10q10k10q10k.net

What changed in BOSTON OMAHA Corp's 10-K — 2023 vs 2024

vs

Paragraph-level year-over-year comparison of BOSTON OMAHA Corp's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+345 added−324 removedSource: 10-K (2025-03-28) vs 10-K (2024-03-27)

Top changes in BOSTON OMAHA Corp's 2024 10-K

345 paragraphs added · 324 removed · 253 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

64 edited+32 added−16 removed162 unchanged
Biggest changeBetween August and November 2020, we invested, through BOC Yellowstone, approximately $7.8 million through the purchase of 3,399,724 shares of Class B common stock and 7,719,779 non-redeemable private placement warrants, each warrant entitling us to purchase one share of Class A common stock at $11.50 per share.
Biggest changeCrescent is located in New Orleans and generates the majority of its revenues from indirect subprime automobile lending across the United States. ● In October 2020, our subsidiary BOC Yellowstone LLC, which we refer to as "BOC Yellowstone," served as sponsor for the underwritten initial public offering of a special purpose acquisition company named Yellowstone Acquisition Company, which we refer to as "Yellowstone." Between August and November 2020, we invested, through BOC Yellowstone, approximately $7.8 million through the purchase of 3,399,724 shares of Class B common stock and 7,719,779 non-redeemable private placement warrants, each warrant entitling us to purchase one share of Class A common stock at $11.50 per share.
Since DFH’s initial public offering through December 31, 2023, we have sold all 4,801,099 shares of DFH Class A common stock for gross proceeds of approximately $81 million. ● In May 2018, through one of our subsidiaries, we invested approximately $19 million through the purchase of common stock of CB&T Holding Corporation, which we refer to as "CB&T," the privately-held parent company of Crescent Bank & Trust, Inc., which we refer to as "Crescent." Our investment now represents 15.6% of CB&T’s outstanding common stock.
Since DFH’s initial public offering through December 31, 2023, we have sold all our 4,801,099 shares of DFH Class A common stock for gross proceeds of approximately $81 million. ● In May 2018, through one of our subsidiaries, we invested approximately $19 million through the purchase of common stock of CB&T Holding Corporation, which we refer to as "CB&T," the privately-held parent company of Crescent Bank & Trust, Inc., which we refer to as "Crescent." Our investment now represents 15.6% of CB&T’s outstanding common stock.
The consideration consisted of $2,759,072 in cash at closing, an additional $1,254,102 in cash subject to holdback, and 45,644 shares of BOC Class A common stock (based on the average closing price of BOC Class A common stock for the 30 business day period ending two days before the closing date).
The consideration consisted of $2,759,072 in cash at closing, an additional $1,254,102 in cash subject to holdback, and 45,644 shares of BOC Class A common stock (based on the average closing price of BOC Class A common stock for the 30 business day period ending two days before the closing date).
The shares issued in the transaction are unregistered and have no registration rights. The purchase agreement also provides for certain payments based on performance to receive the holdback amount and certain other potential earnout payments. In addition, we have invested, through one of our subsidiaries, an aggregate of $6 million in the 24th Street Funds.
The shares issued in the transaction are unregistered and have no registration rights. The purchase agreement also provides for certain payments based on performance to receive the holdback amount and certain other potential earnout payments. In addition, we have invested, through one of our subsidiaries, an aggregate of $6 million in the 24th Street Funds.
In addition to its homebuilding operations, DFH's subsidiaries provide mortgage loan origination and title insurance services to homebuyers. On January 25, 2021, Dream Finders Homes, Inc., a wholly owned subsidiary of DFH, completed its initial public offering and Dream Finders Homes, Inc. became a holding company and sole manager of DFH.
In addition to its homebuilding operations, DFH's subsidiaries provide mortgage loan origination and title insurance services to homebuyers. On January 25, 2021, Dream Finders Homes, Inc., a wholly owned subsidiary of DFH, completed its initial public offering and Dream Finders Homes, Inc. became a holding company and sole manager of DFH.
Upon completion of the initial public offering, our outstanding common units in DFH were converted into 4,681,099 shares of Class A common stock of Dream Finders Homes, Inc., and one of our subsidiaries purchased an additional 120,000 shares of Class A common stock in the initial public offering.
