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MarketScreener Homepage  >  Equities  >  Nasdaq  >  Boston Omaha Corporation    BOMN

BOSTON OMAHA CORPORATION

(BOMN)
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BOSTON OMAHA : Management's Discussion and Analysis of Financial Condition and Results of Operations. (form 10-Q)

11/09/2020 | 04:11pm EST

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. AMONG THE FACTORS THAT COULD CAUSE OUR ACTUAL RESULTS TO DIFFER
MATERIALLY FROM OUR FORWARD-LOOKING STATEMENTS ARE: THE SCOPE AND DURATION OF
THE COVID-19 PANDEMIC, GOVERNMENT ACTIONS AND OTHER THIRD PARTY RESPONSES TO IT
AND THE CONSEQUENCES FOR THE ECONOMY, AS WELL AS THE REGIONAL AND LOCAL
ECONOMIES IN WHICH WE OPERATE, UNCERTAINTIES REGARDING WHEN THE RISKS OF THE
PANDEMIC WILL SUBSIDE, AND ITS IMPACT ON OUR BUSINESS, OPERATIONS, RESULTS OF
OPERATIONS AND FINANCIAL CONDITION. ADDITIONALLY, MANY OF THE OTHER RISK FACTORS
AFFECTING US ARE CURRENTLY ELEVATED BY, AND LIKELY WILL CONTINUE TO BE ELEVATED
BY, THE COVID-19 PANDEMIC. 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, 2019, in exhibit 99.1 to our form 8-k as filed with the
SECURITIES AND EXCHANGE commission on APRIL 13, 2020, IN EXHIBIT 99.1 TO OUR
FORM 8-K AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 27, 2020,
THE DISCUSSION UNDER THE HEADING "RECENT DEVELOPMENTS - IMPACT OF THE COVID-19
DISEASE ON OUR BUSINESS" SET FORTH BELOW IN MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" OF THIS QUARTERLY REPORT ON
FORM 10-Q AND FROM TIME TO TIME IN OUR OTHER SECURITIES AND EXCHANGE COMMISSION
(THE "SEC") FILINGS. 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 2020 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 and surety insurance
and related brokerage businesses and commenced a broadband business in March
2020. In addition, we hold minority investments in commercial real estate
management and brokerage services, a bank focused on servicing the automotive
loan market, and a homebuilding company with operations located primarily in the
Southeast United States.



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. These transactions include our acquisition on July 31, 2018
of Tammy Lynn for approximately $16 million, our acquisition on August 22, 2018
of substantially all of the assets of Key for approximately $38 million, and our
acquisition on August 31, 2018 of Waitt for approximately $84 million. We
believe that the acquisitions of Waitt and Key, with over 1,600 and 700
billboard structures, respectively, make us a leading outdoor billboard
advertising company in the markets we serve in the Midwest. As of October 31,
2020, we operate approximately 3,000 billboards with approximately 5,600
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 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 three years, we have also
acquired additional surety insurance brokerage businesses located in various
regions of the United States.



Broadband Services: In March 2020, we commenced our broadband services business
with the acquisition of substantially all of the assets of FibAire. We provide
these services to over 7,000 customers located in Arizona and hope to continue
to expand this business in Arizona 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 Company, LLC, both
    directly and indirectly through our ownership in Logic. In addition, we

have invested, through one of our subsidiaries, $3 million in 24th Street Fund

I, LLC. The fund is managed by 24th Street Asset Management, LLC, a subsidiary

of 24th Street Holding Company, LLC, and will focus on opportunities within

    secured lending and direct investments in commercial real estate.



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

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

builder with operations in Colorado, Florida, Georgia, Maryland, 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. In May 2019, we invested, through one of our

subsidiaries, an additional $12 million in DFH through the purchase of

preferred units with a mandatory preferred return of at least 14% per annum.

In January 2020, DFH redeemed $6 million of the preferred units and then

    redeemed the remaining $6 million of preferred units in July 2020.



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

million through the purchase of common stock of CBT Holding Corporation, the

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

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




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 and in the future 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
may 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 CBT and DFH 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 provide 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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      Recent Developments - Impact of the COVID-19 Disease on Our Business



The global outbreak of a novel strain of coronavirus ("COVID-19") has had a
significant impact on many industries and companies, and is also impacting our
business. We cannot presently estimate the significance, extent or duration of
the overall operational and financial impact of COVID-19 on our business. As a
result of the COVID-19 pandemic, economic uncertainties have arisen which are
likely to negatively impact our net income and surplus. The extent to which the
COVID-19 pandemic impacts our business, net income, surplus, as well as our
capital and liquidity position, will depend on future developments, which are
highly uncertain and cannot be estimated, including the scope and duration of
the pandemic and actions taken by governmental authorities and other third
parties in response to the pandemic. However, the COVID-19 pandemic has had
various impacts on us, and is expected to have additional impacts on us,
including, among other things, the following, which have had an adverse effect
and may in the future have a material adverse effect on our business, financial
performance and condition, operating results and cash flows and stock price:



? We expect that the impact of "stay at home" and other governmental mandates

closing retail and other businesses will adversely impact revenues for our

billboard business and the ability of certain customers to pay outstanding

invoices. For the quarter ended September 30, 2020, our revenues from our

billboard business decreased by 0.8% from revenues for the quarter ended

September 30, 2019. For the quarter ended September 30, 2020, bad debt expense

for our billboard business increased to $104,449 from $71,009 in the quarter

    ended September 30, 2019.




  ? We expect to sell fewer surety bonds as some of the markets we serve

(contractors, small businesses, residential and commercial lease) have been

impacted by the COVID-19 virus. In New York and other states where we

previously sold residential lease bonds, eviction actions have been suspended

and it is unclear what impact the COVID-19 pandemic will have on lease

defaults. Due to the current disruption in this market, we have suspended

issuing new rental insurance bonds in most instances, which could

significantly reduce the revenues at our UCS business as we currently do not

intend to reenter this market based on current market trends. These bonds

accounted for approximately 46% of GIG's written premium during the year ended

December 31, 2019 and 24% of our written premium during the nine months ended

September 30, 2020. UCS has also implemented an increasingly conservative loss

reserve methodology for this program. While UCS believes that these increased

loss reserve levels will adequately cover the possibility of greater risk

exposures, this is not assured and these reserves may prove inadequate if

defaults exceed projected loss estimates. Furthermore, various state and local

legislators are actively contemplating new laws and civil actions which could

meaningfully impact the insurance industry generally and, specifically our

surety business. We recognize revenues from the sale of these bonds over the

life of the bond so the suspension of certain rental bond sales and decreases

in other surety bond sales may not immediately impact our reported revenues in

    the short term.




  ? In our insurance business, we rely in significant part on reinsurance

arrangements for some of our insurance business. Although we do not currently

anticipate any loss of our reinsurance and have recently renewed reinsurance

arrangements, insurance markets are currently highly volatile, and any loss

would place our other UCS assets at risk. We also anticipate that our

reinsurance premium costs could increase substantially, which higher costs we

    may not be able to pass through to our customers.



? In the broadband telecommunications business, we expect demand for services to

remain high but we may experience reduced revenues if customers are unable to

pay their bills due to loss of employment or other causes related to the

    pandemic.



? We expect to continue to seek additional acquisitions of businesses. Current

market conditions may result in fewer companies wishing to be acquired, which

could delay certain of our growth plans. Other companies available for sale

may have had their operations severely impacted due to the pandemic and may

not generate the returns we generally seek from acquisitions. While the cost

to acquire such companies would potentially be lower than the purchase price

we might pay in a more normal market environment, the risks associated with

    any newly acquired company may also be greater.



? We hold minority investments in Logic, DFH and CBT. Financial results for both

    Logic and DFH are included in our results of operations. We expect the
    COVID-19 pandemic to adversely impact all three investments.




  ? For Logic, we expect that a significant portion of its fee income from

brokerage and property management will be adversely impacted but that some of

    its other real estate finance operations may experience growth.



