BASIS OF PRESENTATION AND SIGNIFICANT POLICIES

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION AND SIGNIFICANT POLICIES

Audacy, Inc. was formed as a Pennsylvania corporation in 1968. Its New York Stock Exchange ticker symbol is "AUD." On May 16, 2023, trading in our Class A common stock on the New York Stock Exchange was suspended. On October 30, 2023, the New York Stock Exchange (the “NYSE”) filed a Form 25 relating to the delisting from the NYSE of our Class A common stock with the Securities and Exchange Commission (“SEC”). The delisting is expected to become effective 10 days after the filing of Form 25. Our Class A common stock will continue to trade Over The Counter (the "OTC Pink") under the ticker symbol "AUDA".

The interim unaudited condensed consolidated financial statements included herein have been prepared by Audacy, Inc. and its subsidiaries (collectively, the “Company”) in accordance with: (i) generally accepted accounting principles (“U.S. GAAP”) for interim financial information; and (ii) the instructions of the Securities and Exchange Commission (the “SEC”) for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for annual financial statements. In the opinion of management, the condensed consolidated financial statements reflect all adjustments considered necessary for a fair statement of the results of operations and financial position for the interim periods presented. All such adjustments are of a normal and recurring nature. The Company’s results are subject to seasonal fluctuations and, therefore, the results shown on an interim basis are not necessarily indicative of results for a full year.

This Form 10-Q should be read in conjunction with the consolidated financial statements and related notes included in the Company’s audited consolidated financial statements as of and for the year ended December 31, 2022, and filed with the SEC on March 16, 2023, as part of the Company’s Annual Report on Form 10-K (the "2022 Annual Report"). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations.

There have been no material changes from Note 2, Significant Accounting Policies, as described in the notes to the Company’s consolidated financial statements contained in the 2022 Annual Report.

On June 30, 2023, we effected a one-for-thirty reverse stock split (the “Reverse Stock Split”) of our issued and outstanding shares of Class A and Class B common stock, par value $0.01 per share (“Common Stock”). As a result of the Reverse Stock Split every thirty (30) shares of Common Stock issued and outstanding were automatically combined into one (1) share of issued and outstanding Common Stock, without any change in the par value per share. In addition, proportional adjustments were made to the number of shares of the Company’s Class A common stock, par value $0.01 per share (“Class A common stock”) subject to outstanding equity awards, as well as the applicable exercise price, to reflect the Reverse Stock Split. All information related to Common Stock, stock options, restricted stock units and earnings per share have been retroactively adjusted to give effect to the Reverse Stock Split for all periods presented. The Company effected the Reverse Stock Split to seek to regain compliance with the minimum average closing price requirement of Rule 802.01C of the New York Stock Exchange’s Listing Company Manual. Following the Reverse Stock Split, the Class A common stock continued to be traded on the OTC Pink under the symbol “AUDA” on a split-adjusted basis beginning on June 30, 2023.

Going Concern

In accordance with Accounting Standards Codification ("ASC") 205-40, Going Concern, the Company continues to critically review its liquidity and anticipated capital requirements, including for service of the Company's debt, in light of the significant uncertainty created by the current macroeconomic conditions to determine whether these conditions and events, when considered in the aggregate, raise substantial doubt about its ability to continue as a going concern within twelve months after the date that the accompanying unaudited consolidated financial statements are issued.

Current macroeconomic conditions have created, and continue to create, significant uncertainty in operations, including rising inflation and interest rates, significant volatility in financial markets, decreases in advertising revenue, and increased competition for advertising expenditures, which have had, and are expected to continue to have, a material adverse effect on the Company’s forecasted revenue. As a result, management continues to execute on cash management and strategic operational plans to manage liquidity and debt covenant compliance, including evaluating contractual obligations and workforce reductions, managing operating expenses, divesting non-strategic assets of the Company, and initiating a variety of transactions to manage the Company’s liabilities, which includes the utilization and extension of certain grace periods and waivers of certain financial covenants as described in Note 8, Long-Term Debt, and could include extending maturities or otherwise reorganizing the Company’s debt to decrease overall leverage. The Company is unable to predict with certainty the impact that the current

macroeconomic conditions will have on its ability to consummate or continue to consummate these transactions or maintain compliance with the financial covenants contained in the Company’s debt agreements.

As of September 30, 2023, the Company was in compliance with its debt and related covenants, some of which were due to the amendments and waivers described in Note 8, Long-Term Debt. However, based on the Company’s cash and cash equivalents balance, the current maturities of its existing debt facilities, its forecasted business plan in light of current macroeconomic conditions and the Company’s current forecast of future revenue over the next twelve months, indications suggest that such forecasts are unlikely to be sufficient for the Company to be able to continue to maintain compliance with the financial covenants under our debt agreements for at least twelve months from the issuance of the accompanying unaudited consolidated financial statements. Failure to meet these covenant requirements in the future would cause the Company to be in default and could cause the maturity of the related debt to be accelerated and become immediately payable absent obtaining additional waivers from its lenders or negotiating additional amendments to avoid acceleration of its indebtedness. There can be no assurance that any such additional waivers or amendments would be available on acceptable terms or at all. If the Company is unable to obtain additional necessary waivers or amendments and its debt is accelerated, there can be no assurance that the Company would be able to obtain replacement financing or to satisfy its obligations, in which case the Company may pursue a process to restructure its indebtedness under the protection of a bankruptcy court. Based on the Company’s debt balance and the potential that it could seek protection from creditors under the bankruptcy laws as well as the uncertainty surrounding compliance with the Company’s debt covenants and its ability to obtain additional waivers or amendments when needed, the Company determined that there is substantial doubt regarding its ability to continue as a going concern for a period of twelve months from the issuance of the accompanying unaudited consolidated financial statements. In 2024, $926.4 million of debt is set to mature, beginning with the Accounts Receivable Facility, with $75 million of outstanding borrowings at September 30, 2023 and maturing in July 2024, followed by the Revolver with $219.0 million of outstanding borrowings at September 30, 2023 and maturing in August 2024.

The accompanying unaudited consolidated financial statements have been prepared on a going concern basis, which contemplates realization of assets and satisfaction of liabilities in the ordinary course of business. As such, they do not include any adjustments to the recoverability and reclassification of recorded amounts that might be necessary should the Company be unable to continue as a going concern.

Refer to Note 8, Long-Term Debt, Note 17, Subsequent Events, "Management's Discussion And Analysis Of Financial Condition And Results Of Operations” in Part I, Item 2, and “Risk Factors” in Part II, Item 1A, for additional information.

Recent Accounting Pronouncements

All new accounting pronouncements that are in effect that may impact the Company’s financial statements have been implemented. The Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on the Company’s financial position, results of operations or cash flows.

Restricted Cash

The following table presents cash, cash equivalents and restricted cash reported in the Condensed Consolidated Balance Sheets to the total of amounts reported in the Condensed Consolidated Statements of Cash Flow.


Cash, Cash Equivalents and Restricted Cash	September 30, 2023		December 31, 2022
	(amounts in thousands)

Cash and cash equivalents	$	54,080	$	103,344
Restricted cash (1)	3,300		—
Total cash, cash equivalents and restricted cash in the Statement of Cash Flows	$	57,380	$	103,344
(1) Restricted cash consists of cash held in a bank in connection with the Company's corporate credit card program.