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BOSTON OMAHA CORPORATION

(BOC)
  Report
Delayed Nyse  -  04:00 2022-09-30 pm EDT
23.04 USD   -0.86%
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BOSTON OMAHA CORP Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)

08/12/2022 | 07:53am EDT

CAUTIONARY STATEMENT FOR FORWARD-LOOKING STATEMENTS




This Quarterly Report on Form 10-Q includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended,
Section 21E of the Securities Exchange Act of 1934, as amended, and other
federal securities laws, PARTICULARLY THOSE ANTICIPATING FUTURE FINANCIAL
PERFORMANCE, BUSINESS PROSPECTS, GROWTH, OPERATING STRATEGIES AND SIMILAR
MATTERS, INCLUDING WITHOUT LIMITATION, STATEMENTS CONCERNING THE IMPACTS OF THE
COVID-19 PANDEMIC ON OUR BUSINESS, OPERATIONS, RESULTS OF OPERATIONS, LIQUIDITY,
INVESTMENTS AND FINANCIAL CONDITION. We have based these forward-looking
statements on our current intent, expectations and projections about future
events, and these forward-looking statements are not guaranteed to occur and may
not occur. These forward-looking statements are subject to known and unknown
risks, uncertainties and assumptions about us that may cause our actual results,
levels of activity, performance or achievements to be materially different from
any future results, levels of activity, performance or achievements expressed or
implied by such forward-looking statements. In some cases, you can identify
forward-looking statements by terminology such as "may," "will," "should,"
"could," "would," "intend," "project," "contemplate," "potential," "expect,"
"plan," "anticipate," "believe," "estimate," "continue," or the negative of such
terms or other similar expressions. These statements are only predictions.
Factors that might cause or contribute to such a discrepancy include, but are
not limited to, those described in our other Securities and Exchange Commission
filings.



THE OUTCOME OF THE EVENTS DESCRIBED IN 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.



The following discussion should be read in conjunction with our Financial
Statements and related Notes thereto included elsewhere in this report. Any of
the forward-looking statements that we make in this quarterly report on Form
10-Q and in other public reports and statements we make may turn out to be
inaccurate as a result of our beliefs and assumptions we make in connection with
the factors set forth above or because of other unidentified and unpredictable
factors. IN ADDITION, OUR BUSINESS AND FUTURE RESULTS ARE SUBJECT TO A NUMBER OF
OTHER FACTORS, INCLUDING THOSE FACTORS SET FORTH IN THE "risk factors" SECTION
OF OUR ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED December 31, 2021 AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") ON MARCH 28,
2022. Because of these and other uncertainties, our actual future results may be
materially different from the results indicated by these forward-looking
statements and you should not rely on such statements. We undertake no
obligation to publish revised forward-looking statements to reflect the
occurrence of unanticipated events or circumstances after the date hereof. These
risks could cause our actual results for 2022 and beyond to differ materially
from those expressed in any forward-looking statements by or on behalf of us,
and could negatively affect our financial condition, liquidity and operating and
stock price performance.



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                                    Overview



We are currently engaged in outdoor billboard advertising, broadband services,
surety insurance and related brokerage businesses and an asset management
business. In addition, we hold minority investments in commercial real estate
management and brokerage services, a bank focused on servicing the automotive
loan market, a homebuilding company and a developer of private aviation
infrastructure focused on building, leasing and managing business aviation
hangars.



Billboards: In June 2015, we commenced our billboard business operations through
acquisitions by Link, our wholly-owned subsidiary, of smaller billboard
companies located in the Southeast United States and Wisconsin. During July and
August 2018, we acquired the membership interest or assets of three larger
billboard companies which increased our overall billboard count to approximately
2,900 billboards. In addition, we have made a number of billboard acquisitions
on a smaller scale since that date. We believe that we are a leading outdoor
billboard advertising company in the markets we serve in the Midwest. As of June
30, 2022, we operate approximately 3,900 billboards with approximately 7,400
advertising faces. One of our principal business objectives is to continue to
acquire additional billboard assets through acquisitions of existing billboard
businesses in the United States when they can be made at what we believe to be
attractive prices relative to other opportunities generally available to us.



Surety Insurance: In September 2015, we established an insurance subsidiary,
GIG, designed to own and operate insurance businesses generally handling high
volume, lower policy limit commercial lines of property and casualty insurance.
In April 2016, our surety insurance business commenced with the acquisition of a
surety insurance brokerage business with a national internet-based presence. In
December 2016, we completed the acquisition of UCS, a surety insurance company,
which at that time was licensed to issue surety bonds in only nine states. UCS
now has licenses to operate in all 50 states and the District of Columbia. In
addition, over the last several years, we have also acquired additional surety
insurance brokerage businesses located in various regions of the United States.
We may in the future expand the reach of our insurance activities to other forms
of insurance which may have similar characteristics to surety, such as high
volume and low average policy premium insurance businesses which historically
have similar economics.



Broadband Services: 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 serves 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 provides high-speed internet to over
10,000 customers throughout Utah. In September 2021, we announced the launch of
Fiber Fast Homes, LLC ("FFH"), which partners with builders, developers and
build-to-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 are fiber and fixed
wireless internet service providers with over 20,000 customers throughout
Southern and Central Utah, Northern Arizona and Moapa Valley, Nevada. We hope to
continue to expand in Arizona, Florida, Nevada, Utah, and other locales.



Investments:


? Since September 2015, we have made a series of investments in commercial real

estate, a commercial real estate management, brokerage and related services

business as well as an asset management business. We currently own 30% of

Logic and approximately 49.9% of 24th Street Holding Co., both directly and

indirectly through our ownership in Logic. In addition, we have invested,

through one of our subsidiaries, an aggregate of $6 million in 24th Street

Fund I, LLC and 24th Street Fund II, LLC. These funds are managed by 24th

Street Asset Management, LLC, a subsidiary of 24th Street Holding Co. and

    focus on opportunities within secured lending and direct investments in
    commercial real estate.


? In December 2017, we invested $10 million in common units of Dream Finders

Holdings LLC, the parent company of Dream Finders Homes, LLC, a national home

builder with operations in Colorado, Florida, Georgia, Maryland, North

Carolina, South Carolina, Texas and northern Virginia. In addition to its

homebuilding operations, DFH's subsidiaries provide mortgage loan origination

and title insurance services to homebuyers. On January 25, 2021, Dream Finders

Homes, Inc., a wholly owned subsidiary of DFH, completed its initial public

offering and Dream Finders Homes, Inc. became a holding company and sole

manager of DFH. Upon completion of the initial public offering, our

outstanding common units in DFH were converted into 4,681,099 shares of Class

A Common Stock of Dream Finders Homes, Inc., and one of our subsidiaries

purchased an additional 120,000 shares of Class A common stock in the initial

public offering. At June 30, 2022, we held 1,096,744 shares of DFH Class A

common stock. During the second quarter of fiscal 2022, we sold 900,751 shares

of DFH Class A common stock for gross proceeds of approximately $15.7 million.

Since DFH's initial public offering through August 1, 2022, we have sold

    3,704,355 shares of DFH Class A common stock for gross proceeds of
    approximately $68.1 million.



? In May 2018, we invested, through one of our subsidiaries, approximately $19

million through the purchase of common stock of CB&T Holding Corporation, the

privately-held parent company of Crescent Bank & Trust, Inc. Our investment

now represents 15.6% of CB&T's outstanding common stock. Crescent is located

    in New Orleans and generates the majority of its revenues from indirect
    subprime automobile lending across the United States.



? In October 2020, our subsidiary BOC Yellowstone, served as sponsor for the

underwritten initial public offering of a special purpose acquisition company

named Yellowstone. Yellowstone sold in its public offering 13,598,898 units at

a price of $10.00 per unit, each unit consisting of one share of Class A

common stock and a redeemable warrant to purchase one-half of a share of Class

A common stock at an exercise price of $11.50 per share. Between August and

November 2020, we invested, through BOC Yellowstone, approximately $7.8

million through the purchase of 3,399,724 shares of Class B common stock and

7,719,779 non-redeemable private placement warrants, each warrant entitling us

to purchase one share of Class A common stock at $11.50 per share. In

August 2021, Yellowstone entered into a business combination agreement with

Sky Harbour LLC ("SHG"), a developer of private aviation infrastructure

focused on building, leasing and managing business aviation hangars. The

business combination was completed on January 25, 2022 and Yellowstone changed

its name to Sky Harbour Group Corporation, which we refer to as "Sky Harbour".

Sky Harbour's Class A common stock trades on the NYSE American under the

symbol "SKYH" and its warrants to purchase Class A Common Stock trade under

    the symbol "SKYH.WS".



? In August 2021, through one of our subsidiaries, we agreed to invest $55

million directly into SHG and received Series B preferred units. On September

14, 2021, we completed the $55 million transaction, purchasing the Sky Harbour

Series B Preferred Units. Upon the consummation of the Sky Harbour business

combination, this investment converted into 5,500,000 shares of Sky Harbour's

Class A common stock based upon an assumed value of $10.00 per share. In

December 2021, we agreed to provide Sky Harbour an additional $45 million

through the purchase of 4,500,000 shares of Class A common stock upon the

    closing of the Sky Harbour business combination.



? We recently established a subsidiary within BOAM to operate a proposed build

for rent business in which we would develop and own single family detached

and/or townhomes for long term rental. We have bought parcels of land in

Nevada which we hope to develop or repurpose for other uses. We are currently

providing 100% of the financing for the initial stages of these projects but

may consider a range of financing options in the future, such as raising third

party capital to be invested alongside our capital. Once completed and

stabilized, we expect that these properties will be financed with long term

fixed rate debt capital. In addition to developing and managing these

properties, we would also expect to provide broadband services to these homes,

    providing us a second or third source of potential revenue from these
    developments.




