Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing;
As stated earlier, on April 1, 2022, MediaCo Holding Inc. (the “Company”) has received a deficiency letter (the “Nasdaq Letter”) from the Nasdaq Listing Qualifications Departmentadvising the Company that the Company was not in compliance with Nasdaq Listing Rule 5550(b)(3), which requires the Company to maintain net income from continuing operations of $500,000 from continuing operations during the last completed financial year, or during two of the last three completed financial years (the “minimum income requirement”), and also did not comply with any of the standards of listing alternatives, the market value of listed securities or equity.
Pursuant to the Nasdaq Letter, the Company had 45 calendar days from the date of the Nasdaq Letter to submit a plan to restore compliance, and has therefore submitted such a plan. The Nasdaq accepted the plan and granted an extension per August 31, 2022
for the Company to demonstrate compliance.
In its submission to Nasdaq, the company outlined initiatives that, when completed, would enable it to demonstrate and subsequently maintain compliance with minimum requirements. $2,500,000 capital requirement for continued listing. Specifically, the negotiated conversion of a substantial majority of outstanding Notes (collectively, the “SG Note”) issued to SG Broadcasting LLC
(“SG Broadcasting“) into Class A common stock of the Company (the “Note Conversion”). The conversion of the note was subject to the approval by the shareholders of the Company of the conversion of the portions of the SG note that the shareholders did not not previously approved As described in point 5.07 below, this approval was obtained at an extraordinary meeting of shareholders of the Company held on July 26, 2022 and the conversion of banknotes was consummated on
July 28, 2022. The conversion of the notes increases the equity of the company by approximately $29,874,000.
As of the date of this current report on Form 8-K, the company believes that it has regained compliance with the equity requirement based on the transactions and events described above. The Company understands that Nasdaq will continue to monitor the Company’s ongoing compliance with the capital requirement and, if at the time of its next periodic report under the Securities Exchange Act of 1934, as amended, the Company does not prove compliance, it may be subject to write-off.
Item 3.02 Unrecorded Sales of Equity securities.
As previously announced, the Company has already issued several convertible promissory notes in favor of SG Broadcasting. Under each of these promissory notes, SG Broadcasting exercised its right to convert the aggregate amount of the unpaid principal and accrued but unpaid interest of the Notes into an aggregate of 12,899,480 Class A common shares of the Company, the amount of which is equal to the unpaid principal and accrued but unpaid interest of each Note divided by the Conversion Price (as defined in such Notes) as determined in accordance with the terms and conditions of such Notes. The conversion was effective on July 28, 2022 and was made pursuant to the provisions of Section 4(2) of the Securities Act of 1933, as amended.
Section 5.07 Submission of Matters to a Vote of Securityholders.
On July 26, 2022, the Company held a special meeting of shareholders (the “Meeting”). At the meeting, shareholders of the Company voted on a proposal to approve the potential issuance of Class A shares in excess of 19.9% of the number of outstanding common shares of the Company. The results of this vote, certified by the Assembly’s inspector of elections, appear below.
Proposal 1. Approval of the potential issuance of Class A shares in excess of 19.9% of the number of outstanding common shares of the Company.
Votes For Votes Against Abstentions Broker Non-Votes
55,044,216 14,101 436 -
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