? For DFH, we expect that new home sales may decrease during the crisis due to

potential buyers' concerns about the general economy and the impact of higher

unemployment rates, however, inventories remain relatively low relative to

other macro-economic downturns. Through September 30, 2020, DFH is reporting

higher revenues and income than in 2019 but the long-term impact of the

pandemic on the economy could result in a reduction in demand in the future.

? For CBT, we expect a reduction in demand for vehicle purchases in the near

    term.




  ? Both DFH and CBT borrow and we do not have guidance on what impact this

pandemic will have on their ability to continue to borrow in the future and

pay down any debt. We believe in the potential long-term value and success of

both DFH and CBT and would consider providing additional funding if necessary.

In October 2020, we provided DFH with a $20 million unsecured short-term loan

which matures on May 1, 2021. This loan allowed DFH to acquire a homebuilding

    business.



? Any increase in unemployment or underemployment may lead to an increase in the

number of loan delinquencies and auto repossessions and have an adverse impact

on CBT. The unemployment rate has risen significantly this year from its

pre-pandemic levels and could continue to rise to a level that is uncertain at

this time. People who are not employed, are underemployed, or are concerned

about the loss of their jobs are less likely to purchase new homes and

automobiles, may be forced to try to sell the homes they own, and may face

difficulties in making required auto loan payments. Therefore, any increase in

unemployment or underemployment may lead to an increase in the number of loan

delinquencies experienced by CBT and have an adverse impact on DFH both by

reducing demand for the homes DFH builds and by increasing the supply of homes

    for sale. CBT has significantly increased its loss reserves for 2020 in
    anticipation of future losses.




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  ? We held $63.8 million in a few publicly traded investment securities at

September 30, 2020. Since the pandemic started in the United States in early

March, the market prices for these securities have dropped significantly. We

believe that the prices for these securities will continue to be volatile

during the pandemic and any ongoing economic downturn which may follow the

cessation of the pandemic. Our investments in publicly traded securities are

solely in larger market capitalized companies (market capitalizations in

    excess of $4 billion at the time of purchase).



? Boston Omaha is debt free as are some of our subsidiaries. However, Link's

billboard business has borrowed to date $23.5 million under two term loan

arrangements which are due in August 2026 and which provide for monthly

principal payments amortized over a 15-year term commencing July 1, 2020.

Under its credit arrangement, Link may borrow additional funds through a $5

million revolver, which has not been drawn upon since the inception of the

loan in August 2019. Any loans are guaranteed by Link's operating subsidiaries

but these loans are not guaranteed by us or any of our other non-Link

subsidiaries. Link's term loan requires monthly principal repayments which

commenced in July 2020 and we can cure certain financial covenant defaults by

    paying any monthly principal payment then due. As a result, we do not
    currently anticipate any adverse impact to the Link credit facility.



? All our acquisitions involve assets with anticipated long lives, and while we

do not currently anticipate any material write-off of goodwill or other

significant impairment of assets, any unforeseen extensive economic downturn

could cause us to incur significant impairment charges. At September 30, 2020,

we recorded goodwill of approximately $113.4 million, or 23.6% of our total

    assets at September 30, 2020. Any significant impairment charges could
    materially adversely impact our balance sheet.




  ? Our ability to conduct our business operations has not been materially
    impacted by the pandemic and absent a future larger scale pandemic or

illnesses involving a significant portion of our work force, we do not foresee

a significant impact on our ability to continue to deliver services. Our

information technology systems allow for remote computing by most of our

employees who require access to these systems. Our accounting systems also

allow us to fully monitor all financial activities and we do not expect the

pandemic to have a materially adverse impact on our system of internal

controls. In response to the COVID-19 pandemic, we moved to a "remote work"

model for office personnel in March 2020. This model has significantly

increased the use of remote networking and online conferencing services that

enable employees to work outside of our corporate infrastructure and, in some

cases, use their own personal devices. This has resulted in increased demand

for information technology resources and exposes us to additional

cybersecurity risks, including unauthorized access to sensitive information as

a result of increased remote access and the risk of other cybersecurity

related incidents. None of our businesses require a manufacturing facility or

    other physical assets which cannot currently operate.



? As a result of these recent developments, we have implemented work-from-home

policies for almost all our employees. The effects of these orders,

government-imposed quarantines and our work-from-home policies may negatively

impact productivity, disrupt our business and could delay timelines, the

magnitude of which will depend, in part, on the length and severity of the

restrictions and other limitations on our ability to conduct our business in

the ordinary course. Quarantines, shelter-in-place and similar government

orders, or the perception that such orders, shutdowns or other restrictions on

the conduct of business operations could occur, related to COVID-19 or other

infectious diseases could impact personnel at third-party supplier facilities

    in the United States and other countries.




  ? At September 30, 2020, we had $42.3 million in unrestricted cash, $76.7

million in U.S. treasury securities and $63.8 million in marketable equity

securities. We may also continue to sell shares of our Class A common stock

through our "at the market" offering. Concerns over the economic impact of

COVID-19 pandemic have caused extreme volatility in financial and other

capital markets which has and may continue to adversely impact our stock price

    and our ability to access capital markets.




  ? To the extent the COVID-19 pandemic adversely affects our business and

financial results, it may also have the effect of heightening many of the

other risks described in the "Risk Factors" sections of both our Annual Report

on Form 10-K for the year ended December 31, 2019, our Form 8-K as filed with

the SEC on April 13, 2020, and our Form 8-K as filed with the SEC on May 27,

2020, including but not limited to, those relating to our products and

services, financial performance, credit rating of our insurance subsidiary and

    debt obligations of our billboard business.



? In the second half of March 2020, we announced the implementation of a stock

buyback plan. We have not repurchased any shares as of this date. We may in

the future repurchase shares of our Class A common stock, which could reduce

    our cash available for working capital and other purposes.




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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 September 30, 2020 Compared to Three Months Ended September 30, 2019




The following is a comparison of our results of operations for the three months
ended September 30, 2020, which we refer to as the "third quarter of fiscal
2020," compared to the three months ended September 30, 2019, which we refer to
as the "third quarter of fiscal 2019." Our results for the third quarter of
fiscal 2020 include the operating results of our broadband services business
which was acquired during the first quarter of fiscal 2020. Therefore,
comparisons of our results for the third quarter of fiscal 2020 to the third
quarter of fiscal 2019 may not be meaningful.



Revenues. For the third quarter of fiscal 2020 and the third quarter of fiscal
2019, our revenues in dollars and as a percentage of total revenues were as
follows:



                                                 For the Three Months Ended September 30,
                                                               (unaudited)
                                         2020                            2019                  2020 vs 2019
                                               As a % of                       As a % of
                                                 Total                           Total
                                 Amount        Revenues         Amount         Revenues         $ Variance
Revenues:
Billboard rentals, net        $  7,121,957       61.3%       $  7,182,884         66.4%       $      (60,927 )
Broadband services               1,144,343       9.9%                   -           -              1,144,343
Premiums earned                  2,880,544       24.8%          3,065,490         28.3%             (184,946 )
Insurance commissions              382,493       3.3%             442,824          4.1%              (60,331 )
Investment and other income         77,499       0.7%             131,610          1.2%              (54,111 )
Total Revenues                $ 11,606,836      100.0%       $ 10,822,808         100.0%      $      784,028




We realized total revenues of $11,606,836 during the third quarter of fiscal
2020, an increase of 7.2% over revenues of $10,822,808 during the third quarter
of fiscal 2019. The increase in total revenues was driven by our acquisition of
FibAire in March 2020 and was partially offset by lower revenue within our UCS
insurance subsidiary, mainly due to the suspension of its rental guarantee bond
program, as well as the impact of COVID-19 on our billboard operations and
surety brokerage operations.



? Net billboard rentals in the third quarter of fiscal 2020 decreased 0.8% from

the third quarter of fiscal 2019, reflecting a reduction in rental and

occupancy rates across a number of our markets due to COVID-19. The decline

due to COVID-19 was partially offset by the acquisition of billboards from

Image in the third quarter of fiscal 2019, which accounted for

approximately 4% of our billboard revenues in the third quarter of fiscal

    2020.




  ? Revenue from broadband services in the third quarter of fiscal 2020 was

$1,144,343, reflecting the acquisition of our broadband services business in

    March 2020.



