendment No. 1”) amends and supplements the Current Report on Form 8-K of MediaCo Holding Inc., an Indiana corporation (“MediaCo”), filed with the Securities and Exchange Commission (the “SEC”) on April 18, 2024 (the “Original Form 8-K”). As disclosed in the Original Form 8-K, on April 17, 2024, 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 and assets owned by Estrella and its subsidiaries (the “Estrella Broadcast Assets”) and certain other retained assets) (the “Purchased Assets”), and assumed substantially all of the liabilities (the “Assumed Liabilities”) of Estrella and its subsidiaries (collectively, the “Transaction”). Purchaser conducts the business acquired from Estrella under the trade name Estrella MediaCo, and the business is referred to herein as the “Estrella MediaCo Business.”

This Amendment No. 1 is being filed solely for the purpose of amending the disclosure in the Original Form 8-K to include (i) a description of the business of the Estrella MediaCo Business after giving effect to the Transaction, which is filed as Exhibit 99.1 hereto, and (ii) the financial statements of Estrella and the pro forma financial information related to the Transaction that are required by Items 9.01(a) and 9.01(b) of Form 8-K, respectively, and should be read in conjunction with the Original Form 8-K. Except as set forth herein, no other modification has been made to the Original Form 8-K.

The pro forma financial information included in this Amendment No. 1 has been presented for informational purposes only and is not necessarily indicative of the combined financial position or results of operations that would have been realized had the Transaction consummated as of the dates indicated, nor is it meant to be indicative of any anticipated combined financial position or future results of operations that Estrella MediaCo will experience after the consummation of the Transaction.

Item 9.01

Financial Statements and Exhibits.

(a)	Financial statements of businesses acquired.

The audited financial statements of Estrella as of and for the years ended December 31, 2023 and December 31, 2022, together with the notes thereto and the independent auditor’s report thereon, and the unaudited financial statements of Estrella as of March 31, 2024 and for the three months ended March 31, 2023 and March 31, 2024, together with the notes there, in each case, required by Item 9.01(a) of Form 8-K are filed as Exhibits 99.2 and 99.3, respectively, and are incorporated herein by reference.

(b)	Pro forma financial information.

The unaudited pro forma condensed combined financial statements of MediaCo as of March 31, 2024, for the three months ended March 31, 2024, and for the year ended December 31, 2023 required by Item 9.01(b) of Form 8-K, which give pro forma effect to the Transaction and certain other transactions described in the pro forma financial statements, are filed as Exhibit 99.4 hereto and are incorporated herein by reference.

(d)

Exhibits.

See the Exhibit Index below, which is incorporated by reference herein.

EXHIBIT INDEX

Exhibit	Description
23.1	Consent of BDO USA, P.C., Independent Auditor.
99.1	Business Description of Estrella MediaCo Business.
99.2	Audited financial statements of Estrella Broadcasting, Inc. as of and for the years ended December 31, 2023 and December 31, 2022, together with the notes thereto and the independent auditor’s report thereon.
99.3	Unaudited financial statements of Estrella Broadcasting, Inc. as of and for the three months ended March 31, 2024, together with the notes thereto.
99.4	Unaudited pro forma condensed combined financial statements of MediaCo Holding Inc. as of March 31, 2024, for the three months ended March 31, 2024 and for the year ended December 31, 2023, together with the notes thereto.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

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 hereunto duly authorized.

	MEDIACO HOLDING INC.

Date: July 3, 2024	By:	/s/ Ann C. Beemish
		Ann C. Beemish
		Chief Financial Officer

Exhibit 23.1

Consent of Independent Auditor

We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-258593) and Form S-8 (No. 333-246338 and 333-256430) of Mediaco Holding Inc. of our report dated May 3, 2024, except for additional disclosures made in preparation for an SEC filing discussed in Note 2 to the consolidated financial statements, as to which the date is July 2, 2024, relating to the consolidated financial statements of Estrella Broadcasting, Inc. which appears in this Current Report on Form 8-K/A.

/s/ BDO USA, P.C.

Los Angeles, California

July 3, 2024

Exhibit 99.1

Business Description

MEDIACO HOLDING INC.

The business description of MediaCo Holding Inc., an Indiana corporation (“MediaCo”) is contained in MediaCo’s Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the Securities and Exchange Commission on April 1, 2024, and is incorporated herein by reference.

ESTRELLA MEDIACO BUSINESS

GENERAL

On April 17, 2024, MediaCo, through its wholly-owned subsidiary MediaCo Operations LLC, a Delaware limited liability company (“MediaCo Operations”), purchased substantially all of the assets of Estrella Broadcasting, Inc., a Delaware corporation (“Estrella Broadcasting”) and its subsidiaries (other than certain broadcasting assets owned by Estrella Broadcasting and its subsidiaries) and assumed substantially all of the liabilities of Estrella Broadcasting and its subsidiaries (the foregoing, collectively, the “Estrella Transaction”).

In connection with the Estrella Transaction, MediaCo Operations acquired all of the network, content, digital, and commercial operations of Estrella Broadcasting’s subsidiary, Estrella Media, Inc. (“Estrella Media”), including production facilities used to produce television programing and studio facilities in Burbank, California, Houston, Texas, and Dallas, Texas. Estrella Media retained certain broadcasting assets relating to the ownership and operation of its television and radio stations (“Estrella Broadcasting Assets”) in connection with the Estrella Transaction.

MediaCo Operations, using the Estrella brand names acquired in the Estrella Transaction, produces and distributes Spanish-language video, audio, and digital content across television, radio, and digital platforms. Through its EstrellaTV broadcast network and studio operations, MediaCo Operations services a large and growing Hispanic audience, with a focus on the U.S. Mexican population, especially in California and Texas. Through its affiliation and other contractual arrangements, MediaCo Operations aims to provide its radio and television programming to top Hispanic markets across the country. MediaCo Operations conducts the business acquired from Estrella Broadcasting under the trade name Estrella MediaCo, and the business is referred to herein as the “Estrella MediaCo Business.”

The Estrella MediaCo Business primarily generates revenue from fees associated with its radio and television programming provided to third parties, sales of local, regional, and national (including network) advertising time for its programming that is broadcast on radio and television stations operated by its affiliates and other contractual counterparties, and sales of digital advertising on its streaming channels.

MediaCo Operations is party to certain affiliation or similar agreements with Estrella Media pursuant to which MediaCo Operations provides its network programming for distribution on:

•

Estrella Media’s radio stations broadcasting in Los Angeles, California, San Bernardino, California, Houston, Texas, and Dallas, Texas; and

•

Estrella Media’s television stations broadcasting in Los Angeles, California, Denver, Colorado, Houston, Texas, New York, New York, Chicago, Illinois, and Miami, Florida.

Under these agreements, MediaCo Operations receives a network programming fee and collects revenue associated with sales of advertising time in its programming that is broadcast on such stations.

MediaCo Operations is also party to affiliation agreements with certain other television stations to broadcast its television network programming on the affiliate station’s primary or digital multicast channels. MediaCo Operations distributes its television programming to these stations, and it shares in the available advertising time to be sold on these affiliate stations while its television programming is broadcasting.

Together, the network programming is broadcast by affiliated television stations in various states serving 48 designated market areas (“DMA”), including twelve in Texas, seven in California, six in Florida, three in Arizona, two each in Nevada, Oklahoma, Tennessee, and Washington, and one each in Arkansas, Colorado, Georgia, Idaho, Illinois, Kentucky, New Mexico, New York, North Carolina, Oregon, South Carolina, and Utah. These television DMAs include almost all of the top 20 U.S. Hispanic television markets. MediaCo Operations’ television programming is also carried by cable and satellite providers in most television DMAs across the U.S.

MediaCo Operations also syndicates its popular radio morning show, El Show de Don Cheto, in over 30 markets.

MediaCo Operations operates four streaming channels, EstrellaTV, Estrella News, Estrella Games, and Cine EstrellaTV, on over-the-top platforms through third-party distribution partners. EstrellaTV-branded program content is also available to consumers on the EstrellaTV website and advertising supported video-on-demand app.

MediaCo Operations holds an option to purchase 100% of the equity interests of certain subsidiaries of Estrella Broadcasting holding the Estrella Broadcasting Assets (the “Option Subsidiaries Equity”) in exchange for 7,051,538 shares of MediaCo’s Class A Common Stock. Estrella Broadcasting was also granted the right to put the Option Subsidiaries Equity to MediaCo Operations for the same consideration beginning six months after the date of the closing of the Estrella Transaction (as applicable, the “Option”).

The Company determined that the Estrella entities holding the Estrella Broadcast Assets subject to the Option (the “Estrella VIE”) is a variable interest entity (“VIE”) in which the Company holds a controlling financial interest. The Company’s conclusion that the Estrella VIE is a VIE results from the Option, which caps Estrella VIE’s right to residual returns. Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) paragraph 810-10-25-38A and paragraph 810-10-25-38B, a reporting entity (the Company) is deemed to have a controlling financial interest in a VIE if it has both of the following characteristics:

The power to direct the activities of a VIE that most significantly impact the VIE’s economic performance; and

The obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

The Company determined that since substantially all of the activities of the Estrella VIE are conducted on behalf of a single VIE holder, and that the Company is the primary beneficiary of the VIE, the remaining assets and liabilities of the Estrella VIE should be consolidated in the Company’s consolidated financial statements as of April 17, 2024.

Estrella Media owns and operates its FCC radio and television licenses and its transmission facilities, which broadcast the MediaCo Operations content pursuant to affiliation agreements. Estrella Media’s advertising revenue is generated from the sale of advertising time from programming on its owned local television and radio stations. Advertising sales are conducted under the facilities and services agreement.

COMPETITION

All of our businesses operate in intensely competitive, consumer-driven, and rapidly-changing environments and compete with a growing number of companies that provide a broad range of communications products and services and entertainment, news, and information products and services to consumers. Technological changes are further intensifying and complicating the competitive landscape for all of our businesses by challenging existing business models and affecting consumer behavior.

Although the broadcasting industry is highly competitive, barriers to entry exist. The operation of a broadcasting radio or television station in the United States requires a license from the FCC. Also, the number of stations that can operate in a given market is limited by the availability of stations in that market, as well as by the FCC’s multiple ownership rules regulating the number and types of stations that may be owned or controlled by the same person or company.

In selecting the form of media through which to advertise, advertisers evaluate their ability to target audiences having a specific demographic profile, lifestyle, brand, or media consumption or purchasing behavior, or audiences located in, or traveling through, a particular geography. Advertisers also compare the relative costs of available media, evaluating the number of impressions (potential viewings), exposure (the opportunity for advertising to be seen or heard) and circulation (traffic volume in a market), as well as potential effectiveness, quality of related services (such as advertising copy design and layout), and customer service.

Massive media conglomerates dominate the global content production and distribution industry. The ability to compete successfully depends on the capacity to provide high-quality popular content, adapt to and exploit technological developments, respond to changes in consumer behavior, and achieve widespread distribution.

Radio Broadcasting and Programming

Radio broadcasting stations compete with the other radio broadcasting stations in their respective market areas, as well as with other advertising media such as newspapers, cable and broadcast television, magazines, outdoor advertising, transit advertising, the Internet, satellite radio, streaming services, direct marketing, and mobile and wireless device marketing. Competition within the broadcasting industry occurs primarily in individual market areas, so that a station in one market (e.g., New York) does not generally compete with stations in other markets (e.g., Los Angeles). Our stations face competition from other stations with substantial financial resources, including stations targeting the same demographic groups. In addition to management experience, factors that are material to competitive position include the station’s rank in its market in terms of the number of listeners, authorized power, assigned frequency, audience characteristics, local program acceptance and the number and characteristics of other stations in the market area. We attempt to improve our competitive position with programming and promotional campaigns aimed at the demographic groups targeted by our owned stations and our programmed stations. We also seek to improve our position through sales efforts designed to attract advertisers that have done little or no radio advertising by emphasizing the effectiveness of radio advertising in increasing the advertisers’ revenues. Although we believe that each of our owned and programmed stations can compete effectively in their respective markets, there can be no assurance that we will be able to maintain or increase current audience ratings or advertising revenue market share.

Video and Digital Broadcasting and Programming

We compete with a number of different sources that provide television news, sports, information, and entertainment programming to consumers locally and nationally. We also may compete with online digital distributors and platforms that enable Internet video streaming of television shows and other video programming.

The explosion of digital video content provided by companies such as Facebook, YouTube, and Netflix challenges traditional content providers to keep up. Meanwhile, the proliferation of mobile devices and widespread availability of mobile broadband technology is allowing more audiences across the globe to consume media content. Revenue from digital and mobile advertising continues to grow at the expense of traditional broadcast advertising.

The proliferation of high-speed broadband has significantly increased competition in the video marketplace, with a vast majority of Americans owning devices that can access mobile broadband via mobile or home devices.

Cable Networks and Broadcast Television

Our television networks and channels compete with cable and broadcast television networks and owned local broadcast television stations for viewers’ attention and audience share with all forms of programming provided to viewers, including cable, broadcast, and premium television networks, local broadcast television stations, home entertainment, pay-per-view and video-on-demand services, online activities, such as social networking and viewing user-generated content, and other forms of entertainment, news, and information. Our broadcast television and streaming networks, channels, and local broadcast programs (“Video Programming Services”) may compete for viewers’ attention with digital distributors, some of which have their own high-quality original content.

Our Video Programming Services may also compete for the acquisition of programming and for on-air and creative talent with other cable and broadcast television networks, local television stations, and online digital distributors.

Our Video Programming Services may also compete with other cable and broadcast television networks, stations, and programming providers for carriage of their programming by multichannel video providers and online digital distributors in markets across the United States and to secure affiliations with independently owned television stations, which are necessary to ensure the effective distribution of our Video Programming Services to a nationwide audience.

In addition, our television production operations compete with other production companies and creators of content for the acquisition of story properties, creative, performing, and technical personnel, and with distributors for their content and for consumers interest in their content.

Our network, local, and digital advertising sales compete with other television and radio networks, stations, and digital platforms for the sale of advertising time. Additionally, advertisers’ willingness to purchase advertising from us may be adversely affected by a decrease in audience ratings across our platforms. Declines in advertising revenue also can be caused by increased competition for the leisure time of audiences and audience fragmentation and from the growing use of new technologies.

The popularity and ratings of our Video Programming Services will also have an effect on the rates we can secure from our distributors and advertisers.

FEDERAL REGULATION

The Estrella MediaCo Business and the broadcast stations and multichannel video program distributors (“MVPDs”) it relies on to deliver its programming are subject to and affected by laws and regulations of U.S. federal, state, and local governmental authorities. The FCC regulates numerous areas of broadcasting and television programming pursuant to rules, regulations and policies adopted under authority of the Communications Act of 1934, as amended (the “Communications Act”). Under the Communications Act, the FCC also regulates certain aspects of network affiliation and programming agreements.

The following is a brief summary of certain provisions of the Communications Act and of specific FCC regulations and policies. Legislation has been introduced from time to time which would amend the Communications Act in various respects or otherwise affect the Estrella MediaCo Business, either directly or by impacting the stations and MVPDs that distribute its programming to the public. Similarly, the FCC from time to time considers new regulations or amendments to its existing regulations that can create such impacts. We cannot predict whether any such legislation will be enacted or whether new or amended FCC regulations will be adopted or what their effect would be on the Estrella MediaCo Business.

Broadcast License Renewal

Broadcasting is prohibited except in accordance with a license issued by the FCC, ordinarily granted by the FCC for maximum terms of eight years and subject to renewal upon application and approval by the FCC. The FCC has the power to deny license renewal or revoke licenses for, among other things, false statements made in FCC filings or willful or repeated violations of the Communications Act or of FCC rules. The Estrella MediaCo Business could be adversely affected if the licenses of stations with which it has affiliation, programming, or other agreements are not renewed.

Broadcast Ownership Restrictions

FCC rules relating to commercial television stations generally limit an entity from having an attributable interest in more than two television stations in the same DMA and, subject to rule waiver or grandfathering of existing arrangements, generally require that no entity have an attributable interest in more than one top-4-rated station in a DMA. The FCC’s local radio ownership rule limits the number of commercial radio stations in a radio market in which a person or entity may hold an attributable interest based on the number of radio stations in that market.

The FCC is required by statute to review its broadcast ownership rules on a quadrennial basis (i.e., every four years) and to repeal or modify rules that are no longer “necessary in the public interest.” The FCC completed its 2018 quadrennial review in December 2023, largely leaving its radio rules unchanged, and modifying its TV rules to extend its prohibition on holding an attributable interest in two top-4-rated stations in a DMA to prohibit, in certain circumstances, the placement of a second top-4-rated program stream on an existing top-4-rated station or on a co-owned low power television (“LPTV”) station, and restricting whether an existing top-4-rated stream or LPTV station may be transferred or assigned. The 2022 quadrennial review was launched in December 2022 and that proceeding remains pending. We cannot predict whether the 2022 quadrennial review proceeding will result in further modifications of the ownership rules or the impact (if any) that such modifications would have on our business.

