BOSTON OMAHA Corp
For the period ended Jun 30, 2024. Filed Aug 13, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 13, 2024
BOC$13.61-2.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-14.
0001437749-24-016637
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-13.
0001437749-24-026413
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 80 previous paragraphs and 103 current paragraphs.
53 unchanged; 26 reworded; 13 added; 1 removed; 0 previous and 11 current paragraphs rearranged.
Tables are not compared: 60 previous and 104 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
We realized total revenues of $27,087,783 during the second quarter of fiscal 2024, an increase of 11.9% over revenues of $24,216,394 during the second quarter of fiscal 2023. The key factors impacting revenue across each of our businesses during the second quarter of fiscal 2024 were as follows:
Current report
*Other Income.*During thesecond quarter of fiscal 2024, we had net other income of $2,357,407. Net other income included non-cash gains of $2,957,387 from unconsolidated affiliates mainly related to our share of Sky Harbour's income from operations during the second quarter of fiscal 2024, which we account for under the equity method, and interest and dividend income of $313,775.These items were partially offset by $545,385 in other investment losses mainly driven by a $4,014,285 unrealized loss on the Sky Harbour warrants held by Boston Omaha, which was partially offset by (i) $1,957,056 in non-cash gains associated with the transfer of Sky Harbour Class A common stock to our former Co-CEO as a part of his separation and stock repurchase agreement, (ii) $894,324 in realized gains on the sale of 246,389 shares of Sky Harbour Class A common stock, and (iii) other investment income of $628,355 primarily related to changes in the fair value of the BFR Fund mainly driven by the underlying real estate properties, and interest expense of $368,370 mainly incurred under Link's term loan and revolver. During thesecond quarter of fiscal 2023, we had net other income of $3,357,575, which included $5,350,524 in equity in income of unconsolidated affiliates mainly related to non-cash gains recognized in May 2023 due to our purchase of the membership interests in 24th Street held by third parties resulting in the remeasurement of our previously held interest in 24th Street and interest and dividend income of $561,090. These items were partially offset by other investment losses of $2,267,004 mainly related to the Sky Harbour warrants held by Boston Omaha and the impact of the fair value mark-to-market adjustments recorded for the commercial real estate assets held within each of the 24th Street Funds and interest expense of $287,035 mainly incurred under Link's term loan.
Current report
Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
Current report
During the first six months of fiscal 2024, we had total costs and expenses of $59,095,410, as compared to total costs and expenses of $51,651,875 in the first six months of fiscal 2023. Total costs and expenses as a percentage of total revenues increased from 109.8% in the first six months of fiscal 2023 to 112.3% in the first six months of fiscal 2024. The increase was mainly driven by one-time severance and bonus payments to our former Co-CEO as a part of his separation and stock repurchase agreement. The key factors impacting costs and expenses across each of our businesses during the first six months of fiscal 2024 were as follows:
Current report
Other Income. During thefirst six months of fiscal 2024, we had net other income of $231,444. Net other income included $7,243,060 in other investment income mainly driven by a $4,014,285 unrealized gain on the Sky Harbour warrants held by Boston Omaha, $1,957,056 in non-cash gains associated with the transfer of Sky Harbour Class A common stock to our former Co-CEO as a part of his separation and stock repurchase agreement, $894,324 in realized gains on the sale of 246,389 shares of Sky Harbour Class A common stock, and interest and dividend income of $853,015. These items were partially offset by a non-cash loss of $7,214,228 from unconsolidated affiliates mainly related to our share of Sky Harbour's loss from operations duringthe first six months of fiscal 2024, which we account for under the equity method, and interest expense of $650,403 mainly incurred under Link's term loan and revolver. During thefirst six months of fiscal 2023, we had net other income of $1,242,900, which included $370,446 in equity in income of unconsolidated affiliates mainly related to non-cash gains recognized in May 2023 due to our purchase of the membership interests in 24th Street held by third parties resulting in the remeasurement of our previously held interest in 24th Street, which was partially offset by our share of Sky Harbour's loss from operations during the first six months of fiscal 2023, which we account for under the equity method, interest and dividend income of $842,956, and other investment income of $605,215 mainly related to the Sky Harbour warrants held by Boston Omaha, which was partially offset by the impact of the fair value mark-to-market adjustments recorded for the commercial real estate assets held within each of the 24th Street Funds. These items were partially offset by interest expense of $575,717 mainly incurred under Link's term loan.