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In each of our businesses, we hope to expand our geographic reach and market
share and seek to develop a competitive advantage and/or brand name for our
services, which we hope will be a differentiating factor for customers. Our
insurance market primarily services small contractors, small and medium-sized
businesses and individuals required to provide surety bonds (i) in connection
with their work for government agencies and others, (ii) in connection with
contractual obligations, or (iii) to meet regulatory requirements and other
needs. We have expanded the licensing of the UCS business to all 50 states and
the District of Columbia.  In outdoor advertising, our plan is to continue to
grow this business through acquisitions of billboard assets. We also expect to
expand our broadband services in Arizona, Florida, Nevada, Utah and in other
locations. We also expect to continue to make additional investments in real
estate management service businesses, as well as in other businesses. In the
future, we expect to expand the range of services we provide in the insurance
sector, seek to continue to expand our billboard operations and broadband
services and to possibly consider acquisitions of other businesses, as well as
investments, in other sectors. Our decision to expand outside of these current
business sectors we serve or in which we have made investments will be based on
the opportunity to acquire businesses which we believe provide the potential for
sustainable earnings at an attractive level relative to capital employed and,
with regard to investment, we believe have the potential to provide attractive
returns.



We seek to enter markets where we believe demand for our services will grow in
the coming years due to certain barriers to entry and/or to anticipated
long-term demand for these services. In the outdoor billboard business,
government restrictions often limit the number of additional billboards that may
be constructed. At the same time, advances in billboard technology provide the
opportunity to improve revenues through the use of digital display technologies
and other new technologies. In the surety insurance business, new insurance
companies must be licensed by state agencies that impose capital, management and
other strict requirements on these insurers. These hurdles are at the individual
state level, with statutes often providing wide latitude to regulators to impose
judgmental requirements upon new entrants. In addition, new distribution
channels in certain areas of surety may provide a new opportunity. In the real
estate management services market, we believe the continued growth of commercial
real estate in many sections of the United States will provide opportunities for
management services for the foreseeable future. We also believe our
investment in both CB&T and Sky Harbour provides the opportunity for each
company to significantly grow its business.  We invest our available capital and
the surplus capital from UCS in a wide range of securities, including equity
securities of large cap public companies, various corporate and government bonds
and U.S. treasuries. In broadband services, we believe that our fiber to the
home services can compete with traditional cable operators as broadband provides
higher rates of transmission and improved speed to consumers and that, once
built, other competitors may be less willing to compete in communities which we
serve.



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                        Impact of the COVID-19 Pandemic



The unprecedented and rapid spread of COVID-19 has to date generally had limited
or no material adverse impact on our billboard and broadband businesses.
Specifically, the COVID-19 pandemic has impacted different parts of our business
in different ways:


? Our billboard business incurred some overall reductions in revenue during the

first half of fiscal 2020 but has returned to more normal levels in fiscal

2021 and continues to grow during the first six months of fiscal 2022. As most

of our billboards are on roads and highways and not in airports and other mass

transit hubs, shopping centers and sports arenas, our revenues for billboards

were not as significantly impacted as those of certain of our competitors.

? Our broadband business was generally unaffected by COVID-19 and we continued

to expand that business through the launch of our FFH business during fiscal

2021, the InfoWest and Go Fiber acquisitions in April 2022, and investing

capital to expand our footprint and serve additional customers in Arizona,

    Florida, Nevada, Utah, and other locales.




  ? Our surety insurance business was primarily impacted by the decision we

implemented in the second quarter of fiscal 2020 to cease issuing rental

insurance bonds and increase our loss reserves related to these bonds. We made

this decision due to concern about the potential for increasing default rates

by residential tenants. However, due to the favorable development of losses

within UCS throughout fiscal 2021, our actuarial analysis at the end of 2021

indicated that UCS was over-reserved so management released this excess back

into income to remain consistent with previous years' reserving methodologies.

UCS no longer has any material exposure to the rental guarantee bond program

    as substantially all of these bonds have since expired.




  ? As of June 30, 2022, we did not incur any impairment charges related to

goodwill or long-lived assets (including operating lease right of use assets).

We also did not incur any significant credit losses for the six months ended

    June 30, 2022 and 2021.




We have observed an improvement in business activity beginning in the second
half of 2020 and throughout fiscal 2021 and the first six months of fiscal 2022
as government-imposed restrictions on travel were relaxed, businesses which were
temporarily closed or limited are fully reopening, more of the population has
been vaccinated and unemployment rates are dropping. Accordingly, we are not
actively pursuing additional cost saving measures, and are resuming acquisition
activities and spending on capital projects.



We cannot predict the length or strength of the recovery in demand for our
billboard, surety insurance and broadband businesses due to continued impact of
the pandemic on the U.S. economy. Any significant resurgence of the pandemic
could adversely impact our business in the future. We will continue to evaluate
the impact of the COVID-19 pandemic on our business and we may access the debt
and/or equity capital markets for additional liquidity, if necessary. We
continue to actively monitor the situation and may take further actions that
alter our business operations as may be required by federal, state or
local authorities, or that we determine are in the best interests of our
employees and customers.



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             How We Generate Our Revenues and Evaluate Our Business



We currently generate revenues primarily through billboard advertising and
related services, from the sale of surety insurance and related brokerage
activities and by providing high-speed broadband services. Revenue for outdoor
advertising space rental is recognized on a straight-line basis over the term of
the contract and advertising revenue is reported net of agency
commissions. Payments received in advance of being earned are recorded as
deferred revenue. In our surety insurance business, premiums written are
recognized as revenues based on a pro rata daily calculation over the respective
terms of the policies in-force. Unearned premiums represent the portion of
premiums written applicable to the unexpired term of the policies in-force. In
connection with our surety agency business, insurance commissions are recognized
at a point in time, on a bond-by-bond basis as of the policy effective date and
are generally nonrefundable. In our broadband business, revenue is derived
principally from internet services and is recognized on a straight-line basis
over the term of the contract in the period the services are rendered. Revenue
received or receivable in advance of the delivery of services is included in
deferred revenue.



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 surety business, direct
cost of services includes commissions, premium taxes, fees and assessments, and
losses and loss adjustment 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.



                             Results of Operations


Three Months Ended June 30, 2022 Compared to Three Months Ended June 30, 2021




The following is a comparison of our results of operations for the three months
ended June 30, 2022, which we refer to as the "second quarter of fiscal 2022,"
compared to the three months ended June 30, 2021, which we refer to as the
"second quarter of fiscal 2021."



Revenues. For the second quarter of fiscal 2022 and the second quarter of fiscal
2021, our revenues in dollars and as a percentage of total revenues were as
follows:



                                                   For the Three Months Ended June 30,
                                                               (unaudited)
                                         2022                            2021                  2022 vs 2021
                                               As a % of                       As a % of
                                                 Total                           Total
                                 Amount        Revenues         Amount         Revenues         $ Variance
Revenues:
Billboard rentals, net        $  9,825,164       47.0%       $  7,952,832         56.1%       $    1,872,332
Broadband services               8,078,580       38.7%          3,760,454         26.5%            4,318,126
Premiums earned                  2,407,523       11.5%          1,736,158         12.3%              671,365
Insurance commissions              494,244       2.4%             658,703          4.6%             (164,459 )
Investment and other income         89,505       0.4%              71,734          0.5%               17,771
Total Revenues                $ 20,895,016      100.0%       $ 14,179,881         100.0%      $    6,715,135




We realized total revenues of $20,895,016 during the second quarter of fiscal
2022, an increase of 47.4% over revenues of $14,179,881 during the second
quarter of fiscal 2021. Revenues increased within each of our businesses in the
second quarter of fiscal 2022 when compared to the second quarter of fiscal
2021. The key factors impacting revenue across each of our businesses during
the second quarter of fiscal 2022 were as follows:


? Net billboard rentals in the second quarter of fiscal 2022 increased 23.5%

from the second quarter of fiscal 2021, reflecting an improvement in rental

and occupancy rates across a number of our markets as well as the acquisition

of billboards from Keleher and Missouri Neon in the fourth quarter of fiscal

2021, which accounted for approximately 14.2% of our billboard revenues in

    the second quarter of fiscal 2022.


? Revenue from broadband services in the second quarter of fiscal 2022 increased

114.8% from the second quarter of fiscal 2021, mainly reflecting the revenues

generated from the InfoWest and Go Fiber acquisitions completed in April 2022.

? Premiums earned from our UCS insurance subsidiary increased 38.7% in the

second quarter of fiscal 2022 when compared to the second quarter of fiscal

2021. The increase in premiums earned was primarily due to increases in

production throughout fiscal 2021 and the first six months of fiscal 2022. We

recognize revenues for written premium over the life of the surety bond and,

as a result, increased sales activities are not fully reflected in the quarter

    in which the surety bond is issued.



  ? Revenue from insurance commissions generated by our surety brokerage
    operations decreased by 25.0% in the second quarter of fiscal 2022 when

compared to the second quarter of fiscal 2021, primarily due to two large

    one-time bonds placed by ACS during the second quarter of fiscal 2021.



  ? Investment and other income at UCS increased from $71,734 in the second
    quarter of fiscal 2021 to $89,505 in the second quarter of fiscal 2022.




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Expenses. For the second quarter of fiscal 2022 and the second quarter of fiscal
2021, our expenses, in dollars, and as a percentage of total revenues, were as
follows:



                                                      For the Three Months Ended June 30,
                                                                  (unaudited)
                                            2022                             2021                  2022 vs 2021
                                                  As a % of                        As a % of
                                                    Total                            Total
                                   Amount         Revenues          Amount         Revenues         $ Variance
Costs and Expenses:
Cost of billboard revenues      $  3,655,782            17.5 %   $  3,073,530            21.7 %   $      582,252
Cost of broadband revenues         2,070,812             9.9 %        854,429             6.0 %        1,216,383
Cost of insurance revenues         1,000,794             4.8 %        872,605             6.2 %          128,189
Employee costs                     6,572,286            31.5 %      4,526,049            31.9 %        2,046,237
Professional fees                  1,098,782             5.3 %      1,024,181             7.2 %           74,601
Depreciation                       2,012,916             9.6 %      1,250,663             8.8 %          762,253
Amortization                       1,723,773             8.2 %      1,205,537             8.5 %          518,236
General and administrative         3,393,835            16.2 %      2,411,053            17.0 %          982,782
Loss on disposition of assets         32,094             0.2 %         22,859             0.2 %            9,235
Accretion                             50,924             0.2 %         32,447             0.2 %           18,477
Total Costs and Expenses        $ 21,611,998           103.4 %   $ 15,273,353           107.7 %   $    6,338,645




During the second quarter of fiscal 2022, we had total costs and expenses
of $21,611,998, as compared to total costs and expenses of $15,273,353 in the
second quarter of fiscal 2021. Total costs and expenses as a percentage of total
revenues decreased from 107.7% in the second quarter of fiscal 2021 to 103.4% in
the second quarter of fiscal 2022. The key factors impacting costs and expenses
across each of our businesses during the second quarter of fiscal 2022 were as
follows:


? Cost of billboard revenues decreased as a percentage of billboard revenues

from 38.6% in the second quarter of fiscal 2021 to 37.2% in the second quarter

of fiscal 2022. The decrease was mainly due to lower ground rent expense and

    commissions paid as a percentage of billboard revenues.