The FCC generally deems the following relationships and interests to be attributable for purposes of its ownership restrictions:

•

all officer and director positions in a licensee or its direct/indirect parent(s);

•

voting stock interests of at least 5% (or 20%, if the holder is a passive institutional investor,i.e., a mutual fund, insurance company or bank);

•

any equity interest in a limited partnership or limited liability company where the limited partner or member has not been “insulated” from the media-related activities of the LP or LLC pursuant to specific FCC criteria;

•

equity and/or debt interests which, in the aggregate, exceed 33% of the total equity and debt of a station licensee if the interest holder (a) supplies more than 15% of the station’s total weekly programming, or (b) holds an attributable interest in another broadcast station in the same market.

The consent of the FCC is required to obtain control of a broadcast station license, and ownership-rule conflicts could result in Estrella MediaCo being unable to obtain FCC consents necessary for future acquisitions or restrict media investments by shareholders having or acquiring an interest in Estrella MediaCo. Additionally, ownership of a station in a market could limit our ability to provide programming or, in the case of radio, ad sales services, to a local non-owned station if we could not acquire that station under the local broadcast ownership rules.

Under the Communications Act, no FCC license may be held by a corporation if more than one-fifth of its capital stock is owned or voted by aliens or their representatives, a foreign government or representative thereof, or an entity organized under the laws of a foreign country (collectively, “Non-U.S. Persons”). Furthermore, the Communications Act provides that no FCC license may be granted to an entity directly or indirectly controlled by another entity of which more than one-fourth of its capital stock is owned or voted by Non-U.S. Persons if the FCC finds that the public interest will be served by the denial of such license.

Programming and Operations

The FCC regulates the content of broadcast, network, and other video programming. The FCC prohibits broadcasters from airing obscene material at any time and indecent or profane material between 6:00 a.m. and 10:00 p.m. The FCC also monitors compliance with requirements that apply to broadcasters and their networks, including those relating to political advertising, identification of program sponsors, the use and integrity of the Emergency Alert System, the amount of commercial content that may be shown on cable networks, broadcast networks and local broadcast television stations during programming originally produced and broadcast primarily for an audience of children 12 years of age and under, and the provision of educational programming for children 16 years of age and under. In addition, FCC regulations require the closed captioning of almost all broadcast and cable/satellite TV programming, as well as certain programming in the U.S. delivered by internet protocol.

NEW OPERATING STRUCTURE AND REPORTING SEGMENTS OF MEDIACO HOLDING INC.

Effective April 17, 2024, in connection with the Estrella Transaction, MediaCo changed its operating structure from one operating and reporting segment to three operating and reporting segments. MediaCo’s revised operating and reporting segments are comprised of the following:

•

MediaCo NY Audio: The MediaCo NY Audio segment includes the MediaCo business that existed prior to the Estrella Transaction, which consists of two radio stations, WQHT(FM) and WBLS(FM), which serve the New York City DMA and primarily target Black, Hispanic, and multi-cultural consumers. Revenues in this segment are primarily from radio and digital advertising sales on these two radio stations, and also from events, including sponsorships and ticket sales, licensing, and syndication.

•

Estrella MediaCo Audio & Events: The Estrella MediaCo Audio & Events segment includes MediaCo Operations’ audio and events business acquired pursuant to the Estrella Transaction, which primarily generates revenue from network programming fees and sales of local, regional, and national (including network) advertising time on its affiliated radio stations and the sale of time to brokered or infomercial customers on its affiliated radio stations.

•

Estrella MediaCo TV & Digital: The Estrella MediaCo TV & Digital segment includes MediaCo Operations’ video and digital business acquired pursuant to the Estrella Acquisition, and primarily generates revenue from networking programming fees, the sale of local, regional, and national (including network) advertising time on television stations operated by its affiliation and other contractual counterparties and the sale of time to brokered or infomercial customers on its affiliated television stations, as well as from sales of digital impressions on its streaming channels. Estrella MediaCo TV & Digital also generates advertising sales from stations that broadcast its “EstrellaTV” network programming.

*****

Exhibit 99.2

Estrella Broadcasting, Inc.

Consolidated Financial Statements

Years Ended December 31, 2023 and 2022

Estrella Broadcasting, Inc.

Contents

Independent Auditor’s Report		3-4

Consolidated Financial Statements

	Consolidated Balance Sheets	6-7

	Consolidated Statements of Operations	8

	Consolidated Statements of Changes in Shareholders’ Deficit	9

	Consolidated Statements of Cash Flows	10

	Notes to Consolidated Financial Statements	11-36

Independent Auditor’s Report

To the Management of

Estrella Broadcasting, Inc.

Los Angeles, California

Opinion

We have audited the consolidated financial statements of Estrella Broadcasting, Inc. (the Company), which comprise the consolidated balance sheets as of December 31, 2023 and 2022, and the related consolidated statements of operations, changes in shareholders’ deficit and cash flows for the years then ended, and the related notes to the consolidated financial statements.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Change in Accounting Method Related to Current Expected Credit Losses

As discussed in Note 1 to the financial statements, the Company has changed its method of accounting for Credit Losses during the year ended December 31, 2023, due to the adoption of the Accounting Standards Codification (“ASC”) – Current Expected Credit Losses (CECL) (“ASC 326”).

Basis for Opinion

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the consolidated financial statements are issued or available to be issued.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

In performing an audit in accordance with GAAS, we:

•

Exercise professional judgment and maintain professional skepticism throughout the audit.

•

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

•

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is expressed.

•

Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.

•

Conclude whether, in our judgment, there are conditions or events, considered in the aggregate that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Other Information

Management is responsible for the other information. The other information comprises the Management’s Discussion and Analysis of Financial Condition and Results of Operations but does not include the consolidated financial statements and our auditor’s report thereon. Our opinion on the consolidated financial statements does not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the consolidated financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

/s/ BDO USA, P.C.

Los Angeles, California

May 3, 2024, except for additional disclosures made in preparation for an SEC filing discussed in Note 2 to the consolidated financial statements, as to which the date is July 2, 2024.

Consolidated Financial Statements

Estrella Broadcasting, Inc.

Consolidated Balance Sheets

(in thousands, except share amounts)

December 31,	2023		2022

Assets
Current assets:
Cash and cash equivalents	$	2,343	$	6,320
Accounts receivable, net of allowance of $1,617 and $1,686 at December 31, 2023 and December 31, 2022, respectively		23,476		24,516
Current portion of television program rights, net		1,558		2,893
Prepaid expenses and other current assets		3,006		2,783
Assets held for sale		-		351

Total current assets		30,383		36,863

Property and equipment, net		18,925		21,442
Right-of-use asset, net		27,494		27,919
Broadcast licenses, net		103,850		118,478
Television program rights, excluding current portion		391		2,062
Employee advances		35		55
Restricted cash		520		407
Other assets		385		485

Total assets	$	181,983	$	207,711

Estrella Broadcasting, Inc.

Consolidated Balance Sheets (Continued)

(in thousands, except share amounts)

December 31,	2023			2022

Liabilities and Shareholders’ deficit

Liabilities
Current liabilities: Accounts payable	$	4,218		$	8,779
Accrued liabilities		17,952			17,171
Line of credit		4,339			-
Accrued interest		56,421			38,438
Current portion of finance lease liability		439			525
Current portion of operating lease liability		3,737			3,881
Current portion of long-term debt		148,630			3,470
Current portion of deferred taxes		19			-

Total current liabilities		235,755			72,264

Long-term debt, excluding current portion		33			153,463
Deferred income taxes		7,257			7,044
Long-term portion of finance lease liability		3,069			4,316
Long-term portion of operating lease liability		51,298			54,989

Total liabilities		272,833			263,541

Commitment and Contingencies (Note 5)

Shareholders’ deficit:
Common stock - Class A, $0.001 par value:
Authorized shares – 666,667 Issued and outstanding shares –611,771 at December 31, 2023 and 608,491 at December 31, 2022		1			1
Additional paid-in capital		33,895			33,819
Accumulated deficit		(124,746	)		(89,650	)

Total shareholders’ deficit		(90,850	)		(55,830	)

Total liabilities and shareholders’ deficit	$	181,983		$	207,711

See accompanying notes to consolidated financial statements.

Estrella Broadcasting, Inc.

Consolidated Statements of Operations

(in thousands)

Years ended December 31,	2023			2022

Net revenues	$	90,198		$	99,573

Operating expenses
Program and technical, exclusive of depreciation and amortization of property and equipment shown below (including noncash compensation expense of $0.0 million and $0.2 million, respectively)		60,726			62,144
Promotional, exclusive of depreciation and amortization shown below		4,588			5,431
Selling, general and administrative, exclusive of depreciation and amortization shown below (including noncash compensation expense of $0.1 million and $0.6 million, respectively)		40,659			42,942
Depreciation and amortization of property and equipment		3,143			3,213
(Gain)/loss on sale and disposal of property and equipment		(2,329	)		942
Impairment of broadcast licenses and long-lived assets		6,324			881
Other expense/(income)		110			(936	)

Total operating expenses		113,221			114,617

Operating loss		(23,023	)		(15,044	)

Interest expense		20,207			15,018

Gain on extinguishment of debt		(8,320	)		-

Loss from continuing operations before income taxes		(34,910	)		(30,062	)

Income tax provision		(186	)		(637	)

Net loss	$	(35,096	)	$	(30,699	)

See accompanying notes to consolidated financial statements.

Estrella Broadcasting, Inc.

Consolidated Statements of Changes in Shareholders’ Deficit

(in thousands, except share amounts)

	Class A Common Stock				Additional					Total
	Number of Shares		Amount		Paid-in Capital		Accumulated Deficit			(Deficit) / Capital

Balance, December 31, 2021		608,410	$	1	$	33,245	$	(58,951	)	$	(25,705	)

Stock-based compensation		-		-		574		-			574
Issuance of restricted stock units		81		-		-		-			-

Net loss		-		-		-		(30,699	)		(30,699	)

Balance, December 31, 2022		608,491		1		33,819		(89,650	)		(55,830	)

Stock-based compensation		-		-		76		-			76
Issuance of restricted stock units		3,280-		-		-		-			-

Net loss		-		-		-		(35,096	)		(35,096	)

Balance, December 31, 2023		611,771	$	1	$	33,895	$	(124,746	)	$	(90,850	)

See accompanying notes to consolidated financial statements.

Estrella Broadcasting, Inc.

Consolidated Statements of Cash Flows

(in thousands)

December 31,	2023			2022

Operating activities
Net loss	$	(35,096	)	$	(30,699	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization of property and equipment		3,143			3,213
(Gain) loss on sale and disposal of property and equipment		(2,329	)		942
Impairment of broadcast licenses and long-lived assets		6,324			881
Amortization of television program costs		3,414			6,539
Non-cash lease expense		4,026			3,992
Stock-based compensation		76			574
Provision for credit losses and doubtful accounts		220			736
Gain on extinguishment of debt		(8,320	)		-
Changes in operating assets and liabilities:
Accounts receivable		820			(823	)
Television program costs		1,353			(3,317	)
Prepaid expenses and other current assets		(229	)		545
Employee advances		20			(18	)
Accounts payable		(3,556	)		4,262
Accrued liabilities		(1,717	)		965
Accrued interest		18,169			13,787
Operating lease liability		(1,100	)		(3,411	)
Deferred income taxes		232			631
Other assets		100			193

Net cash used in operating activities		(14,450	)		(1,008	)

Investing activities
Purchases of property and equipment		(1,534	)		(1,051	)
Proceeds from the sale of broadcast licenses and property and equipment		8,708			103

Net cash provided by/(used in) investing activities		7,174			(948	)

Financing activities
Proceeds from line of credit		4,339			-
Payments on capital lease		(759	)		-
Payments on finance lease		-			(497	)
Payments on exit facility		(136	)		(130	)

Net cash provided by/(used in) financing activities		3,444			(627	)

Net decrease in cash, cash equivalents, and restricted cash		(3,832	)		(2,583	)

Cash, cash equivalents, and restricted cash at beginning of year		6,727			9,310

Cash, cash equivalents, and restricted cash at end of year	$	2,895		$	6,727

Supplemental disclosure of cash flow information
Cash paid for:
Interest	$	1,359		$	788
Income taxes, net of tax refunds		-			6

See accompanying notes to consolidated financial statements.

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

1.	Summary of Significant Accounting Policies

Description of Business and Basis of Presentation

Estrella Broadcasting, Inc. (“Estrella Broadcasting”) is a holding company with substantially no assets, operations or cash flows other than its investment in its subsidiaries and intercompany loans. Estrella Media, Inc. (“Estrella Media”), a wholly owned subsidiary, is the operating entity of the consolidated group, therefore the majority of disclosures in the financial statements reference Estrella Media. Estrella Broadcasting, Inc. and its wholly owned subsidiaries (collectively referred to as the “Company”), through Estrella Media own and operate television stations located in California, Texas, New York, Colorado, Illinois, and Florida as well as radio stations in California and Texas. In addition, Estrella Media operates leased television stations in California and Texas. Estrella Media also owns television production facilities that are used to produce programming for its owned and affiliated television stations. Estrella Media sells commercial airtime on its radio and television stations to local, regional and national advertisers.

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

Estrella Media’s television studio facilities in Burbank, California, in Houston, Texas, and Dallas, Texas, are operated by its wholly owned subsidiaries.

In 2009, Estrella Media began entering into affiliation agreements with certain television stations to broadcast its EstrellaTV network programming on the affiliate station’s primary or digital multicast channels. Currently, the EstrellaTV network is broadcast by television stations in various states.

Estrella Media also operates four streaming channels, Estrella TV, Estrella News, Estrella Games and Cine Estrella, on Over-the-top (“OTT”) platforms through third party distribution partners. These channels are also available on the Estrella Media website and Estrella mobile app throughout the United States. Estrella content is also available to consumers on the Estrella advertising supported video on demand (“VOD”) app.

Liquidity

As of December 31, 2023, Estrella Broadcasting’s total indebtedness was approximately $153.0 million, of which approximately $153.0 million was due within the next twelve months.

In accordance with FASB ASC 205-40, Estrella Broadcasting assessed whether there is substantial doubt that the Company has the ability to continue as a going concern. FASB ASC 205-40 provides the following guidance, “substantial doubt about an entity’s ability to continue as a going concern exists when conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued.”

On April 17, 2024, the Company completed the sale of substantially all of the assets of Estrella Broadcasting to a subsidiary of MediaCo Holding Inc., other than its local radio and television stations. As part of that transaction, the Exit Facility and line of credit were settled. The non-HPS lenders were paid off and the HPS lenders received warrants plus 60,000 shares of Mediaco Holding Inc. Series B Preferred Stock in full settlement. Refer to the Subsequent Events disclosure for details.

Principles of Consolidation and Basis of Presentation

The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The consolidated financial statements include the accounts of Estrella Broadcasting, Inc. and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.

Additional Disclosures Made in Preparation for an SEC Filing

Subsequent to the original issuance of the consolidated financial statements and in connection with acquisition of the Company, which is discussed in Note 12 to the consolidated financial statements, certain footnote disclosures have been either updated or added in order to conform to the requirements for these consolidated financial statements to be included in an SEC filing. Specifically, the Company previously elected to use the risk-free rate in determining the present value of lease payments. As described in the “Leases” sub-section in Note 1, the Company used the incremental borrowing rate in determining the present value of lease payments and has updated the amounts included in the consolidated financial statements, the “Leases” sub-section in Note 1, and the “Operating Lease Liability” and “Finance Lease Liability” subsections in Note 5 to reflect the application of the incremental borrowing rate.

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instrument,” (“ASU 2016-13”) which amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses on certain types of financial instruments which includes trade receivables; to record an allowance for credit risk based on expected losses rather than incurred losses. The Company adopted ASU 2016-03 on January 1, 2023, and the adoption of this ASU did not have a material impact on the Company’s unaudited interim consolidated financial statements and related disclosures.

Cash and Cash Equivalents

Estrella Broadcasting considers all highly liquid financial instruments purchased with an original maturity of three months or less and investments in money market accounts to be cash equivalents. Cash and cash equivalents are maintained at financial institutions, which, at times, may exceed federally insured limits. Cash in banks in excess of federally insured amounts were $2.1 million and $6.0 million as of December 31, 2023 and December 31, 2022, respectively. Estrella Broadcasting has not experienced any losses in such accounts. Estrella Broadcasting believes it is not exposed to any significant credit risk of cash and cash equivalents.

Restricted Cash

At December 31, 2023 and December 31, 2022, Estrella Media had restricted cash of $0.5 million and $0.4 million, respectively, for a collateral account related to merchant banking, for the Company’s purchase card program and for an office lease security deposit.

Accounts Receivable Net of Allowance for Credit Losses

Accounts receivables are recorded at the amounts billed less estimated allowances for credit losses for any potential uncollectible amounts. The Company continually monitors customer payments and maintains an allowance for estimated losses resulting from a customer’s inability to make required payments. The Company considers factors such as historical experience, credit quality, age of the accounts receivable balances, geographic related risks and economic conditions that may affect a customer’s ability to pay. Accounts receivables are written-off and charged against an allowance for credit losses when the Company has exhausted collection efforts without success. As of December 31, 2023 and December 31, 2022, accounts receivable is presented net of an allowance for credit losses of $1.6 million and $1.7 million, respectively.