Current report
Results of Operations by Segment
Current report
Results of Billboard Operations
Current report
Results of Broadband Operations
Current report
*Comparison of the First Six Months of Fiscal 2024 to the First Six Months of Fiscal 2023.*In the first six months of fiscal 2024, total operating revenues increased by 13.0% when compared to the first six months of fiscal 2023 mainly reflecting subscriber growth across a number of our markets. The key factors affecting our broadband operations results during the first six months of fiscal 2024 were as follows:
Current report
Results of Insurance Operations
Current report
*Comparison of the First Six Months of Fiscal 2024 to the First Six Months of Fiscal 2023.*In the first six months of fiscal 2024, total operating revenues increased by 27.6% when compared to the first six months of fiscal 2023, mainly due to increased earned premium at our UCS insurance subsidiary. The key factors affecting our insurance operations results during the first six months of fiscal 2024 were as follows:
Current report
Results of Asset Management Operations
Current report
On July 23, 2024, the Board approved and authorized a share repurchase program (the “Share Repurchase Program”), pursuant to which the Company intends to repurchase up to $20 million of its Class A common stock, from time to time, in the open market, privately negotiated transactions, or otherwise in compliance with Rule 10b-18 under the Securities Exchange Act of 1934. The Board also authorized the Company, in its discretion, to establish “Rule 10b5-1 trading plans” for these share repurchases. The Share Repurchase Program will go into effect on or about August 15, 2024, following the release of this quarterly report on Form 10-Q for the quarter ended June 30, 2024 and will terminate on September 30, 2025, unless earlier terminated in the discretion of the Board. The actual timing, number, and value of shares repurchased under the Share Repurchase Program will depend on a number of factors, including constraints specified in applicable SEC regulations, price, general business and market conditions, and alternative investment opportunities. Pursuant to the Share Repurchase Program, the Company is not obligated to repurchase any specific number of shares of its Class A common stock and shall not repurchase more than 25% of the average daily volume of its stock over the previous 20 trading days.
Removed paragraphs (1)
Previous report
Other Expense. During thefirst quarter of fiscal 2024, we had net other expense of $2,125,963. Net other expense included our loss from affiliate operations of $10,171,615 mainly related to our investment in Sky Harbour, which we account for under the equity method, and interest expense of $282,033 mainly incurred under Link's term loan. These items were partially offset by $7,788,445 in other investment income mainly related to the Sky Harbour warrants held by Boston Omaha and interest and divided income of $539,240. During thefirst quarter of fiscal 2023, we had net other expense of $2,114,675, which included our loss from affiliate operations of $4,980,078 mainly related to our investment in Sky Harbour, which we account for under the equity method, and interest expense of $288,682 mainly incurred under Link's term loan. These items were partially offset by $2,872,219 in other investment income related to public securities held by Boston Omaha and UCS and interest and divided income of $281,866.
Reworded paragraphs (26)
Previous wording
Broadband Services: In April 2019, we established a broadband subsidiary, Fiber is Fast, LLC, which has changed its name to Boston Omaha Broadband, LLC, which we refer to as "BOB." In March 2020, we commenced our broadband services business with the acquisition of substantially all of the business assets of FibAire, a rural broadband internet provider that served over 8,000 customers in communities in southern Arizona with a high-speed fixed wireless internet service and is building an all fiber-to-the-home network in select Arizona markets. In December 2020, we acquired substantially all of the business assets of UBB, a broadband internet provider that provided high-speed internet to over 10,000 customers throughout Utah. In September 2021, we announced the launch of Fiber Fast Homes, LLC, which we refer to as "FFH," which partners with builders, developers, and build for rent communities to build fiber-to-the-home infrastructure and provide fiber internet service to residents. In April 2022, we acquired substantially all of the business assets of InfoWest and Go Fiber, which we refer to on a combined basis now as "InfoWest," fiber and fixed wireless internet service providers with over 20,000 customers throughout Southern and Central Utah, Northern Arizona, and Moapa Valley, Nevada. In addition, over the last few years, we have also acquired additional smaller broadband businesses located in Utah. As of March 31, 2024, we have approximately 43,400 broadband customers (10,600 fiber subscribers) and 30,500 fiber passings completed. We hope to continue to expand in Arizona, Florida, Nevada, Utah, and other locales.
Current wording
Broadband Services: In April 2019, we established a broadband subsidiary, Fiber is Fast, LLC, which has changed its name to Boston Omaha Broadband, LLC, which we refer to as "BOB." In March 2020, we commenced our broadband services business with the acquisition of substantially all of the business assets of FibAire, a rural broadband internet provider that served over 8,000 customers in communities in southern Arizona with a high-speed fixed wireless internet service and is building an all fiber-to-the-home network in select Arizona markets. In December 2020, we acquired substantially all of the business assets of UBB, a broadband internet provider that provided high-speed internet to over 10,000 customers throughout Utah. In September 2021, we announced the launch of Fiber Fast Homes, LLC, which we refer to as "FFH," which partners with builders, developers, and build for rent communities to build fiber-to-the-home infrastructure and provide fiber internet service to residents. In April 2022, we acquired substantially all of the business assets of InfoWest and Go Fiber, which we refer to on a combined basis now as "InfoWest," fiber and fixed wireless internet service providers with over 20,000 customers throughout Southern and Central Utah, Northern Arizona, and Moapa Valley, Nevada. In addition, over the last few years, we have also acquired additional smaller broadband businesses located in Utah. As of June 30, 2024, we have approximately 44,500 broadband customers (12,400 fiber subscribers) and 34,300 fiber passings completed. We hope to continue to expand in Arizona, Florida, Nevada, Utah, and other locales.
Previous wording
Segment gross profit is a key metric that we use to evaluate segment operating performance and to determine resource allocation between segments. We define segment gross profit as segment revenues less segment direct cost of services. In our billboard business, direct cost of services includes land leases, utilities, repairs and maintenance of equipment, sales commissions, contract services, and other billboard level expenses. In our broadband business, direct costs of services includes network operations and data costs, programming costs, cell site rent and utilities, and other broadband level expenses. In our surety business, direct cost of services includes commissions, premium taxes, fees and assessments, and losses and loss adjustment expenses.