? Cost of broadband revenues increased as a percentage of broadband revenues

from 22.7% in the second quarter of fiscal 2021 to 25.6% in the second quarter

of fiscal 2022. The increase is mainly driven by the InfoWest and Go Fiber

acquisitions in April 2022 as well as our FFH business, which launched during

    the third quarter of fiscal 2021.


? Cost of insurance revenues decreased as a percentage of insurance revenues

from 35.4% in the second quarter of fiscal 2021 to 33.5% in the second quarter

of fiscal 2022. The decrease was mainly due to lower losses and loss

adjustment expenses as a percentage of insurance revenues as UCS no longer has

    any material exposure to the rental guarantee bond program given that
    substantially all of these bonds have since expired.


? Employee costs increased from $4,526,049 in the second quarter of fiscal 2021

to $6,572,286 in the second quarter of fiscal 2022, an increase of 45.2%. The

increase was mainly driven by the InfoWest and Go Fiber acquisitions in April

    2022, hiring within our FFH business, and the Keleher and Missouri Neon
    acquisitions in the fourth quarter of fiscal 2021.



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? Professional fees in the second quarter of fiscal 2022 were $1,098,782, or

5.3% of total revenues, as compared to $1,024,181, or 7.2% of total revenues,

in the second quarter of fiscal 2021. The increase was mainly driven by

professional fees associated with the InfoWest and Go Fiber acquisitions

    completed in April 2022.



? General and administrative expenses increased from $2,411,053 in the second

quarter of fiscal 2021 to $3,393,835 in the second quarter of fiscal 2022, an

increase of 40.8%. The increase was mainly driven by the InfoWest and Go Fiber

acquisitions in April 2022, our FFH business, which launched during the third

quarter of fiscal 2021, and the Keleher and Missouri Neon acquisitions in the

    fourth quarter of fiscal 2021.



? Non-cash expenses in the second quarter of fiscal 2022 included $2,012,916 in

depreciation expense, $1,723,773 in amortization expense, and $50,924 in

accretion expense related to asset retirement obligations for certain

billboard and broadband assets. The increase in depreciation expense is mainly

due to measurement period adjustments to increase the fair value assigned to

UBB's property, plant and equipment by $1,149,000 during the third quarter of

fiscal 2021 as well as the InfoWest and Go Fiber acquisitions completed in

April 2022. The increase in amortization expense is mainly driven by the

    InfoWest and Go Fiber acquisitions completed in April 2022.




Net Loss from Operations. Net loss from operations for the second quarter of
fiscal 2022 was $716,982, or 3.4% of total revenues, as compared to a net loss
from operations of $1,093,472, or 7.7% of total revenues, in the second quarter
of fiscal 2021. The decrease in net loss from operations in dollars was
primarily due to improved operations within our billboard business and insurance
business, which were partially offset by costs associated with the InfoWest and
Go Fiber acquisitions completed in April 2022 and our FFH business, which
launched during the third quarter of fiscal 2021. Our net loss from operations
included $3,787,613 from non-cash depreciation, amortization and accretion
expenses in the second quarter of fiscal 2022, as compared to $2,488,647 in the
second quarter of fiscal 2021.



Other Income (Expense). During the second quarter of fiscal 2022, we had net
other expense of $14,777,668. Net other expense included $16,933,563 in other
investment losses mainly related to public securities held by Boston Omaha and
UCS and interest expense of $303,531 mainly incurred under Link's term loan.
These items were partially offset by income of $2,386,339 mainly related to our
equity method position in Sky Harbour and interest and dividend income of
$73,087. During the second quarter of fiscal 2021, we had net other income of
$12,566,457, which included $11,377,475 in other investment income related to
public equity securities mainly held by Boston Omaha, $883,928 related to the
remeasurement of Yellowstone's public warrants, $435,988 in equity in income of
unconsolidated affiliates, interest and dividend income of $102,725, and
interest expense of $233,659 mainly incurred under Link's term loan.



As a result of a change in GAAP effective in 2018, we are required to include
the unrealized changes in market prices of investments in public equity
securities 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.



Net Income (Loss) Attributable to Common Stockholders. We had a net loss attributable to common stockholders in the amount of $11,496,339 in the second quarter of fiscal 2022, or a loss per share of $0.39, based on 29,698,361 diluted weighted average shares outstanding. This is compared to net income attributable to common stockholders of $8,637,563 in the second quarter of fiscal 2021, or income per share of $0.29, based on 29,492,765 diluted weighted average shares outstanding.

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Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021




The following is a comparison of our results of operations for the six months
ended June 30, 2022, which we refer to as the "first six months of fiscal 2022,"
compared to the six months ended June 30, 2021, which we refer to as the
"first six months of fiscal 2021."



Revenues. For the first six months of fiscal 2022 and the first six months of
fiscal 2021, our revenues in dollars and as a percentage of total revenues were
as follows:



                                                    For the Six Months Ended June 30,
                                                               (unaudited)
                                          2022                            2021                 2022 vs 2021
                                                As a % of                       As a % of
                                                  Total                           Total
                                 Amount         Revenues          Amount        Revenues        $ Variance
Revenues:
Billboard rentals, net        $ 18,963,313         51.0%       $ 15,106,517       55.1%       $    3,856,796
Broadband services              12,155,526         32.7%          7,555,491       27.6%            4,600,035
Premiums earned                  4,695,972         12.6%          3,522,722       12.9%            1,173,250
Insurance commissions            1,191,444          3.2%          1,058,880       3.9%               132,564
Investment and other income        181,708          0.5%            141,290       0.5%                40,418
Total Revenues                $ 37,187,963         100.0%      $ 27,384,900      100.0%       $    9,803,063




We realized total revenues of $37,187,963 during the first six months of fiscal
2022, an increase of 35.8% over revenues of $27,384,900 during the first six
months of fiscal 2021. Revenues increased within each of our businesses in
the first six months of fiscal 2022 when compared to the first six months of
fiscal 2021. The key factors impacting revenue across each of our
businesses during the first six months of fiscal 2022 were as follows:


? Net billboard rentals in the first six months of fiscal 2022 increased 25.5%

from the first six months of fiscal 2021, reflecting an improvement in rental

and occupancy rates across a number of our markets as well as the acquisition

of billboards from Keleher and Missouri Neon in the fourth quarter of fiscal

2021, which accounted for approximately 14.0% of our billboard revenues in

    the first six months of fiscal 2022.



  ? Revenue from broadband services in the first six months of fiscal 2022
    increased 60.9% from the first six months of fiscal 2021, mainly

reflecting the revenues generated from the InfoWest and Go Fiber acquisitions

    completed in April 2022.



  ? Premiums earned from our UCS insurance subsidiary increased 33.3% in

the first six months of fiscal 2022 when compared to the first six months of

fiscal 2021. The increase in premiums earned was primarily due to increases in

production throughout fiscal 2021 and the first six months of fiscal 2022. We

recognize revenues for written premium over the life of the surety bond and,

as a result, increased sales activities are not fully reflected in the quarter

    in which the surety bond is issued.



  ? Revenue from insurance commissions generated by our surety brokerage

operations increased by 12.5% in the first six months of fiscal 2022 when

    compared to the first six months of fiscal 2021, mainly reflecting the
    revenues generated from the ACS acquisition completed in April 2021.


? Investment and other income at UCS increased from $141,290 in the first six

months of fiscal 2021 to $181,708 in the first six months of fiscal 2022.





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Expenses. For the first six months of fiscal 2022 and the first six months of
fiscal 2021, our expenses, in dollars, and as a percentage of total revenues,
were as follows:



                                                     For the Six Months Ended June 30,
                                                                (unaudited)
                                          2022                              2021                 2022 vs 2021
                                                As a % of                         As a % of
                                                  Total                             Total
                                 Amount         Revenues           Amount         Revenues        $ Variance
Costs and Expenses:
Cost of billboard revenues    $  7,183,154            19.3 %    $  5,935,277            21.7 %   $   1,247,877
Cost of broadband revenues       2,981,587             8.0 %       1,610,642             5.9 %       1,370,945
Cost of insurance revenues       2,181,685             5.9 %       2,001,815             7.3 %         179,870
Employee costs                  11,996,506            32.3 %       8,768,196            32.0 %       3,228,310
Professional fees                3,289,379             8.8 %       2,118,164             7.7 %       1,171,215
Depreciation                     3,752,987            10.1 %       2,397,467             8.8 %       1,355,520
Amortization                     2,916,966             7.8 %       2,370,709             8.7 %         546,257
General and administrative       5,973,670            16.1 %       4,638,916            16.9 %       1,334,754
Loss (gain) on disposition
of assets                          (22,109 )          (0.1 %)         58,426             0.2 %         (80,535 )
Accretion                          100,856             0.3 %          64,538             0.2 %          36,318
Total Costs and Expenses      $ 40,354,681           108.5 %    $ 29,964,150           109.4 %   $  10,390,531




During the first six months of fiscal 2022, we had total costs and expenses
of $40,354,681, as compared to total costs and expenses of $29,964,150 in
the first six months of fiscal 2021. Total costs and expenses as a percentage of
total revenues decreased from 109.4% in the first six months of fiscal 2021 to
108.5% in the first six months of fiscal 2022. The key factors impacting costs
and expenses across each of our businesses during the first six months of
fiscal 2022 were as follows:



? Cost of billboard revenues decreased as a percentage of billboard revenues

from 39.3% in the first six months of fiscal 2021 to 37.9% in the first six

months of fiscal 2022. The decrease was mainly due to lower commissions paid

    as a percentage of billboard revenues.


