STOCKHOLDER'S EQUITY (DEFICIT)

Historically, the Company granted restricted shares of the Company's Class A common stock to certain key individuals. In connection with the effectiveness of the Plan of Reorganization, all unvested restricted shares were canceled.

Pursuant to the new equity incentive plan the Company entered into in connection with the effectiveness of our Plan of Reorganization, we have granted restricted stock units and options to purchase shares of the Company's Class A common stock to certain key individuals.

Predecessor Common Stock

The following table presents the balances of the Company's Class A, Class B, Class C and Class D Common Stock as of June 30, 2019 and December 31, 2018 are as below:



(In thousands, except share and per share data)	Successor Company	Predecessor Company
	June 30, 2019	December 31, 2018
	(Unaudited)
Predecessor Class A Common Stock, par value $.001 per share, authorized 400,000,000 shares, no shares issued in 2019 and 32,292,944 shares issued in 2018	—	32
Predecessor Class B Common Stock, par value $.001 per share, authorized 150,000,000 shares, no shares issued in 2019 and 555,556 shares issued in 2018	—	1
Predecessor Class C Common Stock, par value $.001 per share, authorized 100,000,000 shares, no shares issued in 2019 and 58,967,502 shares issued in 2018	—	59
Predecessor Class D Common Stock, par value $.001 per share, authorized 200,000,000 shares, no shares issued in 2019 and 2018	—	—

Successor Common Stock

Class A Common Stock

Holders of shares of the Successor Company's Class A common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. Holders of the Successor Company's Class A common stock will have the exclusive right to vote for the election of directors. There will be no cumulative voting rights in the election of directors.

Holders of shares of the Successor Company's Class A common stock are entitled to receive dividends, on a per share basis, when and if declared by the Company's Board out of funds legally available therefor and whenever any dividend is made on the shares of the Successor Company's Class B common stock subject to certain exceptions set forth in our certificate.

The Successor Company may not subdivide or combine (by stock split, reverse stock split, recapitalization, merger, consolidation or any other transaction) its shares of Class A common stock or Class B common stock without subdividing or combining its shares of Class B common stock or Class A common stock, respectively, in a similar manner.

Upon our dissolution or liquidation or the sale of all or substantially all of the Successor Company's assets, after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, the holders of shares of the Successor Company's Class A common stock will be entitled to receive pro rata together with holders of the Successor Company's Class B common stock our remaining assets available for distribution.

New Class A common stock certificates issued upon transfer or new issuance of Class A common stock shares will contain a legend stating that such shares of Class A common stock are subject to the provisions of our amended and restated certificate of incorporation, including but not limited to provisions governing compliance with requirements of the Communications Act and regulations thereunder, including, without limitation, those concerning foreign ownership and media ownership.

On July 18, 2019, the Company’s Class A common stock was listed and began trading on the NASDAQ Global Select Market ("Nasdaq") under the ticker symbol “IHRT”.

Class B Common Stock

Holders of shares of the Successor Company's Class B common stock are not entitled to vote for the election of directors or, in general, on any other matter submitted to a vote of the Company’s stockholders, but are entitled to one vote per share on the following matters: (a) any amendment or modification of any specific rights or obligations of the holders of Class B common stock that does not similarly affect the rights or obligations of the holders of Class A common stock, in which case the holders of Class B Common Stock will be entitled to a separate class vote, with each share of Class B common stock having one vote; and (b) to the extent submitted to a vote of our stockholders, (i) the retention or dismissal of outside auditors by the Company, (ii) any dividends or distributions to our stockholders, (ii) any material sale of assets, recapitalization, merger, business combination, consolidation, exchange of stock or other similar reorganization of the Company or any of its subsidiaries, (iv) the adoption of any amendment to our certificate of incorporation, (v) other than in connection with any management equity or similar plan adopted by the Company's Board, any authorization or issuance of equity interests, or any security or instrument convertible into or exchangeable for equity interests, in the Company or any of its subsidiaries, and (vi) the liquidation of the Company, in which case in respect to any such vote concerning the matters described in clause (b), the holders of Class B common stock are entitled to vote with the holders of the Class A common stock, with each share of common stock having one vote and voting together as a single class.