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

Property and Equipment, Net

Property and equipment are recorded at cost less accumulated depreciation. Maintenance and repairs are charged to expense as incurred. Depreciation for the Company is computed using the straight-line method over estimated useful lives as follows:

Description	Average Useful Life

Buildings and building improvements	30 years
Leasehold Improvements	30 years or remaining lease term, whichever is shorter
Leased Towers	15 years
Antennae, towers and transmission equipment	12 years
Studio and production equipment	10 years
Office furnishings and equipment	5 years
Automobiles	5 years
Computer equipment and software	3 years
Construction in progress	Not depreciated

Impairment of Long-lived Assets

In connection with Accounting Standards Codification (“ASC”) 360 Property, Plant, and Equipment, the carrying value of property and equipment is evaluated periodically in relation to the operating performance and anticipated future cash flows of the underlying radio and television stations for indicators of impairment. When indicators of impairment are present and the undiscounted cash flows estimated to be generated from these assets are less than the carrying value of these assets, an adjustment to reduce the carrying value to the fair market value of the assets is recorded, if necessary. The fair market value of the assets is determined by using current broadcasting industry equipment prices, solicited current market data from dealers of used broadcast equipment and used equipment price lists, catalogs and listings in trade magazines and publications.

When performing its impairment analysis, Estrella Media used both the cost and market approaches as appropriate in determining the fair value of long-lived assets. The value of Estrella Media’s tangible assets was based on each asset’s replacement cost with a provision for depreciation, and where appropriate, the cost of comparable used assets of like age and condition. Estrella Media used current communications industry equipment prices appearing in appropriate manufacturers’ price lists and catalogs, solicited current market data from dealers of used broadcast equipment, and relied upon published used equipment price lists, catalogs, and listings in trade magazines and publications. The fair value of Estrella Media’s land was determined based on comparable land sales data. The Company considered its current operations and determined no impairment charge relating to property and equipment was deemed necessary for the years ended December 31, 2023 and 2022.

Broadcast Licenses

Estrella Media’s indefinite-lived assets consist of its Federal Communications Commission (FCC) broadcast licenses. Estrella Media believes its broadcast licenses have indefinite useful lives given that they are expected to indefinitely contribute to the future cash flows of Estrella Media and that they may be continually renewed without substantial cost to Estrella Media.

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

In accordance with ASC 350-30 General Intangibles Other Than Goodwill, Estrella Media does not amortize its broadcast licenses. Estrella Media tests its broadcast licenses for impairment at least annually or when indicators of impairment are identified. Estrella Media’s valuations principally use the discounted cash flow methodology, an income approach based on market revenue projections, and not company-specific projections, which assumes broadcast licenses are acquired and operated by a third party. This approach incorporates variables such as types of signals, media competition, audience share, market advertising revenue projections, anticipated operating margins and discount rates, without taking into consideration the station’s format or management capabilities. This method calculates the estimated present value that would be paid by a prudent buyer for Estrella Media’s FCC licenses as new radio or television stations. If the discounted cash flows estimated to be generated from these assets are less than the carrying value, an adjustment to reduce the carrying value to the fair market value of the assets is recorded.

Estrella Media generally tests its broadcast licenses for impairment at the individual license level. However, Estrella Media has applied the provisions of ASC 350-30 to certain of its broadcast licenses, which states that separately recorded indefinite-lived intangible assets should be combined into a single unit of accounting for purposes of testing impairment if they are operated as a single asset and, as such, are essentially inseparable from one another. Estrella Media aggregates broadcast licenses for impairment testing if their signals are simulcast and are operating as one revenue- producing asset.

The Company completed its impairment review of its broadcast licenses as of December 31, 2023 and determined that seven of its radio broadcast licenses were impaired. As such, the Company recorded a non-cash impairment loss of $6.3 million to reduce the net book value of these broadcast licenses to their estimated fair market values.

Estrella Media completed its impairment review of its broadcast licenses as of September 30, 2022 and concluded that two of its radio broadcast licenses and one television license were impaired. The two licenses impaired relates to the radio stations that went silent. One of the related licenses expired as of December 31, 2022. As such, the Company recorded a non-cash impairment loss of $0.9 million for the year ended December 31, 2022 to reduce the net book value of these broadcast licenses to their estimated fair market values.

As a result of the Middle-Class Tax Relief and Job Creation Act of 2012 (“Spectrum Act”), the Company is eligible to receive funds from the FCC for reimbursement of expenditures related to the FCC reorganization of broadcast television stations (“repack”). The Company received no reimbursements during the year ended December 31, 2023 and $0.3 million in reimbursements during the year December 31, 2022. The reimbursements are recorded against repairs and maintenance expense within selling, general and administrative expenses for non-capitalized purchases or to other income for capital purchases.

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

Television Program Rights, Net

Television program rights acquired by Estrella Media from third-party vendors are stated at the lower of remaining unamortized cost or estimated fair value. Program rights are amortized using the straight-line method over the license term beginning in the period in which the license period begins and the program becomes available for broadcast in accordance with ASC 920. Program rights expected to be amortized in the next year and program rights payable due within one year are classified as current assets and current liabilities, respectively. The acquired programming rights will be amortized through February 2028. Approximately $0.9 million and $3.3 million of acquired program rights were capitalized for the years ended December 31, 2023 and 2022, respectively. Approximately $3.4 million and $6.5 million of television programming rights were amortized in the years ended December 31, 2023 and 2022, respectively. No impairment of programming rights was recognized for the years ended December 31, 2023 and 2022. The balance of unamortized acquired program rights was approximately $1.9 million and $5.0 million as of December 31, 2023 and December 31, 2022, respectively.

Asset Sales

Sale of KZMP-AM

On December 15, 2022, Estrella Media entered into an agreement with North Texas Radio Group, L.P., for the sale of KZMP-AM for $0.3 million. The assets to be sold include, among other things, (i) licenses and permits authorized by the FCC for or in connection with the operation of the station and (ii) other equipment used to operate the station, which represents the total amount of assets held for sale in the balance sheet. Based on the agreement, North Texas Radio Group, L.P. made a deposit payment of $12,500 on January 5, 2023. The Company recognized a $0.1 million loss on the sale, which closed on May 10, 2023.

Sale of KWIZ-FM

On January 1, 2023, Estrella Media entered into an asset purchase agreement with Universal Church, Inc., for the sale of KWIZ-FM for $8.0 million. The assets to be sold include, among other things, (i) licenses and permits authorized by the FCC for or in connection with the operation of the station and (ii) other equipment used to operate the station. Concurrently, the Company entered into a local programming and marketing agreement (LMA) with Universal Church, Inc., which allows Universal Church, Inc. to run its programming on the station until December 31, 2024, unless the sale closes earlier. Based on the agreement, Universal Church, Inc. paid $3.6 million on December 30, 2022 as a prepaid monthly fee for the LMA, which is presented as unearned income under accrued liabilities in the balance sheet. The sale closed on May 16, 2023.

Sale of KVPA-LD and KSDX-LD

On September 11, 2023, Estrella Media entered into an asset purchase agreement with Bridge News LLC, for the sale of KVPA-LD and KSDX-LD for $3.0 million. The assets to be sold include, among other things, (i) licenses and permits authorized by the FCC for or in connection with the operation of the station and (ii) other equipment used to operate the station. Based on the agreement, Bridge News LLC made a deposit payment of $300,000 that was placed into escrow. The sale closed on November 22, 2023.

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

Barter Transactions

Included in the accompanying consolidated statements of operations are non-monetary transactions arising from the trading of advertising time for merchandise and services. Barter revenues and expenses are recognized and recorded at the fair market value, which is determined to be the standalone selling price of the services rendered by the Company. Barter expenses are recorded at the same time as barter revenue, which approximates the date the expenses were incurred. Net barter revenue totaled approximately $3.1 million and $2.2 million for the years ended December 31, 2023 and 2022, respectively.

Revenue Recognition

Revenues are recognized when control of the promised services is transferred to Estrella Media’s customers, in an amount that reflects the consideration Estrella Media expects to be entitled to in exchange for those services. The following table presents revenues disaggregated by source (in thousands):

December 31,	2023		2022

Broadcasting revenue	$	68,759	$	81,543
Digital revenue		13,465		11,112
Trade revenue		3,129		2,200
Other revenue		4,845		4,718

Total revenue, net	$	90,198	$	99,573

Broadcast Advertising: Television and radio revenue related to the sale of advertising is recognized at the time of broadcast. Broadcast advertising rates are fixed based on each medium’s ability to attract audiences in demographic groups targeted by advertisers and rates can vary based on the time of day and ratings of the programming airing in that day part.

Digital Advertising: Revenue from digital advertising primarily consists of advertisements on websites, OTT platforms and digital applications that are sold based on a cost-per-thousand impressions delivered. These impressions are delivered through Estrella Media’s websites and applications as well as through third party publishers either through direct relationships with the publishers or through digital advertising exchanges.

Trade Revenue: Estrella Media engages in barter transactions, primarily for media and advertising, with other companies to provide goods and services for Estrella Media in exchange for advertising in Estrella Media’s radio and television stations. Barter revenues and expenses are recognized and recorded at the fair market value of the advertising space surrendered, which are determined to equate their standalone selling price (“SSP”) under Topic 606.

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

Broadcast, digital, and trade advertising revenue is recognized over time in a series as a single performance obligation as the advertisement, impression or digital advertising is delivered. Estrella Media applies the practical expedient to recognize revenue for each distinct advertising service delivered at the amount Estrella Media has the right to invoice, which corresponds directly to the value a customer has received relative to Estrella Media’s performance. Contracts with customers are short term in nature and billing occurs on a monthly basis with payment due in 30 days. Value added taxes collected concurrent with advertising revenue producing activities are excluded from revenue. Cash payments received prior to services rendered result in deferred revenue, which is then recognized as revenue when the advertising time or space is actually provided, and the performance obligations satisfied. Certain Estrella Media network sales contracts include a guaranteed number of impressions. If the guarantee is not met the Company is obligated to provide additional spots at no charge until the guaranteed number of impressions is met, referred to as a makegood liability. The liability for each deal is calculated by determining the cost per guarantee per the original contract, multiplied by the number of under-delivered impressions. The liability is recorded as a reduction of revenues and presented in accrued liabilities on the consolidated balance sheets. Estrella Media has calculated and recorded a liability of $7.9 million and $4.3 million for the years ended December 31, 2023 and 2022, respectively.

Contract liabilities represent payments received from customers in advance of performance under certain contracts and were $0.6 million and $0.7 million at December 31, 2023 and 2022, respectively. Contract liabilities are included in accrued liabilities on the consolidated balance sheets.

Other Revenue: Estrella Media generates other revenues that are related to its broadcast operations, which primarily consist of commissions from network affiliates, fees from cable affiliations, fees for rental of certain stations, and licensing of Estrella Media’s library. The Company recognizes other revenues as earned upon delivery of the related services or over time based on contract terms for licensing revenues. Other revenue makes up approximately 5.4% and 4.7% of total consolidated revenue for the years ended December 31, 2023 and 2022, respectively.

The Company elects to use the following practical expedients (i) to expense costs as incurred for costs to obtain a contract when the amortization period would have been one year or less; and (ii) not to assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer. Revenue for contracts with advertising agencies is recorded at an amount that is net of the commission retained by the agency. Revenue from contracts directly with the advertisers is recorded as gross revenue and the related commission or national representation fee is recorded in operating expense.

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

Leases

On January 1, 2022, the Company adopted ASC 842, Leases using the modified retrospective transition approach by applying the new standard to all leases existing at the date of initial application.

The Company elected the package of practical expedients permitted under the transition guidance, which allows for the Company to carryforward our historical lease classification, their assessment on whether a contract was or contains a lease, and their initial direct costs for any leases that existed prior to January 1, 2022. No initial direct costs and non-lease components were identified in the Company’s leases at the adoption date.

Upon adoption, the Company recognized a Right-of-Use (“ROU”) asset of $31.9 million, with corresponding operating lease liability of $31.4 million for its real estate, office, and tower leases in the accompanying consolidated balance sheets. The adoption did not result in any cumulative- effective adjustments to the opening balance of retained earnings.

Under Topic 842, we determine if an arrangement is a lease at inception. ROU assets and lease liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As the interest rate implicit to the Company’s lease was not readily determinable, the Company used the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. The lease term includes options to extend or terminate the lease when it is reasonably certain that we will exercise such options. When determining the probability of exercising such options, the Company consider contract-based, asset-based, entity-based, and market-based factors. At the adoption date the Company concluded that they were not reasonably certain that the options to extend would be exercised and therefore excluded the options periods from the calculation of the present value of the future lease payments. The lease agreement contains variable costs such as common area maintenance, insurance, real estate taxes or other costs. Variable lease costs are expensed as incurred on the consolidated statements of income.

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

The components of lease expense were as follows (in thousands):

December 31,	2023

Lease cost
Operating lease cost:
Amortization of ROU Asset	$	4,026
Interest on Lease liability		1,158
Variable lease cost		185

Total lease cost	$	5,369

December 31,		2023

Other information
Weighted-average remaining lease term (in months):
Finance leases		75
Operating leases		175

Weighted-average annual discount rate:
Finance leases		6.9	%
Operating leases		12.2	%

On March 1, 2023, the Company entered into an operating lease agreement for an office space having an initial term of four years. Under the lease, the Company recognized a ROU asset and an operating lease liability of $1.2 million in the accompanying balance sheets and is presented in the statement of cash flows under supplemental disclosure of non-cash financing transactions.

December 31,	2022

Lease Cost
Operating lease cost:
Amortization of ROU Asset	$	4,172
Interest on Lease liability		1,019
Variable lease cost		716

Total lease cost	$	5,907

December 31,		2022

Other Information
Weighted-average remaining lease term (in months):
Finance leases		63
Operating leases		161

Weighted-average annual discount rate:
Finance leases		6.9	%
Operating leases		11.99	%

Cash paid for amounts included in the measurement of lease liabilities:	2023		2022
Operating cash flows for operating leases	$	3,325	$	4,487
Operating cash flows for finance leases		-		-
Financing cash flows for finance leases		759		497

Right-of-use assets obtained in exchange for new lease obligations:
Operating leases		972		31,911
Finance leases		-		-

Net change in operating right-of-use assets due to lease modifications resulting in reclassification of leases from operating to finance		-		-

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

Income Taxes

The U.S. Federal jurisdiction and the state jurisdictions of California and Texas are the major tax jurisdictions where Estrella Media files income tax returns. Estrella Media is no longer subject to federal or state income tax examinations for years prior to 2020.

Estrella Media accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

In assessing deferred tax assets, Estrella Media considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Estrella Media considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. If the realization of deferred tax assets in the future is considered more likely than not, an adjustment to the deferred tax assets would increase net operations in the period such determination is made.

Based upon the level of historical taxable income and projections for future taxable income over the periods which the deferred tax assets are deductible, at this time, Estrella Media believes it is more likely than not that it will not realize the benefits of the majority of these deductible differences. As a result, Estrella Media has established and maintained a valuation allowance for that portion of the deferred tax assets it believes will not be realized.

Estrella Media may be audited by the Internal Revenue Service and various state tax authorities. Disputes may arise with these tax authorities involving issues of the timing and amount of deductions and allocations of income and expenses among various tax jurisdictions because of differing interpretations of tax laws and regulations. Estrella Media periodically evaluates its exposures associated with tax filing positions and, while it believes its positions comply with applicable laws, may record liabilities based upon estimates of the ultimate outcome of these matters and the guidance provided in ASC 740 Income Taxes (“ASC 740”).

Advertising Costs

Advertising costs are expensed as incurred. The accompanying consolidated statements of operations include advertising costs (included in promotional expense) of approximately $0.8 million and $1.4 million for the twelve months ended December 31, 2023 and 2022, respectively.

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, actual results could differ from those estimates.

Management evaluates these estimates using historical experience and other factors, including the general economic environment and actions it may take in the future. Estrella Media adjusts such estimates when facts and circumstances dictate. However, these estimates may involve significant uncertainties and judgments and cannot be determined with precision. In addition, these estimates are based on management’s best judgment at a point in time and as such, these estimates may ultimately differ from actual results.

Concentration of Credit Risk

Estrella Media sells broadcast time to a diverse customer base including advertising agencies and other direct customers. Estrella Media performs credit evaluations of its customers and generally does not require collateral. Estrella Media maintains allowances for potential losses and such losses have been within management’s expectations.

2.	Fair Value Measurements

ASC Topic 820 Fair Value Measurements and Disclosures establishes a framework for measuring fair value and expands related disclosures. The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities.

Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:

Level Input	Input Definition
Level I	Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.
Level II	Inputs, other than quoted prices included in Level I, that are observable for the asset or liability through corroboration with market data at the measurement date.
Level III	Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

Certain assets and liabilities are measured at fair value on a non-recurring basis. This means that certain assets are not measured at fair value on an ongoing basis but are subject to fair value reviews only in certain circumstances. Included in this category are Estrella Media’s radio and television FCC broadcast licenses that are written down to fair value when they are determined to be impaired.