? Cost of broadband revenues increased as a percentage of broadband revenues

from 21.3% in the first six months of fiscal 2021 to 24.5% in the first six

months of fiscal 2022. The increase is mainly driven by the InfoWest and Go

Fiber acquisitions in April 2022 as well as our FFH business, which launched

    during the third quarter of fiscal 2021.


? Cost of insurance revenues decreased as a percentage of insurance revenues

from 42.4% in the first six months of fiscal 2021 to 35.9% in the first six

months of fiscal 2022. The decrease was mainly due to lower losses and loss

adjustment expenses as a percentage of insurance revenues as UCS no longer has

    any material exposure to the rental guarantee bond program given that
    substantially all of these bonds have since expired.


? Employee costs increased from $8,768,196 in the first six months of fiscal

2021 to $11,996,506 in the first six months of fiscal 2022, an increase of

36.8%. The increase was mainly driven by the InfoWest and Go Fiber

acquisitions in April 2022, hiring within our FFH business, the Keleher and

Missouri Neon acquisitions in the fourth quarter of fiscal 2021, and the ACS

    acquisition in April 2021.



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? Professional fees in the first six months of fiscal 2022 were $3,289,379, or

8.8% of total revenues, as compared to $2,118,164, or 7.7% of total revenues,

    in the first six months of fiscal 2021. The increase was mainly driven by
    professional fees associated with Yellowstone finalizing its business
    combination with SHG, the InfoWest and Go Fiber acquisitions completed

in April 2022, and the formation of our build for rent business and fund

    structure within BOAM.



? General and administrative expenses increased from $4,638,916 in the first six

months of fiscal 2021 to $5,973,670 in the first six months of fiscal 2022, an

increase of 28.8%. The increase was mainly driven by the InfoWest and Go Fiber

acquisitions in April 2022 and our FFH business, which launched during the

    third quarter of fiscal 2021.



? Non-cash expenses in the first six months of fiscal 2022 included $3,752,987

in depreciation expense, $2,916,966 in amortization expense, and $100,856 in

accretion expense related to asset retirement obligations for certain

billboard and broadband assets. The increase in depreciation expense is mainly

due to measurement period adjustments to increase the fair value assigned to

UBB's property, plant and equipment by $1,149,000 during the third quarter of

fiscal 2021 as well as the InfoWest and Go Fiber acquisitions completed in

April 2022. The increase in amortization expense is mainly driven by the

    InfoWest and Go Fiber acquisitions completed in April 2022.




Net Loss from Operations. Net loss from operations for the first six months of
fiscal 2022 was $3,166,718, or 8.5% of total revenues, as compared to a net loss
from operations of $2,579,250, or 9.4% of total revenues, in the first six
months of fiscal 2021. The increase in net loss from operations in dollars was
primarily due to costs associated with Yellowstone finalizing its business
combination with SHG, the InfoWest and Go Fiber acquisitions completed in April
2022, and our FFH business, which launched during the third quarter of fiscal
2021. These cost increases were partially offset by improved operations within
our billboard business and insurance business. Our net loss from operations
included $6,770,809 from non-cash depreciation, amortization and accretion
expenses in the first six months of fiscal 2022, as compared to $4,832,714 in
the first six months of fiscal 2021.



Other Income (Expense). During the first six months of fiscal 2022, we had net
other income of $10,720,978. Net other income included a gain of $24,977,740
related to the deconsolidation of Yellowstone (see Note 17 to the consolidated
financial statements for further discussion), $1,837,211 related to the
remeasurement of Yellowstone's public warrants from January 1, 2022 to January
25, 2022, and interest and dividend income of $118,411. These items were
partially offset by $14,318,240 in other investment losses mainly related to
public securities held by Boston Omaha and UCS, a loss of $1,288,964 mainly
related to our equity method position in Sky Harbour and interest expense of
$605,180 mainly incurred under Link's term loan. During the first six months of
fiscal 2021, we had net other income of $122,689,521, which included
$118,685,597 in other investment income related to public equity securities
mainly held by Boston Omaha, $3,059,752 related to the remeasurement of
Yellowstone's public warrants, $836,872 in interest and dividend income,
$576,285 in equity in income of unconsolidated affiliates, and interest expense
of $468,985 mainly incurred under Link's term loan.



As a result of a change in GAAP effective in 2018, we are required to include
the unrealized changes in market prices of investments in public equity
securities 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.



Net Income Attributable to Common Stockholders. We had net income attributable
to common stockholders in the amount of $4,806,254 in the first six months of
fiscal 2022, or income per share of $0.16, based on 29,761,369 diluted weighted
average shares outstanding. This is compared to net income attributable to
common stockholders of $93,075,190 in the first six months of fiscal 2021, or
income per share of $3.26, based on 28,545,034 diluted weighted average shares
outstanding.



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Results of Operations by Segment




The following tables report results for the following three segments in which we
operate, billboards, insurance and broadband, for the second quarter of fiscal
2022 and the second quarter of fiscal 2021:





                        Results of Billboard Operations



                                                           For the Three Months Ended June 30,
                                                                       (unaudited)
                                                           2022                          2021
                                                                 As a % of                     As a % of
                                                                  Segment                       Segment
                                                                 Operating                     Operating
                                                   Amount        Revenues        Amount        Revenues
Operating Revenues
Billboard rentals, net                           $ 9,825,164      100.0%       $ 7,952,832      100.0%
Cost of Revenues
Ground rents                                       1,917,756       19.5%         1,620,771       20.4%
Utilities                                            407,061       4.2%            311,242       3.9%
Commissions paid                                     796,754       8.1%            762,278       9.6%
Other costs of revenues                              534,211       5.4%            379,239       4.7%
Total cost of revenues                             3,655,782       37.2%         3,073,530       38.6%
Gross margin                                       6,169,382       62.8%         4,879,302       61.4%
Other Operating Expenses
Employee costs                                     1,715,749       17.5%         1,445,171       18.2%
Professional fees                                    111,748       1.1%             95,726       1.2%
Depreciation                                       1,130,239       11.5%           895,395       11.3%
Amortization                                         906,111       9.2%            860,540       10.8%
General and administrative                           888,448       9.0%            664,220       8.3%
Accretion                                             47,490       0.5%             29,013       0.4%
Loss on disposition of assets                         34,202       0.4%             22,859       0.3%
Total expenses                                     4,833,987       49.2%         4,012,924       50.5%
Segment Income from Operations                     1,335,395       13.6%           866,378       10.9%
Interest expense, net                               (288,169 )    (2.9%)          (228,018 )    (2.9%)
Net Income Attributable to Common Stockholders   $ 1,047,226       10.7%       $   638,360       8.0%




Comparison of the Second Quarter of Fiscal 2022 to the Second Quarter of Fiscal
2021. In the second quarter of fiscal 2022, there was a 23.5% increase in net
billboard revenues from the second quarter of fiscal 2021, reflecting an
improvement in rental and occupancy rates across a number of our markets as well
as the acquisition of billboards from Keleher and Missouri Neon in the fourth
quarter of fiscal 2021, which accounted for approximately 14.2% of our billboard
revenues in the second quarter of fiscal 2022. The key factors affecting our
billboard operations results during the second quarter of fiscal 2022 were as
follows:


? Ground rent expense decreased as a percentage of total segment operating

revenues from 20.4% in the second quarter of fiscal 2021 to 19.5% in the

    second quarter of fiscal 2022.


? Commissions paid as a percentage of total segment operating revenues decreased

from 9.6% in the second quarter of fiscal 2021 to 8.1% in the second quarter

    of fiscal 2022. The decrease is mainly driven by new incentive programs
    throughout several of our markets.


? Employee costs as a percentage of total segment operating revenues decreased

from 18.2% in the second quarter of fiscal 2021 to 17.5% in the second quarter

of fiscal 2022. The decrease is due to organic revenue growth as well as the

    impact from the Keleher and Missouri Neon acquisitions.


? General and administrative expenses increased as a percentage of total segment

operating revenues from 8.3% in the second quarter of fiscal 2021 to 9.0% in

the second quarter of fiscal 2022. The increase is primarily due to higher

    fuel costs and other travel related expenses.


? Depreciation and amortization expense increased by $234,844 and $45,571,

    respectively, from the second quarter of fiscal 2021. The increases
    are primarily due to the Keleher and Missouri Neon acquisitions.


? Net interest expense of $288,169 in the second quarter of fiscal 2022 compared

to net interest expense of $228,018 in the second quarter of fiscal 2021.