Current wording
Segment gross profit is a key metric that we use to evaluate segment operating performance and to determine resource allocation between segments. We define segment gross profit as segment revenues less segment direct cost of services. In our billboard business, direct cost of services includes land leases, utilities, repairs and maintenance of equipment, sales commissions, contract services, and other billboard level expenses. In our broadband business, direct costs of services includes network operations and data costs, software costs, cell site rent and utilities, and other broadband level expenses. In our surety business, direct cost of services includes commissions, premium taxes, fees and assessments, and losses and loss adjustment expenses.
Previous wording
The following is a comparison of our results of operations for the three months ended March 31, 2024, which we refer to as the “first quarter of fiscal 2024,” compared to the three months ended March 31, 2023, which we refer to as the “first quarter of fiscal 2023.”
Current wording
The following is a comparison of our results of operations for the three months ended June 30, 2024, which we refer to as the “second quarter of fiscal 2024,” compared to the three months ended June 30, 2023, which we refer to as the “second quarter of fiscal 2023.”
Previous wording
Revenues. For the first quarter of fiscal 2024 and the first quarter of fiscal 2023, our revenues in dollars and as a percentage of total revenues were as follows:
Current wording
Revenues. For the second quarter of fiscal 2024 and the second quarter of fiscal 2023, our revenues in dollars and as a percentage of total revenues were as follows:
Previous wording
Expenses.** **For the first quarter of fiscal 2024 and the first quarter of fiscal 2023, our expenses, in dollars, and as a percentage of total revenues, were as follows:
Current wording
Expenses.** **For the second quarter of fiscal 2024 and the second quarter of fiscal 2023, our expenses, in dollars, and as a percentage of total revenues, were as follows:
Previous wording
During the first quarter of fiscal 2024, we had total costs and expenses of $27,611,012, as compared to total costs and expenses of $25,792,577 in the first quarter of fiscal 2023. Total costs and expenses as a percentage of total revenues decreased from 113.0% in the first quarter of fiscal 2023 to 108.1% in the first quarter of fiscal 2024. The key factors impacting costs and expenses across each of our businesses during the first quarter of fiscal 2024 were as follows:
Current wording
During the second quarter of fiscal 2024, we had total costs and expenses of $31,484,398, as compared to total costs and expenses of $25,859,298 in the second quarter of fiscal 2023. Total costs and expenses as a percentage of total revenues increased from 106.8% in the second quarter of fiscal 2023 to 116.2% in the second quarter of fiscal 2024. The increase was mainly driven by one-time severance and bonus payments to our former Co-CEO as a part of his separation and stock repurchase agreement. The key factors impacting costs and expenses across each of our businesses during the second quarter of fiscal 2024 were as follows:
Previous wording
Net Loss from Operations. Net loss from operations for thefirst quarter of fiscal 2024 was $2,058,281, or 8.1% of total revenues, as compared to a net loss from operations of $2,976,792, or 13.0% of total revenues, in thefirst quarter of fiscal 2023. Thedecrease in net loss from operations in dollars was primarily due to improved operations within our billboard, broadband and insurance businesses as well as lower costs at Boston Omaha's parent company, which were partially offset by an increase in depreciation expense related to continued capital investments within our broadband businesses. Our net loss from operations included $5,390,798 from non-cash depreciation, amortization and accretion expenses inthe first quarter of fiscal 2024, as compared to $4,563,167 inthe first quarter of fiscal 2023.
Current wording
Net Loss from Operations. Net loss from operations for thesecond quarter of fiscal 2024 was $4,396,615, or 16.2% of total revenues, as compared to a net loss from operations of $1,642,904, or 6.8% of total revenues, in thesecond quarter of fiscal 2023. Theincrease in net loss from operations was primarily due to one-time costs associated with our former Co-CEO's separation and stock repurchase agreement and an increase in depreciation expense related to continued capital investments within our broadband businesses, which were partially offset by improved operations within our billboard, broadband and insurance businesses. Our net loss from operations included $5,512,274 from non-cash depreciation, amortization and accretion expenses inthe second quarter of fiscal 2024, as compared to $4,897,882 inthe second quarter of fiscal 2023.
Previous wording
Additionally, we have evaluated our investment in Sky Harbour as of March 31, 2024, and determined that there was not an other-than-temporary impairment. Our conclusion was based on several contributing factors, including: (i) our assessment that the underlying business and financial condition of Sky Harbour is favorable; (ii) the period of time for which the fair value was less than the carrying value during 2023, (iii) the recovery of Sky Harbour's stock price during the last several months, and (iv) our ability and intent to hold the investment. We will continue to review our investment in Sky Harbour for an other-than-temporary impairment on a quarterly basis or upon the occurrence of certain events. If Sky Harbour's stock price drops below our carrying value of $6.37 per share for a sustained period of time, it will likely result in an impairment of our investment. There may also be a future impairment of our investment if our expectations about Sky Harbour's prospective results of operations and cash flows decline, which could be influenced by a variety of factors including adverse market conditions.