Upon completion of the initial public offering, our outstanding common units in DFH were converted into 4,681,099 shares of Class A common stock of Dream Finders Homes, Inc., and one of our subsidiaries purchased an additional 120,000 shares of Class A common stock in the initial public offering.
Since DFH’s initial public offering through December 31, 2022, we have sold all 4,801,099 shares of DFH Class A common stock for gross proceeds of approximately $81 million. ● In May 2018, through one of our subsidiaries, we invested approximately $19 million through the purchase of common stock of CB&T, the privately-held parent company of Crescent.
Since DFH’s initial public offering through December 31, 2022, we have sold all our 4,801,099 shares of DFH Class A common stock for gross proceeds of approximately $81 million. ● In May 2018, through one of our subsidiaries, we invested approximately $19 million through the purchase of common stock of CB&T, the privately-held parent company of Crescent.
We invested approximately $15 million of capital to finance the initial acquisitions for these projects and subsequently raised third-party capital to be invested alongside our capital. The BFR Fund acquired land parcels in Nevada with the initial plan to develop, construct, and operate build-for-rent communities.
We invested approximately $15 million of capital to finance the initial acquisitions for these projects and subsequently raised third-party capital to be invested alongside our capital. The BFR Fund acquired land parcels in Nevada with the initial plan to develop, construct, and operate build-for-rent communities.
However, challenges in the market, including the increase in interest rates and the inability to achieve what we believe are appropriate risk-adjusted returns, have led us to pursue selling the BFR Fund's entitled land assets to public homebuilders.
However, challenges in the market, including the increase in interest rates and the inability to achieve what we believe are appropriate risk-adjusted returns, have led us to pursue selling the BFR Fund's entitled land assets to public homebuilders.
We also maintain certain levels of insurance designed to provide some coverage in the event of any damages arising from a breach of our computer security systems. 8 Table of Contents Regulation of Our Advertising Business The outdoor advertising industry in the United States is subject to governmental regulation at the federal, state and local levels.
We also maintain certain levels of insurance designed to provide some coverage in the event of any damages arising from a breach of our computer security systems. 8 Table of Contents Regulation of Our Outdoor Advertising Business The outdoor advertising industry in the United States is subject to governmental regulation at the federal, state and local levels.
We believe that the demand for broadband services has increased significantly since the COVID pandemic began and that this demand will continue to grow as more businesses and consumers rely on remote connectivity for work, learning, telehealth and other connectivity needs and as new technologies expand the ability to digitally share information and services. 6 Table of Contents Business Overview and Strategy Since present management took over in February 2015, we have engaged in (i) acquisitions and minority investments in outdoor billboard advertising, broadband service providers, asset management, surety insurance, commercial real estate services, homebuilding and a bank holding company, (ii) purchases of publicly traded equity securities and (iii) in October 2020 served as the sponsor for an initial public offering for Yellowstone and its subsequent business combination with Sky Harbour in January 2022.
We believe that the demand for broadband services has increased significantly since the COVID pandemic and that this demand will continue to grow as more businesses and consumers rely on remote connectivity for work, learning, telehealth and other connectivity needs and as new technologies expand the ability to digitally share information and services. 6 Table of Contents Business Overview and Strategy Since present management took over in February 2015, we have engaged in (i) acquisitions and minority investments in outdoor billboard advertising, broadband service providers, asset management, surety insurance, commercial real estate services, homebuilding and a bank holding company, (ii) purchases of publicly traded equity securities and (iii) in October 2020 served as the sponsor for an initial public offering for Yellowstone and its subsequent business combination with Sky Harbour in January 2022.
The business combination was completed on January 25, 2022 and Yellowstone changed its name to Sky Harbour Group Corporation, which we refer to as “Sky Harbour.” Sky Harbour’s Class A common stock trades on the NYSE American under the symbol “SKYH” and its warrants to purchase Class A common stock trade under the symbol “SKYH.WS.” ● In September 2021, through one of our subsidiaries, we invested $55 million directly into SHG and received Series B preferred units, which we refer to "Sky Series B Preferred Units." Upon the successful consummation of the Sky Harbour business combination, this investment converted into 5,500,000 shares of Sky Harbour's Class A common stock based upon an assumed value of $10.00 per share.