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

fiscal 2020 decreased 6.0% from the third quarter of fiscal 2019. The decrease

in premiums earned was primarily due to the suspension of issuing new bonds

under its rental guarantee bond program, which is expected to reduce future

revenues at UCS. We recognize revenues for written premium over the life of

the surety bond and, as a result, an increase in sales activities is not fully

    reflected in the quarter in which the surety bond is issued.




  ? Revenue from insurance commissions generated by our surety brokerage

operations in the third quarter of fiscal 2020 decreased by 13.6% from the

third quarter of fiscal 2019, primarily because our agents are able to place

more surety bond business through UCS but also due to a reduction in demand as

some of the markets we serve (contractors, small businesses, residential and

    commercial lease) were impacted by COVID-19.



? Investment and other income at UCS decreased 41.1% in the third quarter of

fiscal 2020 from $131,610 in the third quarter of fiscal 2019 due to the

    decline in interest rates over the past year.




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Expenses. For the third quarter of fiscal 2020 and the third quarter of fiscal
2019, our expenses, in dollars, and as a percentage of total revenues, were as
follows:



                                                 For the Three Months Ended September 30,
                                                                (unaudited)
                                           2020                           2019                2020 vs 2019
                                                 As a % of                      As a % of
                                                   Total                          Total
                                   Amount        Revenues         Amount        Revenues       $ Variance
Costs and Expenses:
Cost of billboard revenues      $  2,780,359       24.0%       $  2,857,680       26.4%       $     (77,321 )
Cost of broadband revenues           129,414       1.1%                   -         -               129,414

Cost of insurance revenues 1,758,451 15.2% 2,025,320

      18.7%            (266,869 )
Employee costs                     3,311,885       28.5%          3,109,483       28.7%             202,402
Professional fees                    630,604       5.4%             944,862       8.7%             (314,258 )
Depreciation                         978,672       8.4%             463,410       4.3%              515,262
Amortization                       1,031,805       8.9%           3,656,612       33.8%          (2,624,807 )
General and administrative         1,544,334       13.3%          1,445,859       13.4%              98,475
Loss on disposition of assets         20,751       0.2%               2,760       0.0%               17,991
Accretion                             36,462       0.3%              33,154       0.3%                3,308
Bad debt expense                     104,722       0.9%              72,767       0.7%               31,955

Total Costs and Expenses $ 12,327,459 106.2% $ 14,611,907

     135.0%       $  (2,284,448 )




During the third quarter of fiscal 2020, we had total costs and expenses
of $12,327,459, as compared to total costs and expenses of $14,611,907 in the
third quarter of fiscal 2019. Total costs and expenses as a percentage of total
revenues decreased from 135.0% in the third quarter of fiscal 2019 to 106.2% in
the third quarter of fiscal 2020. This improvement reflects our increase in
total revenues, a reduction in amortization expense due to extending the
amortization period from 3 years to 10 years for customer relationships within
our billboard segment during the fourth quarter of fiscal 2019 and our continued
focus on reducing general and administrative expenses as well as professional
fees. In the third quarter of fiscal 2020, cost of billboard revenues, cost of
insurance revenues, employee costs, professional fees, amortization and general
and administrative expenses decreased as a percentage of total revenues as
compared to the third quarter of fiscal 2019.



? During the third quarter of fiscal 2020, cost of billboard revenues decreased

by $77,321, from the third quarter of fiscal 2019. The decrease was mainly

    related to lower commissions paid and ground rent expense.



? During the third quarter of fiscal 2020, cost of insurance revenues decreased

by $266,869, or 13.2%, from the third quarter of fiscal 2019. The decrease was

driven by lower commissions paid which was partially offset by increased loss

    reserves at UCS related to its rental guarantee bond program due to the
    uncertainty caused by COVID-19 which has led to higher losses and loss
    adjustment expense.



? Employee costs increased $202,402 from the third quarter of fiscal 2019. The

increase was mainly driven by our broadband services business, which we

acquired in March 2020, and was partially offset by lower employee costs

    within our billboard and insurance businesses.




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? Professional fees in the third quarter of fiscal 2020 were $630,604, or 5.4%

of total revenues, as compared to $944,862, or 8.7% of total revenues, in the

third quarter of fiscal 2019. Professional fees mainly include costs

associated with third-party accounting, audit, legal, and acquisition related

    expenses.



? Non-cash expenses in the third quarter of fiscal 2020 included $1,031,805 in

amortization expense, $978,672 in depreciation expense, and $36,462 in

accretion expense related to asset retirement obligations for certain

billboard and broadband assets. Amortization expense in the third quarter of

fiscal 2020 decreased by 71.8% from the third quarter of fiscal 2019 as

we extended the amortization period from 3 years to 10 years to better reflect

    the estimated economic lives of our customer relationships within our
    billboard segment.



? General and administrative expenses increased from $1,445,859 in the third

quarter of fiscal 2019 to $1,544,334 in the third quarter of fiscal 2020, an

increase of 6.8%. The increase was mainly driven by our broadband services

business, which was acquired in March 2020, and was partially offset by lower

    general and administrative expenses within our billboard and insurance
    businesses.




Net Loss from Operations. Net loss from operations for the third quarter of
fiscal 2020 was $720,623, or 6.2% of total revenues, as compared to a net loss
from operations of $3,789,099, or 35.0% of total revenues, in the third quarter
of fiscal 2019. The decrease in net loss from operations in dollars was
primarily due to the addition of our broadband services operations, as well as a
decrease in amortization expense after extending the amortization period from 3
years to 10 years for customer relationships within our billboard segment. Our
net loss from operations included $2,046,939 from non-cash amortization,
depreciation and accretion expenses in the third quarter of fiscal 2020, as
compared to $4,153,176 in the third quarter of fiscal 2019.



Other Income (Expense).  During the third quarter of fiscal 2020, we had net
other income of $4,186,794. Net other income included $2,026,193 in realized
gains mainly from the sale of large publicly traded equity securities held at
Boston Omaha, $1,342,826 in equity in income of unconsolidated
affiliates, $819,130 in unrealized gains mainly on large publicly traded equity
securities held by UCS, $106,716 in dividend income from public equity
securities held by Boston Omaha, and interest income of $104,125. These items
were partially offset by interest expense of $212,196 mainly incurred under
Link's term loan which commenced in August 2019. During the third quarter of
fiscal 2019, we had net other income of $4,456,704, which included $2,813,544 in
unrealized gains on securities, $1,266,731 of interest income, $315,897 in
dividend income, $159,564 in equity in income of unconsolidated affiliates,
$7,565 in realized gains on disposition of investments, and then $106,597 in
interest expense.



Net Income Attributable to Common Stockholders. We had net income attributable
to common stockholders in the amount of $3,463,671 in the third quarter of
fiscal 2020, or income per share of $0.13, based on 27,231,115 weighted average
shares outstanding. This is compared to net income attributable to common
stockholders of $634,999 in the third quarter of fiscal 2019, or income per
share of $0.03, based on 22,798,738 weighted average shares outstanding.



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Nine Months Ended September 30, 2020 Compared to Nine Months Ended September 30, 2019




The following is a comparison of our results of operations for the nine months
ended September 30, 2020, which we refer to as the "first nine months of fiscal
2020," compared to the nine months ended September 30, 2019, which we refer to
as the "first nine months of fiscal 2019."  Our results for the first nine
months of fiscal 2020 include the operating results of our broadband services
business which was acquired during the first quarter of fiscal 2020. Therefore,
comparisons of our results for the first nine months of fiscal 2020 to the first
nine months of fiscal 2019 may not be meaningful.