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

As of December 31, 2023 each major category of assets measured at fair value on a non-recurring basis during the period is categorized as follows (in thousands):

	Total		Level 1		Level 2		Level 3		Total Impairment

Non-recurring assets subject to fair market measurement:
Broadcast licenses	$	114,593	$	-	$	-	$	114,593	$	6,324

Total	$	114,593	$	-	$	-	$	114,593	$	6,324

As of December 31, 2022 each major category of assets measured at fair value on a non-recurring basis during the period is categorized as follows (in thousands):

	Total		Level 1		Level 2		Level 3		Total Impairment

Non-recurring assets subject to fair market measurement:
Broadcast licenses	$	128,312	$	-	$	-	$	128,312	$	881

Total	$	128,312	$	-	$	-	$	128,312	$	881

The fair value of the Company’s financial instruments included in current assets and current liabilities such as cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, and other similar items approximate fair value due to their short-term nature.

3.	Property and Equipment, Net

Property and equipment, net comprise of the following (in thousands):

December 31,	2023			2022

Land	$	491		$	491
Buildings and building improvements		254			254
Antennae, towers and transmission equipment		11,170			10,992
Studio and production equipment		8,310			7,433
Computer equipment and software		2,523			2,418
Office furnishings and equipment		370			353
Automobiles		679			795
Leasehold improvements		1,962			1,789
Leased tower asset		4,658			4,836
Construction in progress		149			744

Total Property and equipment, cost		30,566			30,105
Less Accumulated depreciation		(11,641	)		(8,663	)

Total Property and equipment, net	$	18,925		$	21,442

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

Depreciation and amortization expense was $3.1 million and $3.2 million, for the years ended December 31, 2023 and 2022, respectively.

Debt

Debt is comprised of the following (in thousands):

December 31,	2023		2022

Exit facility	$	148,606	$	148,734
PPP loan		57		8,199
Line of credit		4,339		-

Total Debt		153,002		156,933

Less: Current portion of long-term debt		152,969		3,470

Total long-term debt	$	33	$	153,463

Exit Facility

On October 15, 2019, upon effectiveness of the approved Third Amended Joint Chapter 11 Plan of Reorganization of LBI Media, Inc. and its Affiliated Debtors, term loans were made to LBI Media, Inc. in an aggregate principal amount equal to $180.0 million with a maturity date on the fifth anniversary of closing date or the next business date. The facility is secured by an interest in all of the company’s assets, including capital stock and other equity interests. The Company is subject to certain financial covenants under the Exit Facility, including submission of annual audited financial statements and budgets, restriction on indebtedness not exceeding $10 million, restrictions on liens on tangible property and quarterly aggregate EBITDA not going below $20.0 million. The company received a waiver on all of the financial covenants as of December 31, 2023 with an effective period for one year from December 31, 2023.

Estrella Media is obligated to pay principal payments on a quarterly basis in the amount of $0.5 million on the last business day of each fiscal quarter, in addition to quarterly interest payments at a rate per annum equal to 7.5% per annum plus LIBOR.

On March 31, 2020, June 30, 2020, September 30, 2020, January 6, 2021, April 14, 2021, July 14, 2021, October 11, 2021, January 10, 2022, March 29, 2022, June 27, 2022, September 15, 2022, March 22, 2023, June 20, 2023, September 22, 2023, December 12, 2023, and March 26, 2024 amendments to the Exit Facility were executed whereby interest payments due on March 31, 2020, April 15, 2020, July 15, 2020, October 15, 2020, January 15, 2021, April 15, 2021, July 15, 2021, October 15, 2021, January 15, 2022, April 15, 2022, July 15, 2022, October 15, 2022, January 15, 2023, April 15, 2023, July 15, 2023, October 15, 2023, January 15, 2024, and April 15, 2024 to consenting lenders were deferred until July 15, 2024. Total interest accrued of $56.4 million and $38.3 million as of December 31, 2023 and 2022, respectively, is presented under accrued interest in the consolidated balance sheets.

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

PPP Loan

On March 24, 2021, the Company was granted a loan from a financial institution in the aggregated amount of $8.2 million, pursuant to the Paycheck Protection Program (PPP loan) under Division A, Title I of the Congress enacted the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was enacted March 27, 2020. The loan bears interest at a rate of 1% per year and matures on March 27, 2026. The Company has elected to account for the PPP loan under ASC 470, Debt.

On July 12, 2023, the Company received partial forgiveness of the PPP loan in the amount of $8.1 million. Payments of principal and interest would be made on the balance due of $0.1 million until maturity in 2026.

Line of credit

On April 19, 2023, the Company entered into a loan and security agreement with North Mill Capital LLC, for a revolving credit facility where it can make advances up to eighty-five (85%) on the outstanding amount of eligible accounts receivable, with a limit of $15.0 million. The facility is secured by an interest in all of the Company’s assets and automatically renews annually for a period of one (1) year term until April 19, 2025, unless cancelled by either party. Interest is payable at one and one-half of one percent (1.50%) above the prime rate in effect from time to time, but not less than seven and three-quarters of one percent (7.75%).

Debt Repayments

As of December 31, 2023, Estrella Media’s debt had scheduled repayments for each of the next five years as follows (in thousands):

	Amount

2024	$	148,606
2025		25
2026		25
2027		7
Thereafter		-

Total debt	$	148,663

Warrants

In connection with the consummation of the transactions contemplated by the Third Amended Joint Chapter 11 Plan of Reorganization of LBI Media, Inc. and Its Affiliated Debtors, dated as of April 12, 2019, on October 15, 2019, the Company issued Warrants to purchase up to 480,805 shares of its Class B Common Stock, $0.001 par value per share issued to claimholders in settlement of Liabilities subject to compromise. As the Warrants are indexed to the Company’s own stock and are classified as stockholder’s equity under ASC 815-40-25-1 through 35, they were accounted for as Equity under ASC 815 Derivatives and Hedging.

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

Each Warrant entitled the holder to purchase one share of Class B Common Stock of Liberman Broadcasting, Inc. at an exercise price equal to $0.01 per share. The Warrants were exercisable, in whole, to the extent permitted by law, immediately upon the effective date of the Plan. Warrants were determined to have a value of $22,266 thousand.

The Warrants and the shares issuable upon exercise of the Warrants have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”) and may not be offered or sold, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. A holder of Warrants also may not exercise its Warrants if such exercise results in violations of the Communications Act of 1934.

On September 30, 2021, the original holders of the Warrants assigned 100% of their right, title and interest to SLF LBI Aggregator, LLC (US Aggregator). US Aggregator subsequently exercised the Warrants to purchase 480,805 shares of Class B Common Stock and converted such shares into 480,805 shares of Class A Common Stock. No expense was recognized for the years ending December 31, 2023 and 2022 for the issuance of the warrants.

5.	Commitments and Contingencies

Ratings Services

In September 2009, Estrella Media entered into a contract with Nielsen Media Research (“Nielsen”), to provide television programming ratings services for Estrella Media’s Estrella TV network and local television. In December 2023, Estrella Media entered into an agreement with Nielsen to amend certain payment provisions in the contract. As a result, the aggregate payments remaining under the agreement was approximately $15.3 million and $8.5 million as of December 31, 2023 and 2022, respectively.

Operating Lease Liability

Estrella Media leases land, tower, studio and/or office space for certain stations under non-cancelable operating leases that expire at various times through 2039, with some having renewal options, generally for one to five years. Rental expenses under these agreements totaled approximately $5.5 million and $5.9 million for the years ended December 31, 2023 and 2022, respectively.

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

Future minimum lease payments by year and in the aggregate, under non-cancelable operating leases, consist of the following at December 31, 2023 (in thousands):

	Amount

2024	$	4,527
2025		4,604
2026		4,804
2027		4,373
2028		4,276
Thereafter		42,407

Total operating lease payments and interest		64,991
Less: Amounts allocated to interest		(34,535	)
Total operating lease payments, net		30,456

Long term portion of operating lease liability		26,719
Current portion of operating lease liability	$	3,737

Licensing Agreements

Estrella Media enters into program license agreements to acquire programming rights to broadcast programs on its television network. Such agreements expire at various times through February 2028.

Future minimum payments by year and in the aggregate, under licensing agreements, consist of the following at December 31, 2023 (in thousands):

	Amount

2024	$	3,847
2025		2,099
2026		2,099
2027		2,099
2028		350
Thereafter		-

Total	$	10,494

Litigation

From time to time, the Company is subject to various legal claims and litigation arising out of matters occurring during the ordinary course of business. The ultimate disposition of these legal matters is not expected to have a materially adverse effect to the financial position, results of operations or cash flows of the Company.

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

Finance Lease Liability

On March 31, 2014, Estrella Media completed a purchase and sale agreement (“Purchase Agreement”) to sell certain of its broadcast towers to Tall Tower Capital LLC, with a net book value of approximately $6.9 million and a sales price of $7.5 million, resulting in a deferred gain of $0.6 million. Under ASC 842 – Leases, the Company continues to amortize the deferred gain in proportion to the amortization of the right-of-use asset. In connection with the sale of these broadcast towers, Estrella Media entered into a lease for the continued use and operations at each site. These leases have an effective interest rate of 6.4%; payable in $49,000 monthly installments, increased annually by 4%, over 15 years. The aggregate lease payments remaining under the agreement at December 31, 2023 was approximately $4.2 million and will be paid through March 2029.

Future minimum lease payments by year and in the aggregate, comprise of the following at December 31, 2023 (in thousands):

	Amount

2024	$	739
2025		768
2026		799
2027		831
2028		864
Thereafter		218

Total future lease payments		4,219
Less: amounts allocated to interest and deferred gain		(711	)

Total finance lease liability		3,508

Long term portion of finance lease liability		3,069

Current portion of finance lease liability	$	439

6.	Related Party Transactions

On October 15, 2019, upon effectiveness of the approved Third Amended Joint Chapter 11 Plan of Reorganization of LBI Media, Inc. and its Affiliated Debtors, Estrella Media entered into an Exit Facility agreement with HPS Investment Partners, LLC (the administrative agent for the Lenders as well as the equity owners). The aggregate principal amount was equal to $180.0 million with a maturity date on the fifth anniversary of closing date or the next business date. See Note 4 for additional detail on the Company’s Exit Facility.

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

7.	Defined Contribution Plan

In 1999, Estrella Media established a 401(k) defined contribution plan (the “401(k) Plan”), which covers all eligible employees (as defined in the 401(k) Plan). Participants are allowed to make non-forfeitable contributions of up to 60% of their annual salary, including commissions, up to the maximum IRS allowable amount. Estrella Media is allowed to contribute a discretionary amount to the 401(k) Plan. During the years ended December 31, 2023 and 2022, Estrella Media made no discretionary contributions to the 401(k) Plan.

8.	Shareholders’ Equity

Class A Common Stock

The Company is authorized to issue 666,667 of Class A Common Stock with a par value of $0.001 per share. Class A Common Stock provides for the holder to be entitled to one vote for each share of Class A Common Stock held on the record date therefore on any matter submitted to a vote of the stockholders of the Corporation. As of December 31, 2023 and 2022, there were 611,771 and 608,491, respectively, shares of Class A Common Stock issued and outstanding.

Class B Common Stock

The Company is authorized to issue 480,805 of Class B Common Stock with a par value of $0.001 per share. Class B Common Stock provides for the holder to be entitled to a separate class vote on any amendment or modification of any specific rights or obligations of the holders of Class B Common Stock that does not similarly affect the rights or obligations of the holders of Class A Common Stock. As of December 31, 2023 and 2022, there were no shares of Class B Common Stock issued and outstanding. As discussed in Note 4, on September 30, 2021, the warrants were exercised to purchase 480,805 shares of Class B Common Stock and converted such shares into 480,805 shares of Class A Common Stock.

9.	Share-based Compensation

The Company established the 2019 Management Incentive Plan (“Plan”), under which the Company may issue up to 666,667 shares of Common Stock that can be awarded in the form of options, restricted stock units, stock awards, stock units, stock appreciation rights, or other incentive payable in shares of Common Stock (collectively referred to as “Share-based Awards”) as compensation to employees, officers, directors and others. The Company has estimated the fair value of Share-based Awards on the date of grant, which is being recognized as compensation expense ratably over the service periods, which is generally not greater than four years. In accordance with ASC 718, Compensation-Stock Compensation, the Company has elected to account for forfeitures as they occur.

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

On March 10, 2023, the Company granted options to purchase 8,334 shares of the Company’s common stock and awarded 8,334 shares of restricted stock units (RSUs) to certain management employees under the Plan. The stock options and RSUs are subject to time or performance-based criteria and have various vesting periods up to 2026. On March 15, 2023, a total of 5,279 of the RSUs were settled and issued as shares of common stock to the participants.

For the twelve months ended December 31, 2023 and 2022, a total of $0.1 million and $0.6 million of share-based compensation expense was recognized, respectively. Unrecognized compensation expense to be recognized in future periods was approximately $0.0 million and $0.1 million as of December 31, 2023 and 2022, respectively.

Option

An option share provides for the holder to purchase one share of the Company’s Common Stock at an exercise price as defined in each option grant agreement. Options vest over a service period as defined in each option grant agreement and expire ten years from grant date.

The Company has estimated the fair value of the stock options as of the date of grant using the Black Scholes Model. The Black Scholes Model considers, among other factors, the expected life of the award and the expected volatility of the estimated fair value of the Company’s Common Stock.

The remainder of this page intentionally left blank.

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

A summary of the status of the options granted during the years ended December 31, 2023 and 2022 is as follows:

	Option Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)

Outstanding, December 31, 2021		24,580		$	103.43		8.4

Granted		-			-		-
Exercised		-			-		-
Forfeited		-			-		-

Outstanding, December 31, 2022		24,580			103.43		7.4

Granted		8,334			0.09		0.8
Exercised
Forfeited		(834	)		29.11		-

Outstanding, December 31, 2023		32,080		$	92.48		6.4

Exercisable, December 31, 2023		11,560		$	94.56		6.6

Exercisable, December 31, 2022		11,808		$	104.94		7.4

Restricted Stock Units

Restricted stock units (“RSUs”) vest over a service period as defined in each grant agreement. The Company has estimated the fair value of the restricted stock units as of the grant date using the Option Pricing Model.

The remainder of this page intentionally left blank.

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

A summary of the status of the RSUs granted during the years ended December 31, 2023 and 2022 is as follows:

	Number Of Units			Weighted Average Grant Date Fair Value

Outstanding, December 31, 2021		34,195		$	-

Granted		-			-
Vested		-			-
Forfeited		-			-

Outstanding, December 31, 2022		34,195			-

Granted		8,334			.09
Vested
Forfeited		(1,112	)		11.01

Outstanding, December 31, 2023		41,417		$	64.88

The remainder of this page intentionally left blank.

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

10.	Income Taxes

Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements.

Estrella Media’s net deferred tax liabilities as of December 31, 2023 were approximately $7.3 million and result primarily from book and tax basis differences of Estrella Media’s indefinite-lived intangible assets that, for tax purposes are amortized over fifteen years, as well as interest expense carryforward attributes that are carried forward indefinitely.

The benefit from income taxes before discontinued operations consisted of the following (in thousands):

Years ended December 31,	2023			2022

Current federal	$	(31	)	$	-
Current state		3			12

Total current income tax expense		(28	)		12

Deferred federal		38			721
Deferred state		176			(96	)

Total deferred income tax expense /(benefit)		214			625

Total income tax provision/(benefit)	$	186		$	637

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

The following is a reconciliation of income tax benefit computed by applying the statutory federal income tax rate of 21% to loss before provision for (benefit from) income taxes, for the years ended December 31, 2023 and 2022 (in thousands).

Years ended December 31,	2023			2022

Income tax benefit computed at the federal statutory rate	$	(7,312	)	$	(6,261	)
Change in valuation allowance		8,091			9,893
State income taxes		8			461
Permanent differences		(362	)		244
Deferred True Up		(239	)		(3,700	)

Total income tax provision	$	186		$	637

The following table outlines the principal components of deferred tax assets and liabilities (in thousands):

December 31,	2023			2022

Deferred Tax Assets:
Net operating loss carryforwards	$	28,243		$	20,909
Interest expense carryforwards		34,200			29,795
State net operating loss and credits		3,461			3,438
Intangible assets, net		2,218			3,763
Lease liabilities		14,582			9,700
Other		3,659			4,182

Total deferred tax assets		86,363			71,787

Deferred Tax Liabilities: Intangible assets, net		(29,193	)		(28,557	)
481(a) Adjustments		-			(857	)
Property and Equipment, net		(1,888	)		-
Right-of-use Assets		(13,830	)		(9,021	)
Other		-			(2,204	)

Total deferred tax liabilities		(44,911	)		(40,639	)

Valuation allowance	$	(48,709	)	$	(38,192	)

Net deferred liabilities	$	(7,257	)	$	(7,044	)

Based upon the level of historical taxable income and projections for future taxable income over the periods that the deferred tax assets are deductible, at this time, Estrella Media believes it is more likely than not that it will not realize the benefits of some of these deductible differences. As a result, Estrella Media has established and maintained a valuation allowance for that portion of the deferred tax assets it believes will not be realized.

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

ASC 740, Income Taxes, clarifies the accounting for uncertainty in income taxes recognized in financial statements and requires the impact of a tax position to be recognized in the financial statements if that position is more likely than not of being sustained by the taxing authority. As of December 31, 2023, Estrella Media does not have a liability for unrecognized tax benefits. Estrella Media recognizes interest and penalties associated with tax matters as part of the income tax provision and include accrued interest and penalties with the related tax liability in the consolidated balance sheet. For the years ended December 31, 2023 and 2022, there were no interest or penalties recorded on the consolidated statements of operations or consolidated balance sheets.