Current wording
Additionally, we have evaluated our investment in Sky Harbour as of June 30, 2024, and determined that there was not an other-than-temporary impairment. Our conclusion was based on several contributing factors, including: (i) our assessment that the underlying business and financial condition of Sky Harbour is favorable; (ii) the period of time for which the fair value was less than the carrying value during 2023, (iii) the recovery of Sky Harbour's stock price during the last several months, and (iv) our ability and intent to hold the investment. We will continue to review our investment in Sky Harbour for an other-than-temporary impairment on a quarterly basis or upon the occurrence of certain events. If Sky Harbour's stock price drops below our carrying value of $6.61 per share for a sustained period of time, it will likely result in an impairment of our investment. There may also be a future impairment of our investment if our expectations about Sky Harbour's prospective results of operations and cash flows decline, which could be influenced by a variety of factors including adverse market conditions.
Previous wording
We realized total revenues of $25,552,731 during the first quarter of fiscal 2024, an increase of 12.0% over revenues of $22,815,785 during the first quarter of fiscal 2023. Revenues increased within each of our businesses in the first quarter of fiscal 2024 when compared to the first quarter of fiscal 2023. The key factors impacting revenue across each of our businesses during the first quarter of fiscal 2024 were as follows:
Current wording
We realized total revenues of $52,640,514 during the first six months of fiscal 2024, an increase of 11.9% over revenues of $47,032,179 during the first six months of fiscal 2023. Revenues increased within each of our businesses in the first six months of fiscal 2024 when compared to the first six months of fiscal 2023. The key factors impacting revenue across each of our businesses during the first six months of fiscal 2024 were as follows:
Previous wording
*Net Loss Attributable to Common Stockholders.*We had a net loss attributable to common stockholders in the amount of $2,808,081 in thefirst quarter of fiscal 2024, or a loss per share of$0.09, based on 31,331,597 diluted weighted average shares outstanding. This is compared to a net loss attributable to common stockholders of $3,321,154 in thefirst quarter of fiscal 2023, or a loss per share of $0.11, based on 30,524,067 diluted weighted average shares outstanding.
Current wording
*Net Loss Attributable to Common Stockholders.*We had a net loss attributable to common stockholders in the amount of $5,043,300 in thefirst six months of fiscal 2024, or a loss per share of$0.16, based on 31,594,198 diluted weighted average shares outstanding. This is compared to a net loss attributable to common stockholders of $1,779,542 in thefirst six months of fiscal 2023, or a loss per share of $0.06, based on 30,876,835 diluted weighted average shares outstanding.
Previous wording
The following tables report results for the following four segments in which we operate: billboards, broadband, insurance and asset management for the first quarter of fiscal 2024 and the first quarter of fiscal 2023:
Current wording
The following tables report results for the following four segments in which we operate: billboards, broadband, insurance and asset management for the second quarter of fiscal 2024 and the second quarter of fiscal 2023:
Previous wording
*Comparison of the First Quarter of Fiscal 2024 to the First Quarter of Fiscal 2023.*In the first quarter of fiscal 2024, there was a 3.8% increase in net billboard revenues from the first quarter of fiscal 2023, reflecting an improvement in rental and occupancy rates across a number of our markets. The key factors affecting our billboard operations results during the first quarter of fiscal 2024 were as follows:
Current wording
*Comparison of the Second Quarter of Fiscal 2024 to the Second Quarter of Fiscal 2023.*In the second quarter of fiscal 2024, there was a 5.6% increase in net billboard revenues from the second quarter of fiscal 2023, reflecting an improvement in rental and occupancy rates across a number of our markets. The key factors affecting our billboard operations results during the second quarter of fiscal 2024 were as follows:
Previous wording
*Comparison of the First Quarter of Fiscal 2024 to the First Quarter of Fiscal 2023.*In the first quarter of fiscal 2024, total operating revenues increased by 13.4% when compared to the first quarter of fiscal 2023 mainly reflecting subscriber growth across a number of our markets. The key factors affecting our broadband operations results during the first quarter of fiscal 2024 were as follows:
Current wording
*Comparison of the Second Quarter of Fiscal 2024 to the Second Quarter of Fiscal 2023.*In the second quarter of fiscal 2024, total operating revenues increased by 12.6% when compared to the second quarter of fiscal 2023 mainly reflecting subscriber growth across a number of our markets. The key factors affecting our broadband operations results during the second quarter of fiscal 2024 were as follows:
Previous wording
*Comparison of the First Quarter of Fiscal 2024 to the First Quarter of Fiscal 2023.*In the first quarter of fiscal 2024, total operating revenues increased by 26.9% when compared to the first quarter of fiscal 2023, mainly due to increased earned premium and investment and other income at our UCS insurance subsidiary. The key factors affecting our insurance operations results during the first quarter of fiscal 2024 were as follows:
Current wording
*Comparison of the Second Quarter of Fiscal 2024 to the Second Quarter of Fiscal 2023.*In the second quarter of fiscal 2024, total operating revenues increased by 28.2% when compared to the second quarter of fiscal 2023, mainly due to increased earned premium at our UCS insurance subsidiary. The key factors affecting our insurance operations results during the second quarter of fiscal 2024 were as follows:
Previous wording
*Comparison of the First Quarter of Fiscal 2024 to the First Quarter of Fiscal 2023.*In September 2017, we formed our asset management business. Throughout fiscal 2022 and fiscal 2023 we had been hiring within our asset management business to ensure adequate staffing for the anticipated demands and needs of the business. In May 2023, we acquired 100% of the membership interests in 24th Street from the members of 24th Street other than BOAM. Therefore, comparisons of our asset management results for the first quarter of fiscal 2024 to the first quarter of fiscal 2023 may not be meaningful. In addition, as previously mentioned, we are winding down BOAM's operations and implementing cost cutting measures. The key factors affecting our asset management operations results during the first quarter of fiscal 2024 were as follows:
Current wording
*Comparison of the Second Quarter of Fiscal 2024 to the Second Quarter of Fiscal 2023.*In September 2017, we formed our asset management business. Throughout fiscal 2022 and fiscal 2023 we had been hiring within our asset management business to ensure adequate staffing for the anticipated demands and needs of the business. In May 2023, we acquired 100% of the membership interests in 24th Street from the members of 24th Street other than BOAM. Therefore, comparisons of our asset management results for the second quarter of fiscal 2024 to the second quarter of fiscal 2023 may not be meaningful. In addition, as previously mentioned, we are winding down BOAM's operations and implementing cost-cutting measures. The key factors affecting our asset management operations results during the second quarter of fiscal 2024 were as follows:
Previous wording
Cash Flows for the First Three Months of Fiscal 2024 compared to the First Three Months of Fiscal 2023
Current wording
Cash Flows for the First Six Months of Fiscal 2024 compared to the First Six Months of Fiscal 2023
Previous wording
The table below summarizes our cash flows, in dollars, for the first three months of fiscal 2024 and the first three months of fiscal 2023:
Current wording
The table below summarizes our cash flows, in dollars, for the first six months of fiscal 2024 and the first six months of fiscal 2023:
Previous wording
Net Cash Provided by**Operating Activities. Net cash provided by operating activities was $2,415,294 for the first three months of fiscal 2024 compared to net cash used in operating activities of $1,368,181 for the first three months of fiscal 2023. The increase in net cash provided by operating activities was mainly driven by improved cash flow generation within our billboard and broadband businesses and positive operating cash flow impact from the ProComm and Cable Systems acquisitions at InfoWest. These items were partially offset by operating costs within our FFH business and our asset management business.
Current wording
Net Cash Provided by**Operating Activities. Net cash provided by operating activities was $6,920,547 for the firstsix months of fiscal 2024 compared to net cash provided by operating activities of $4,363,708 for the firstsix months of fiscal 2023. The increase in net cash provided by operating activities was mainly driven by improved cash flow generation within our billboard and broadband businesses and positive operating cash flow impact from the ProComm and Cable Systems acquisitions at InfoWest. These items were partially offset by operating costs within our FFH business and our asset management business as well as costs associated with our former Co-CEO's separation and stock repurchase agreement.
Previous wording
*Net Cash Provided by (Used in)*Investing Activities. Net cash provided by investing activities was $22,884,604 for the first three months of fiscal 2024 as compared with net cash used in investing activities of $37,844,737 for the first three months of fiscal 2023. The increase in net cash provided by investing activities is primarily attributable to $31,355,578 in net proceeds from sales of investments mainly from the sale or maturity of U.S. Treasury securities within the 24th Street Funds and BFR Fund.
Current wording
*Net Cash Provided by (Used in)*Investing Activities. Net cash provided by investing activities was $30,155,714 for the firstsix months of fiscal 2024 as compared with net cash used in investing activities of $39,149,019 for the firstsix months of fiscal 2023. The increase in net cash provided by investing activities is primarily attributable to $47,463,794 in net proceeds from sales of investments mainly from the sale or maturity of U.S. Treasury securities within the 24th Street Funds and BFR Fund, which was partially offset by $17,268,681 in capital expenditures mainly within our broadband businesses.
Previous wording
Net Cash (Used in) Provided by Financing Activities*.* Net cash used in financing activities was $4,646,567 during the first three months of fiscal 2024 as compared to net cash provided by financing activities of $30,333,692 during the first three months of fiscal 2023. During the first three months of fiscal 2024, net cash used in financing activities mainly consisted of $4,531,675 in collateral released by UCS and $202,058 in principal payments on Link’s term loan.
Current wording
Net Cash (Used in) Provided by Financing Activities*.* Net cash used in financing activities was $39,086,411 during the first six months of fiscal 2024 as compared to net cash provided by financing activities of $39,696,268 during the first six months of fiscal 2023. During the first six months of fiscal 2024, net cash used in financing activities mainly consisted of $27,504,485 in distributions to noncontrolling interests from the 24th Street Funds and BFR Fund, $16,761,371 related to repurchase of Class A and Class B common stock and Class B warrants from our former Co-CEO, and $4,504,530 in collateral released by UCS. These items were partially offset by $10,000,000 in additional borrowings on Link's revolving line of credit.
