| Liabilities Subject to Compromise |
Reorganization items, net Reorganization items incurred as a result of the Chapter 11 Cases are presented separately in the accompanying Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2026 and were as follows (in thousands):
| | | | | | | | | | | | | Three Months Ended | | Six Months Ended | | June 30, 2026 | | June 30, 2026 | Allowed claims adjustments for debt obligations (1) | $ | (1,049) | | | $ | 19,271 | | Professional fees (2) | (5,762) | | | (13,527) | | Rejected lease contracts (3) | — | | | 10,195 | | Other (4) | (769) | | | (1,507) | | | Reorganization items, net | $ | (7,580) | | | $ | 14,432 | |
(1)Adjustments to reflect estimated allowed claims as detailed in the Plan and related disclosure statement with respect to outstanding debt obligations. (2) Professional fees relate to legal, financial advisory and other professional costs directly associated with the reorganization process. (3) Adjustment recorded for allowed claim amounts related to rejected lease contracts. (4) Other relates to Federal Communications Commission filing and United States Trustee fees directly associated with the reorganization process.
As of June 30, 2026, $4.0 million of Professional fees and Other were unpaid and accrued in Accounts Payable and Accrued Expenses in the accompanying Condensed Consolidated Balance Sheet. For the six months ending June 30, 2026, the Company made payments of approximately $13.1 million for Reorganization Items. Liabilities Subject to Compromise As discussed in "Note 1, Nature of Business, Interim Financial Data and Basis of Presentation," since the Petition Date, the Company has been operating as debtor-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with provisions of the Bankruptcy Code. On the accompanying Condensed Consolidated Balance Sheets, Liabilities Subject to Compromise reflects the expected allowed amount of the prepetition claims that are not fully secured and that have at least a possibility of not being repaid at the full claim amount. Liabilities Subject to Compromise at June 30, 2026 consisted of the following (in thousands):
| | | | | | | June 30, 2026 | | Accounts payable and accrued expenses | $ | 69,054 | | | Operating lease liabilities | 100,503 | | | Debt | 697,120 | | | Financing liabilities, net | 171,224 | | | Other liabilities | 6,125 | | | Total liabilities subject to compromise | $ | 1,044,026 | |
Determination of the value at which liabilities will ultimately be settled cannot be made until the Plan has been reconciled and effectuated. The Company will continue to evaluate the amount and classification of its prepetition liabilities. Any additional liabilities that are subject to compromise will be recognized accordingly, and the aggregate amount of Liabilities Subject to Compromise may change, including after effectiveness of the Plan. Condensed Combined Debtors' Financial StatementsThe financial statements below represent the condensed combined financial statements of the Debtors. For the three and six months ended June 30, 2026, the Company’s Non-Filing Entities, which are comprised of the Company's FCC license holding entities, are accounted for as non-consolidated subsidiaries in these financial statements. Intercompany transactions among the Debtors have been eliminated in the financial statements contained herein. Intercompany transactions among the Debtors and the Non-Filing Entities have not been eliminated in the Debtors’ financial statements.
Debtors' Balance Sheet
(Dollars in thousands, except for share data) | | | | | | | | Dollars in thousands (except for share data) | June 30, 2026 | | | Assets | | | | Current assets: | | | Cash and cash equivalents (includes restricted cash of $4,218) | $ | 60,987 | | | | | | Accounts receivable, less allowance for doubtful accounts of $4,705 at June 30, 2026 | 113,121 | | | | Trade receivable | 7,507 | | | | | | | Prepaid expenses and other current assets | 28,165 | | | | Total current assets | 209,780 | | | | Property and equipment, net | 121,357 | | | | Operating lease right-of-use assets | 95,216 | | | | | | | | | | Other intangible assets, net | 51,578 | | | | | | | Other assets | 9,079 | | | | Total assets | $ | 487,010 | | | | Liabilities and Stockholders’ Deficit | | | | Current liabilities: | | | | Accounts payable and accrued expenses | $ | 54,234 | | | | Current portion of operating lease liabilities | 412 | | | | Trade payable | 686 | | | | Current portion of debt | 2,028 | | | | Total current liabilities not subject to compromise | 57,360 | | | | | | | Operating lease liabilities | 1,051 | | | | | | | Other liabilities | 