Estrella Media files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. Estrella Media is no longer subject to federal or state income tax examinations for years prior to 2020 and 2019, respectively. Notwithstanding the adjustments discussed above, Estrella Media believes that it has appropriate support for the income tax positions taken and presently expected to be taken on its tax returns. Additionally, Estrella Media believes that its accruals for tax liabilities are adequate for all years open to income tax examinations based on an assessment of many factors including past experience, past examinations by taxing authorities and interpretations of tax law applied to the facts of each matter.

11.	Valuation and Qualifying Accounts and Reserves

The following is a summary of the valuation and qualifying accounts and reserves for the year ended December 31, 2023 and 2022 (in thousands):

	Balance at Beginning of Period		Charged to Costs and Expenses		Deductions		Balance at End of Period

Year Ended December 31, 2023
Allowance for doubtful accounts	$	1,686	$	970	$	1,039	$	1,617

Year Ended December 31, 2022
Allowance for doubtful accounts	$	1,281	$	736	$	331	$	1,686

12.	Subsequent Events

On March 26, 2024, an amendment to the Exit Facility was executed whereby principal and interest payments due on March 31, 2020, April 15, 2020, July 15, 2020, October 15, 2020, January 15, 2021, April 15, 2021, July 15, 2021, October 15, 2021, January 15, 2022, April 15, 2022, July 15, 2022, October 15, 2022, January 15, 2023, April 15, 2023, July 15, 2023, October 15, 2023, January 15, 2024, and April 15, 2024 to consenting lenders were deferred until July 15, 2024.

On March 26, 2024, the balance remaining of the unforgiven portion of the PPP loan was paid in full.

Estrella Broadcasting, Inc.

Notes to Consolidated Financial Statements

On April 17, 2024, Estrella Media entered into an asset purchase agreement with MediaCo Holding Inc. for the sale of all of its network, content, digital, and commercial operations. Among the Estrella Media brands included were the EstrellaTV network and its linear and digital video content business, and Estrella Media’s expansive digital channels, including its four FAST channels, EstrellaTV, Estrella News, Cine EstrellaTV, and Estrella Games, and the EstrellaTV app. Estrella’s local radio and television stations were not included as part of the transaction. MediaCo received an option to acquire those stations from Estrella Broadcasting at a future date, subject to receipt of necessary regulatory approval. As consideration in the transaction, Estrella received a warrant to purchase up to a total of 28,206,152 newly issued shares of MediaCo Class A Common Stock, exercisable at an exercise price of $0.00001 per share; $60 million of newly issued shares of MediaCo Series B Preferred Stock that will accrue dividends at a rate of 6.0% per annum; a $30 million second lien term note with a five-year term and an interest rate of SOFR + 6.0% per annum; and approximately $30 million in cash. In connection with the exercise of the local radio and television stations option, Estrella Broadcasting would receive an additional 7,051,538 newly issued shares of MediaCo Class A Common Stock. The transaction closed on April 17, 2024.

The Company evaluated subsequent events through May 3, 2024 the date the consolidated financial statements were originally available to be issued.

Exhibit 99.3

Estrella Broadcasting, Inc.

Condensed Consolidated Financial Statements

As of March 31, 2024, and for the

Three Months Ended March 31, 2024 and 2023

Estrella Broadcasting, Inc.

Contents

Consolidated Financial Statements

	Consolidated Balance Sheets (Unaudited)	4-5

	Consolidated Statements of Operations (Unaudited)	6

	Consolidated Statements of Changes in Shareholders’ Deficit (Unaudited)	7

	Consolidated Statements of Cash Flows (Unaudited)	8

	Notes to Consolidated Financial Statements (Unaudited)	9-25

Condensed Consolidated Financial Statements

Estrella Broadcasting, Inc.

Condensed Consolidated Balance Sheets (Unaudited)

(in thousands, except share amounts)

	March 31, 2024		December 31, 2023

Assets
Current assets:
Cash and cash equivalents	$	2,166	$	2,343
Accounts receivable, net of allowance of $1,700 and $1,600 at March 31, 2024 and December 31, 2023, respectively		19,905		23,476
Current portion of television program rights, net		1,100		1,558
Prepaid expenses and other current assets		2,960		3,006
Assets held for sale		1,592

Total current assets		27,723		30,383

Property and equipment, net		17,696		18,925
Operating lease right-of-use asset		27,107		27,494
Broadcast licenses, net		102,258		103,850
Television program rights, excluding current portion		334		391
Employee advances		35		35
Restricted cash		520		520
Other assets		259		385

Total assets	$	175,932	$	181,983

Estrella Broadcasting, Inc.

Condensed Consolidated Balance Sheets (Unaudited) (Continued)

(in thousands, except share amounts)

	March 31, 2024			December 31, 2023

Liabilities and Shareholders’ deficit

Liabilities
Current liabilities:
Accounts payable	$	5,301		$	4,218
Accrued liabilities		18,401			17,952
Line of credit		2,854			4,339
Accrued interest		61,013			56,421
Current portion of finance lease liability		453			439
Current portion of operating lease liability		3,499			3,737
Current portion of related-party long-term debt		148,543			148,630
Current portion of deferred taxes		33			19

Total current liabilities		240,097			235,755
Related-party long-term debt, excluding current portion		-			33
Deferred income taxes		7,260			7,257
Long-term portion of finance lease liability		2,936			3,069
Long-term portion of operating lease liability		26,678			26,719

Total liabilities		276,971			272,833

Commitment and Contingencies (Note 5)

Shareholders’ deficit:
Common stock • Class A, $0.001 par value:
Authorized shares - 666,667 Issued and outstanding shares - 611,771 at March 31, 2024 and 611,771 at December 31, 2023		1			1
Additional paid-in capital		33,902			33,895
Accumulated deficit		(134,942	)		(124,746	)

Total shareholders’ deficit		(101,039	)		(90,850	)

Total liabilities and shareholders’ deficit	$	175,932		$	181,983

See accompanying notes to consolidated financial statements.

Estrella Broadcasting, Inc.

Condensed Consolidated Statements of Operations (Unaudited)

(in thousands)

	Three Months Ended March 31, 2024			Three Months Ended March 31, 2023
Net revenues	$	19,220		$	19,582

Operating expenses
Program and technical, exclusive of depreciation and amortization of property and equipment shown below:		12,531			13,926
Promotional, exclusive of depreciation and amortization shown:		1,014			1,135
Selling, general and administrative, exclusive of depreciation and amortization shown below:		9,377			9,710
Depreciation and amortization of property and equipment		742			721
Gain on sale and disposal of property and equipment		584			12
Other expense		13			-

Total operating expenses		24,261			25,504

Operating loss		(5,041	)		(5,922	)

Interest expense		5,138			4,654

Loss from continuing operations before income taxes		(10,179	)		(10,576	)

Income tax provision		17			476

Net loss	$	(10,196	)	$	(11,052	)

See accompanying notes to consolidated financial statements.

Estrella Broadcasting, Inc.

Condensed Consolidated Statements of Changes in Shareholders’ Deficit (Unaudited)

(in thousands, except share amounts)

	Common Stock				Additional Paid-in Capital		Accumulated Deficit			Total Shareholders’ Equity/ (Deficit)
	Number of Shares		Amount		Additional Paid-in Capital		Accumulated Deficit			Total Shareholders’ Equity/ (Deficit)

Balance, January 1, 2024		611,771	$	1	$	33,895	$	(124,746	)	$	(90,850	)

Stock-based compensation		-		-		7		-			7

Net loss		-		-		-		(10,196	)		(10,196	)

Balance, March 31, 2024		611,771	$	1	$	33,902	$	(134,942	)	$	(101,039	)

	Common Stock				Additional Paid-in Capital		Accumulated Deficit			Total Shareholders’ Equity/ (Deficit)
	Number of Shares		Amount		Additional Paid-in Capital		Accumulated Deficit			Total Shareholders’ Equity/ (Deficit)

Balance, January 1, 2023		611,771	$	1	$	33,819	$	(89,650	)	$	(55,830	)

Stock-based compensation		-		-		59		-			59

Issuance of restricted stock units		3,280		-		-		-			3,280

Net loss		-		-		-		(11,052	)		(11,052	)

Balance, March 31, 2023		611,771	$	1	$	33,878	$	(100,702	)	$	(66,823	)

See accompanying notes to consolidated financial statements.

Estrella Broadcasting, Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

(in thousands)

	Three Months Ended March 31, 2024			Three Months Ended March 31, 2023

Operating activities
Net Loss	$	(10,196	)	$	(11,052	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization of property and equipment		742			721
Loss on sale and disposal of property and equipment		584			2
Amortization of television program costs		1,193			1,331
Non-cash lease expense		960			995
Stock-based compensation		7			59
Provision for credit losses		144			423
Changes in operating assets and liabilities:
Accounts receivable		3,427			3,095
Television program costs		(153	)		(12	)
Prepaid expenses and other current assets		46			(858	)
Employee advances		-			16
Accounts payable		1,108			(1,260	)
Accrued liabilities		(76	)		(66	)
Accrued interest		4,592			4,295
Right-of-use asset		(852	)		1
Deferred income taxes		17			476
Assets held for sale		-			(144	)
Other assets		126			(129	)

Net cash provided by (used in) operating activities		1,669			(2,107	)

Investing activities
Purchases of Property and equipment, net		(62	)		(661	)

Net cash used in investing activities		(62	)		(661	)

Financing activities
Payments on line of credit		(1,485	)		(844	)
Payments on finance lease		(179	)		(121	)
Payments on PPP loan		(57	)		-
Payments on exit facility		(63	)		(32	)

Net cash used in financing activities		(1,784	)		(997	)

Net decrease in cash, cash equivalents, and restricted cash		(177	)		(3,765	)

Cash, cash equivalents, and restricted cash at beginning of year		2,863			6,727

Cash, cash equivalents, and restricted cash at end of period	$	2,686		$	2,962

Supplemental disclosure of cash flow information
Cash paid for:
Interest	$	356		$	258

Supplemental disclosure of non-cash investing and financing transactions
Acquisition of right of use asset	$	-		$	1,162

See accompanying notes to consolidated financial statements.

Estrella Broadcasting, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

1.	Summary of Significant Accounting Policies

Description of Business and Basis of Presentation

Estrella Broadcasting, Inc. (“Estrella Broadcasting”) is a holding Company with substantially no assets, operations or cash flows other than its investment in its subsidiaries and intercompany loans. Estrella Media, Inc. (“Estrella Media”), a wholly owned subsidiary, is the operating entity of the consolidated group, therefore the majority of disclosures in the consolidated financial statements reference Estrella Media. Estrella Broadcasting, Inc. and its wholly owned subsidiaries (collectively referred to as the “Company”), through Estrella Media own and operate television stations located in California, Texas, Arizona, New York, Colorado, Illinois, and Florida as well as radio stations in California and Texas. In addition, Estrella Media operates leased television stations in California and Texas. Estrella Media also owns television production facilities that are used to produce programming for its owned and affiliated television stations. Estrella Media sells commercial airtime on its radio and television stations to local, regional and national advertisers.

Estrella Broadcasting, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Estrella Media’s two studio facilities in Burbank, California, and one each in Houston, Texas, and Dallas, Texas, are operated by its wholly owned subsidiaries.

Liquidity

As of March 31, 2024, Estrella Broadcasting’s total indebtedness was approximately $151.4 million, of which approximately $151.4 million was due within the next twelve months. As of March 31, 2023, Estrella Broadcasting’s total indebtedness was approximately $156.9 million, of which approximately $3.9 million was due within the next twelve months.

Estrella Broadcasting, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

On April 17, 2024, the Company completed the sale of substantially all of the assets of Estrella Broadcasting to a subsidiary of MediaCo Holding Inc., other than its local radio and television stations. As part of that transaction, the Exit Facility and line of credit were settled. The non-HPS lenders were paid off and the HPS lenders received warrants plus 60,000 shares of MediaCo Holding Inc. Series B Preferred Stock in full settlement. Refer to the Subsequent Events disclosure for details.

Principles of Consolidation and Basis of Presentation

Additional Disclosures Made in Preparation for an SEC Filing

Subsequent to the original issuance of the unaudited condensed consolidated financial statements and in connection with acquisition of the Company, which is discussed in Note 10 to the unaudited condensed consolidated financial statements, certain footnote disclosures have been either updated or added in order to conform to the requirements for these consolidated financial statements to be included in an SEC filing. Specifically, the Company previously elected to use the risk-free rate in determining the present value of lease payments. As described in the “Leases” sub-section in Note 1, the Company used the incremental borrowing rate in determining the present value of lease payments and has updated the amounts included in the unaudited condensed consolidated financial statements, the “Leases” sub-section in Note 1, and the “Operating Lease Liability” and “Finance Lease Liability” subsections in Note 5 to reflect the application of the incremental borrowing rate.

Cash and Cash Equivalents

Estrella Broadcasting considers all highly liquid debt instruments purchased with an original maturity of three months or less and investments in money market accounts to be cash equivalents. Cash and cash equivalents are maintained at financial institutions, which, at times, may exceed federally insured limits. Cash in banks in excess of federally insured amounts were $1.9 million and $2.1 million as of March 31, 2024 and December 31, 2023, respectively. Estrella Broadcasting has not experienced any losses in such accounts. Estrella Broadcasting believes it is not exposed to any significant credit risk of cash and cash equivalents.

Restricted Cash

At March 31, 2024 and December 31, 2023, Estrella Media had restricted cash of $0.5 million and $0.5 million, respectively, for a collateral account related to merchant banking, for the Company’s purchase card program and for an office lease security deposit.

Credit Losses-Accounts Receivable

Accounts receivable are recorded at the amounts billed less estimated allowances for credit losses for any potential uncollectible amounts. The Company continually monitors customer payments and maintains an allowance for estimated losses resulting from a customer’s inability to make required payments. The Company considers factors such as historical experience, credit quality, age of the accounts receivable balances, geographic related risks and economic conditions that may affect a customer’s ability to pay. Accounts receivable are written-off and charged against an allowance for credit losses when the Company has exhausted collection efforts without success. As of March 31, 2024 and December 31, 2023, accounts receivable is presented net of an allowance for credit losses of $1.7 million and $1.6 million, respectively.

Estrella Broadcasting, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Property and Equipment, Net

Description	Average Useful Life

Buildings and building improvements	30 years
Leasehold Improvements	30 years or remaining lease term, whichever is shorter
Leased towers	15 years
Antennae, towers and transmission equipment	12 years
Studio and production equipment	10 years
Office furnishings and equipment	5 years
Automobiles	5 years
Computer equipment and software	3 years
Construction in progress	Not depreciated

Impairment of Long-lived Assets

In connection with Accounting Standards Codification (“ASC”) 360 - Property, Plant, and Equipment, the carrying value of property and equipment is evaluated periodically in relation to the operating performance and anticipated future cash flows of the underlying radio and television stations for indicators of impairment. When indicators of impairment are present and the undiscounted cash flows estimated to be generated from these assets are less than the carrying value of these assets, an adjustment to reduce the carrying value to the fair market value of the assets is recorded, if necessary. The fair market value of the assets is determined by using current broadcasting industry equipment prices, solicited current market data from dealers of used broadcast equipment and used equipment price lists, catalogs and listings in trade magazines and publications.

Broadcast Licenses

Estrella Broadcasting, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

In accordance with ASC 350-30 - General Intangibles Other Than Goodwill, Estrella Media does not amortize its broadcast licenses. Estrella Media tests its broadcast licenses for impairment at least annually or when indicators of impairment are identified. Estrella Media’s valuations principally use the discounted cash flow methodology, an income approach based on market revenue projections, and not company-specific projections, which assumes broadcast licenses are acquired and operated by a third party. This approach incorporates variables such as types of signals, media competition, audience share, market advertising revenue projections, anticipated operating margins and discount rates, without taking into consideration the station’s format or management capabilities. This method calculates the estimated present value that would be paid by a prudent buyer for Estrella Media’s FCC licenses as new radio or television stations. If the discounted cash flows estimated to be generated from these assets are less than the carrying value, an adjustment to reduce the carrying value to the fair market value of the assets is recorded.

As a result of the Middle-Class Tax Relief and Job Creation Act of 2012 (“Spectrum Act”), the Company is eligible to receive funds from the FCC for reimbursement of expenditures related to the FCC reorganization of broadcast television stations (“repack”). The Company received no reimbursements during the three months ended March 31, 2024 and no reimbursements during the three months ended March 31, 2023. The reimbursements are recorded against repairs and maintenance expense for non-capitalized purchases or to other income for capital purchases.

Television Program Rights, Net

Television program rights acquired by Estrella Media from third-party vendors are stated at the lower of remaining unamortized cost or estimated fair value. Program rights are amortized using the straight-line method over the license term beginning in the period in which the license period begins and the program becomes available for broadcast in accordance with ASC 920. Program rights expected to be amortized in the next year and program rights payable due within one year are classified as current assets and current liabilities, respectively. The acquired programming rights will be amortized through 2026. Approximately $0.2 million and $0.4 million of acquired program rights were capitalized for the three months ended March 31, 2024 and 2023, respectively. Approximately $1.2 million and $1.2 million of television programming rights were amortized in the three months ending March 31, 2024 and 2023, respectively. No impairment of programming rights was recognized for the three months ended March 31, 2024 and 2023. The balance of unamortized acquired program rights was approximately $1.4 million and $1.9 million as of March 31, 2024 and December 31, 2023, respectively.