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                        Results of Broadband Operations



                                                        For the Three Months Ended June 30,
                                                                    (unaudited)
                                                       2022                            2021
                                                             As a % of                       As a % of
                                                              Segment                         Segment
                                                             Operating                       Operating
                                             Amount          Revenues        Amount          Revenues
Operating Revenues
Broadband revenues                         $ 8,078,580        100.0 %      $ 3,760,454        100.0 %
Cost of Revenues
Network operations and data costs            1,186,914         14.7 %          586,610         15.6 %
Programming costs                               24,814          0.3 %           29,711          0.8 %
Cell site rent and utilities                   305,776          3.8 %          140,700          3.7 %
Other costs of revenues                        553,308          6.8 %           97,408          2.6 %
Total cost of revenues                       2,070,812         25.6 %          854,429         22.7 %
Gross margin                                 6,007,768         74.4 %        2,906,025         77.3 %
Other Operating Expenses
Employee costs                               2,750,355         34.0 %        1,289,680         34.3 %
Professional fees                              200,092          2.5 %           24,114          0.6 %
Depreciation                                   844,752         10.5 %          322,135          8.6 %
Amortization                                   770,601          9.5 %          296,685          7.9 %
General and administrative                   1,353,570         16.8 %          481,546         12.8 %
Accretion                                        3,434          0.0 %            3,434          0.1 %
Loss on disposition of assets                   (2,108 )       (0.0 %)               -          0.0 %
Total expenses                               5,920,696         73.3 %        2,417,594         64.3 %
Segment Income from Operations                  87,072          1.1 %          488,431         13.0 %
Interest expense, net                           (6,353 )       (0.1 %)          (2,866 )       (0.1 %)
Noncontrolling interest in subsidiary
income                                        (240,425 )       (3.0 %)        (116,198 )       (3.1 %)
Net Income (Loss) Attributable to Common
Stockholders                               $  (159,706 )       (2.0 %)     $   369,367          9.8 %




Comparison of the Second Quarter of Fiscal 2022 to the Second Quarter
of Fiscal 2021. In the second quarter of fiscal 2022, total operating revenues
increased by 114.8% when compared to the second quarter of fiscal 2021 mainly
reflecting the revenues generated from the InfoWest and Go Fiber acquisitions
completed in April 2022. The key factors affecting our broadband operations
results during the second quarter of fiscal 2022 were as follows:



? Total cost of revenues increased as a percentage of total segment operating

revenues from 22.7% in the second quarter of fiscal 2021 to 25.6% in the

second quarter of fiscal 2022. The increase is mainly driven by the InfoWest

and Go Fiber acquisitions in April 2022 as well as our FFH business, which

    launched during the third quarter of fiscal 2021.



? Employee costs in the second quarter of fiscal 2022 increased by 113.3% from

the second quarter of fiscal 2021. The increase is mainly due to the InfoWest

and Go Fiber acquisitions in April 2022 and hiring within our FFH business.




  ? Professional fees as a percentage of total segment operating revenues

increased from 0.6% in the second quarter of fiscal 2021 to 2.5% in the second

quarter of fiscal 2022. The increase is mainly due to the InfoWest and Go

    Fiber acquisitions completed in April 2022.



? General and administrative expenses as a percentage of total segment operating

revenues increased from 12.8% in the second quarter of fiscal 2021 to 16.8% in

the second quarter of fiscal 2022. The increase as a percent of revenues is

mainly due to our FFH business, which launched during the third quarter of

    fiscal 2021.



? Depreciation and amortization expense increased by $522,617 and $473,916,

    respectively, from the second quarter of fiscal 2021. The increase in
    depreciation expense is mainly due to measurement period adjustments to
    increase the fair value assigned to UBB's property, plant and equipment by

$1,149,000 during the third quarter of fiscal 2021 as well as the InfoWest and

Go Fiber acquisitions completed in April 2022. The increase in amortization

    expense is mainly driven by the InfoWest and Go Fiber acquisitions
    completed in April 2022.




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                        Results of Insurance Operations



                                                      For the Three Months Ended June 30,
                                                                  (unaudited)
                                                       2022                          2021
                                                             As a % of                     As a % of
                                                              Segment                       Segment
                                                             Operating                     Operating
                                               Amount        Revenues        Amount        Revenues
Operating Revenues
Premiums earned                             $  2,407,523       80.5%       $ 1,736,158       70.4%
Insurance commissions                            494,244       16.5%           658,703       26.7%
Investment and other income                       89,505       3.0%             71,734       2.9%
Total operating revenues                       2,991,272      100.0%         2,466,595      100.0%
Cost of Revenues
Commissions paid                                 613,117       20.5%           492,388       20.0%
Premium taxes, fees, and assessments              77,612       2.6%             63,707       2.6%
Losses and loss adjustment expense               310,065       10.4%           316,510       12.8%
Total cost of revenues                         1,000,794       33.5%           872,605       35.4%
Gross margin                                   1,990,478       66.5%         1,593,990       64.6%
Other Operating Expenses
Employee costs                                 1,376,236       46.0%         1,261,795       51.1%
Professional fees                                 79,347       2.6%             72,764       2.9%
Depreciation                                      10,590       0.4%              7,803       0.3%
Amortization                                      47,061       1.6%             48,312       2.0%
General and administrative                       456,233       15.2%           635,433       25.8%
Total expenses                                 1,969,467       65.8%         2,026,107       82.1%
Segment Income (Loss) from Operations             21,011       0.7%           (432,117 )    (17.5%)
Interest income, net                                   -         -                   2       0.0%
Other investment income (loss)                (1,844,331 )    (61.7%)          750,867       30.4%
Net Income (Loss) Attributable to Common
Stockholders                                $ (1,823,320 )    (61.0%)      $   318,752       12.9%




Comparison of the Second Quarter of Fiscal 2022 to the Second Quarter
of Fiscal 2021. In the second quarter of fiscal 2022, total operating revenues
increased by 21.3% when compared to the second quarter of fiscal 2021, mainly
due to increased earned premium at our UCS insurance subsidiary, which was
partially offset by a decrease in revenues from insurance commissions
primarily due to reduced production through other insurance carriers. The key
factors affecting our insurance operations results during the second quarter of
fiscal 2022 were as follows:


? Premiums earned from our UCS insurance subsidiary in the second quarter of

fiscal 2022 increased 38.7% from the second quarter of fiscal 2021. The

increase in premiums earned was primarily due to increases in production

throughout fiscal 2021 and the first six months of fiscal 2022. We recognize

revenues for written premium over the life of the surety bond and, as a

result, increased sales activities are not fully reflected in the quarter in

    which the surety bond is issued.


? Insurance commissions generated by our surety brokerage operations decreased

by 25.0% in the second quarter of fiscal 2022 when compared to the second

quarter of fiscal 2021, primarily due to two large one-time bonds placed by

     ACS during the the second quarter of fiscal 2021.



  ?  Commissions paid as a percentage of total segment operating revenues
     increased from 20.0% in the second quarter of fiscal 2021 to 20.5% in the
     second quarter of fiscal 2022.



  ?  Losses and loss adjustment expenses as a percentage of total segment

operating revenues decreased from 12.8% in the second quarter of fiscal 2021

to 10.4% in the second quarter of fiscal 2022. Losses and loss adjustment

expenses are reserved monthly based on a percentage of earned premium. The

reduction in loss reserves when compared to the second quarter of fiscal 2021

is mainly related to UCS no longer having any material exposure to the rental

     guarantee bond program as substantially all of these bonds have since
     expired.


? Employee costs in the second quarter of fiscal 2022 increased by 9.1% from the

    second quarter of fiscal 2021. The increase is mainly due to the hiring
    of finance, IT and marketing positions at GIG.



  ? General and administrative expenses in the second quarter of fiscal

2022 decreased by 28.2% from the second quarter of fiscal 2021. The decrease

    is mainly due to lower IT system implementation related expenses.


? During the second quarter of fiscal 2022, our segment income from insurance

operations of $21,011 was offset by other investment losses of $1,844,331

mainly from unrealized losses on our investments in publicly held securities.

We expect to continue to invest a portion of our excess capital in accordance

with insurance regulatory limitations in both large-cap publicly traded equity

securities and bonds. These investments are subject to the risk of loss in

value depending upon market conditions and factors outside of our control.





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                        Results of Billboard Operations



                                                             For the Six Months Ended June 30,
                                                                        (unaudited)
                                                            2022                           2021
                                                                  As a % of                      As a % of
                                                                   Segment                        Segment
                                                                  Operating                      Operating
                                                    Amount        Revenues         Amount        Revenues
Operating Revenues
Billboard rentals, net                           $ 18,963,313      100.0%       $ 15,106,517      100.0%
Cost of Revenues
Ground rents                                        3,880,776       20.4%          3,178,629       21.0%
Utilities                                             811,197       4.3%             624,382       4.1%
Commissions paid                                    1,526,869       8.1%           1,461,077       9.7%
Other costs of revenues                               964,312       5.1%             671,189       4.5%
Total cost of revenues                              7,183,154       37.9%          5,935,277       39.3%
Gross margin                                       11,780,159       62.1%          9,171,240       60.7%
Other Operating Expenses
Employee costs                                      3,458,972       18.3%          2,923,743       19.4%
Professional fees                                     228,256       1.2%             307,273       2.0%
Depreciation                                        2,231,595       11.8%          1,755,322       11.6%
Amortization                                        1,798,550       9.5%           1,697,641       11.2%
General and administrative                          1,693,583       8.9%           1,401,973       9.3%
Accretion                                              94,025       0.5%              57,707       0.4%
(Gain) loss on disposition of assets                  (70,197 )    (0.4%)             55,154       0.4%
Total expenses                                      9,434,784       49.8%          8,198,813       54.3%
Segment Income from Operations                      2,345,375       12.3%            972,427       6.4%
Interest expense, net                                (575,027 )    (3.0%)           (457,298 )    (3.0%)
Net Income Attributable to Common Stockholders   $  1,770,348       9.3%        $    515,129       3.4%




Comparison of the First Six Months of Fiscal 2022 to the First Six Months
of Fiscal 2021. In the first six months of fiscal 2022, there was a
25.5% increase in net billboard revenues from the first six months of fiscal
2021, reflecting an improvement in rental and occupancy rates across a number of
our markets as well as the acquisition of billboards from Keleher and Missouri
Neon in the fourth quarter of fiscal 2021, which accounted for approximately
14.0% of our billboard revenues in the first six months of fiscal 2022. The key
factors affecting our billboard operations results during the first six months
of fiscal 2022 were as follows:



? Ground rent expense decreased as a percentage of total segment operating

    revenues from 21.0% in the first six months of fiscal 2021 to 20.4% in
    the first six months of fiscal 2022.


? Commissions paid as a percentage of total segment operating revenues decreased

from 9.7% in the first six months of fiscal 2021 to 8.1% in the first six

months of fiscal 2022. The decrease is mainly driven by new incentive programs

    throughout several of our markets.


? Employee costs as a percentage of total segment operating revenues decreased

from 19.4% in the first six months of fiscal 2021 to 18.3% in the first six

months of fiscal 2022. The decrease is due to organic revenue growth as well

    as the impact from the Keleher and Missouri Neon acquisitions.


? General and administrative expenses decreased as a percentage of total segment

operating revenues from 9.3% in the first six months of fiscal 2021 to 8.9% in

    the first six months of fiscal 2022.