Revenues. For the first nine months of fiscal 2020 and the first nine months of
fiscal 2019, our revenues in dollars and as a percentage of total revenues were
as follows:



                                                 For the Nine Months Ended September 30,
                                                               (unaudited)
                                          2020                           2019                 2020 vs 2019
                                                As a % of                      As a % of
                                                  Total                          Total
                                  Amount        Revenues         Amount        Revenues        $ Variance
Revenues:
Billboard rentals, net         $ 20,991,755       60.8%       $ 21,113,266       70.2%       $     (121,511 )
Broadband services                2,575,676       7.5%                   -         -              2,575,676
Premiums earned                   9,538,183       27.6%          7,435,389       24.7%            2,102,794
Insurance commissions             1,065,013       3.1%           1,200,927       4.0%              (135,914 )
Investment and other income         338,953       1.0%             323,512       1.1%                15,441
Total Revenues                 $ 34,509,580      100.0%       $ 30,073,094      100.0%       $    4,436,486




We realized total revenues of $34,509,580 during the first nine months of fiscal
2020, an increase of 14.8% over revenues of $30,073,094 during the first nine
months of fiscal 2019. The increase in total revenues was largely driven by our
acquisition of FibAire in March 2020 as well as premiums earned at
UCS, reflecting our ability to issue surety bonds in all 50 states and the
District of Columbia and prior quarter growth within our rental guarantee bond
program. However, due to the current disruption in this market, we have
suspended issuing new rental guarantee bonds, which could significantly reduce
future revenues at UCS. 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.



? Net billboard rentals in the first nine months of fiscal 2020 decreased 0.6%

from the first nine months of fiscal 2019, reflecting a reduction in rental

and occupancy rates across a number of our markets due to COVID-19. The

decline due to COVID-19 was partially offset by the acquisition of billboards

from Image in the third quarter of fiscal 2019, which accounted for

approximately 4% of our billboard revenues in the first nine months of fiscal

    2020.



? Revenue from broadband services in the first nine months of fiscal 2020 was

$2,575,676, reflecting the acquisition of our broadband services business in

    March 2020.



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

fiscal 2020 increased 28.3% from the first nine months of fiscal 2019. The

increase in premiums earned was primarily due to an increase in gross written

premium now that UCS is licensed in all 50 states and the District of Columbia

and prior quarter growth within our rental guarantee bond program. However,

due to the current disruption in this market, we have suspended issuing new

rental guarantee bonds, which is expected to reduce future revenues at UCS. We

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

as a result, an increase in sales activities is not fully reflected in the

    quarter in which the surety bond is issued.




  ? Revenues from insurance commissions generated by our surety brokerage

operations in the first nine months of fiscal 2020 decreased by 11.3% from the

first nine months of fiscal 2019, primarily because our agents are able to

place more surety bond business through UCS but also due to a reduction in

    demand as some of the markets we serve (contractors, small businesses,
    residential and commercial lease) were impacted by COVID-19.



? Investment and other income at UCS increased 4.8% in the first nine months of

    fiscal 2020 from $323,512 in the first nine months of fiscal 2019.




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Expenses. For the first nine months of fiscal 2020 and the first nine months of
fiscal 2019, our expenses, in dollars, and as a percentage of total revenues,
were as follows:



                                                  For the Nine Months Ended September 30,
                                                                (unaudited)
                                           2020                           2019                2020 vs 2019
                                                 As a % of                      As a % of
                                                   Total                          Total
                                   Amount        Revenues         Amount        Revenues       $ Variance
Costs and Expenses:
Cost of billboard revenues      $  8,472,265       24.5%       $  8,333,967       27.7%       $     138,298
Cost of broadband revenues           379,073       1.1%                   -         -               379,073

Cost of insurance revenues 5,367,231 15.6% 4,742,025

      15.8%             625,206
Employee costs                     9,542,845       27.6%          8,953,935       29.8%             588,910
Professional fees                  2,582,961       7.5%           3,005,543       10.0%            (422,582 )
Depreciation                       2,744,376       8.0%           2,167,815       7.2%              576,561
Amortization                       3,012,641       8.7%           9,361,736       31.1%          (6,349,095 )
General and administrative         4,655,960       13.5%          4,933,960       16.4%            (278,000 )
Loss on disposition of assets         89,685       0.3%              28,293       0.1%               61,392
Accretion                            105,964       0.3%              99,086       0.3%                6,878
Bad debt expense                     322,483       0.9%             226,422       0.8%               96,061

Total Costs and Expenses $ 37,275,484 108.0% $ 41,852,782

     139.2%       $  (4,577,298 )




During the first nine months of fiscal 2020, we had total costs and expenses
of $37,275,484, as compared to total costs and expenses of $41,852,782 in the
first nine months of fiscal 2019. Total costs and expenses as a percentage of
total revenues decreased from 139.2% in the first nine months of fiscal 2019 to
108.0% in the first nine months of fiscal 2020. This improvement reflects our
increase in total revenues, a reduction in amortization expense due to extending
the amortization period from 3 years to 10 years for customer relationships
within our billboard segment during the fourth quarter of fiscal 2019 and our
continued focus on reducing general and administrative expenses as well as
professional fees. In the first nine months of fiscal 2020, cost of billboard
revenues, cost of insurance revenues, employee costs, professional fees,
amortization and general and administrative expenses decreased as a percentage
of total revenues as compared to the first nine months of fiscal 2019.



? During the first nine months of fiscal 2020, cost of billboard revenues

increased by $138,298, or 1.7%, when compared to the first nine months of

fiscal 2019. The increase was mainly related to the acquisition of billboards

    from Image in the third quarter of fiscal 2019.




  ? During the first nine months of fiscal 2020, cost of insurance revenues

increased by $625,206, or 13.2%, when compared to the first nine months of

fiscal 2019. The increase was mainly driven by increased loss reserves at UCS

related to its rental guarantee bond program due to the uncertainty caused by

    COVID-19 which has led to higher losses and loss adjustment expense.



? Employee costs in the first nine months of fiscal 2020 increased $588,910 from

the first nine months of fiscal 2019. The increase was mainly driven by our

broadband services business, which we acquired in March 2020, and was

partially offset by lower employee costs within our billboard and insurance

    businesses.




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? Professional fees in the first nine months of fiscal 2020 were $2,582,961, or

7.5% of total revenues, as compared to $3,005,543, or 10.0% of total revenues,

in the first nine months of fiscal 2019. Professional fees mainly include

costs associated with third-party accounting, audit, legal, and acquisition

    related expenses.



? Non-cash expenses in the first nine months of fiscal 2020 included $3,012,641

in amortization expense, $2,744,376 in depreciation expense, and $105,964 in

accretion expense related to asset retirement obligations for certain

billboard and broadband assets. Amortization expense decreased by 67.8% from

the first nine months of fiscal 2019 to the first nine months of fiscal

2020 as we extended the amortization period from 3 years to 10 years to better

reflect the estimated economic lives of our customer relationships within our

    billboard segment.



? General and administrative expenses decreased from $4,933,960 in the first

nine months of fiscal 2019 to $4,655,960 in the first nine months of fiscal

2020, a decrease of 5.6%. As a percentage of total revenues, general and

administrative expenses decreased from 16.4% in the first nine months of

    fiscal 2019 to 13.5% in the first nine months of fiscal 2020.




Net Loss from Operations. Net loss from operations for the first nine months of
fiscal 2020 was $2,765,904, or 8.0% of total revenues, as compared to a net loss
from operations of $11,779,688, or 39.2% of total revenues, in the first nine
months of fiscal 2019. The decrease in net loss from operations in dollars was
primarily due to increased revenue within our insurance operations, the addition
of our broadband services operations, as well as a decrease in amortization
expense after extending the amortization period from 3 years to 10 years
for customer relationships within our billboard segment. Our net loss from
operations included $5,862,981 from non-cash amortization, depreciation and
accretion expenses in the first nine months of fiscal 2020, as compared to
$11,628,637 in the first nine months of fiscal 2019.



Other Income (Expense).  During the first nine months of fiscal 2020, we had net
other expense of $15,060,171. Net other expense included $24,413,748 from
unrealized losses mainly on large publicly traded equity securities held by
Boston Omaha as well as UCS, $5,696,068 in realized gains from the sale of large
publicly traded equity securities mainly held at Boston Omaha, $2,406,151 in
equity in income of unconsolidated affiliates, $967,864 in dividend income from
public equity securities held by Boston Omaha, interest income of $884,125,
primarily derived from our DFH preferred units as well as from our investments
in short-term treasury securities, and interest expense of $600,631
mainly incurred under Link's term loan which commenced in August 2019. During
the first nine months of fiscal 2019, we had net other income of $6,261,025,
which included $2,864,060 in unrealized gains on securities, $2,431,923
of interest income, $432,409 in realized gains on disposition of
investments, $323,333 in equity in income of unconsolidated
affiliates, $315,897 in dividend income, and then $106,597 in interest expense.