Previous wording
Currently, we own billboards in Alabama, Arkansas, Florida, Georgia, Illinois, Iowa, Kansas, Missouri, Nebraska, Nevada, Oklahoma, South Dakota, Tennessee, Virginia, West Virginia and Wisconsin, a surety insurance company we acquired in December 2016, surety insurance brokerage firms we acquired in 2016, 2017 and 2021, broadband services providers whose assets we acquired in 2020, 2022 and 2023, an asset management business, minority investments in commercial real estate management and brokerage services, a bank focused on servicing the automotive loan market, and a developer of private aviation infrastructure focused on building, leasing and managing business aviation hangars. At March 31, 2024, we had approximately $17 million in unrestricted cash and approximately $14 million in short-term treasury securities. Subsequent to the end of the first quarter of fiscal 2024, we received distributions totaling approximately $10.5 million from the 24th Street Funds and BFR Fund. Our strategy is to continue to acquire other billboard locations, insurance businesses, and broadband service providers as well as acquire other businesses and open new businesses which we believe have the potential to generate positive cash flows when made at what we believe to be attractive prices relative to other opportunities generally available to us. We currently expect to finance any future acquisitions and investments with cash, debt and seller or third-party financing. In the future, we may satisfy all or a portion of the purchase price for an acquisition with our equity securities. In addition, we have made investments in several companies and expect to continue to make investments in the securities of both publicly traded and privately held companies.
Current wording
Currently, we own billboards in Alabama, Arkansas, Florida, Georgia, Illinois, Iowa, Kansas, Missouri, Nebraska, Nevada, Oklahoma, South Dakota, Tennessee, Virginia, West Virginia and Wisconsin, a surety insurance company we acquired in December 2016, surety insurance brokerage firms we acquired in 2016, 2017 and 2021, broadband services providers whose assets we acquired in 2020, 2022 and 2023, an asset management business, minority investments in commercial real estate management and brokerage services, a bank focused on servicing the automotive loan market, and a developer of private aviation infrastructure focused on building, leasing and managing business aviation hangars. At June 30, 2024, we had approximately $25 million in unrestricted cash and approximately $14 million in short-term treasury securities. Subsequent to end of the second quarter of fiscal 2024, we received distributions totaling approximately $4 million from the 24th Street Funds and BFR Fund. Our strategy is to continue to acquire other billboard locations, insurance businesses, and broadband service providers as well as acquire other businesses and open new businesses which we believe have the potential to generate positive cash flows when made at what we believe to be attractive prices relative to other opportunities generally available to us. We currently expect to finance any future acquisitions and investments with cash, debt and seller or third-party financing. In the future, we may satisfy all or a portion of the purchase price for an acquisition with our equity securities. In addition, we have made investments in several companies and expect to continue to make investments in the securities of both publicly traded and privately held companies.
Previous wording
Pursuant to the terms of the 2022 Sales Agreement, we may sell, from time to time, shares of our Class A common stock, par value $0.001 per share (the “Class A common stock”), with an aggregate sales price of up to $100 million through WFS, in transactions that are deemed to be “at the market” offerings as defined in Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”). Since the signing of the 2022 Sales Agreement, we sold 7,887 shares of Class A common stock in December 2022 for gross proceeds of approximately $205 thousand and 1,532,065 shares of our Class A common stock during fiscal 2023 for gross sale proceeds of approximately $37.5 million. We did not sell any shares of our Class A common stock during the first quarter of fiscal 2024.
Current wording
Pursuant to the terms of the 2022 Sales Agreement, we may sell, from time to time, shares of our Class A common stock, par value $0.001 per share (the “Class A common stock”), with an aggregate sales price of up to $100 million through WFS, in transactions that are deemed to be “at the market” offerings as defined in Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”). Since the signing of the 2022 Sales Agreement, we sold 7,887 shares of Class A common stock in December 2022 for gross proceeds of approximately $205 thousand and 1,532,065 shares of our Class A common stock during fiscal 2023 for gross sale proceeds of approximately $37.5 million. We did not sell any shares of our Class A common stock during thefirstsix months of fiscal 2024.
Previous wording
On August 12, 2019, Link entered into a Credit Agreement (the “Credit Agreement”) with First National Bank of Omaha (the “Lender”) under which Link could borrow up to $40 million (the “Credit Facility”). The Credit Agreement provided for an initial term loan (“Term Loan 1”), an incremental term loan (“Term Loan 2”) and a revolving line of credit. Link initially borrowed approximately $18 million under Term Loan 1 and $5.5 million under Term Loan 2. On December 6, 2021, Link entered into a Fourth Amendment to Credit Agreement, which modified the Credit Agreement by increasing the borrowing limit to $30 million and combining the outstanding balances under Term Loan 1 and Term Loan 2 as well as any incremental borrowings into a term loan (“Term Loan”). The Term Loan is secured by all assets of Link and its operating subsidiaries, including a pledge of equity interests of each of Link’s subsidiaries. In addition, each of Link’s subsidiaries has joined as a guarantor to the obligations under the Credit Agreement. The loan is not guaranteed by Boston Omaha or any of our non-billboard businesses. Long-term debt included within our consolidated balance sheet as of March 31, 2024 consists of Link’s Term Loan borrowings of $27,135,708, of which $825,864 is classified as current. There were no amounts outstanding related to the revolving line of credit as of March 31, 2024.
Current wording
On August 12, 2019, Link entered into a Credit Agreement (the “Credit Agreement”) with First National Bank of Omaha (the “Lender”) under which Link could borrow up to $40 million (the “Credit Facility”). The Credit Agreement provided for an initial term loan (“Term Loan 1”), an incremental term loan (“Term Loan 2”) and a revolving line of credit. Link initially borrowed approximately $18 million under Term Loan 1 and $5.5 million under Term Loan 2. On December 6, 2021, Link entered into a Fourth Amendment to Credit Agreement, which modified the Credit Agreement by increasing the borrowing limit to $30 million and combining the outstanding balances under Term Loan 1 and Term Loan 2 as well as any incremental borrowings into a term loan (“Term Loan”). The Term Loan is secured by all assets of Link and its operating subsidiaries, including a pledge of equity interests of each of Link’s subsidiaries. In addition, each of Link’s subsidiaries has joined as a guarantor to the obligations under the Credit Agreement. The loan is not guaranteed by Boston Omaha or any of our non-billboard businesses.