? Depreciation and amortization expense increased by $476,273 and $100,909,

    respectively, from the first six months of fiscal 2021. The increases
    are primarily due to the Keleher and Missouri Neon acquisitions.



  ? Net interest expense of $575,027 in the first six months of fiscal

2022 compared to net interest expense of $457,298 in the first six months of

    fiscal 2021.




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                        Results of Broadband Operations



                                             For the Six Months Ended June 30,
                                                        (unaudited)
                                          2022                               2021
                                                As a % of                         As a % of
                                                 Segment                           Segment
                                                Operating                         Operating
                                 Amount          Revenues          Amount          Revenues
Operating Revenues
Broadband revenues            $ 12,155,526            100.0 %    $ 7,555,491            100.0 %
Cost of Revenues
Network operations and data
costs                            1,691,982             13.9 %      1,089,944             14.4 %
Programming costs                   40,905              0.3 %         55,798              0.7 %
Cell site rent and
utilities                          481,825              4.0 %        279,618              3.7 %
Other costs of revenues            766,875              6.3 %        185,282              2.5 %
Total cost of revenues           2,981,587             24.5 %      1,610,642             21.3 %
Gross margin                     9,173,939             75.5 %      5,944,849             78.7 %
Other Operating Expenses
Employee costs                   4,567,654             37.6 %      2,508,412             33.2 %
Professional fees                  406,451              3.4 %         82,634              1.1 %
Depreciation                     1,448,627             11.9 %        588,464              7.8 %
Amortization                     1,024,293              8.4 %        590,111              7.8 %
General and administrative       2,008,624             16.5 %        899,268             11.9 %
Accretion                            6,831              0.1 %          6,831              0.1 %
Loss on disposition of
assets                              48,088              0.4 %          3,272              0.0 %
Total expenses                   9,510,568             78.3 %      4,678,992             61.9 %
Segment Income (Loss) from
Operations                        (336,629 )           (2.8 %)     1,265,857             16.8 %
Interest expense, net              (10,524 )           (0.1 %)        (4,969 )           (0.1 %)
Noncontrolling interest in
subsidiary income                 (306,603 )           (2.5 %)      (254,461 )           (3.4 %)
Net Income (Loss)
Attributable to Common
Stockholders                  $   (653,756 )           (5.4 %)   $ 1,006,427             13.3 %




Comparison of the First Six Months of Fiscal 2022 to the First Six Months
of Fiscal 2021. In the first six months of fiscal 2022, total operating revenues
increased by 60.9% when compared to the first six months of fiscal 2021 mainly
reflecting the revenues generated from the InfoWest and Go Fiber acquisitions
completed in April 2022. The key factors affecting our broadband operations
results during the first six months of fiscal 2022 were as follows:



? Total cost of revenues increased as a percentage of total segment operating

revenues from 21.3% in the first six months of fiscal 2021 to 24.5% in

the first six months of fiscal 2022. The increase is mainly driven by the

InfoWest and Go Fiber acquisitions in April 2022 as well as our FFH business,

    which launched during the third quarter of fiscal 2021.



? Employee costs in the first six months of fiscal 2022 increased by 82.1% from

the first six months of fiscal 2021. The increase is mainly due to the

InfoWest and Go Fiber acquisitions in April 2022 and hiring within our FFH

    business.




  ? Professional fees as a percentage of total segment operating revenues
    increased from 1.1% in the first six months of fiscal 2021 to 3.4% in
    the first six months of fiscal 2022. The increase is mainly due to the
    InfoWest and Go Fiber acquisitions completed in April 2022.



? General and administrative expenses as a percentage of total segment operating

revenues increased from 11.9% in the first six months of fiscal 2021 to 16.5%

in the first six months of fiscal 2022. The increase as a percent of revenues

is mainly due to our FFH business, which launched during the third quarter of

    fiscal 2021.



? Depreciation and amortization expense increased by $860,163 and $434,182,

    respectively, from the first six months of fiscal 2021. The increase in
    depreciation expense is mainly due to measurement period adjustments to
    increase the fair value assigned to UBB's property, plant and equipment by

$1,149,000 during the third quarter of fiscal 2021 as well as the InfoWest and

Go Fiber acquisitions completed in April 2022. The increase in amortization

    expense is mainly driven by the InfoWest and Go Fiber acquisitions
    completed in April 2022.




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                        Results of Insurance Operations



                                               For the Six Months Ended June 30,
                                                          (unaudited)
                                              2022                           2021
                                                    As a % of                      As a % of
                                                     Segment                        Segment
                                                    Operating                      Operating
                                      Amount        Revenues         Amount        Revenues
Operating Revenues
Premiums earned                    $  4,695,972       77.4%       $  3,522,722       74.6%
Insurance commissions                 1,191,444       19.6%          1,058,880       22.4%
Investment and other income             181,708       3.0%             141,290       3.0%
Total operating revenues              6,069,124      100.0%          4,722,892      100.0%
Cost of Revenues
Commissions paid                      1,293,515       21.3%            957,042       20.3%
Premium taxes, fees, and
assessments                             125,675       2.1%             138,380       2.9%
Losses and loss adjustment
expense                                 762,495       12.5%            906,393       19.2%
Total cost of revenues                2,181,685       35.9%          2,001,815       42.4%
Gross margin                          3,887,439       64.1%          2,721,077       57.6%
Other Operating Expenses
Employee costs                        2,769,737       45.6%          2,446,846       51.8%
Professional fees                       152,018       2.5%             185,349       3.9%
Depreciation                             18,393       0.3%              13,536       0.3%
Amortization                             94,123       1.6%              82,957       1.8%
General and administrative            1,026,339       17.0%          1,211,993       25.6%
Total expenses                        4,060,610       67.0%          3,940,681       83.4%
Segment Loss from Operations           (173,171 )    (2.9%)         (1,219,604 )    (25.8%)
Interest expense, net                         -         -               (1,996 )    (0.1%)
Other investment income (loss)       (2,943,875 )    (48.5%)         3,906,214       82.7%
Net Income (Loss) Attributable
to Common Stockholders             $ (3,117,046 )    (51.4%)      $  2,684,614       56.8%




Comparison of the First Six Months of Fiscal 2022 to the First Six Months
of Fiscal 2021. In the first six months of fiscal 2022, total operating revenues
increased by 28.5% when compared to the first six months of fiscal 2021, mainly
due to increased earned premium at our UCS insurance subsidiary and the ACS
acquisition completed in April 2021. The key factors affecting our insurance
operations results during the first six months of fiscal 2022 were as follows:



? Premiums earned from our UCS insurance subsidiary in the first six months of

fiscal 2022 increased 33.3% from the first six months of fiscal 2021. The

increase in premiums earned was primarily due to increases in production

throughout fiscal 2021 and the first six months of fiscal 2022. We recognize

revenues for written premium over the life of the surety bond and, as a

result, increased sales activities are not fully reflected in the quarter in

    which the surety bond is issued.



  ?  Our brokerage operations realized a 12.5% increase in insurance
     commissions in the first six months of fiscal 2022 when compared to
     the first six months of fiscal 2021. The increase is mainly due to the
     ACS acquisition completed in April 2021.



  ?  Commissions paid as a percentage of total segment operating revenues

increased from 20.3% in the first six months of fiscal 2021 to 21.3% in

     the first six months of fiscal 2022.



  ?  Losses and loss adjustment expenses as a percentage of total segment

operating revenues decreased from 19.2% in the first six months of fiscal

2021 to 12.5% in the first six months of fiscal 2022. Losses and loss

adjustment expenses are reserved monthly based on a percentage of earned

premium. The reduction in loss reserves when compared to the first six months

of fiscal 2021 is mainly related to UCS no longer having any

material exposure to the rental guarantee bond program as substantially all

     of these bonds have since expired.


? Employee costs in the first six months of fiscal 2022 increased by 13.2% from

the first six months of fiscal 2021. The increase is mainly due to the

ACS acquisition completed in April 2021 as well as the hiring of finance, IT

    and marketing positions at GIG.



  ? General and administrative expenses in the first six months of fiscal

2022 decreased by 15.3% from the first six months of fiscal 2021. The decrease

    is mainly due to lower IT system implementation related expenses.


? During the first six months of fiscal 2022, our segment loss from insurance

operations of $173,171 was increased by other investment losses of $2,943,875

mainly from unrealized losses on our investments in publicly held securities.

We expect to continue to invest a portion of our excess capital in accordance

with insurance regulatory limitations in both large-cap publicly traded equity

securities and bonds. These investments are subject to the risk of loss in

value depending upon market conditions and factors outside of our control.





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                                   Cash Flows


Cash Flows for the First Six Months of Fiscal 2022 compared to the First Six Months of Fiscal 2021

The table below summarizes our cash flows, in dollars, for the first six months of fiscal 2022 and the first six months of fiscal 2021:



                                                       Six Months         Six Months
                                                         Ended              Ended
                                                     June 30, 2022      June 30, 2021
                                                      (unaudited)        (unaudited)
Net cash (used in) provided by operating
activities                                           $  (14,679,836 )   $   

5,290,113

Net cash provided by (used in) investing
activities                                              110,796,471        (46,908,356 )
Net cash (used in) provided by financing
activities                                             (116,124,168 )       

52,359,788

Net (decrease) increase in cash, cash equivalents,
and restricted cash                                  $  (20,007,533 )   $   10,741,545




Net Cash (Used in) Provided by Operating Activities. Net cash used in operating
activities was $14,679,836 for the first six months of fiscal 2022 compared to
net cash provided by operating activities of $5,290,113 for the first six months
of fiscal 2021. The decrease in net cash provided by operating activities was
mainly driven by the bonus payments under our Management Incentive Bonus Plan,
which totaled $15,000,000 and were accrued for in the fourth quarter of fiscal
2021 but paid in January 2022, operating costs within our FFH business, which
launched during the third quarter of fiscal 2021, and the formation of our build
for rent business and fund structure within BOAM. These items were partially
offset by improved cash flow generation within our billboard and
insurance businesses as well as positive operating cash flow impact from the
InfoWest and Go Fiber acquisitions completed in April 2022.



