INDEX
| Page |
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| Part I |
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| Item 1. Business. | 1 |
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| Item 1A. Risk Factors. | 13 |
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| Item 1B. Unresolved Staff Comments. | 39 |
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| Item 1C. Cybersecurity Risk Management, Strategy, Governance and Incident Disclosure | 39 |
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| Item 2. Properties. | 40 |
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| Item 3. Legal Proceedings. | 40 |
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| Item 4. Mine Safety Disclosures. | 40 |
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| Part II |
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| Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. | 40 |
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| Item 6. Selected Financial Data. | 41 |
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| Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 42 |
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| Item 7A. Quantitative and Qualitative Disclosures About Market Risk. | 61 |
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| Item 8. Financial Statements and Supplementary Data. | 61 |
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| Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. | 61 |
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| Item 9A. Controls and Procedures. | 62 |
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| Item 9B. Other Information. | 63 |
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| Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 63 |
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| Part III |
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| Item 10. Directors, Executive Officers and Corporate Governance. | 63 |
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| Item 11. Executive Compensation. | 63 |
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| Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. | 63 |
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| Item 13. Certain Relationships and Related Transactions, and Director Independence. | 63 |
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| Item 14. Principal Accounting Fees and Services. | 63 |
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| Part IV |
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| Item 15. Exhibits and Financial Statement Schedules. | 64 |
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| Exhibit Index | 65 |
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| Signatures | 68 |
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CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS
This Report contains certain statements that are, or may be deemed to be, “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or by Public Law 104-67. All statements included in this Report, other than statements that relate solely to historical fact, are “forward-looking statements.” Such statements include, but are not limited to, any statement that may predict, forecast, indicate or imply future results, performance, achievements or events, including the impact of the COVID-19 pandemic, or any statement that may relate to strategies, plans or objectives for, or potential results of, future operations, financial results, financial condition, business prospects, growth strategy or liquidity, and are based upon management’s current plans and beliefs or current estimates of future results or trends. Forward-looking statements can generally be identified by phrases such as “believes,” “expects,” “potential,” “continues,” “may,” “should,” “seeks,” “predicts,” “anticipates,” “intends,” “projects,” “estimates,” “plans,” “could,” “designed,” “should be” and other similar expressions that denote expectations of future or conditional events rather than statements of fact.
Forward-looking statements include certain statements made under the caption, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” under Item 7 of this Report, but also forward-looking statements that appear in other parts of this Report. Forward-looking statements reflect our current views with respect to future events and are based on certain assumptions and are subject to risks and uncertainties that could cause our actual results to differ materially from trends, plans, or expectations set forth in the forward-looking statements. These risks and uncertainties may include the risks and uncertainties described elsewhere in this Report, including under the caption “Risk Factors,” under Item 1A of this Report. Additionally, there may be other factors not presently known to us or which we currently consider to be immaterial that may cause our actual results to differ materially from the forward-looking statements.
This Report also contains statistical and other industry and market data related to our business and industry that we obtained from industry publications and research, surveys and studies conducted by us and third parties as well as our estimates of potential market opportunities. Industry publications, third-party and our own research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. This market data includes projections that are based on a number of assumptions. If these assumptions turn out to be incorrect, actual results may differ from the projections based on these assumptions. As a result, our markets may not grow at the rates projected by this data, or at all. The failure of these markets to grow at these projected rates may have a material adverse effect on our business, results of operations, financial condition and the market price of our common stock.
Summary of Risk Factors
Some of the factors that could materially and adversely affect our financial condition, results of operations, cash flow, the market price of shares of our Class A common stock or our prospects include, but are not limited to, the following. You should read this summary together with the more detailed description of each risk factor contained in this Item 1A “Risk Factors” in this Annual Report on Form 10-K and the other reports and documents filed or furnished by us with the SEC for a more detailed discussion of the principal risks (as well as certain other risks) that you should carefully consider before deciding to invest in our securities.
Risks Related To Acquisitions and Operations of Our Business
| ● | We have incurred losses from operations since inception and we anticipate that we will continue to incur losses for the foreseeable future; |
| ● | We may be unable to identify and successfully complete acquisitions and, even if acquisitions are identified and completed, we may fail to successfully operate acquired properties; |
| ● | Our business strategy relies on the successful acquisition and integration of diverse companies and operations, and expansion of current business lines or entering into new industries could negatively impact our operating income; |
| ● | A significant portion of our assets are securities we hold in other companies. Our investments in Sky Harbour Group Corporation ("Sky Harbour") Class A common stock and securities of other companies involve a substantial degree of risk and our investments in Sky Harbour Class A common stock and these other securities may be subject to material impairment charges depending on the value of these securities. Our ability to sell all or a portion of the Class A common stock, which are registered, may be limited due to our significant ownership position relative to the total public market float for Sky Harbour's Class A common stock; |
| ● | As we enter new business segments, members of our senior management may have limited or no experience in the industries we operate, and we will be reliant on key personnel. The departure of any of our key personnel could materially and adversely affect us; and |
Risks Related to Our Indebtedness
| ● | Our ability to borrow may be limited in case of adverse changes within the credit market; and |
| ● | Any failure in the future to comply with the covenants set forth in our billboard business and broadband business credit agreements could result in the loan balance becoming immediately due and payable. |
Risks Related to Access to Capital and Raising Additional Capital
| ● | We may not be able to generate sufficient cash to service all of our operations and may be forced to take actions to fund our operations such as debt financing, refinancing current indebtedness, or future equity issuances of our capital stock, any or all of which may not be successful; and |
| ● | We may raise additional equity capital through additional public or private placements, any of which could substantially dilute your investment. |
Risks Related to Ownership of Our Securities
| ● | The market price and trading volume of our Class A common stock as well as investments we hold in Sky Harbour and other publicly traded securities we own, may be volatile and negatively impacted by broad market fluctuations; |
| ● | Provisions of our certificate of incorporation and bylaws and Delaware law might discourage, delay or prevent a change of control of our company or changes in our management and, as a result, depress the trading price of our common stock; |
| ● | Our chief executive officer and certain directors are now, and all of them may in the future become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented; |
| ● | We do not intend to pay dividends on our common stock and, consequently, the ability of investors to achieve a return on their investment will depend on appreciation in the price of our common stock; |
| ● | Certain of our stockholders still hold 8,555,957 registered shares of our Class A common stock. |
Regulatory Risks
| ● | Dependent on the price of certain publicly-traded securities we currently hold, including our ownership of Sky Harbour Class A common stock, we could become subject to registration and regulation under the Investment Company Act; |
| ● | Our business segments are subject to complex federal, state and local laws and regulations that could adversely affect the cost, manner or feasibility of conducting our operations or expose us to significant liabilities; and |
| ● | Changes in laws or regulations governing our operations or our failure to comply with those laws or regulations and changes in tax laws may adversely impact us. |
