XML 33 R19.htm IDEA: XBRL DOCUMENT v3.6.0.2
Subsequent Events
9 Months Ended
Nov. 30, 2016
Subsequent Event [Abstract]  
Subsequent Events [Text Block]
Subsequent Events
Amendment of NextRadio LLC agreement with Sprint
On August 9, 2013, NextRadio LLC, a wholly-owned subsidiary of Emmis, entered into an agreement with Sprint whereby Sprint agreed to pre-load the Company's NextRadio smartphone application in a minimum of 30 million FM-enabled wireless devices on the Sprint wireless network over a three-year period. In return, NextRadio LLC agreed to serve as a conduit for the radio industry to pay Sprint $15 million per year in equal quarterly installments over the three year term and to share with Sprint certain revenue generated by the NextRadio application. Emmis has not guaranteed NextRadio LLC's performance under this agreement and Sprint does not have recourse to any Emmis related entity other than NextRadio LLC. Through November 30, 2016, NextRadio LLC had remitted $33.2 million to Sprint under the terms of this agreement.
Effective December 8, 2016, NextRadio LLC and Sprint entered into an Amendment of their original agreement. The Amendment calls for NextRadio LLC to make installment payments totaling $6.0 million commencing with a $0.6 million payment that was made on December 12, 2016. Installment payments are to be made periodically, with the last one due on March 15, 2017. Once the installment payments are completed, Sprint will forgive the remaining $5.8 million that it was due under the original agreement. Also in connection with this amendment, NextRadio LLC and Sprint agreed to increase Sprint's share of certain revenue generated by the NextRadio application. NextRadio LLC has received a loan of up to $4.0 million for the sole purpose of fulfilling the payment obligations to Sprint under the Amendment. The loan is to be repaid out of proceeds from sales of enhanced advertising through the NextRadio application. On December 22, 2016, NextRadio LLC received $1.4 million under the loan, which was promptly remitted to Sprint. NextRadio is in discussions with radio broadcasters and other companies involved in the radio industry to fund the remaining installment payments due to Sprint.
Modification of Digonex non-recourse debt
In December 2016, holders of Digonex secured notes payable agreed to extend the maturity date of the notes from December 31, 2017 to December 31, 2020, provided that the holders of Digonex's unsecured notes payable agree to a similar extension. The notes will continue to accrue interest at 5.0% per annum with interest payable at maturity.
Additional investment in Digonex
On January 3, 2017, Emmis contributed an additional $0.5 million to Digonex in the form of convertible debt. Subsequent to this contribution, Emmis owns rights that are convertible into approximately 80% of the common equity of Digonex.