Previous wording
Principal amounts under the Term Loan were payable in monthly installments according to a 15-year amortization schedule with principal payments commencing on January 1, 2022. Starting July 1, 2023, principal amounts under the Term Loan are payable in monthly installments according to a 25-year amortization schedule. The Term Loan is payable in full on December 6, 2028. During the first three years of the Term Loan, Link may prepay up to 10% of the loan principal in each year without incurring any prepayment penalty. Otherwise, there is a prepayment penalty ranging between 3.0% and 0.5%. After three years, there is no prepayment penalty. The Term Loan has a fixed interest rate of 4.00% per annum. On September 22, 2023, the maximum availability under the revolving line of credit loan facility was increased from $5,000,000 to $10,000,000. Interest payments are based on the U.S. Prime Rate minus an applicable margin ranging between 0.65% and 1.15% dependent on Link’s consolidated leverage ratio. The new revolving line of credit is due and payable on August 12, 2025.
Current wording
Principal amounts under the Term Loan were payable in monthly installments according to a 15-year amortization schedule with principal payments commencing on January 1, 2022. Starting July 1, 2023, principal amounts under the Term Loan are payable in monthly installments according to a 25-year amortization schedule. The Term Loan is payable in full on December 6, 2028. During the first three years of the Term Loan, Link may prepay up to 10% of the loan principal in each year without incurring any prepayment penalty. Otherwise, there is a prepayment penalty ranging between 3.0% and 0.5%. After three years, there is no prepayment penalty. The Term Loan has a fixed interest rate of 4.00% per annum.
Previous wording
The Credit Agreement includes representations and warranties, reporting covenants, affirmative covenants, negative covenants, financial covenants and events of default customary for financings of this type. Upon the occurrence of an event of default the Lender may accelerate the loan. Upon the occurrence of certain insolvency and bankruptcy events of default the loan will automatically accelerate. The foregoing summary of the Credit Agreement and the transactions contemplated thereby does not purport to be a complete description and is qualified in its entirety by reference to the terms and conditions of the Credit Agreement and Security Agreement, copies of which are attached as Exhibit 10.1 and Exhibit 10.2, respectively to our Form 8-K as filed with the SEC on August 13, 2019, a First Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on October 29, 2019, a Second Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on June 30, 2020, a Third Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on August 24, 2021, a Fourth Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on December 9, 2021, a Fifth Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on June 3, 2022, a Sixth Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on April 11, 2023, a Seventh Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on September 26, 2023, and an Eighth Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on February 16, 2024.
Current wording
The Credit Agreement includes representations and warranties, reporting covenants, affirmative covenants, negative covenants, financial covenants and events of default customary for financings of this type. Upon the occurrence of an event of default the Lender may accelerate the loan. Upon the occurrence of certain insolvency and bankruptcy events of default the loan will automatically accelerate. The foregoing summary of the Credit Agreement and the transactions contemplated thereby does not purport to be a complete description and is qualified in its entirety by reference to the terms and conditions of the Credit Agreement and Security Agreement, copies of which are attached as Exhibit 10.1 and Exhibit 10.2, respectively to our Form 8-K as filed with the SEC on August 13, 2019, a First Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on October 29, 2019, a Second Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on June 30, 2020, a Third Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on August 24, 2021, a Fourth Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on December 9, 2021, a Fifth Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on June 3, 2022, a Sixth Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on April 11, 2023, a Seventh Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on September 26, 2023, an Eighth Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on February 16, 2024, and a Ninth Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on June 5, 2024.
Previous wording
We believe that our existing cash and short-term investments, funds available through the Credit Agreement Link entered into on August 12, 2019, as amended, and any funds that we may receive from cash flows from operations will be sufficient to meet working capital requirements and anticipated capital expenditures for the next 12 months. At March 31, 2024, we had approximately $17 million in unrestricted cash and approximately $14 million in short-term treasury securities. Subsequent to the end of the first quarter of fiscal 2024, we received distributions totaling approximately $10.5 million from the 24th Street Funds and BFR Fund.
Current wording
We believe that our existing cash and short-term investments, funds available through the Credit Agreement Link entered into on August 12, 2019, as amended, and any funds that we may receive from cash flows from operations will be sufficient to meet working capital requirements and anticipated capital expenditures for the next 12 months. At June 30, 2024, we had approximately $25 million in unrestricted cash and approximately $14 million in short-term treasury securities. Subsequent to end of the second quarter of fiscal 2024, we received distributions totaling approximately $4 million from the 24th Street Funds and BFR Fund.
Rearranged current paragraphs (11)
Current report — wording carried from elsewhere
*Net Loss Attributable to Common Stockholders.*We had a net loss attributable to common stockholders in the amount of $2,235,219 in thesecond quarter of fiscal 2024, or a loss per share of$0.07, based on 31,853,692 diluted weighted average shares outstanding. This is compared to net income attributable to common stockholders of $1,541,612 in thesecond quarter of fiscal 2023, or income per share of $0.05, based on 31,281,828 diluted weighted average shares outstanding.