Holders of shares of the Successor Company's Class B common stock are generally entitled to convert shares of Class B common stock into shares of Class A common stock on a one-for-one basis, subject to the Company’s ability to restrict conversion in order to comply with the Communications Act and FCC regulations.

Holders of shares of the Successor Company's Class B common stock are entitled to receive dividends when and if declared by the Company's Board out of funds legally available therefor and whenever any dividend is made on the shares of the Successor Company's Class A common stock subject to certain exceptions set forth in our certificate of incorporation. Upon our dissolution or liquidation or the sale of all or substantially all of our assets, after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any, the holders of shares of the Successor Company's Class B common stock will be entitled to receive pro rata with holders of the Successor Company's Class A common stock our remaining assets available for distribution.

Special Warrants

Each Special Warrant issued under the special warrant agreement entered into in connection with the Reorganization may be exercised by its holder to purchase one share of Successor Class A common stock or Successor Class B common stock at an exercise price of $0.001 per share, unless the Company in its sole discretion believes such exercise would, alone or in combination with any other existing or proposed ownership of common stock, result in, subject to certain exceptions, (a) such exercising holder owning more than 4.99 percent of the Successor Company's outstanding Class A common stock, (b) more than 22.5 percent of the Successor Company's capital stock or voting interests being owned directly or indirectly by foreign individuals or entities, (c) the Company exceeding any foreign ownership threshold set by the FCC pursuant to a declaratory ruling or specific approval requirement or (d) the Company violating any provision of the Communications Act or restrictions on ownership or transfer imposed by the Company's certificate of incorporation or the decisions, rules and policies of the FCC. Any holder exercising Special Warrants must complete and timely deliver to the warrant agent the required exercise forms and certifications required under the special warrant agreement.

To the extent there are any dividends declared or distributions made with respect to the Successor Class A common stock or Successor Class B common stock, those dividends or distributions will also be made to holders of Special Warrants concurrently and on a pro rata basis based on their ownership of common stock underlying their Special Warrants on an as-exercised basis; provided, that no such distribution will be made to holders of Special Warrants if (x) the Communications Act or an FCC rule prohibits such distribution to holders of Special Warrants or (y) our FCC counsel opines that such distribution is reasonably likely to cause (i) the Company to violate the Communications Act or any applicable FCC rule or (ii) any such holder not to be deemed to hold a noncognizable (under FCC rules governing foreign ownership) future equity interest in the Company; provided further, that, if any distribution of common stock or any other securities to a holder of Special Warrants is not permitted pursuant to clauses (x) or (y), the Company will cause economically equivalent warrants to be distributed to such holder in lieu thereof, to the extent that such distribution of warrants would not violate the Communications Act or any applicable FCC rules.

To the extent within the Company's control, any tender or exchange offer subject to Sections 13 or 14 of the Exchange Act for the Successor Class A common stock, Successor Class B common stock or Special Warrants will be made concurrently and on a pro rata basis (in the case of holders of Special Warrants, based upon their ownership of common stock underlying their Special Warrants on an as-exercised basis) to all holders of Successor Class A common stock, Successor Class B common stock and Special Warrants. Distributions to holders of Special Warrants and payments to holders of Special Warrants pursuant to a tender or exchange offer for Special Warrants subject to Sections 13 or 14 of the Exchange Act will be made in compliance with FCC ownership conditions.

The number of shares of the Successor Company's common stock to be received upon exercise of each special warrant is subject to adjustment from time to time. Such number will increase or decrease proportionally upon any increase or decrease in the number of shares of the Successor Company's common stock outstanding resulting from any subdivisions, splits, combination or reverse splits (except in connection with a change of control). The Company is not required to issue fractional shares in connection with the exercise of Special Warrants, and may either pay an amount in cash in lieu of such fractional shares or round the number of shares received to the nearest whole number. The exercise price is not subject to any adjustment.

