UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to ______ Commission file number 001-36558 Townsquare Media, Inc. (Exact name of registrant as specified in its charter) Delaware 27-1996555 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) One Manhattanville Road Suite 202 Purchase, New York 10577 (Address of Principal Executive Offices) (Zip Code) (203) 861-0900 Registrant's telephone number, including area code Not applicable (Former name, former address and former fiscal year, if changed since last report) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Class A Common Stock, $0.01 par value per share TSQ The New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Smaller reporting company ☒ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ The aggregate market value of the registrant’s voting and non-voting common stock held by non-affiliates of the registrant was $73,159,704 based upon the closing price on the New York Stock Exchange on June 28, 2019, the last business day of the registrant’s most recently completed second fiscal quarter. For this computation, the registrant has excluded the market value of all shares of its common stock held by directors and officers of the registrant and certain other stockholders; such exclusion shall not be deemed to constitute an admission that any such person is an “affiliate” of the registrant. As of May 29, 2020, the registrant had 18,978,195 outstanding shares of common stock consisting of: (i) 14,330,220 shares of Class A common stock, par value $0.01 per share; (ii) 3,011,634 shares of Class B common stock, par value $0.01 per share; and (iii) 1,636,341 shares of Class C common stock, par value $0.01 per share. The registrant also had 8,977,676 warrants to purchase Class A common stock outstanding as of that date. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s definitive proxy statement relating to its 2020 annual meeting of stockholders (the “2020 Proxy Statement”), to be filed with the Securities and Exchange Commission are incorporated by reference in Part III, Items 10 to 14 of this Annual Report on Form 10-K as indicated herein. TOWNSQUARE MEDIA, INC. INDEX Overview of Restatement ii PART I Item 1. Business 1 Item 1A. Risk Factors 24 Item 1B. Unresolved Staff Comments 43 Item 2. Properties 43 Item 3. Legal Proceedings 43 Item 4. Mine Safety Disclosures 44 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 45 Item 6. Selected Financial Data 45 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 46 Item 8. Financial Statements and Supplementary Data 66 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 66 Item 9A. Controls and Procedures 66 Item 9B. Other Information 70 PART III Item 10. Directors, Executive Officers and Corporate Governance 70 Item 11. Executive Compensation 70 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 70 Item 13. Certain Relationships and Related Transactions, and Director Independence 70 Item 14. Principal Accountant Fees and Services 70 Item 15. Exhibits, Financial Statement Schedules 71 Item 16. Form 10-K Summary 75 Signatures 76 i EXPLANATORY NOTE Restatement As previously disclosed in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on June 9, 2020, this Annual Report on Form 10-K for the year ended December 31, 2019 includes the following restated information: (a) Consolidated Balance Sheets as of December 31, 2018 and 2017 and the related Consolidated Statements of Operations, Comprehensive Income, Changes in Stockholders’ Equity and Consolidated Statements of Cash Flows for the years ended December 31, 2018 and 2017, respectively; (b) amends our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) as it relates to the years ended December 31, 2018 and 2017; (c) restates our Unaudited Quarterly Financial Data for the first three quarters of the year ended December 31, 2019; and (d) restates our Unaudited Quarterly Financial Data for each quarter of the year ended December 31, 2018. Background on the Restatement Impairment of FCC Licenses In connection with the performance of our 2019 annual testing for impairment to our FCC licenses, management determined that the projected cash flows utilized under the income valuation method to perform our annual testing for impairment to our FCC licenses included cash flows which have been determined to be indirectly related to the cash flows generated from the use of our FCC licenses. As a result, our non-cash impairment charge for the years ended December 31, 2018 and 2017 were understated by approximately $28.3 million and $3.8 million, respectively and therefore the provision for income taxes, net income, earnings per share and retained earnings were all overstated in our previously reported Consolidated Financial Statements for the years ended December 31, 2018 and 2017. The impact on our Consolidated Balance Sheets was primarily an overstatement of intangible assets, net and an overstatement to retained earnings as of December 31, 2018 and 2017. Additionally, a non-cash impairment charge has been reflected in our restated Consolidated Statements of Stockholders’ Equity as of January 1, 2017 for the impact of this adjustment on prior period results. Additionally, the tax basis in certain FCC licenses recognized during the year ended December 31, 2014 were retrospectively adjusted in connection with the completion of our 2019 annual testing for impairment. The impact of the adjustment represents a decrease to retained earnings in the amount of $3.5 million. This adjustment has been reflected in our restated Consolidated Statements of Stockholders Equity as of January 1, 2017. Increase to Valuation Allowance on Federal Net Operating and Capital Loss Carryforwards In connection with the non-cash impairment charges discussed above, the Company further assessed the need for a valuation allowance to reduce deferred tax assets related to its federal net operating loss carryforwards, including an evaluation of the available pertinent positive and negative evidence, such as our history of earnings, the scheduled reversal of deferred tax assets and liabilities and projected earnings. Based on such evaluation, the Company determined that it was more likely than not that a portion of the deferred tax assets related to its federal net operating and capital loss carryforwards may not be realized and that evidence supporting such determination became evident as of December 31, 2018. As such, an adjustment of $42.9 million, $28.4 million of which is reflected as an adjustment to the provision for income taxes in our restated Consolidated Financial Statements for the year ended December 31, 2018, related to the establishment of a valuation allowance to reduce the deferred tax assets to the amount that the Company expects will be realized. As a result, net income, earnings per share and retained earnings were all overstated, while the provision for income taxes was understated in our previously reported Consolidated Financial Statements for the year ended December 31, 2018. The impact on our ii Consolidated Balance Sheets was primarily an overstatement of deferred tax assets and an overstatement to retained earnings as of December 31, 2018.