Estrella Broadcasting, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Asset Sales

Sale of KEYH-AM

On January 16, 2024, Estrella Media entered into an asset purchase agreement with Hector Guevara, for the sale of KEYH-AM for $0.1 million. The assets to be sold include the licenses and permits authorized by the FCC for or in connection with the operation of the station. Based on the agreement, Hector Guevara made a non-refundable deposit payment of $10,000. The sale is expected to close by June 2024.

Sale of KZMP-AM

On December 15, 2022, Estrella Media entered into an agreement with North Texas Radio Group, L.P., for the sale of KZMP-AM for $250,000. The assets to be sold include, among other things, (i) licenses and permits authorized by the FCC for or in connection with the operation of the station and (ii) other equipment used to operate the station, which represents the total amount of assets held for sale in the balance sheet Based on the agreement, North Texas Radio Group, L.P. made a deposit payment of $12,500 on January 5, 2023. The sale closed on May 10, 2023.

Sale of KWIZ-FM

On January 1, 2023, Estrella Media entered into an asset purchase agreement with Universal Church, Inc, for the sale of KWIZ-FM for $8.0 million. The assets to be sold include, among other things, (i) licenses and permits authorized by the FCC for or in connection with the operation of the station and (ii) other equipment used to operate the station. Concurrently, the Company entered into a local programming and marketing agreement (LMA) with Universal Church, Inc. which allows Universal Church, Inc. to run its programming on the station until December 31, 2024, unless the sale closes earlier. Based on the agreement, Universal Church, Inc. paid $3.6 million on December 30, 2022 as a prepaid monthly fee for the LMA, which is presented as unearned income under accrued liabilities in the balance sheet. The sale closed on May 16, 2023.

Barter Transactions

Included in the accompanying consolidated statements of operations are non-monetary transactions arising from the trading of advertising time for merchandise and services. Barter revenues and expenses are recognized and recorded at the fair market value, which is determined to be the standalone selling price of the services rendered by the Company. Barter expenses are recorded at the same time as barter revenue, which approximates the date the expenses were incurred. Net barter revenue totaled approximately $0.6 million and $0.6 million for the three months ended March 31, 2024 and 2023, respectively.

Revenue Recognition

Estrella Broadcasting, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

The following table presents revenues disaggregated by source (in thousands):

	Three Months Ended March 31, 2024		Three Months Ended March 31, 2023

Broadcasting revenue	$	13,778	$	14,787
Digital revenue		4,010		2,192
Trade revenue		606		618
Other revenue		826		1,985

Total revenue, net	$	19,220	$	19,582

Broadcast, digital, and trade advertising revenue is recognized over time in a series as a single performance obligation as the advertisement, impression or digital advertising is delivered. Estrella Media applies the practical expedient to recognize revenue for each distinct advertising service delivered at the amount Estrella Media has the right to invoice, which corresponds directly to the value a customer has received relative to Estrella Media’s performance. Contracts with customers are short term in nature and billing occurs on a monthly basis with payment due in 30 days. Value added taxes collected concurrent with advertising revenue producing activities are excluded from revenue. Cash payments received prior to services rendered result in deferred revenue, which is then recognized as revenue when the advertising time or space is actually provided, and the performance obligations satisfied. Estrella Media generates revenue from network sales contracts that include a guaranteed number of impressions. If the guarantee is not met the Company is obligated to provide additional spots at no charge until the guaranteed number of impressions is met, referred to as a makegood liability. The liability for each deal is calculated by determining the cost per guarantee per the original contract, multiplied by the number of under-delivered impressions. The liability is recorded as a reduction of revenues and presented in accrued liabilities on the balance sheet. Estrella Media has calculated and recorded a liability of $8.0 million and $7.9 million as of March 31, 2024 and December 31, 2023, respectively.

Estrella Broadcasting, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Contract liabilities represent payments received from customers in advance of performance under certain contracts and were $0.8 million and $0.6 million at March 31, 2024 and December 31, 2023, respectively. Contract liabilities are included in accrued liabilities on the consolidated balance sheet. The Company has no contract assets as of March 31, 2024 and December 31, 2023.

Other Revenue: Estrella Media generates other revenues that are related to its broadcast operations, which primarily consist of commissions from network affiliates, fees from cable affiliations, fees for rental of certain stations, and licensing of Estrella Media’s library. The Company recognizes other revenues as earned upon delivery of the related services or over time based on contract terms for licensing revenues. Other revenue makes up approximately 4.3% and 10.1% of total consolidated revenue for the three months ended March 31, 2024 and 2023, respectively.

Leases

Under Topic 842, we determine if an arrangement is a lease at inception. ROU assets and lease liabilities are recognized at commencement date based on the present value of remaining lease payments over the lease term. For this purpose, the Company considers only payments that are fixed and determinable at the time of commencement. As the interest rate implicit to the Company’s lease was not readily determinable, the Company used the Company’s incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The ROU asset also includes any lease payments made prior to commencement and is recorded net of any lease incentives received. The lease term includes options to extend or terminate the lease when it is reasonably certain that we will exercise such options. When determining the probability of exercising such options, the Company considers contract-based, asset-based, entity-based, and market-based factors. At the adoption date the Company concluded that they were not reasonably certain that the options to extend would be exercised and therefore excluded the options periods from the calculation of the present value of the future lease payments. The lease agreement contains variable costs such as common area maintenance, insurance, real estate taxes or other costs. Variable lease costs are expensed as incurred on the consolidated statements of operations.

Estrella Broadcasting, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Income Taxes

Estrella Broadcasting, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Advertising Costs

Advertising costs are expensed as incurred. The accompanying consolidated statements of operations include advertising costs (included in promotional expense) of approximately $0.1 million and $0.1 million for the three months ended March 31, 2024 and 2023, respectively.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Although these estimates are based on management’s knowledge of current events and actions it may undertake in the future, actual results could differ from those estimates.

Concentration of Credit Risk

Estrella Broadcasting, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Recently Adopted Accounting Pronouncements

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the Company to use a current expected credit loss model (“CECL”) that will immediately recognize an estimate of credit losses that are expected to occur over the life of the financial instruments that are in the scope of this update, including trade receivables. The CECL model uses a broader range of reasonable and supportable information in the development of credit loss estimates. In November 2019, the FASB issued ASU 2019-10, according to which, the new standard is effective for private entities, including Estrella Media, the new standard is effective for fiscal years beginning after December 15, 2022, and interim periods within that fiscal year. Estrella Media adopted ASU 2016-13 as of January 1, 2023 and the adoption did not have a material impact on the Company’s unaudited interim consolidated financial statements and related disclosures.

2.	Fair Value Measurements

Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows:

Level 1:	Inputs are unadjusted quoted prices in active markets for identical assets and liabilities that can be assessed at a measurement date.

Level 2:	Observable inputs other than those included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

Level 3:	Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

The Company’s debt instruments were issued at market rates, therefore the carrying values included in current and long-term liabilities are expected to approximate fair value.

Estrella Broadcasting, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

3.	Property and Equipment, Net

Property and equipment, net comprise of the following (in thousands):

	March 31, 2024			December 31, 2023

Land	$	491		$	491
Buildings and building improvements		254			254
Antennae, towers and transmission equipment		11,080			11,170
Studio and production equipment		6,899			8,310
Computer equipment and software		2,546			2,523
Office furnishings and equipment		323			370
Automobiles		679			679
Leasehold improvements		1,945			1,962
Leased tower asset		4,748			4,658
Construction in progress		183			149

Total Property and equipment, cost		29,148			30,566

Less: Accumulated depreciation		(11,452	)		(11,641	)

Total Property and equipment, net	$	17,696		$	18,925

Depreciation and amortization expense was $0.7 million and $0.7 million for the three months ended March 31, 2024 and 2023, respectively.

Debt

Debt is comprised of the following (in thousands):

	March 31, 2024		December 31, 2023

Exit facility	$	148,543	$	148,606
PPP loan		-		57
Line of credit		2,854		4,339

Total Debt		151,397		153,002

Less: Current portion of long-term debt		151,397		152,969

Total long-term debt	$	-	$	33

Estrella Broadcasting, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Exit Facility

Estrella Media is obligated to pay principal payments on a quarterly basis in the amount of $450,000 on the last business day of each fiscal quarter, in addition to quarterly interest payments at a rate per annum equal to 7.50% per annum plus LIBOR.

On March 31, 2020, June 30, 2020, September 30, 2020, January 6, 2021, April 14, 2021, July 14, 2021, October 11, 2021, January 10, 2022, March 29, 2022, June 27, 2022, September 15, 2022, March 22, 2023, June 20, 2023, September 22, 2023, December 12, 2023, and March 26, 2024 amendments to the Exit Facility were executed whereby interest payments due on March 31, 2020, April 15, 2020, July 15, 2020, October 15, 2020, January 15, 2021, April 15, 2021, July 15, 2021, October 15, 2021, January 15, 2022, April 15, 2022, July 15, 2022, October 15, 2022, January 15, 2023, April 15, 2023, July 15, 2023, October 15, 2023, January 15, 2024, and April 15, 2024 to consenting lenders were deferred until July 15, 2024. Total interest accrued of $61.0 million and $56.4 million as of March 31, 2024 and December 31, 2023, respectively, is presented under accrued interest in the balance sheet.

PPP Loan

On March 26, 2024, the Company paid the balance of the loan in full.

Line of credit

Estrella Broadcasting, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Debt Repayments

As of March 31, 2024, Estrella Media’s debt had scheduled repayments for each of the next five years as follows (in thousands):

	Amount

2024	$	151,397
2025		-
2026		-
2027		-
2028		-
Thereafter		-

Total Debt	$	151,397

5.	Commitments and Contingencies

Ratings Services

In September 2009, Estrella Media entered into a contract with Nielsen Media Research (“Nielsen”), to provide television programming ratings services for Estrella Media’s Estrella TV network and local television. In December 2018 Estrella Media entered into an agreement with Nielsen to amend certain payment provisions in the contract. As a result, the aggregate payments remaining under the agreement was approximately $14.3 million and $15.3 million as of March 31, 2024 and December 31, 2023, respectively.

Operating Lease Liability

Estrella Media leases land, tower, studio and/or office space for certain stations under non-cancelable operating leases that expire at various times through 2039, with some having renewal options, generally for one to five years. Rental expenses under these agreements totaled approximately $1.4 million and $1.4 million for the three months ended March 31, 2024 and 2023, respectively.

The remainder of this page intentionally left blank.

Estrella Broadcasting, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Future minimum lease payments by year and in the aggregate, under non-cancelable operating leases, consist of the following at March 31, 2024 (in thousands):

	Amount

2024	$	3,397
2025		4,604
2026		4,804
2027		4,373
2028		4,276
Thereafter		42,406

Total Operating lease payments		63,860
Less: Amounts allocated to interest		(33,683	)

Total operating lease liabilities		30,177
Long-term portion of operating lease liability		26,678

Current portion of operating lease liability	$	3,499

Cash paid for amounts included in the measurement of lease liabilities:	March 31, 2024		March 31, 2023
Operating cash flows for operating leases	$	279	$	30,024
Operating cash flows for finance leases		-		-
Financing cash flows for finance leases		179		121

Right-of-use assets obtained in exchange for new lease obligations:
Operating leases		-		30,032
Finance leases		-		-

Net change in operating right-of-use assets due to lease modifications resulting in reclassification of leases from operating to finance		-		-

Licensing Agreements

Estrella Media enters into program license agreements to acquire programming rights to broadcast programs on its television network. Such agreements expire at various times through 2028.

Future minimum payments by year and in the aggregate, under licensing agreements, consist of the following at March 31, 2024 (in thousands):

	Amount

2024	$	2,343
2025		2,099
2026		2,099
2027		2,099
2028		350
Thereafter		-

Total	$	8,990

Litigation

From time to time, the Company is subject to various legal claims and litigation arising out of matters occurring during the ordinary course of business. The ultimate disposition of these legal matters is not expected to have a materially adverse effect on the financial position, results of operations or cash flows of the Company.

Estrella Broadcasting, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Finance Lease Liability

On March 31, 2014, Estrella Media completed a purchase and sale agreement (“Purchase Agreement”) to sell certain of its broadcast towers to Tall Tower Capital LLC, with a net book value of approximately $6.9 million and a sales price of $7.5 million, resulting in a deferred gain of $0.6 million. Under ASC 842 - Leases, the Company continues to amortize the deferred gain in proportion to the amortization of the right-of-use asset. In connection with the sale of these broadcast towers, Estrella Media entered into a lease for the continued use and operations at each site. These leases have an effective interest rate of 6.9%, payable in $49,000 monthly installments: and increases annually by 4% over 15 years. The aggregate lease payments remaining under the agreement at March 31, 2024 was approximately $4.0 million and will be paid through March 2029.

Future minimum lease payments by year and in the aggregate, comprise of the following at March 31, 2024 (in thousands):

	Amount

2024	$	560
2025		768
2026		799
2027		831
2028		864
Thereafter		218

Total Future lease payments		4,040

Less: Amounts allocated to interest and deferred gain		(651	)

Total finance lease liability		3,389

Long-term portion of finance lease liability		2,936

Current portion of finance lease liability	$	453

6.	Related Party Transactions

Estrella Broadcasting, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

7.	Defined Contribution Plan

In 1999, Estrella Media established a 401(k) defined contribution plan (the “401(k) Plan”), which covers all eligible employees (as defined in the 401(k) Plan). Participants are allowed to make non-forfeitable contributions of up to 60% of their annual salary, including commissions, up to the maximum IRS allowable amount. Estrella Media is allowed to contribute a discretionary amount to the 401(k) Plan. During the three months ended March 31, 2024 and 2023, Estrella Media made no discretionary contributions to the 401(k) Plan.

8.	Shareholders’ Equity

Class A Common Stock

The Company is authorized to issue 666,667 of Class A Common Stock with a par value of $0.001 per share. Class A Common Stock provides for the holder to be entitled to one vote for each share of Class A Common Stock held on the record date therefore on any matter submitted to a vote of the stockholders of the Corporation. As of March 31, 2024 and December 31, 2023, there were 611,771 and 611,711, respectively, shares of Class A Common Stock issued and outstanding.

Class B Common Stock

The Company is authorized to issue 480,805 of Class B Common Stock with a par value of $0.001 per share. Class B Common Stock provides for the holder to be entitled to a separate class vote on any amendment or modification of any specific rights or obligations of the holders of Class B Common Stock that does not similarly affect the rights or obligations of the holders of Class A Common Stock. As of March 31, 2024 and December 31, 2023, there were no shares of Class B Common Stock issued and outstanding.

9.	Share-based Compensation

The Company established the 2019 Management Incentive Plan (“Plan”), under which it can issue up to 66,667 shares of common stock that can be awarded in the form of options, restricted stock units, stock awards, stock units, stock appreciation rights, or other incentive payable in shares of Common Stock (collectively referred to as “Share-based Awards”) as compensation to employees, officers, directors and others. The Company has estimated the fair value of Share-based Awards on the date of grant, which is being recognized as compensation expense ratably over the service periods, which is generally not greater than four years. In accordance with ASC 718 Compensation - Stock Compensation, the Company has elected to account for forfeitures are they occur.

On March 10, 2023, the Company granted options to purchase 8,334 shares of the Company’s common stock and awarded 8,334 shares of restricted stock units (RSUs) to certain management employees under the Plan. The stock options and RSUs are subject to time or performance based criteria and have various vesting periods up to 2026. On March 15, 2023, a total of 3,280 of the RSUs were settled and issued as shares of common stock to the participants.

For the three months ended March 31, 2024 and 2023, a total of $0.0 million and $0.0 million of share-based compensation expense was recognized, respectively. Unrecognized compensation expense to be recognized in future periods was approximately $0.0 million and $0.0 million as of March 31, 2024 and December 31, 2023, respectively.

Estrella Broadcasting, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Option

Restricted Stock Units

The remainder of this page intentionally left blank.

Estrella Broadcasting, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Estrella Broadcasting, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

Estrella Broadcasting, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

10.	Subsequent Events

The Company evaluated subsequent events through May 30, 2024, the date the consolidated financial statements were available to be issued.

The remainder of this page intentionally left blank.

Exhibit 99.4

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

Asset Purchase Agreement

On April 17, 2024, MediaCo Holding Inc., an Indiana corporation (“MediaCo” or “the Company”), 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 (the foregoing collectively, the “Estrella Acquisition”).

MediaCo provided the following consideration for the Purchased Assets (the “Transaction Consideration”):

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”);

60,000 shares of a newly designated series of MediaCo’s preferred stock designated as “Series B Preferred Stock” (the “Series B Preferred Stock”);

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

An aggregate cash payment in the amount of approximately $30.8 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 A Common Stock on a fully diluted basis (assuming the full exercise of the Warrant and the Option Agreement (as defined below)).

