Sale-Leaseback Transaction

12 Months Ended

Dec. 31, 2025

Sale-Leaseback Transaction

Sale-Leaseback Transaction

16. Sale-Leaseback Transaction

On October 17, 2025 (the “Closing Date”), the Company entered into an Asset Purchase Agreement (the “Purchase Agreement”) by and among the Company, GTC Uno, LLC (“GTC”) and certain of the Company’s subsidiaries (the “Subsidiaries”), under which the Subsidiaries agreed to sell 24 telecommunications towers and related real property and other assets located at 22 sites (the “GTC Assets”) for a total cash purchase price of approximately $10.7 million (the “Sale-Leaseback Transaction”). The Purchase Agreement contains customary representations and warranties made by the Company, GTC and the Subsidiaries. On the Closing Date, the parties closed on the sale of the 22 tower sites. Sales proceeds, net of brokerage commissions and certain adjustments, of approximately $10.1 million were paid to the

Company, with the remaining purchase price of $400 thousand remaining in escrow and not controlled by the Company as of year-end. Several towers had underlying land leases requiring consent to the sale by the land-owners. There was one tower with a consent pending as of year-end, as the other were received prior to the sale and three were received during the fourth quarter of 2025. The Company anticipates that the remaining escrowed funds will be released within the 2^nd quarter of 2026 upon receipt of landlord consent to assign the leases on the real property where the tower is located. To the extent such consent is not received, within six months of the Closing Date, title for that site will revert to the applicable Subsidiary. Simultaneously with the closing, each Subsidiary entered into an Antenna Site Lease Agreement (a “Lease”) with GTC for the Company’s continued use of the towers that were sold, pursuant to which the Subsidiaries have agreed to make annual lease payments of $1.00 per annum. Each Lease has a term of 25 years.

The Company evaluated the Sale-Leaseback transaction under the sale-leaseback guidance in ASC 842-40 and concluded that the transfer of the properties qualified as sales because control of the assets transferred to the buyer-lessor in accordance with the guidance in ASC 606, with the exception of the one tower pending receipt of consent. The Company evaluated the lease classification criteria in ASC 842 and determined that the leasebacks are classified as operating leases.

As the contractual lease payments are nominal annual payments of $1 per lease, the present value of lease payments was not material and therefore no lease liability was recorded. In accordance with ASC 842, the Company determined that the Sale-Leaseback transaction was not at fair value based on the difference between the present value of the lease payments and the present value of market rental payments. As such, the Company adjusted the sales price of the assets to recognize the prepayment of the rent, which is included within the right-of-use assets recorded at the time of the sale and lease commencement. The prepaid rent is amortized on a straight-line basis over the 25-year lease terms and recognized within station operating expenses in the accompanying consolidated statements of income (loss). The estimated market rent was based on comparable third-party leases, including rent escalation provisions and then discounted to present value using a rate of 9.75%. The difference between the present value of the contractual lease payments and the present value of market lease payments was determined to be $5.2 million. This amount was recorded as prepaid rent and added to the net cash proceeds from the sale after expenses of $9.85 million to determine the adjusted sales price of $15.1 million for purposes of calculating the gain on the sale. These proceeds do not include approximately $400 thousand being held in escrow, noted above.

At the time of the transaction, the carrying value of the towers was approximately $3.5 million for the 23 towers that closed as of December 31, 2025. The Company recognized a gain on sale of $11.6 million. This gain is included in Other operating (income) expense, net in the accompanying consolidated statement of income (loss) for the year ended December 31, 2025.

As of December 31, 2025, the carrying value of the prepaid rent included in the right-of-use asset associated with the sale-leaseback transaction was $5.2 million.

The activity related to the prepaid rent associated with the sale-leaseback transaction for the year ended December 31, 2025 was as follows (in thousands):

	Amount
Prepaid rent at lease commencement	$ 5,244
Amortization expense (non-cash rent expense)	(54)
Prepaid rent at December 31, 2025	$ 5,190

Subsequent to year-end, in the second quarter of 2026, the Company entered into amendments to the existing Purchase Agreement and related lease arrangements (the “Amendments”) with GTC to align the previously executed documents with the intended economic substance of the transaction. Under the Amendments the Purchase Agreement was modified to provide for a $15.9 million purchase price which includes the $10.7 million up front cash payment that was previously received upon original closing, consistent with the original Purchase Agreement and new promissory

notes totaling $5.2 million. In addition, the original lease agreements were modified to provide for market rent payments over the 25-year original lease terms.

The amendments to the lease arrangements have been evaluated and determined to represent lease modifications in accordance with ASC 842, Leases. Upon the modification of the lease agreements in Q2 of FY2026, the Company will record right-of-use assets and lease liabilities using the Company’s incremental borrowing rate on the date of modification. Based on the Amendments, the sale leaseback transaction is determined to be at fair value as the present value of contractual lease payments equals the present value of market lease payments. As a result, the previously recognized prepaid rent of $5.2 million will be derecognized.

In accordance with ASC 610-20 Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets, the notes receivable now included within the purchase price will be recorded at fair value in Q2 of FY2026 when the notes becomes enforceable. The notes receivable bears an interest rate of 9.3%, which is materially consistent to the Company’s incremental borrowing rate at the time of the Amendments. The lease payments under the amended lease agreements and principal and interest payments under the notes receivable are determinable and contractually consistent in amount and timing. The agreements include legally enforceable rights to offset, which both parties intent to exercise. As such, the notes receivable and operating lease liabilities based on the Amendments qualify for offsetting in accordance with ASC 210-20, Balance Sheet – Offsetting.

Based on the above, there is no material change to financial position or results of operations based on the Amendments to the Company’s initial accounting for the Purchase Agreement.