8,187 | | | | Deferred income tax liabilities | 1,165 | | | | Total liabilities not subject to compromise | 67,763 | | | | Liabilities subject to compromise | 1,044,026 | | | | Total liabilities | 1,111,789 | | | | Commitments and contingencies (Note 11) | | | | Stockholders’ deficit: | | | Class A common stock, par value $0.0000001 per share; 100,000,000 shares authorized; 23,464,930 shares issued; 17,436,334 shares outstanding at June 30, 2026, respectively | — | | | Convertible Class B common stock, par value $0.0000001 per share; 100,000,000 shares authorized; 231,698 shares issued and outstanding at June 30, 2026 | — | | | Treasury stock, at cost, 6,028,596 shares at June 30, 2026 | (47,131) | | | | Additional paid-in-capital | (46,217) | | | | Accumulated deficit | (531,431) | | | | Total stockholders’ deficit | (624,779) | | | | Total liabilities and stockholders’ deficit | $ | 487,010 | | |
| | | | | | | | | | | | | | | | | Debtors' Statement of Operations | | | | | | (Dollars in thousands) | | | | | | Dollars in thousands (except for share and per share data) | Three Months Ended June 30, | | Six Months Ended June 30, | | | | 2026 | | 2026 | | | | | | Net revenue | $ | 167,907 | | | $ | 332,354 | | | | | | | Operating expenses: | | | | | | | | | Content costs | 55,625 | | | 121,517 | | | | | | | Selling, general and administrative expenses | 85,856 | | | 170,260 | | | | | | | Depreciation and amortization | 12,305 | | | 24,582 | | | | | | | Corporate expenses | 11,876 | | | 40,548 | | | | | | | Gain on sale or disposal of assets or stations | (82) | | | (458) | | | | | | | | | | | | | | | | | | | | | | | Total operating expenses | 165,580 | | | 356,449 | | | | | | | Operating income (loss) | 2,327 | | | (24,095) | | | | | | | Non-operating expense: | | | | | | | | | Reorganization items, net | (7,580) | | | 14,432 | | | | | | Interest expense (excludes contractual interest of 14,098 and 18,324 for the second quarter and first half of 2026, respectively) | (3,044) | | | (15,088) | | | | | | | Interest income | — | | | 184 | | | | | | | | | | | | | | | Other expense, net | (32) | | | (84) | | | | | | | Total non-operating expense, net | (10,656) | | | (556) | | | | | | | Loss before income taxes | (8,329) | | | (24,651) | | | | | | | Income tax expense | (881) | | | (1,421) | | | | | | | Net loss | $ | (9,210) | | | $ | (26,072) | | | | | |
| | | | | | Debtors' Statement of Cash Flows (Dollars in thousands) | | Dollars in thousands | Six Months Ended June 30, | | 2026 | | Cash flows from operating activities: | | | Net loss | $ | (26,072) | | | Adjustments to reconcile net loss to net cash used in operating activities: | | | Depreciation and amortization | 24,582 | | | Amortization of debt issuance costs | 303 | | | Amortization of debt discount | (1,099) | | | Provision for doubtful accounts | 2,233 | | | Gain on sale or disposal of assets or stations | (458) | | | | | | | | | | | | | Deferred income taxes | 1,165 | | | Stock-based compensation expense | 472 | | | Non-cash interest expense on financing liabilities | 1,283 | | | Non-cash imputed rental income | (2,481) | | | Non-cash reorganization items, net | (32,872) | | | Changes in assets and liabilities (excluding acquisitions and dispositions): | | | Accounts receivable | 18,782 | | | Trade receivable | (256) | | | Prepaid expenses and other current assets | (8,213) | | | Operating leases, net | (826) | | | | | Other assets | (3,039) | | | Accounts payable and accrued expenses | 12,194 | | | Trade payable | 856 | | | Other liabilities | 380 | | | Net cash used in operating activities | (13,066) | | | Cash flows from investing activities: | | | Proceeds from sale of assets or stations | 661 | | | | | | | Proceeds from insurance reimbursement | 276 | | | Capital expenditures | (7,093) | | | Net cash used in investing activities | (6,156) | | | Cash flows from financing activities: | | | | | | | | | Borrowings under the 2020 revolving credit facility | 2,028 | | | | | | | | | | | | | Adequate protection payments on 2020 revolving credit facility | (458) | | | Shares returned in lieu of tax payments | (24) | | | | | | | Repayments of financing liabilities | (3,324) | | | Repayments of finance lease obligations | (568) | | | Proceeds from tenant improvement reimbursement | 576 | | | Net cash used in financing activities | (1,770) | | | Decrease in cash, cash equivalents and restricted cash | (20,992) | | | Cash, cash equivalents and restricted cash at beginning of period | 81,979 | | | Cash, cash equivalents and restricted cash at end of period | $ | 60,987 | | | | | | | |
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