Option Agreement

On April 17, 2024, in connection with the Estrella Acquisition, MediaCo and Purchaser entered into an Option Agreement (the “Option Agreement” and, together with the Estrella Acquisition and the transactions contemplated by the Network Affiliation Agreement and the Network Program Supply Agreement described below, collectively, the “Estrella Transaction”) with Estrella and certain subsidiaries of Estrella pursuant to which (i) Purchaser was granted the option to purchase 100% of the equity interests of certain subsidiaries of Estrella holding the Estrella Broadcast Assets (the “Option Subsidiaries Equity”) in exchange for 7,051,538 shares of Class A Common Stock, and (ii) Estrella was granted the right to put the Option Subsidiaries Equity to Purchaser for the same consideration beginning six months after the date of the closing of the Estrella Acquisition (the “Closing Date”).

Voting and Support Agreement

On April 17, 2024, in connection with the Estrella Acquisition, SG Broadcasting LLC (“SG Broadcasting”), the holder of shares of Class A Common Stock and Class B Common Stock, par value $0.01 per share (“Class B Common Stock”) representing a majority of the voting power of the shares of MediaCo, entered into a Voting and Support Agreement with MediaCo and Estrella (the “Voting and Support Agreement”), pursuant to which SG Broadcasting agreed to, among other things, and subject to the terms and conditions set forth therein, at any meeting of MediaCo stockholders (including the Stockholders Meeting), or at any adjournment or postponement thereof, vote in favor of the Proposal and against any action or proposal that would reasonably be expected to prevent or materially delay consummation of the Proposal. The Voting Agreement also includes certain customary restrictions on SG Broadcasting’s ability to transfer its shares of MediaCo stock. The Voting Agreement will automatically terminate upon the date on which the Proposal is approved.

Exhibit 99.4

Warrant

On April 17, 2024, in connection with the Estrella Acquisition, MediaCo issued the Warrant, which provides for the purchase of up to 28,206,152 shares of Class A Common Stock (the “Warrant Shares”), subject to customary adjustments as set forth in the Warrant, at an exercise price per share of $0.00001. Subject to certain limitations, the Warrant also provides that the Warrant holder has the right to participate in distributions on Class A Common Stock on an as-exercised basis. The Warrant further provides that in no event shall the aggregate number of Warrant Shares issuable to the Warrant holder upon exercise of the Warrant exceed 19.9% of the aggregate number of shares of common stock of MediaCo outstanding, or the voting power of such outstanding shares of common stock, on the business day immediately preceding the issue date for such Warrant Shares, calculated in accordance with the applicable rules of the Nasdaq Capital Market (“Nasdaq”), unless and until the Proposal has been approved.

First Lien Term Loan

In order to finance the Estrella Acquisition, MediaCo and its direct and indirect subsidiaries entered into a maximum $45.0 million first lien term loan credit facility, dated April 17, 2024 (the “First Lien Credit Agreement”), with White Hawk Capital Partners, LP, as term agent thereunder, and the lenders party thereto. Under the terms of the First Lien Credit Agreement, MediaCo received an initial term loan of $35.0 million on April 17, 2024 (the “Initial Loan”) and was provided with a subsequent delayed draw facility of up to $10.0 million that may be provided for additional working capital purposes under certain conditions (the “Delayed Draw” and the loans thereunder, the “Delayed Draw Term Loans”; the financing contemplated by the First Lien Term Loan, together with Estrella Transaction and the payment of the Transaction Consideration, the “Transactions”). The Initial Loan and Delayed Draw Term Loans are collectively referred to as the “First Lien Term Loans.” The proceeds of the Initial Loan were used to finance the Estrella Acquisition, pay off certain existing Estrella indebtedness in connection therewith and pay related fees and transaction costs. The Initial Loan will mature on April 17, 2029, and each Delayed Draw Term Loan will mature on the date that is two years after the drawing of such Delayed Draw Term Loan. First Lien Term Loans will be subject to monthly amortization payments equal to 0.8333% of the initial principal amount of the First Lien Term Loans, and monthly interest payments at a rate of SOFR + 6.00%. The First Lien Term Loans are subject to a borrowing base in accordance with the terms of the First Lien Credit Agreement.

Second Lien Term Loan

In addition, MediaCo and its direct and indirect subsidiaries entered into a $30.0 million second lien term loan credit facility, dated April 17, 2024 (the “Second Lien Credit Agreement”), with HPS as term agent, and the lenders party thereto. Under the terms of the Second Lien Credit Agreement, MediaCo was deemed to receive the Second Lien Term Loan of $30.0 million on April 17, 2024 in connection with the consummation of the Estrella Acquisition. The Second Lien Term Loan will mature on April 17, 2029 and will be subject to monthly interest payments at a rate of SOFR + 6.00%. The Second Lien Term Loans are subject to a borrowing base in accordance with the terms of the Second Lien Credit Agreement.

Network Affiliation and Supply Agreements

On April 17, 2024, in connection with the Estrella Acquisition, Purchaser entered into a Network Program Supply Agreement (the “Network Program Supply Agreement”) with certain subsidiaries of Estrella that operate radio broadcast stations (the “Radio Stations”). Pursuant to the Network Program Supply Agreement, Purchaser has agreed to license certain programs and other material to the Radio Stations for distribution on the Radio Stations’ broadcast channels.

On April 17, 2024, in connection with the Estrella Acquisition, Purchaser entered into a Network Affiliation Agreement (the “Network Affiliation Agreement”) with certain subsidiaries of Estrella that operate television broadcast stations (the “TV Stations”). Pursuant to the Network Affiliation Agreement, Purchaser has agreed to license certain programs and other material to the TV Stations for distribution on the TV Stations’ broadcast channels.

These agreements impact the income from noncontrolling interests in these pro forma income statements.

Exhibit 99.4

Variable Interest Entity

The Company determined that the Estrella entities holding the Estrella Broadcast Assets subject to the Option Agreement (the “Estrella VIE”) is a variable interest entity (“VIE”) in which the Company holds a controlling financial interest. The Company’s conclusion that the Estrella VIE is a VIE results from the Option Agreement, which caps Estrella VIE’s right to residual returns. Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) paragraph 810-10-25-38A and paragraph 810-10-25-38B, a reporting entity (the Company) is deemed to have a controlling financial interest in a VIE if it has both of the following characteristics:

The power to direct the activities of a VIE that most significantly impact the VIE’s economic performance; and

The obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

Basis of Presentation

The following tables set forth unaudited pro forma condensed combined financial information of MediaCo and Estrella (including the Estrella VIE) (together, the “Combined Company”). The unaudited pro forma condensed combined financial statements consist of an unaudited pro forma condensed combined balance sheet of the Combined Company as of March 31, 2024, and unaudited pro forma condensed combined statements of operations of the Combined Company for the year ended December 31, 2023, and three months ended March 31, 2024.

The unaudited pro forma condensed combined statements of operations for the three months ended March 31, 2024, and for the year ended December 31, 2023, give pro forma effect to the Transactions, the payment of the Transaction Consideration and the funding of the First Lien Term Loan as if they had occurred on January 1, 2023. The unaudited pro forma condensed combined balance sheet as of March 31, 2024, gives pro forma effect to the Transactions, the payment of the Transaction Consideration and the funding of the First Lien Term Loan as if they were completed on March 31, 2024.

The following unaudited pro forma condensed combined financial information is based on and should be read in conjunction with:

the historical audited consolidated financial statements of MediaCo contained in its Annual Report on Form 10-K for the year ended December 31, 2023;

the historical unaudited condensed consolidated financial information of MediaCo as of and for the three months ended March 31, 2024, contained in MediaCo’s Quarterly Report on Form 10-Q for the period ended March 31, 2024;

the historical audited financial statements of Estrella Broadcasting, Inc. as of and for the years ended December 31, 2023 and December 31, 2022, filed as exhibit 99.2 to this 8-K/A;

the historical unaudited financial statements of Estrella Broadcasting, Inc. as of and for the three months ended March 31, 2024, filed as exhibit 99.3 to this 8-K/A.

The unaudited pro forma condensed combined financial information has been presented for informational purposes only and is not necessarily indicative of the combined financial position or results of operations that would have been realized had the Transactions occurred (and the Transaction Consideration and First Lien Term Loan been paid and/or funded, as applicable) as of the dates indicated, nor is it meant to be indicative of any anticipated combined financial position or future results of operations of the Combined Company. The unaudited pro forma adjustments are based on certain currently available information and certain assumptions and methodologies that management believes are reasonable under the circumstances and are subject to change as additional information becomes available and analyses are performed.

Both MediaCo’s and Estrella’s historical financial statements were prepared in accordance with U.S. GAAP and presented in U.S. dollars. Certain reclassification adjustments were made to conform Estrella’s financial statement presentation to that of MediaCo’s. Additional reclassifications and adjustments may be required if changes are needed to conform Estrella’s financial statement presentation and accounting policies to those of MediaCo.

The unaudited pro forma combined financial information was prepared using the acquisition method of accounting in accordance with ASC 805, Business Combinations, with MediaCo as the accounting acquirer. Under ASC 805, assets acquired and liabilities assumed in a business combination are to be recognized and measured at their estimated acquisition date fair value.

Exhibit 99.4

The pro forma adjustments are based on preliminary estimates of the fair values of assets acquired and liabilities assumed and information available as of the date of this Current Report on Form 8-K/A. Certain valuations and assessments, including valuations of FCC licenses, fixed assets, leases and intangible assets as well as the assessment of tax positions and tax rates of the combined business, are in process.

Actual adjustments may differ from the amounts reflected in the unaudited pro forma combined financial statements, and the differences may be material.

Exhibit 99.4

Unaudited Pro Forma Condensed Combined Balance Sheet

As of March 31, 2024

(dollars in thousands)

	MediaCo (historical)			Estrella (historical) (as adjusted) (Note 2)			Transaction Adjustments			Notes	Other Adjustments			Notes	Pro Forma
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	3,960		$	2,166		$	(31,907	)	(A)	$	33,925		(AA)	$	8,144
Restricted cash		1,354			—			—				—				1,354
Accounts receivable, net of allowance for credit losses		6,684			19,905			(468	)	(B)		—				26,121
Prepaid expenses		2,240			2,084			(40	)	(B)		(755	)	(AA)		3,529
Other current assets		874			3,568			319		(B)		—				4,761
Total current assets		15,112			27,723			(32,096	)			33,170				43,909
PROPERTY AND EQUIPMENT, NET		1,473			17,696			(3,182	)	(C)		—				15,987
INTANGIBLE ASSETS, NET		64,663			102,610			38,267		(C)		—				205,540
OTHER ASSETS:
Operating lease right of use assets		13,529			27,107			—				—				40,636
Goodwill		—			—			48,443		(D)		—				48,443
Deposits and other		2,177			796			(154	)	(B)		—				2,819
Total other assets		15,706			27,903			48,289				—				91,898
Total assets	$	96,954		$	175,932		$	51,278			$	33,170			$	357,334
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	6,662		$	14,197		$	7,565		(B)	$	—			$	28,424
Current maturities of long-term debt		6,458			151,397			—				(151,397	)	(BB)		6,458
Accrued salaries and commissions		688			233			(66	)	(B)		—				855
Deferred revenue		828			8,915			132		(B)		—				9,875
Operating lease liabilities		1,634			3,499			—				—				5,133
Finance lease liabilities		—			453			—				—				453
Income taxes payable		—			245			—				—				245
Other current liabilities		225			61,158			(187	)	(B)		(60,970	)	(BB)		226
Total current liabilities		16,495			240,097			7,444				(212,367	)			51,669
LONG TERM DEBT, NET OF CURRENT		—			—			65,573		(E)		33,195		(AA)		98,768
OPERATING LEASE LIABILITIES, NET OF CURRENT		14,329			26,678			—				—				41,007
FINANCE LEASE LIABILITIES, NET OF CURRENT		—			2,936			—				—				2,936
DEFERRED INCOME TAXES		2,850			7,260			2,000		(B)		—				12,110
OTHER NONCURRENT LIABILITIES		513			—			—				—				513
Total liabilities		34,187			276,971			75,017				(179,172	)			207,003
COMMITMENTS AND CONTINGENCIES
SERIES A CUMULATIVE CONVERTIBLE PARTICIPATING PREFERRED STOCK, $0.01 PAR VALUE, 10,000,000 SHARES AUTHORIZED; 286,031 SHARES ISSUED AND OUTSTANDING		29,477			—			—								29,477
EQUITY:
Net parent investment		—			(101,039	)		(111,328	)	(F)		212,367		(BB)		—
Class A common stock, $0.01 par value; authorized 170,000,000 shares; issued and outstanding 20,578,568 shares at March 31, 2024		206			—			—				—				206
Class B common stock, $0.01 par value; authorized 50,000,000 shares; issued and outstanding 5,413,197 shares at March 31, 2024		54			—			—				—				54
Class C common stock, $0.01 par value; authorized 30,000,000 shares; none issued		—			—			—				—				—
Additional paid-in capital		60,578			—			70,515		(G)		—				131,093
Accumulated deficit		(27,548	)		—			(555	)	(H)		(25	)	(AA)		(28,128	)
Total equity		33,290			(101,039	)		(41,368	)			212,342				103,225
Noncontrolling interests		—			—			17,629		(I)		—				17,629
Total liabilities and equity	$	96,954		$	175,932		$	51,278			$	33,170			$	357,334

See accompanying Note to Unaudited Pro Forma Condensed Combined Financial Statements

Exhibit 99.4

Unaudited Pro Forma Condensed Combined Statement of Operations

Year Ended December 31, 2023

(in thousands, except per share data)

	MediaCo (historical)			Estrella (historical) (as adjusted) (Note 2)			Transaction Adjustments			Notes	Other Adjustments			Notes	Pro Forma
NET REVENUES	$	32,391		$	90,198		$	—			$	—			$	122,589
OPERATING EXPENSES:
Operating expenses excluding depreciation and amortization expense		32,633			106,083			—				—				138,716
Corporate expenses		5,451			—			555		(J)		—				6,006
Depreciation and amortization		568			3,143			1,226		(K)		—				4,937
Gain on disposal of assets		526			(2,329	)		—				—				(1,803	)
Total operating expenses		39,178			106,897			1,781				—				147,856
OPERATING LOSS		(6,787	)		(16,699	)		(1,781	)			—				(25,267	)
OTHER INCOME (EXPENSE):
Interest expense, net		(426	)		(20,207	)		11,481		(L)		(4,308	)	(CC)		(13,460	)
Other (expense) income		100			—			—				—				100
Gain on extinguishment of debt		—			8,320			—				—				8,320
Impairment loss		—			(6,324	)		—				—				(6,324	)
Total other (expense) income		(326	)		(18,211	)		11,481				(4,308	)			(11,364	)
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(7,113	)		(34,910	)		9,700				(4,308	)			(36,631	)
PROVISION FOR INCOME TAXES		308			186			2,716		(M)		(1,206	)	(M)		2,004
NET LOSS FROM CONTINUING OPERATIONS		(7,421	)		(35,096	)		6,984				(3,102	)			(38,635	)
NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTS		—			—			1,948		(N)		—				1,948
PREFERRED STOCK DIVIDENDS		2,415			—			—				—				2,415
NET LOSS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(9,836	)	$	(35,096	)	$	5,036			$	(3,102	)		$	(42,998	)

Net loss from continuing operations per share attributable to common shareholders - basic and diluted:	$	(0.40	)												$	(1.26	)

Weighted average common shares outstanding:
Basic		24,876						9,301		(O)						34,177
Diluted		24,876						9,301		(O)						34,177

See accompanying Note to Unaudited Pro Forma Condensed Combined Financial Statements

Exhibit 99.4

Unaudited Pro Forma Condensed Combined Statement of Operations

Three Months Ended March 31, 2024

(in thousands, except per share data)

	MediaCo (historical)			Estrella (historical) (as adjusted) (Note 2)			Transaction Adjustments			Notes	Other Adjustments			Notes	Pro Forma
NET REVENUES	$	6,706		$	19,220		$	—			$	—			$	25,926
OPERATING EXPENSES:
Operating expenses excluding depreciation and amortization expense		6,650			22,935			—				—				29,585
Corporate expenses		3,390			—			—				—				3,390
Depreciation and amortization		133			742			350		(K)		—				1,225
Gain on disposal of assets		—			584			—				—				584
Total operating expenses		10,173			24,261			350				—				34,784
OPERATING LOSS		(3,467	)		(5,041	)		(350	)			—				(8,858	)
OTHER INCOME (EXPENSE):
Interest expense, net		(136	)		(5,138	)		2,967		(L)		(1,075	)	(CC)		(3,382	)
Other (expense) income		10			—			—				—				10
Total other (expense) income		(126	)		(5,138	)		2,967				(1,075	)			(3,372	)
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(3,593	)		(10,179	)		2,617				(1,075	)			(12,230	)
PROVISION FOR INCOME TAXES		84			17			733		(M)		(301	)	(M)		533
NET LOSS FROM CONTINUING OPERATIONS		(3,677	)		(10,196	)		1,884				—				(12,763	)
NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS		—			—			347		(N)		—				347
PREFERRED STOCK DIVIDENDS		723			—			—				—				723
NET LOSS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(4,400	)	$	(10,196	)	$	1,537			$	—			$	(13,833	)

Net loss from continuing operations per share attributable to common shareholders - basic and diluted:	$	(0.18	)												$	(0.40	)

Weighted average common shares outstanding:
Basic		25,080						9,301		(O)						34,381
Diluted		25,080						9,301		(O)						34,381

See accompanying Note to Unaudited Pro Forma Condensed Combined Financial Statements

Exhibit 99.4

Notes to Unaudited Pro Forma Condensed Combined Financial Statements

(Dollars in Thousands Unless Indicated Otherwise)

Note 1 - Preliminary purchase price allocation

The Company has performed a preliminary valuation analysis of the estimated fair market value of the assets acquired and liabilities assumed in the Transactions and in connection with the payment and/or funding of the Transaction Consideration and the First Lien Term Loan. The following table summarizes the estimated allocation of the preliminary purchase price as of the acquisition date (in thousands).