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. As stated above, we experienced unrealized
losses of $24,413,748 in the value of our securities during the first nine
months of fiscal 2020. This contrasts with unrealized gains in the value of our
securities of $6,273,337 during all of fiscal 2019. 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 Loss Attributable to Common Stockholders. We had a net loss attributable to
common stockholders in the amount of $17,868,259 in the first nine months of
fiscal 2020, or a loss per share of $0.71, based on 25,145,700 weighted average
shares outstanding. This is compared to a net loss attributable to common
stockholders of $5,557,735 in the first nine months of fiscal 2019, or a loss
per share of $0.25, based on 22,563,527 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 third quarter of fiscal
2020 and the third quarter of fiscal 2019:



                        Results of Billboard Operations



                                                    For the Three Months Ended September 30,
                                                                  (unaudited)
                                                      2020                           2019
                                                            As a % of                      As a % of
                                                             Segment                        Segment
                                                            Operating                      Operating
                                              Amount        Revenues         Amount        Revenues
Operating Revenues
Billboard rentals, net                      $ 7,121,957      100.0%       $  7,182,884      100.0%
Cost of Revenues
Ground rents                                  1,479,596       20.8%          1,511,537       21.0%
Utilities                                       297,782       4.2%             298,611       4.2%
Commissions paid                                688,780       9.6%             729,302       10.2%
Other costs of revenues                         314,201       4.4%             318,230       4.4%
Total cost of revenues                        2,780,359       39.0%          2,857,680       39.8%
Gross margin                                  4,341,598       61.0%          4,325,204       60.2%
Other Operating Expenses
Employee costs                                1,364,457       19.2%          1,601,792       22.3%
Professional fees                               202,027       2.8%             334,968       4.7%
Depreciation                                    843,575       11.8%            456,958       6.3%
Amortization                                    827,470       11.6%          3,377,439       47.0%
General and administrative                      632,314       8.9%             725,607       10.1%
Accretion                                        34,740       0.5%              33,154       0.5%
Loss on disposition of assets                     8,751       0.1%               2,760       0.0%
Bad debt expense                                104,449       1.5%              71,009       1.0%
Total expenses                                4,017,783       56.4%          6,603,687       91.9%
Segment Income (Loss) from Operations           323,815       4.5%          (2,278,483 )    (31.7%)
Interest expense, net                          (209,432 )    (2.9%)           (127,725 )    (1.8%)
Net Income (Loss) Attributable to Common
Stockholders                                $   114,383       1.6%        $ (2,406,208 )    (33.5%)




Comparison of the Third Quarter of Fiscal 2020 to the Third Quarter of Fiscal
2019. In the third quarter of fiscal 2020, there was a 0.8% decrease in net
billboard revenues from the third quarter of fiscal 2019, reflecting a reduction
in rental and occupancy rates across a number of our markets due to
COVID-19. The decline due to COVID-19 was partially offset by the acquisition of
billboards from Image in the third quarter of fiscal 2019, which accounted for
approximately 4% of our billboard revenues in the third quarter of fiscal
2020. Segment loss from billboard operations improved mainly due to the
reduction in amortization expense. In the fourth quarter of fiscal 2019, we
updated our analysis of economic lives of customer relationships and
extended the amortization period from 3 years to 10 years to better reflect the
estimated economic lives of our billboard customers. The key factors affecting
our billboard operations results during the third quarter of fiscal 2020 were as
follows:


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

decreased from 21.0% in the third quarter of fiscal 2019 to 20.8% in the third

    quarter of fiscal 2020.



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

from 10.2% in the third quarter of fiscal 2019 to 9.6% in the third quarter of

    fiscal 2020.




  ? Employee costs in the third quarter of fiscal 2020 decreased 14.8% when
    compared to the third quarter of fiscal 2019.




  ? Amortization expense in the third quarter of fiscal 2020 decreased by

$2,549,969 from the third quarter of fiscal 2019. The decrease is primarily

due to extending the amortization period from 3 years to 10 years for customer

    relationships.




  ? General and administrative expenses in the third quarter of fiscal 2020
    decreased 12.9% when compared to the third quarter of fiscal 2019. The

decrease was primarily driven by a reduction in travel related expenses as

    well as other cost savings initiatives due to COVID-19.



? Net interest expense of $209,432 in the third quarter of fiscal 2020 compared

to net interest expense of $127,725 in the third quarter of fiscal 2019. The

    increase in interest expense was related to Link's $18 million and $5.5
    million term loans, which commenced in August 2019 and August 2020,
    respectively.




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                        Results of Insurance Operations



                                                   For the Three Months Ended September 30,
                                                                  (unaudited)
                                                      2020                          2019
                                                            As a % of                     As a % of
                                                             Segment                       Segment
                                                            Operating                     Operating
                                              Amount        Revenues        Amount        Revenues
Operating Revenues
Premiums earned                             $ 2,880,544       86.2%       $ 3,065,490       84.2%
Insurance commissions                           382,493       11.5%           442,824       12.2%
Investment and other income                      77,499       2.3%            131,610       3.6%
Total operating revenues                      3,340,536      100.0%         3,639,924      100.0%
Cost of Revenues
Commissions paid                                845,380       25.3%         1,408,551       38.7%
Premium taxes, fees, and assessments             98,243       2.9%            130,783       3.6%
Losses and loss adjustment expense              814,828       24.4%           485,986       13.4%
Total cost of revenues                        1,758,451       52.6%         2,025,320       55.7%
Gross margin                                  1,582,085       47.4%         1,614,604       44.3%
Other Operating Expenses
Employee costs                                1,072,551       32.1%         1,295,545       35.6%
Professional fees                                69,507       2.1%             43,600       1.2%
Depreciation                                      5,835       0.2%              6,452       0.2%
Amortization                                    123,662       3.7%            279,173       7.7%
Bad debt expense                                    273       0.0%              1,758       0.0%
General and administrative                      411,068       12.3%           584,050       16.0%
Total expenses                                1,682,896       50.4%         2,210,578       60.7%
Segment Loss from Operations                   (100,811 )    (3.0%)          (595,974 )    (16.4%)
Interest income                                       5       0.0%                 36       0.0%
Unrealized gain on securities                 1,770,261       53.0%           204,354       5.6%
Gain (loss) on sale of investments                3,601       0.1%             (3,060 )    (0.1%)
Noncontrolling interest in subsidiary
income                                                -         -             (32,606 )    (0.8%)
Net Income (Loss) Attributable to Common
Stockholders                                $ 1,673,056       50.1%       $  (427,250 )    (11.7%)




Comparison of the Third Quarter of Fiscal 2020 to the Third Quarter
of Fiscal 2019. In the third quarter of fiscal 2020, total operating revenues
declined by 8.2% when compared to the third quarter of fiscal 2019, mainly due
to the suspension of UCS's rental guarantee bond program as well as the impact
of COVID-19 on our surety brokerage operations. Segment loss from insurance
operations improved mainly due to lower operating expenses when compared to the
third quarter of fiscal 2019. The key factors affecting our insurance operations
results during the third quarter of fiscal 2020 were as follows:



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

fiscal 2020 decreased 6.0% from the third quarter of fiscal 2019. The decrease

in premiums earned was primarily due to the suspension of its rental guarantee

    bond program, which is expected to reduce future revenues at UCS.



? Our brokerage operations realized a 13.6% decrease in insurance commissions

from other insurance carriers in the third quarter of fiscal 2020 when

compared to the third quarter of fiscal 2019. The decrease is mainly due to

our agents being able to place more surety bond business through UCS as well

as a reduction in overall demand during the third quarter of fiscal 2020 as

some of the markets we serve (contractors, small businesses, residential and

     commercial lease) were impacted by COVID-19.