Net Cash Provided by (Used in) Investing Activities. Net cash provided
by investing activities was $110,796,471 for the first six months of fiscal 2022
as compared with net cash used in investing activities of $46,908,356 for the
first six months of fiscal 2021. The increase in net cash provided by investing
activities is primarily attributable to $130,190,277 in proceeds from the sale
of investments in Yellowstone's trust account related to Yellowstone's business
combination with Sky Harbour as well as $80,221,635 in net proceeds mainly from
the sale or maturity of U.S. Treasury trading securities and marketable equity
securities held at Boston Omaha. These items were partially offset by net cash
outflows related to our $45,000,000 PIPE investment in Sky Harbour, $40,502,355
in business acquisitions, net of cash acquired, mainly related to the InfoWest
and Go Fiber acquisitions and capital expenditures of $13,644,060.



Net Cash (Used in) Provided by Financing Activities. Net cash used in financing
activities was $116,124,168 during the first six months of fiscal 2022 as
compared to net cash provided by financing activities of $52,359,788 during the
first six months of fiscal 2021. During the first six months of fiscal 2022, net
cash used in financing activities mainly consisted of $123,068,515 in
redemptions and net cash outflows from Yellowstone's trust account as well as
the $4,759,615 deferred underwriting fee payment related to Yellowstone's
business combination with Sky Harbour, partially offset by $12,476,849 in
collateral received at UCS.



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                        Liquidity and Capital Resources



Currently, we own billboards in Alabama, Arkansas, Florida, Georgia, Illinois,
Iowa, Kansas, Missouri, Nebraska, Nevada, Oklahoma, 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 March 2020, December 2020 and April 2022,
minority investments in commercial real estate management and brokerage
services, a bank focused on servicing the automotive loan market, a homebuilding
company and a developer of private aviation infrastructure focused on building,
leasing and managing business aviation hangars. At June 30, 2022, we had
approximately $40 million in unrestricted cash and approximately $41 million in
U.S. Treasury trading securities. 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.



There can be no assurance that we will consummate any subsequent acquisitions.
Furthermore, our acquisitions are subject to a number of risks and
uncertainties, including as to when, whether and to what extent the anticipated
benefits and cost savings of a particular acquisition will be realized. Our
failure to successfully identify and complete future acquisitions of assets or
businesses could reduce future potential earnings, available cash and slow our
anticipated growth. Although we have entered and continue to enter into
non-binding letters of intent to acquire businesses on a regular basis, we do
not have current agreements, commitments or understandings for any specific
material acquisitions which are probable to be consummated at this time.



To date, we have raised funds through the sale of our Common Stock in public
offerings, sales of our Common Stock in "at the market" programs, term loan
financing through our Link subsidiary, proceeds from the sale of publicly traded
securities held by us, cash flow from operations, and, prior to 2019, through
private placements of our Common Stock.



2020 and 2021 Underwritten Public Offerings




On May 28, 2020, we entered into an underwriting agreement, which we refer to as
the "2020 Underwriting Agreement," with Wells Fargo Securities, LLC, which we
refer to as "WFS," and Cowen and Company, LLC, as joint lead book-running
managers for a public offering of 3,200,000 shares, which we refer to as the
"2020 firm shares," of our Class A common stock at a public offering price of
$16.00 per share. Under the terms of the underwriting agreement, we granted the
underwriters an option, exercisable for 30 days, to purchase up to an additional
480,000 shares of Class A common stock at the public offering price less
underwriting discounts and commissions, which we refer to as the "option
shares."  On June 2, 2020, we completed the public offering selling a total of
3,680,000 shares, including both the 2020 firm shares and all of the 2020 option
shares, resulting in total gross proceeds to us of $58.9 million. The shares
were sold in the offering pursuant to the Company's shelf registration statement
on Form S-3 (File No. 333-222853) that was declared effective on February 9,
2018, as supplemented by a prospectus supplement dated May 28, 2020, which we
refer to as the "2018 Shelf Registration Statement."



On March 31, 2021, we entered into an underwriting agreement, which we refer to
as the "2021 Underwriting Agreement," with WFS for a public offering of
2,300,000 shares, which we refer to as the "2021 firm shares," of our Class A
common stock, of which 2,000,000 shares were sold by Boston Omaha and 300,000
shares were sold by a selling stockholder, at a public offering price of
$25.00 per share. Under the terms of the 2021 Underwriting Agreement, we granted
the underwriters an option, exercisable for 30 days, to purchase up to an
additional 345,000 shares of Class A common stock at the public offering price
less underwriting discounts and commissions, which we refer to as the "2021
option shares." On April 6, 2021, we announced the completion of the public
offering consisting of 2,345,000 shares, including both the 2021 firm shares and
all of the 2021 option shares issued as a result of the underwriters' exercise
in full of their over-allotment option, resulting in total gross proceeds to us
of $58.6 million. We raised this capital to fund the planned expansion of
our fiber-to-the-home broadband business, to seek to grow our Link billboard
business through the acquisitions of additional billboard businesses, and for
general corporate purposes. The shares were sold in the offering pursuant to the
Company's universal shelf registration statement on Form S-3ASR (File No.
333-254870) that was declared effective on March 30, 2021, which we refer to as
the "2021 Shelf Registration Statement." The 2021 Shelf Registration Statement
expired on March 28, 2022 upon the filing of our 2021 Annual Report on Form 10-K
as we no longer qualified as a well-known seasoned issuer. In April 2022, we
filed a shelf Registration Statement on Form S-3 (File No. 333-264470) that was
declared effective on May 11, 2022, relating to the offering of Class A common
stock, preferred stock, par value $0.001 per share, which we refer to as
"preferred stock," debt securities and warrants of the Company for up to $500
million.



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At The Market Offering Programs




Starting in March 2018, we utilized our at the market offering that was part of
our 2018 Shelf Registration Statement. This 2018 Shelf Registration Statement,
which authorized us to sell up to $200 million through the sales of securities
to the public, expired in February 2021 and was superseded by the 2021 Shelf
Registration Statement. We sold a total of 2,630,787 shares of Class A common
stock resulting in gross proceeds of $60.1 million under the 2018 Shelf
Registration Statement.



On September 29, 2021, we entered into an at the market equity offering program
(the "ATM Program") pursuant to a Sales Agreement (the "Sales Agreement") by and
between us and WFS. This ATM Program is consistent with our historical practice
of having available to management the option to issue stock from time to time in
order to continue to fund the growth of its fiber to the home rural broadband
business, acquire additional billboards, and make other such investments in
assets as needed to seek to grow intrinsic value per share. Our general
preference is always to have options available to us from a capital allocation
perspective which includes, but is not limited to, having a regularly filed ATM
program as well as an authorized share repurchase program.



Pursuant to the terms of the Sales Agreement, we could sell, from time to time,
shares (collectively, the "Placement Shares") of our 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"). The 2021 Shelf
Registration Statement expired on March 28, 2022 upon the filing of our 2021
Annual Report on Form 10-K as we no longer qualified as a well-known seasoned
issuer. We sold a total of 122,246 shares of our Class A common stock resulting
in gross proceeds of approximately $4.2 million under the the 2021 Shelf
Registration Statement.



For sales of Placement Shares through WFS, we paid WFS a commission at a
mutually agreed rate of 3% of the gross sales price per Placement Share. The
Sales Agreement contains customary representations and warranties of the parties
and indemnification and contribution provisions under which we and WFS have
agreed to indemnify each other against certain liabilities, including
liabilities under the Securities Act.



In April 2022, we filed a shelf Registration Statement on Form S-3 (File No.
333-264470) that was declared effective on May 11, 2022, relating to the
offering of Class A common stock, preferred stock, debt securities and warrants
of the Company for up to $500 million. Additionally, in the 2022 shelf
registration statement, we have registered for resale up to 8,297,093 shares of
Class A common stock acquired in 2018 or earlier in private placements in
accordance with the terms of a 2018 registration rights agreement. We will not
receive any proceeds from the sale of Class A common stock by the selling
shareholders. Currently, the selling stockholders are the Massachusetts
Institute of Technology, or "MIT", as well as 238 Plan Associates LLC, an MIT
pension and benefit fund and a limited partnership holding our Class A common
stock for the economic benefit of MIT. No officer or director has any beneficial
interest in any shares eligible for resale by the selling shareholders. We may,
from time to time, in one or more offerings, offer and sell Class A common stock
or preferred stock, various series of debt securities, and/or warrants. The
shelf registration statement may also be used by one or more selling security
holders, to be identified in the future, of our securities. We or any selling
security holders may offer these securities from time to time in amounts, at
prices and on terms determined at the time of offering. We may sell these
securities to or through one or more underwriters, dealers or agents or directly
to purchasers on a delayed or continuous basis. Unless otherwise set forth in an
applicable prospectus supplement, we intend to use the net proceeds from the
sale of the securities that we offer for general corporate purposes, including,
but not limited to, financing our existing businesses and operations, and
expanding our businesses and operations through additional hires, strategic
alliances and acquisitions. Unless otherwise set forth in a prospectus
supplement, we will not receive any proceeds from the sale of securities by any
selling stockholders.



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Link Credit Agreement



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 $40,000,000 (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 (the "Fourth Amendment"), which modified the Credit Agreement by
increasing the borrowing limit to $30,000,000 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 June 30, 2022 consists
of Link's Term Loan borrowings of $29,247,217, of which $1,514,042 is classified
as current. There were no amounts outstanding related to the revolving line of
credit as of June 30, 2022.



Principal amounts under the Term Loan are payable in monthly installments
according to a 15-year amortization schedule with principal payments commencing
on January 1, 2022. 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. The revolving line of credit loan facility has a
$5,000,000 maximum availability. 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 revolving line of credit is due and
payable on August 12, 2023.