This estimated preliminary purchase price allocation has been used to prepare pro forma adjustments in the pro forma balance sheet and statements of operations. The final purchase price will be completed when the Company has completed the detailed valuations and necessary calculations. The final allocation could differ materially from the preliminary calculation used in the pro forma adjustments. The final allocation may include (1) changes in fair values of property, plant and equipment, lease right of use assets, and lease liabilities (2) changes in allocations to intangible assets including goodwill (3) other changes to assets and liabilities and (4) assessment of tax positions and tax rates.

Cash Consideration	$	30,800
Noncash Consideration:
Warrants⁽¹⁾		70,515
Series B Preferred Stock⁽²⁾⁽³⁾		36,492
Second Lien Term Loan⁽²⁾		29,081
Total Noncash Consideration		136,088
Total Consideration	$	166,888

Cash and cash equivalents	$	1,614
Accounts Receivable		19,437
Prepaid Expenses		2,044
Other current assets		3,887
Property and Equipment, net		14,514
Intangible assets, net		140,877
Right of use assets		27,107
Goodwill		48,443
Deposits and other		642
Assets Acquired	$	258,565

Accounts payable and accrued expenses	$	21,762
Accrued salaries and commissions		167
Deferred revenue		9,047
Operating lease liabilities		3,499
Finance lease liabilities		453
Income taxes payable		245
Other current liabilities		1
Operating lease liabilities, net of current		26,678
Finance lease liabilities, net of current		2,936
Deferred income taxes		9,260
Liabilities Assumed	$	74,048
Fair value of noncontrolling interests		17,629

Net Assets Acquired	$	166,888

Exhibit 99.4

⁽¹⁾ Represents the fair value of 28,206,152 warrants issued in the Estrella Transaction valued at the close price on the day prior to close of $2.50.

⁽²⁾ Represents the fair value of the Series B Preferred Stock and Second Lien Term Loan based on MediaCo’s overall market value weighted cost of debt and preferred stock of 12.61%.

⁽³⁾ Series B Preferred Stock classified as a liability as it is mandatorily redeemable after 7 years with no equity conversion option.

Transaction Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet as of March 31, 2024

(A)	Pro forma cash adjustments include the following as a result of the Estrella Transaction:

Distribution of purchase price to Estrella		(30,800	)
Change in working cash balance through the date of the acquisition		(552	)
Distribution for MediaCo estimated transaction fees and expenses		(555	)
Total pro forma adjustment	$	(31,907	)

(B)	Reflects the impact of the preliminary purchase price allocation related to changes in working balances through the date of the acquisition.

(C)	Reflects the impact of the preliminary estimates of fair value for the tangible fixed assets and intangible assets as follows:

Preliminary fair value of tangible fixed assets	$	14,514
Historical value of tangible fixed assets		17,696
Pro forma adjustment		(3,182	)

Preliminary fair value of intangible assets:
Decaying advertiser base asset		15,572
Favorable leasehold interests		13,039
KVNR time brokerage agreement		56
FCC licenses		112,210
Total preliminary fair value of intangible assets		140,877
Less: Historical value of intangible assets		102,610
Pro forma adjustment		38,267

(D)	Reflects the adjustment of $48,443 for goodwill, representing the excess of the purchase consideration over the fair value of Estrella’s net assets acquired based on the estimated preliminary purchase price allocation.

(E)	Pro forma long term debt adjustments include the following as a result of the Transactions:

Second Lien Term Loan		29,081
Series B Preferred Stock		36,492
Total pro forma adjustment	$	65,573

(F)	Represents elimination of Estrella’s historical equity balances and net activity through the date of acquisition, which was primarily driven by the gain on extinguishment of debt. See (AA) for further discussion.

Historical equity balance		101,039
Net activity through the date of acquisition		(212,367	)
Total pro forma adjustment	$	(111,328	)

(G)	Represents the fair value of 28,206,152 warrants issued in the Estrella Transaction valued at the close price on the day prior to close of $2.50.

(H)	Represents the impact of estimated one-time MediaCo transaction fees and expenses.

(I)	Represents the fair value of the noncontrolling interest of the Estrella VIE, calculated as the 7,051,538 warrants issued per the Option Agreement valued at the close price on the day prior to close of $2.50.

Exhibit 99.4

Other Adjustments to Unaudited Pro Forma Condensed Combined Balance Sheet as of March 31, 2024

(AA)	Represents cash received from First Lien Term Loan, net of original issue discount and monitoring fee, as well as the reclassification of deferred financing costs included in Prepaid expenses in MediaCo’s historical balance sheet to Long term debt, net of current.

First Lien Term Loan face value		35,000
Original issue discount		(1,050	)
Monitoring fee		(25	)
Net cash received		33,925
Deferred financing costs		(755	)
Add back monitoring fee recorded to expense	$	25
Total long term debt pro forma adjustment	$	33,195

(BB)	Reflects the extinguishment of Estrella’s existing debt, which was not assumed by MediaCo and therefore removed from the historical balances, of $151,397 and related accrued interest of $60,970 and gain on extinguishment of $212,367.

Transaction Adjustments to the Unaudited Pro Forma Condensed Combined Statements of Operations for the three months ended March 31, 2024 and year ended December 31, 2023

(J)	Represents the impact of estimated one-time MediaCo transaction fees and expenses.

(K)	Reflects the adjustment to depreciation and amortization based on preliminary estimated fair value and estimated useful lives as follows:

	Preliminary Fair Value		Estimated Useful Life (Years)
Decaying Advertiser Base Assets	$	15,572		15
Favorable Leasehold Assets		13,039		35
Time Brokerage Agreement		56		1
Fixed Assets		14,514		5
Total	$	43,181

The fair value and useful lives calculations are preliminary and subject to change after the Company finalizes its review of the tangible and intangible assets acquired. The following table summarizes the changes in the estimated depreciation and amortization expense:

	Three months ended March 31, 2024		Twelve months ended December 31, 2023
Estimated depreciation and amortization expense	$	1,092	$	4,369
Less: Historical depreciation and amortization expense		742		3,143
Pro forma adjustment to depreciation and amortization expense	$	350	$	1,226

(L)

Reflects the adjustment to interest expense for interest on debt extinguished by Estrella in the Transactions and in connection with the Transaction Consideration and interest expense on the Second Lien Term Loan and Series B Preferred Stock issued as part of the Transactions and Transaction Consideration.

	Three months ended March 31, 2024			Twelve months ended December 31, 2023
Second Lien Term Loan	$	880		$	3,523
Series B Preferred Stock	$	1,427		$	5,629
Estimated interest expense	$	2,307		$	9,152
Less: Historical interest expense		5,274			20,633
Pro forma adjustment to interest expense	$	(2,967	)	$	(11,481	)

The First Lien Term Loan and Second Lien Term Loan have variable interest rates and an increase or decrease of 1/8th percent in the interest rate would increase or decrease interest expense by $20 thousand and $91 thousand for the three months ended March 31, 2024 and the year ended December 31, 2023, respectively.

Exhibit 99.4

(M)	Reflects the impact of the pro forma adjustments on income tax calculated using our statutory tax rate of 28% for all periods presented. This represents our U.S. statutory rate during these periods, which differs from our effective rate and does not include the impact of valuation allowances.

(N)	Represents the expected net income from continuing operations attributable to noncontrolling interests held in the Estrella VIE.

(O)

The number of shares used in calculating the pro forma combined basic and diluted net loss per share has been adjusted to reflect the estimated total number of shares of common stock of the Combined Company that would be outstanding as of the Transaction closing date. As of the Transaction closing date, the warrant shares are subject to a 19.9% Share Cap. The warrant shares in excess of the 19.9% Share Cap are contingently issuable pending shareholder approval. Therefore, only those contingently issuable warrant shares for which all conditions are satisfied will be included in the pro forma basic shares. Based on the total number of shares of Class A and Class B common stock outstanding on April 17, 2024, the total number of warrants able to be exercised was 9,300,650. The pro forma weighted average shares outstanding are calculated as follows:

	Three months ended March 31, 2024		Twelve months ended December 31, 2023
Historical weighted average common shares outstanding - basic and diluted		25,080		24,876
Warrant shares		9,301		9,301
Pro Forma weighted average common shares outstanding - basic and diluted		34,381		34,177

Other Adjustments to the Unaudited Pro Forma Condensed Combined Statements of Operations for the three months ended March 31, 2024 and year ended December 31, 2023

(CC)	Reflects the adjustment to interest expense for interest expense on the First Lien Term Loan issued as part of the Transactions.

Note 2 - Estrella Reclassification Adjustments

During the preparation of the unaudited pro forma condensed combined financial information, management performed a preliminary analysis of Estrella’s financial information to identify differences in financial statement presentation as compared to the presentation of the Company. Based on a preliminary analysis performed, certain reclassification adjustments have been made to conform Estrella’s historical combined financial statement presentation to the Company’s consolidated financial statement presentation. The Company is currently performing a full and detailed review of its financial statement presentation and accounting policies, which could result in amounts set forth in the Company's consolidated financial statements being materially different from the amounts set forth in the unaudited pro forma condensed combined financial information presented herein.

Refer to the table below for a summary of adjustments made to present Estrella’s historical unaudited balance sheet as of March 31, 2024, to conform with the presentation of the Company's historical unaudited consolidated balance sheet as of March 31, 2024.

Exhibit 99.4

Estrella Historical Balance Sheet Line Items	MediaCo Historical Balance Sheet Line Items	Estrella Historical Balances as of March 31, 2024			Reclassification Adjustments			Notes	Estrella Reclassified as of March 31, 2024
Cash and cash equivalents	Cash and cash equivalents	$	2,166						$	2,166
Accounts receivable, net	Accounts receivable, net of allowance for credit losses		19,905							19,905
Current portion of television program rights, net			1,100			(1,100	)	(a)		—
Prepaid expenses and other current assets	Prepaid expenses		2,960			(876	)	(b)		2,084
	Other current assets					3,568		(a)(b)(c)		3,568
Assets held for sale			1,592			(1,592	)	(c)		—
Total current assets			27,723			—				27,723
Property and equipment, net	PROPERTY AND EQUIPMENT, NET		17,696							17,696
Right-of-use asset, net	Operating lease right of use assets		27,107							27,107
Broadcast licenses, net	INTANGIBLE ASSETS, NET		102,258			352		(d)(g)		102,610
Television program rights, excluding current portion			334			(334	)	(d)		—
Employee advances			35			(35	)	(e)		—
Restricted cash			520			(520	)	(f)		—
Other assets	Deposits and other		259			537		(e)(f)(g)		796
Total assets			175,932			—				175,932
Accounts payable	Accounts payable and accrued expenses		5,301			8,896		(h)		14,197
	Accrued salaries and commissions					233		(h)		233
	Deferred revenue					8,915		(h)		8,915
Accrued liabilities			18,401			(18,401	)	(h)		—
Line of credit			2,854			(2,854	)	(i)		—
Accrued interest	Other current liabilities		61,013			145		(h)		61,158
Current portion of finance lease liability	Finance lease liabilities		453							453
Current portion of operating lease liability	Operating lease liabilities		3,499							3,499
Current portion of long-term debt	Current maturities of long-term debt		148,543			2,854		(i)		151,397
Current portion of deferred taxes	Income taxes payable		33			212		(h)		245
Total current liabilities			240,097			—				240,097
Long-term debt, excluding current portion	LONG TERM DEBT, NET OF CURRENT		—							—
Deferred income taxes	DEFERRED INCOME TAXES		7,260							7,260
Long-term portion of finance lease liability	FINANCE LEASE LIABILITIES, NET OF CURRENT		2,936							2,936
Long-term portion of operating lease liability	OPERATING LEASE LIABILITIES, NET OF CURRENT		26,678							26,678
Total liabilities			276,971			—				276,971
Shareholders’ deficit	Net parent investment		(101,039	)						(101,039	)
Total liabilities and shareholders’ deficit		$	175,932		$	—			$	175,932

Reflects reclassification of $1,100 thousand of Current portion of television program rights, net to Other current assets.

Exhibit 99.4

Reflects reclassification of $876 thousand of Prepaid expenses and other current assets to Other current assets.

Reflects reclassification of $1,592 thousand of Assets held for sale to Other current assets.

Reflects reclassification of $334 thousand of Television program rights, excluding current portion to Intangible assets, net.

Reflects reclassification of $35 thousand of Employee advances to Deposits and other.

Reflects reclassification of $520 thousand of Restricted cash to Deposits and other.

Reflects reclassification of $18 thousand of Other assets to Intangible assets, net.

Reflects reclassification of Accrued liabilities of $233 thousand to Accrued salaries and commissions, $8,915 thousand to Deferred revenue, $212 thousand to Income taxes payable, $145 thousand to Other current liabilities, and $8,896 thousand to Accounts payable and accrued expenses.

Reflects reclassification of $2,854 thousand of Line of credit to Current maturities of long-term debt.

Refer to the table below for a summary of adjustments made to present Estrella’s historical statement of income for the year ended December 31, 2023, to conform with the presentation of the Company's historical unaudited consolidated statement of operations for the year ended December 31, 2023.

Estrella Historical Income Statement Line Items	MediaCo Historical Income Statement Line Items	Estrella Year Ended December 31, 2023			Reclassification Adjustments			Notes	Estrella Reclassified Year Ended December 31, 2023
Net Revenues	NET REVENUES	$	90,198						$	90,198
Operating expenses
Program and technical, exclusive of depreciation and amortization of property and equipment shown below:	Operating expenses excluding depreciation and amortization expense		60,726			45,357		(a)		106,083
Promotional, exclusive of depreciation and amortization shown:			4,588			(4,588	)	(a)		—
Selling, general and administrative, exclusive of depreciation and amortization shown below:			40,659			(40,659	)	(a)		—
Depreciation and amortization of property and equipment	Depreciation and amortization		3,143							3,143
(Gain)/loss on sale and disposal of property and equipment	Gain on disposal of assets		(2,329	)						(2,329	)
Impairment of broadcast licenses and long-lived assets	Impairment loss		6,324							6,324
Other expense			110			(110	)	(a)		—
Total operating expense	Total operating expenses		113,221			—				113,221
Operating loss	OPERATING LOSS		(23,023	)		—				(23,023	)
Interest expense	Interest expense, net		20,207							20,207
Gain on extinguishment of debt	Gain on extinguishment of debt		(8,320	)						(8,320	)
Loss from continuing operations before income taxes	LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(34,910	)		—				(34,910	)
Income tax provision	PROVISION FOR INCOME TAXES		186							186
Net loss	NET LOSS FROM CONTINUING OPERATIONS	$	(35,096	)	$	—			$	(35,096	)

Reflects reclassification of $4,588 thousand of Promotional expenses, $40,659 thousand of Selling, general and administrative, and $110 thousand of Other expense to Operating expenses excluding depreciation and amortization expense.

Exhibit 99.4

Refer to the table below for a summary of adjustments made to present Estrella’s historical statement of income for the three months ended March 31, 2024, to conform with the presentation of the Company's historical unaudited consolidated statement of operations for the three months ended March 31, 2024.

Estrella Historical Income Statement Line Items	MediaCo Historical Income Statement Line Items	Estrella Three Months Ended March 31, 2024			Reclassification Adjustments			Notes	Estrella Reclassified Three Months Ended March 31, 2024
Net Revenues	NET REVENUES	$	19,220						$	19,220
Operating expenses
Program and technical, exclusive of depreciation and amortization of property and equipment shown below:	Operating expenses excluding depreciation and amortization expense		12,531			10,404		(a)		22,935
Promotional, exclusive of depreciation and amortization shown:			1,014			(1,014	)	(a)		—
Selling, general and administrative, exclusive of depreciation and amortization shown below:			9,377			(9,377	)	(a)		—
Depreciation and amortization of property and equipment	Depreciation and amortization		742							742
Gain on sale and disposal of property and equipment	Gain on disposal of assets		584							584
Other expense			13			(13	)	(a)		—
Total operating expense	Total operating expenses		24,261			—				24,261
Operating loss	OPERATING LOSS		(5,041	)		—				(5,041	)
Interest expense	Interest expense, net		5,138							5,138
Loss from continuing operations before income taxes	LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(10,179	)		—				(10,179	)
Income tax provision	PROVISION FOR INCOME TAXES		17							17
Net loss	NET LOSS FROM CONTINUING OPERATIONS	$	(10,196	)	$	—			$	(10,196	)

Reflects reclassification of $1,014 thousand of Promotional expenses, $9,377 thousand of Selling, general and administrative, and $13 thousand of Other expense to Operating expenses excluding depreciation and amortization expense.