  ?  Commissions paid in the second quarter of fiscal 2020 decreased by
     $563,171 from the third quarter of fiscal 2019 primarily due to the

suspension of UCS's rental guarantee bond program, which generally provided a

     higher commission structure.



? Our losses and loss adjustment expense as a percentage of insurance revenues

increased from 13.4% in the third quarter of fiscal 2019 to 24.4% in the third

quarter of fiscal 2020. During the second and third quarters of fiscal 2020,

UCS increased its loss reserves related to its rental guarantee bond program

    due to the uncertainty caused by COVID-19.




  ? Employee costs and general and administrative expenses decreased as a

percentage of revenue to 32.1% and 12.3%, respectively, during the third

quarter of fiscal 2020. This is compared to 35.6% and 16.0%, respectively,

    during the third quarter of fiscal 2019.



? During the third quarter of fiscal 2020, our segment loss from insurance

operations of $100,811 was offset by unrealized gains of $1,770,261 from our

investments in publicly traded 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 Broadband Operations



                                                          For the Three

Months Ended September 30,

                                                                         (unaudited)
                                                             2020                            2019
                                                                     As a % of                     As a % of
                                                                      Segment                       Segment
                                                                     Operating                     Operating
                                                    Amount           Revenues        Amount        Revenues
Operating Revenues
Broadband revenues                               $   1,144,343        100.0%       $         -         -
Cost of Revenues
Network operations and data costs                       64,913         5.7%                  -         -
Programming costs                                       23,336         2.0%                  -         -
Cell site rent and utilities                            12,275         1.1%                  -         -
Other costs of revenues                                 28,890         2.5%                  -         -
Total cost of revenues                                 129,414         11.3%                 -         -
Gross margin                                         1,014,929         88.7%                 -         -
Other Operating Expenses
Employee costs                                         557,096         48.7%                 -         -
Professional fees                                       10,343         0.9%                  -         -
Depreciation                                           129,262         11.3%                 -         -
Amortization                                            80,673         7.1%                  -         -
General and administrative                             197,233         17.2%                 -         -
Accretion                                                1,722         0.2%                  -         -
Loss on disposition of assets                           12,000         1.0%                  -         -
Total expenses                                         988,329         86.4%                 -         -
Segment Income from Operations                          26,600         2.3%                  -         -
Interest income                                         (1,596 )      (0.1%)                 -         -
Noncontrolling interest in subsidiary income            (2,500 )      (0.2%)                 -         -

Net Income Attributable to Common Stockholders $ 22,504 2.0%

       $         -         -




Comparison of the Third Quarter of Fiscal 2020 to the Third Quarter
of Fiscal 2019. In March 2020, we commenced our broadband services business with
the acquisition of substantially all of the assets of FibAire. Therefore,
comparisons of our broadband results for the third quarter of fiscal 2020 to the
third quarter of fiscal 2019 may not be meaningful.



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                        Results of Billboard Operations



                                                        For the Nine Months Ended September 30,
                                                                      (unaudited)
                                                          2020                           2019
                                                                As a % of                      As a % of
                                                                 Segment                        Segment
                                                                Operating                      Operating
                                                  Amount        Revenues         Amount        Revenues
Operating Revenues
Billboard rentals, net                         $ 20,991,755      100.0%       $ 21,113,266      100.0%
Cost of Revenues
Ground rents                                      4,592,406       21.9%          4,617,444       21.9%
Utilities                                           929,397       4.4%             843,011       4.0%
Commissions paid                                  2,018,314       9.6%           1,975,287       9.4%
Other costs of revenues                             932,148       4.5%             898,225       4.2%
Total cost of revenues                            8,472,265       40.4%          8,333,967       39.5%
Gross margin                                     12,519,490       59.6%         12,779,299       60.5%
Other Operating Expenses
Employee costs                                    4,313,414       20.6%          4,479,344       21.2%
Professional fees                                   464,565       2.2%             587,194       2.8%
Depreciation                                      2,498,514       11.9%          2,151,314       10.2%
Amortization                                      2,462,425       11.7%          8,481,302       40.2%
General and administrative                        1,999,367       9.5%           2,321,746       11.0%
Accretion                                           104,242       0.5%              99,086       0.5%
Loss on disposition of assets                        77,685       0.4%              28,293       0.1%
Bad debt expense                                    321,838       1.5%             223,979       1.0%
Total expenses                                   12,242,050       58.3%         18,372,258       87.0%
Segment Income (Loss) from Operations               277,440       1.3%          (5,592,959 )    (26.5%)
Interest expense, net                              (595,088 )    (2.8%)            (56,638 )    (0.3%)
Net Loss Attributable to Common Stockholders   $   (317,648 )    (1.5%)       $ (5,649,597 )    (26.8%)




Comparison of the First Nine Months of Fiscal 2020 to the First Nine Months
of Fiscal 2019. In the first nine months of fiscal 2020, net billboard revenues
decreased by 0.6% from the first nine months of fiscal 2019, reflecting a
reduction in rental and occupancy rates across a number of our markets due to
COVID-19. The decline due to COVID-19 was partially offset by the acquisition of
billboards from Image in the third quarter of fiscal 2019, which accounted for
approximately 4% of our billboard revenues in the first nine months of fiscal
2020. Segment income from billboard operations improved mainly due to the
reduction in amortization expense. In the fourth quarter of fiscal 2019, we
updated our analysis of economic lives of customer relationships and
extended the amortization period from 3 years to 10 years to better reflect the
estimated economic lives of our billboard customers. The key factors affecting
our billboard operations results during the first nine months of fiscal
2020 were as follows:



? Ground rent as a percentage of total segment operating revenues was 21.9%

during the first nine months of fiscal 2020 as well as during the first nine

    months of fiscal 2019.



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

from 9.4% in the first nine months of fiscal 2019 to 9.6% in the first nine

months of fiscal 2020. For additional comparison, commissions paid as a

percentage of total segment operating revenues was 9.5% for all of fiscal

    2019.



? Employee costs in the first nine months of fiscal 2020 decreased 3.7% when

    compared to the first nine months of fiscal 2019.



? Amortization expense in the first nine months of fiscal 2020 decreased by

$6,018,877 from the first nine months of fiscal 2019. The decrease was

primarily due to extending the amortization period from 3 years to 10 years

    for customer relationships.




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

2020 decreased 13.9% when compared to the first nine months of fiscal 2019.

The decrease was primarily driven by a reduction in travel related expenses as

    well as other cost savings initiatives due to COVID-19.




  ? Net interest expense of $595,088 in the first nine months of fiscal

2020 compared to net interest expense of $56,638 the first nine months of

fiscal 2019. The increase in interest expense was related to Link's $18

million and $5.5 million term loans, which commenced in August 2019 and August

    2020, respectively.




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                        Results of Insurance Operations



                                                        For the Nine Months Ended September 30,
                                                                      (unaudited)
                                                          2020                           2019
                                                                As a % of                      As a % of
                                                                 Segment                        Segment
                                                                Operating                      Operating
                                                  Amount        Revenues         Amount        Revenues
Operating Revenues
Premiums earned                                $  9,538,183       87.2%       $  7,435,389       83.0%
Insurance commissions                             1,065,013       9.7%           1,200,927       13.4%
Investment and other income                         338,953       3.1%             323,512       3.6%
Total operating revenues                         10,942,149      100.0%          8,959,828      100.0%
Cost of Revenues
Commissions paid                                  2,884,197       26.4%          3,122,583       34.9%
Premium taxes, fees, and assessments                244,956       2.2%             350,884       3.9%
Losses and loss adjustment expense                2,238,078       20.5%          1,268,558       14.1%
Total cost of revenues                            5,367,231       49.1%          4,742,025       52.9%
Gross margin                                      5,574,918       50.9%          4,217,803       47.1%
Other Operating Expenses
Employee costs                                    3,286,309       30.0%          3,893,542       43.5%
Professional fees                                   428,922       3.9%             182,474       2.0%
Depreciation                                         17,240       0.2%              16,501       0.2%
Amortization                                        396,453       3.6%             880,434       9.8%
Bad debt expense                                        645       0.0%               2,443       0.0%
General and administrative                        1,430,508       13.1%          1,894,761       21.2%
Total expenses                                    5,560,077       50.8%          6,870,155       76.7%
Segment Income (Loss) from Operations                14,841       0.1%          (2,652,352 )    (29.6%)
Interest income (expense), net                         (365 )    (0.0%)                104       0.0%
Unrealized gain (loss) on securities             (2,448,251 )    (22.3%)           291,827       3.3%
Gain on sale of investments                         263,860       2.4%             417,508       4.7%
Noncontrolling interest in subsidiary income              -         -              (39,072 )    (0.5%)
Net Loss Attributable to Common Stockholders   $ (2,169,915 )    (19.8%)      $ (1,981,985 )    (22.1%)