Under the Term Loan, Link is required to comply with the following financial
covenants: A consolidated leverage ratio for any test period ending on the last
day of any fiscal quarter of Link (a) beginning with the fiscal quarter ended
December 31, 2021 of not greater than 3.50 to 1.00, (b) beginning with the
fiscal quarter ending December 31, 2022 of not greater than 3.25 to 1.00 and
(c) beginning with the fiscal quarter ending December 31, 2023
and thereafter of not greater than 3.00 to 1.00, and a minimum consolidated
fixed charge coverage ratio of not less than 1.15 to 1.00 measured quarterly,
based on rolling four quarters. The Company was in compliance with these
covenants as of June 30, 2022.



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,
and 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.



Loan to Dream Finders Homes



On October 2, 2020, we provided a term loan of $20 million to Dream Finders
Holdings, LLC to be used in expanding DFH's footprint in the Southeast United
States. The effective interest rate on this term loan is approximately 14% and
matured on May 1, 2021. This loan was repaid with interest in early 2021.



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Investments in Yellowstone Acquisition Company and Sky Harbour Group Corporation




In 2020, we acted as the sponsor for the initial public offering of Yellowstone
and purchased 3,399,724 shares of Yellowstone Class B common stock and 7,719,799
private placement warrants at a combined cost of approximately $7.8 million. On
August 1, 2021, we entered into an equity purchase agreement with Sky Harbour
LLC by which Sky Harbour LLC unitholders would acquire a majority interest in
the combined businesses following the completion of a business combination. As
part of the equity purchase agreement, and immediately prior to the completion
by Sky Harbour LLC of a private activity bond financing raising $160 million in
proceeds in September 2021, we purchased Class B Preferred Units in Sky Harbour
LLC for a purchase price of $55 million, which Class B Preferred Units converted
to 5,500,000 shares of Sky Harbour Group Corporation ("Sky Harbour") Class A
common stock upon the closing of the Sky Harbour business combination on January
25, 2022. Also, upon the closing of the business combination, we purchased an
additional 4,500,000 shares of Sky Harbour Class A common stock for a purchase
price of $45 million.


? Upon the closing of the Sky Harbour business combination, our Class B common

stock converted to Class A common stock of Sky Harbour and our private

placement warrants are now exercisable to purchase 7,719,779 shares of Class A

    common stock of Sky Harbour (the "Sky Harbour Warrants").


? Each Sky Harbour Warrant is exercisable for one share of Class A common stock

at a price of $11.50 per share, subject to adjustment, with each Sky Harbour

Warrant being exercisable through January 25, 2026. Unlike Sky Harbour's

publicly traded warrants, these warrants are not redeemable by Sky Harbour as

long as we or permitted transferees hold these warrants. The Sky Harbour

    Warrants are also exercisable on a cashless basis.


? Our Sky Harbour Class A common stock and the Sky Harbour Warrants and the

shares underlying the warrants remain subject to a lockup, which we refer to

as the "Sky Lockup Period," for a period of at least the first to occur of (a)

January 25, 2023, (b) if the last sale price of Sky Harbour's Class A common

stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock

dividends, reorganizations, recapitalizations and the like) for any 20 trading

days within any 30-trading day period commencing at least 150 days after

January 25, 2022, or (c) the date on which Sky Harbour completes a

liquidation, merger, capital stock exchange, reorganization or other similar

transaction that results in all of the Sky Harbour stockholders having the

right to exchange their shares of Class A common stock for cash, securities or

    other property.



  ? Subsequent to the closing of the Sky Harbour business combination, we

distributed 75,000 shares of Sky Harbour Class A common stock to the outside

directors of Yellowstone and 206,250 shares of Sky Harbour Class A common

stock to an investor in the Yellowstone IPO. As of August 12, 2022, we hold

    13,118,474 shares of Sky Harbour Class A common stock and 7,719,779 Sky
    Harbour Warrants.


? All of the shares of Sky Harbour Class A common stock that we own as well as

the Sky Harbour Warrants and the shares of Sky Harbour Class A common stock

underlying the Sky Harbour Warrants were registered with the SEC in 2022 but

    remain subject to the lock-up provisions as described above.


? Depending upon a number of factors, we could be deemed to be an affiliate of

Sky Harbour for purposes of Rule 144, and our ability to liquidate all or a

portion of our holdings in Sky Harbour, if we are deemed to be an affiliate

and in the absence of an effective registration statement for our shares,

would be subject to the volume trading limitations contained in Rule 144,

which generally limits our ability to sell shares in any one quarter to the

greater of 1% of the issued and outstanding shares of Class A common stock or

the average weekly trading volume of such shares over the four weeks preceding

    the date of the sale.




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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,
any proceeds from the future sale of our Class A common stock under the 2022
shelf registration statement, 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, 2022, we
had approximately $40 million in unrestricted cash, $41 million in U.S. treasury
trading securities, and $21 million in marketable equity securities.



If future additional significant acquisition opportunities as well as expansion
opportunities within our billboard and broadband services businesses, and
possible further development under our build for rent business become available
in excess of our currently available cash and U.S. Treasury and marketable
equity securities, we may need to seek additional capital through long term debt
borrowings, the sale of our securities, and/or other financing options and we
may not be able to obtain such debt or equity financing on terms favorable to us
or at all. In the future, we may use a number of different sources to finance
our acquisitions and operations, including current cash on hand, potential
future cash flows from operations, seller financing, debt financings including
but not limited to long-term debt and line of credit facilities, including
additional credit facilities which may or may not be secured by our assets or
those of our operating subsidiaries, additional common or preferred equity
issuances or any combination of these sources, to the extent available to us, or
other sources that may become available from time to time, which could include
asset sales and issuance of debt securities. In addition to Link's current
credit facility, any future debt that we incur may be recourse or non-recourse
and may be secured or unsecured. Link's existing credit facility imposes
restrictions on Link that could increase our vulnerability to general adverse
economic and industry conditions by limiting our flexibility in planning for and
reacting to changes in our billboard, insurance and broadband businesses.
Specifically, these restrictions place limits on Link and its subsidiaries'
ability to, among other things, incur additional indebtedness, make additional
acquisitions and investments, pay dividends, repurchase stock, create liens,
enter into transactions with affiliates, merge or consolidate or transfer or
sell our billboard assets. Link's credit facility requires it to meet a fixed
charge coverage ratio and other financial covenants. Link's ability to comply
with these loan covenants may be affected by factors beyond its control and a
breach of any loan covenants would likely result in an event of default under
the Credit Agreement, which would permit the Lender to declare all amounts
incurred thereunder to be immediately due and payable and to terminate their
commitment to make future extensions of credit. We also may take advantage of
joint venture or other partnering opportunities as such opportunities arise in
order to acquire properties that would otherwise be unavailable to us. Any
future credit facilities which we or any of our subsidiaries may enter into
would likely impose similar restrictions and risks.



We may use the proceeds of any future borrowings to acquire assets or for
general corporate purposes. In determining when to use leverage, we will assess
the appropriateness of new equity or debt capital based on market conditions,
including assumptions regarding future cash flow, the creditworthiness of
customers and future rental rates.



We conduct and plan to continue to conduct our activities in such a manner as
not to be deemed an investment company under the Investment Company Act.
Therefore, no more than 40% of our total assets can be invested in investment
securities, as such term is defined in the Investment Company Act. In addition,
we do not invest or intend to invest in securities as our primary business. We
run the risk of inadvertently being deemed to be an investment company that is
required to register under the Investment Company Act of 1940 (the "Investment
Company Act") because a significant portion of our assets consists of
investments in companies in which we own less than a majority interest. The risk
varies depending on events beyond our control, such as significant appreciation
or depreciation in the market value of certain of our publicly traded holdings,
adverse developments with respect to our ownership of certain of our
subsidiaries, and transactions involving the sale of certain assets. If we are
deemed to be an inadvertent investment company, we may seek to rely on a
safe-harbor under the Investment Company Act that would provide us a one-year
grace period to take steps to avoid being deemed to be an investment company. In
order to ensure we avoid being deemed an investment company, we have taken, and
may need to continue to take, steps to reduce the percentage of our assets that
constitute investments assets under the Investment Company Act. These steps have
included, among others, selling marketable securities that we might otherwise
hold for the long-term and deploying our cash in non-investment assets. We have
recently sold marketable securities, including at times at a loss, and we may be
forced to sell our investment assets at unattractive prices or to sell assets
that we otherwise believe benefit our business in the future to remain below the
requisite threshold. We may also seek to acquire additional non-investment
assets to maintain compliance with the Investment Company Act, and we may need
to incur debt, issue additional equity or enter into other financing
arrangements that are not otherwise attractive to our business. Any of these
actions could have a material adverse effect on our results of operations and
financial condition. Moreover, we can make no assurance that we would
successfully be able to take the necessary steps to avoid being deemed to be an
investment company in accordance with the safe-harbor. If we were unsuccessful,
then we would have to register as an investment company, and we would be unable
to operate our business in its current form. We would be subject to extensive,
restrictive, and potentially adverse statutory provisions and regulations
relating to, among other things, operating methods, management, capital
structure, indebtedness, dividends, and transactions with affiliates. If we were
deemed to be an investment company and did not register as an investment company
when required to do so, there would be a risk, among other material adverse
consequences, that we could become subject to monetary penalties or injunctive
relief, or both, that we would be unable to enforce contracts with third
parties, and/or that third parties could seek to obtain rescission of
transactions with us undertaken during the period in which we were deemed to be
an unregistered investment company.



Our certificate of incorporation and bylaws do not limit the amount of debt that
we may incur. Our Board of Directors has not adopted a policy limiting the total
amount of debt that we may incur. Our Board of Directors will consider a number
of factors in evaluating the amount of debt that we may incur. If we adopt a
debt policy, our Board of Directors may from time to time modify such policy in
light of then-current economic conditions, relative costs of debt and equity
capital, market values of our properties, general conditions in the markets for
debt and equity securities, fluctuations in the market price of our Class A
common stock if then trading on any exchange, growth and acquisition
opportunities and other factors. Our decision to use leverage in the future to
finance our assets will be at our discretion and will not be subject to the
approval of our stockholders, and we are not restricted by our governing
documents or otherwise in the amount of leverage that we may use.



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                         Off-Balance Sheet Arrangements


Except for our normal operating leases, we do not have any off-balance sheet financing arrangements, transactions, or special purpose entities.

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