Upon the occurrence of any reclassification or recapitalization whereby holders of the Successor Company's common stock are entitled to receive proceeds in cash, stock, securities or other assets or property with respect to or in exchange for common stock, holders who exercise Special Warrants are entitled to receive such proceeds commensurate with the number of shares of common stock they would have received if they had exercised their Special Warrants immediately prior to such reclassification or recapitalization. Upon a change of control in which the only consideration payable to holders of common stock is cash, each special warrant will be deemed to be exercised immediately prior to the consummation of such change of control and the holder will receive solely the cash consideration to which such holder would have been entitled as a result of such change of control. Upon a change of control in which the consideration payable to holders of common stock is other than only cash, at the Company's option, each special warrant will be either (A) assumed by the party surviving such change of control and will continue to be exercisable for the kind and amount of consideration to which such holder would have been entitled as a result of such change of control had the special warrant been exercised immediately prior, or (B) if not assumed by the party surviving such change of control, deemed to be exercised immediately prior to the consummation of such change of control and the holder will receive the consideration to which such holder would have been entitled as a result of such Change of Control, less the exercise price, as though the special warrant had been exercised immediately prior.

The Special Warrants will expire on the earlier of the twentieth anniversary of the issuance date and the occurrence of a change in control of the Company.

Computation of Income (Loss) per Share



(In thousands, except per share data)	Successor Company		Predecessor Company
	Period from May 2, 2019 through June 30,		Period from April 1, 2019 through May 1,			Three Months Ended June 30,
	2019		2019			2018
NUMERATOR:
Net loss attributable to the Company – common shares	$	38,793	$	11,298,524		$	(69,899	)
Less:
Non-controlling interest from discontinued operations, net of tax - common shares	$	—	$	(2,190	)	$	(3,609	)
Income (loss) from discontinued operations, net of tax	—		1,854,677			(33,229		)
Total income (loss) from discontinued operations, net of tax - common shares	$	—	$	1,852,487		$	(36,838	)
Income (loss) from continuing operations	$	38,793	$	9,446,037		$	(33,061	)

DENOMINATOR⁽¹⁾:
Weighted average common shares outstanding - basic	145,275		85,652			85,280
Stock options and restricted stock⁽²⁾:	23		—			—
Weighted average common shares outstanding - diluted	145,298		85,652			85,280

Net loss attributable to the Company per common share:
From continuing operations - Basic	$	0.27	$	110.28		$	(0.39	)
From discontinued operations - Basic	$	—	$	21.63		$	(0.43	)
From continuing operations - Diluted	$	0.27	$	110.28		$	(0.39	)
From discontinued operations - Diluted	$	—	$	21.63		$	(0.43	)



(In thousands, except per share data)	Successor Company		Predecessor Company
	Period from May 2, 2019 through June 30,		Period from January 1, 2019 through May 1,		Six Months Ended June 30,
	2019		2019		2018
NUMERATOR:
Net loss attributable to the Company – common shares	$	38,793	$	11,184,141	$	(486,893	)
Less:
Non-controlling interest from discontinued operations, net of tax - common shares	$	—	$	19,028	$	12,437
Income (loss) from discontinued operations, net of tax	—		1,685,123		(157,477		)
Total income (loss) from discontinued operations, net of tax - common shares	$	—	$	1,704,151	$	(145,040	)
Income (loss) from continuing operations	$	38,793	$	9,479,990	$	(341,853	)

DENOMINATOR⁽¹⁾:
Weighted average common shares outstanding - basic	145,275		86,241		85,248
Stock options and restricted stock⁽²⁾:	23		—		—
Weighted average common shares outstanding - diluted	145,298		86,241		85,248

Net loss attributable to the Company per common share:
From continuing operations - Basic	$	0.27	$	109.92	$	(4.01	)
From discontinued operations - Basic	$	—	$	19.76	$	(1.70	)
From continuing operations - Diluted	$	0.27	$	109.92	$	(4.01	)
From discontinued operations - Diluted	$	—	$	19.76	$	(1.70	)


⁽¹⁾	The 81,453,648 Special Warrants issued at Emergence are included in both the basic and diluted weighted average common shares outstanding of the Successor Company for the Period from May 2, 2019 through June 30, 2019.

⁽²⁾

Outstanding equity awards of 1.3 million for the Successor Company for the Period from May 2, 2019 through June 30, 2019 were not included in the computation of diluted earnings per share because to do so would have been antidilutive. Outstanding equity awards of 5.9 million, 8.0 million, 5.9 million and 8.0 million of the Predecessor Company for the Period from April 1, 2019 through May 1, 2019, the three months ended June 30, 2018, the Period from January 1, 2019 through May 1, 2019 and the six months ended June 30, 2018 respectively, were not included in the computation of diluted earnings per share because to do so would have been antidilutive.