Comparison of the First Nine Months of Fiscal 2020 to the First Nine Months
of Fiscal 2019. In the first nine months of fiscal 2020, total operating
revenues increased by 22.1% as compared to the first nine months of fiscal 2019,
primarily due to a 28.3% increase in premiums earned at UCS. At the same time,
operating expenses decreased as a percentage of revenue when compared to the
first nine months of fiscal 2019, resulting in positive segment income from
insurance operations in the first nine months of fiscal 2020. The key factors
affecting our insurance operations results during the first nine months of
fiscal 2020 were as follows:



? Premiums earned from our UCS insurance subsidiary rose, reflecting an increase

in gross written premium now that UCS is licensed in all 50 states and the

District of Columbia and prior quarter growth within our rental guarantee bond

program. However, due to the current disruption in this market, we have

suspended issuing new rental guarantee bonds, which is expected to reduce

    future revenues at UCS.



? Our brokerage operations realized a 11.3% decrease in insurance commissions

from other insurance carriers in the first nine months of fiscal 2020 when

compared to the first nine months of fiscal 2019. The decrease is mainly due

to our agents being able to place more surety bond business through UCS but

also due to a reduction in overall demand during the first nine months of

fiscal 2020 as some of the markets we serve (contractors, small businesses,

     residential and commercial lease) were impacted by COVID-19.




  ?  Commissions paid in the first nine months of fiscal 2020 decreased by
     $238,386 from the first nine months of fiscal 2019 primarily due to the

suspension of UCS's rental guarantee bond program, which generally provided a

     higher commission structure.



? Our losses and loss adjustment expense as a percentage of insurance revenues

increased from 14.1% in the first nine months of fiscal 2019 to 20.5% in the

first nine months of fiscal 2020. During the second and third quarters of

fiscal 2020, UCS increased its loss reserves related to its rental guarantee

    bond program due to the uncertainty caused by COVID-19.



? Employee costs and general and administrative expenses as a percentage of

revenue decreased to 30.0% and 13.1%, respectively, during the first nine

months of fiscal 2020. This is compared to 43.5% and 21.2%, respectively,

    during the first nine months of fiscal 2019.



? During the first nine months of fiscal 2020, our segment income from insurance

operations of $14,841 was reduced by unrealized losses of $2,448,251 from our

investments in publicly traded 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 Broadband Operations



                                                          For the Nine

Months Ended September 30,

                                                                        (unaudited)
                                                             2020                           2019
                                                                    As a % of                     As a % of
                                                                     Segment                       Segment
                                                                    Operating                     Operating
                                                    Amount          Revenues        Amount        Revenues
Operating Revenues
Broadband revenues                               $   2,575,676       100.0%       $         -         -
Cost of Revenues
Network operations and data costs                      172,704        6.7%                  -         -
Programming costs                                       51,871        2.0%                  -         -
Cell site rent and utilities                            42,724        1.7%                  -         -
Other costs of revenues                                111,774        4.3%                  -         -
Total cost of revenues                                 379,073        14.7%                 -         -
Gross margin                                         2,196,603        85.3%                 -         -
Other Operating Expenses
Employee costs                                       1,021,554        39.6%                 -         -
Professional fees                                       25,146        1.0%                  -         -
Depreciation                                           228,622        8.9%                  -         -
Amortization                                           153,763        5.9%                  -         -
General and administrative                             330,361        12.8%                 -         -
Accretion                                                1,722        0.1%                  -         -
Loss on disposition of assets                           12,000        0.5%                  -         -
Total expenses                                       1,773,168        68.8%                 -         -
Segment Income from Operations                         423,435        16.5%                 -         -
Interest expense, net                                   (1,594 )     (0.1%)                 -         -
Noncontrolling interest in subsidiary income           (42,184 )     (1.7%)                 -         -

Net Income Attributable to Common Stockholders $ 379,657 14.7%

      $         -         -




Comparison of the First Nine Months of Fiscal 2020 to the First Nine Months
of Fiscal 2019. In March 2020, we commenced our broadband services business with
the acquisition of substantially all of the assets of FibAire. Therefore,
comparisons of our broadband results for the first nine months of fiscal 2020 to
the first nine months of fiscal 2019 may not be meaningful.



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                                   Cash Flows


Cash Flows for the First Nine Months of Fiscal 2020 compared to the First Nine Months of Fiscal 2019

The table below summarizes our cash flows, in dollars, for the first nine months of fiscal 2020 and the first nine months of fiscal 2019:



                                                      Nine Months        Nine Months
                                                         Ended              Ended
                                                     September 30,      September 30,
                                                          2020               2019
                                                      (unaudited)        (unaudited)
Net cash provided by operating activities            $    3,492,006     $   

5,035,455

Net cash used in investing activities                   (38,885,920 )      (59,515,863 )
Net cash provided by financing activities                61,673,659         

46,364,780

Net increase (decrease) in cash, cash equivalents,
and restricted cash                                  $   26,279,745$   (8,115,628 )




Net Cash Provided by Operating Activities. Net cash provided by operating
activities was $3,492,006 for the first nine months of fiscal 2020 compared to a
cash inflow of $5,035,455 for the first nine months of fiscal 2019. The net cash
provided by operating activities for the first nine months of fiscal 2020 was
primarily attributable to improved operating results within our insurance
business, the addition of our broadband services business, and interest income
and dividend income earned at Boston Omaha, which was offset by a decrease in
unearned premiums at UCS and an increase in interest expense incurred under
Link's term loan which commenced in August 2019.



Net Cash Used in Investing Activities. Net cash used in investing activities was
$38,885,920 for the first nine months of fiscal 2020 as compared with net cash
used in investing activities of $59,515,863 for the first nine months of fiscal
2019. The net cash used in investing activities for the first nine months of
fiscal 2020 is primarily attributable to our investments in U.S.Treasury
securities available for sale, the purchase of the remaining thirty percent
interest in SCS for $1,406,409, the purchase of certain billboard assets and
easements in Nevada for $1,995,832, commencing our broadband services business
with the acquisition of substantially all of the assets of FibAire for a cash
purchase price of $12,341,242, and investing $3,000,000 in 24th Street Fund I,
LLC. These investments were partially offset by DFH's $12,000,000 redemption
of a portion of the preferred units as well as $5,696,068 in realized gains from
the sale of large publicly traded equity securities mainly held at Boston Omaha.



Net Cash Provided by Financing Activities. Net cash provided by financing
activities was $61,673,659 during the first nine months of fiscal 2020 as
compared to net cash provided by financing activities of $46,364,780 during the
first nine months of fiscal 2019. During the first nine months of fiscal 2020,
net cash provided by financing activities mainly consisted of $58,880,000 in
gross proceeds raised through our public offering of Class A common stock on
June 2, 2020, $5,500,000 borrowed under Link's credit facility on August 31,
2020, and gross proceeds of $669,751 raised through our "at the market" offering
during April 2020, offset by offering costs of $3,417,323.



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                        Liquidity and Capital Resources



Currently, we own billboards in Alabama, Florida, Georgia, Illinois, Iowa,
Kansas, Missouri, Nebraska, Nevada, Virginia, West Virginia and Wisconsin,
surety insurance brokerage firms we acquired in 2016 and 2017, a surety
insurance company we acquired in December 2016, a broadband service provider
whose assets we acquired in March 2020 and minority investments in several real
estate management entities, a builder of residential homes, and a bank holding
entity whose primary source of revenue is in subprime automobile lending. At
September 30, 2020, we had approximately $42.3 million in unrestricted cash. Our
strategy is to continue to acquire other billboard locations and insurance
businesses as well as acquire other businesses which we believe have the
potential to generate positive cash flows and 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. Similar to our previous issuance in
connection with the acquisitions of Tammy Lynn and Image, 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.