Current report — wording carried from elsewhere
The following is a comparison of our results of operations for the six months ended June 30, 2024, which we refer to as the “first six months of fiscal 2024,” compared to the six months ended June 30, 2023, which we refer to as the “first six months of fiscal 2023.”
Current report — wording carried from elsewhere
Revenues. For the first six months of fiscal 2024 and the first six months of fiscal 2023, our revenues in dollars and as a percentage of total revenues were as follows:
Current report — wording carried from elsewhere
Expenses.** **For the first six months of fiscal 2024 and the first six months of fiscal 2023, our expenses, in dollars, and as a percentage of total revenues, were as follows:
Current report — wording carried from elsewhere
Net Loss from Operations. Net loss from operations for thefirst six months of fiscal 2024 was $6,454,896, or 12.3% of total revenues, as compared to a net loss from operations of $4,619,696, or 9.8% of total revenues, in thefirst six months of fiscal 2023. Theincrease in net loss from operations was primarily due to one-time costs associated with our former Co-CEO's separation and stock repurchase agreement and an increase in depreciation expense related to continued capital investments within our broadband businesses, which were partially offset by improved operations within our billboard, broadband and insurance businesses. Our net loss from operations included $10,903,072 from non-cash depreciation, amortization and accretion expenses inthe first six months of fiscal 2024, as compared to $9,461,049 inthe first six months of fiscal 2023.
Current report — wording carried from elsewhere
Generally accepted accounting principles ("GAAP") requires us to include the unrealized changes in market prices of investments in public equity securities in our reported earnings. Due to the size of our percentage ownership interest in Sky Harbour's Class A common stock and our right to elect one of the seven members of Sky Harbour's Board of Directors, our investment is recorded under the equity method using the fair market value of Sky Harbour's Class A common stock as of the date of the business combination and we do not include any unrealized gains or losses related to the change in Sky Harbour's stock price in our reported earnings. In the future, if we are deemed to no longer have significant influence, we may no longer be able to record our investment under the equity method and will be required to include any unrealized gains or losses related to the change in Sky Harbour's stock price in our reported earnings. While we intend to hold our current securities for the longer term, we may in the future choose to sell them for a variety of reasons resulting in realized losses or gains.
Current report — wording carried from elsewhere
Additionally, we have evaluated our investment in Sky Harbour as of June 30, 2024, and determined that there was not an other-than-temporary impairment. Our conclusion was based on several contributing factors, including: (i) our assessment that the underlying business and financial condition of Sky Harbour is favorable; (ii) the period of time for which the fair value was less than the carrying value during 2023, (iii) the recovery of Sky Harbour's stock price during the last several months, and (iv) our ability and intent to hold the investment. We will continue to review our investment in Sky Harbour for an other-than-temporary impairment on a quarterly basis or upon the occurrence of certain events. If Sky Harbour's stock price drops below our carrying value of $6.61 per share for a sustained period of time, it will likely result in an impairment of our investment. There may also be a future impairment of our investment if our expectations about Sky Harbour's prospective results of operations and cash flows decline, which could be influenced by a variety of factors including adverse market conditions.
Current report — wording carried from elsewhere
The following tables report results for the following four segments in which we operate: billboards, broadband, insurance and asset management for the first six months of fiscal 2024 and the first six months of fiscal 2023:
Current report — wording carried from elsewhere
*Comparison of the First Six months of Fiscal 2024 to the First Six of Fiscal 2023.*In the first six months of fiscal 2024, there was a 4.7% increase in net billboard revenues from the first six months of fiscal 2023, reflecting an improvement in rental and occupancy rates across a number of our markets. The key factors affecting our billboard operations results during the first six months of fiscal 2024 were as follows:
Current report — wording carried from elsewhere
*Comparison of the First Six Months of Fiscal 2024 to the First Six Months of Fiscal 2023.*In September 2017, we formed our asset management business. Throughout fiscal 2022 and fiscal 2023 we had been hiring within our asset management business to ensure adequate staffing for the anticipated demands and needs of the business. In May 2023, we acquired 100% of the membership interests in 24th Street from the members of 24th Street other than BOAM. Therefore, comparisons of our asset management results for the first six months of fiscal 2024 to the first six months of fiscal 2023 may not be meaningful. In addition, as previously mentioned, we are winding down BOAM's operations and implementing cost-cutting measures. The key factors affecting our asset management operations results during the first six months of fiscal 2024 were as follows:
Current report — wording carried from elsewhere
On May 30, 2024, Link entered into a Ninth Amendment to Credit Agreement, which modified the Credit Agreement by increasing the maximum availability under the revolving line of credit from $10,000,000 to $15,000,000. Interest payments are based on the U.S. Prime Rate minus an applicable margin ranging between 0.65% and 1.15% dependent on Link’s consolidated leverage ratio. The new revolving line of credit is due and payable on August 12, 2026. Long-term debt included within our consolidated balance sheet as of June 30, 2024 consists of Link’s Term Loan borrowings of $26,934,575, of which $834,335 is classified as current, and $10,000,000 related to the revolving line of credit as of June 30, 2024.