In February 2018, we announced the entry into a stock purchase agreement
relating to the issuance and sale of up to $150,000,000 of our unregistered
Class A common stock, which we refer to as the "2018 private placement."
3,300,000 shares were issued in the initial closing, which occurred on March 6,
2018, resulting in gross proceeds to us of $76,890,000. The remaining 3,137,768
shares were issued during the third quarter of fiscal 2018 in a subsequent
closing on May 15, 2018, resulting in gross proceeds to us of approximately
$73,110,000. Under the 2018 private placement, all shares were sold at $23.30, a
slight premium to the $23.29 closing price of the Class A common stock on the
NASDAQ Capital Market, as reported by NASDAQ on the date of the Class A Common
Stock Purchase Agreement.



Since March 2018, we have utilized our "at the market" offering that is part of
our shelf Registration Statement on Form S-3 (File No. 333-222853) that was
filed with the Securities and Exchange Commission, which we refer to as the
"SEC," and declared effective in February 2018, which authorizes us to sell up
to $200,000,000 through the sales of securities to the public. The original "at
the market" offering was pursuant to a Sales Agreement entered into on March 2,
2018 with Cowen and Company, LLC, which we refer to as "Cowen," and related to
the sale of shares of our Class A common stock. In accordance with the terms of
that Sales Agreement, we had the option to sell from time to time up to
$50,000,000 of shares of our Class A common stock through Cowen acting as our
agent. Cowen was not required to sell any specific amount of securities, but
acted as our sales agent using commercially reasonable efforts consistent with
its normal trading and sales practices on mutually agreed terms between Cowen
and us. The compensation to Cowen for sales of Class A common stock sold
pursuant to the Sales Agreement was an amount equal to 3% of the gross proceeds
of any shares of Class A common stock sold under the Sales Agreement. From March
2018 through August 20, 2019, we sold through Cowen an aggregate of 2,141,452
shares of our Class A common stock under this "at the market" offering,
resulting in gross proceeds to us of $49,999,625. We subsequently entered into a
new Sales Agreement with Cowen which allows us to sell up to an additional
$75,000,000 of our Class A common stock under the same compensation arrangement
to Cowen. This new "at the market" offering provides us with the flexibility to
seek to raise additional capital in amounts we deem appropriate and at price
levels approved by us, with lower costs than a traditional underwritten public
offering. We have no specific plans for the use of any proceeds from this new
"at the market" offering of our Class A common stock. During fiscal 2019, we
sold 448,880 shares of our Class A common stock under this new "at the market"
offering for gross proceeds of $9,450,789. During the first half of fiscal 2020,
we sold under the new "at the market" offering 40,455 shares of our Class A
common stock for gross proceeds of $669,751. During the third quarter of fiscal
2020, we did not sell any shares of our Class A common stock under the new "at
the market" offering.



On May 28, 2020, we entered into an underwriting agreement, which we refer to as
the "underwriting agreement," with Wells Fargo Securities, LLC 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 "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." Adam Peterson and Alex Rozek,
our Co-Chairmen, together with another member of our board of directors and
another employee, purchased, directly or through their affiliates, an aggregate
of 39,375 shares of Class A common stock in the offering at the public offering
price.  On June 2, 2020, we announced the completion of the public offering for
a total of 3,680,000 shares, including both the firm shares and all of the
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 approximately
$58.9 million.  We raised this capital to fund the planned expansion of our
recently acquired fiber-to-the-home broadband, telecommunication business, to
seek to grow our Link billboard business through the acquisitions of additional
billboard businesses, and for general corporate purposes. We do not have current
agreements, commitments or understandings for any specific material acquisitions
at this time. 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.



On August 12, 2019, Link, our wholly owned subsidiary which owns and operates
our billboard businesses, entered into a Credit Agreement, which we refer to as
the "Credit Agreement," with First National Bank of Omaha, which we refer to as
the "Lender," under which Link may borrow up to $40,000,000, which we refer to
as the "Credit Facility." The Credit Agreement provides for an initial term
loan, which we refer to as "Term Loan 1," an incremental term loan, which we
refer to as "Term Loan 2," and a revolving line of credit. These loans are
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. These loans are not guaranteed by Boston Omaha Corporation or any of
our non-billboard businesses. On August 12, 2019, Link borrowed $18,060,000
through Term Loan 1 under the Credit Facility. On August 31, 2020, Link
borrowed $5,500,000 through Term Loan 2 under the Credit Facility. We may not
borrow additional funds under the Credit Facility. Term Loan 1 has a fixed
interest rate of 4.25% per annum with interest only payments due through July 1,
2020. Term Loan 2 has a fixed interest rate of 3.375% per annum. Principal
amounts under each of Term Loan 1 and Term Loan 2 are payable in monthly
installments according to a 15-year amortization schedule. For Term Loan 1,
these payments commenced on July 1, 2020. For Term Loan 2, these payments
commenced on October 1, 2020. Both term loans are payable in full on August 12,
2026. During the first three years of the term loans, Link may prepay up to 10%
of the loan principal in each year without paying any prepayment penalty.
Otherwise, there is a prepayment penalty ranging between 2.0% and 0.5%. After
three years, there is no prepayment penalty. In addition to the term loans, the
Credit Agreement allows Link to borrow up to $5,000,000 through August 12, 2021
under a revolving line of credit. Interest payments on the revolving line of
credit are based on the 30 day LIBOR rate plus an applicable margin ranging
between 2.00% and 2.50% dependent on Link's consolidated leverage ratio.



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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 loans. Upon the occurrence of
certain insolvency and bankruptcy events of default the loans 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 and a First Amendment to Credit Agreement, a copy of which is attached
as Exhibit 10.1 to our Form 8-K as filed with the SEC on October 29, 2019, and a
Second Amendment to Credit Agreement, a copy of which is attached as Exhibit
10.1 to our Form 8-K as filed with the SEC on June 30, 2020.



We believe that our existing cash and short-term investments, funds that we may
receive in the current "at the market" offering, funds available through the
Credit Agreement Link entered into on August 12, 2019, 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. We have also taken steps to suspend the future issuance of certain
rental surety bonds issued by UCS and have taken other steps to reduce certain
costs of our operations. At September 30, 2020, we had $42.3 million in
unrestricted cash, $76.7 million in U.S. treasury securities and $63.8 million
in marketable equity securities.



If future additional significant acquisition opportunities become available in
excess of our currently available cash and U.S.Treasury 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.



On October 2, 2020, we provided a term loan of $20,000,000 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
matures on May 1, 2021.



On October 26, 2020, we purchased 7,500,000 warrants (the "Private Placement
Warrants") at a purchase price of $1.00 per Private Placement Warrant,
generating gross proceeds to Yellowstone of $7,500,000. In addition, we acquired
3,593,750 shares of Yellowstone's Class B common stock (up to 468,750 shares of
which are subject to forfeiture depending on the extent to which the
underwriters' over-allotment option is exercised) for a purchase price of
$25,000. The shares of Class B common stock will automatically convert into
shares of Class A common stock at the time, if any, when Yellowstone completes
an initial business combination, on a one-for-one basis, subject to certain
adjustments.



On March 18, 2020, we announced the authorization of a share repurchase program
which allows us to repurchase our Class A common stock. We have not yet
repurchased any shares under this program and we cannot predict when or if we
will repurchase any shares of Class A common stock as any such share repurchases
will depend on a number of factors, including constraints specified in any Rule
10b5-1 trading plans, price, general business and market conditions, and
alternative investment opportunities.



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 our current credit facility, any
other 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 and insurance industries. 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. Our credit facility requires us to meet a fixed charge
coverage ratio and other financial covenants. Our ability to comply with these
loan covenants may be affected by factors beyond our control and a breach of any
loan covenants would likely result in an event of default under the credit
facility, 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.



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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