The business combination was completed on January 25, 2022 and Yellowstone changed its name to Sky Harbour Group Corporation, which we refer to as “Sky Harbour.” Sky Harbour’s Class A common stock trades on the NYSE under the symbol “SKYH” and its warrants to purchase Class A common stock trade under the symbol “SKYH.WS.” ● In September 2021, through one of our subsidiaries, we invested $55 million directly into SHG and received Series B preferred units, which we refer to "Sky Series B Preferred Units." Upon the successful consummation of the Sky Harbour business combination, this investment converted into 5,500,000 shares of Sky Harbour's Class A common stock based upon an assumed value of $10.00 per share.
Crescent is located in New Orleans and generates the majority of its revenues from indirect subprime automobile lending across the United States. ● In October 2020, our subsidiary BOC Yellowstone LLC, which we refer to as "BOC Yellowstone," served as sponsor for the underwritten initial public offering of a special purpose acquisition company named Yellowstone Acquisition Company, which we refer to as "Yellowstone." Yellowstone sold in its public offering 13,598,898 units at a price of $10.00 per unit, each unit consisting of one share of Class A common stock and a redeemable warrant to purchase one-half of a share of Class A common stock at an exercise price of $11.50 per share.
Crescent is located in New Orleans and generates the majority of its revenues from indirect subprime automobile lending across the United States. ● In October 2020, our subsidiary BOC Yellowstone served as sponsor for the underwritten initial public offering of a special purpose acquisition company named Yellowstone Acquisition Company, which we refer to as "Yellowstone" sold in its public offering 13,598,898 units at a price of $10.00 per unit, each unit consisting of one share of Class A common stock and a redeemable warrant to purchase one-half of a share of Class A common stock at an exercise price of $11.50 per share.
These regulations, or actions by third parties, may impose greater restrictions on digital billboards due to alleged concerns over aesthetics or driver safety. 9 Table of Contents Regulation of Our Insurance Business GIG and its subsidiaries transact their insurance business in all 50 U.S. states and the District of Columbia and are subject to regulation in the various states and jurisdictions in which they operate.
These regulations, or actions by third parties, may impose greater restrictions on digital billboards due to alleged concerns over aesthetics or driver safety. 9 Table of Contents Regulation of Our Surety Insurance Business GIG and its subsidiaries transact their insurance business in all 50 U.S. states and the District of Columbia and are subject to regulation in the various states and jurisdictions in which they operate.
Sky Harbour’s Class A common stock trades on the NYSE American under the symbol “SKYH” and its warrants to purchase Class A common stock trade under the symbol “SKYH.WS.” ● In September 2021, through one of our subsidiaries, we invested $55 million directly into SHG and received Series B preferred units.
Sky Harbour’s Class A common stock trades on the NYSE under the symbol “SKYH” and its warrants to purchase Class A common stock trade under the symbol “SKYH.WS.” ● In September 2021, through one of our subsidiaries, we invested $55 million directly into SHG and received Series B preferred units.
In March 2020, AireBeam acquired substantially all the business assets of FibAire, a rural broadband internet provider. AireBeam provided high-speed internet to over 8,000 subscribers in communities in southern Arizona with a high-speed fixed wireless internet service and is building an all fiber-to-the-home network in select Arizona markets.
Broadband Services . In March 2020, AireBeam acquired substantially all the business assets of FibAire, a rural broadband internet provider. AireBeam provided high-speed internet to over 8,000 subscribers in communities in southern Arizona with a high-speed fixed wireless internet service and is building an all fiber-to-the-home network in select Arizona markets.
In addition, through our FFH business, we have already entered into contracts with home builders to bring fiber-to-the-home in large residential developments currently under construction and expect to continue to expand this to additional developments in the future.
In addition, through our FFH business, we have entered into contracts with home builders to bring fiber-to-the-home in large residential developments currently under construction and expect to continue to expand this to additional developments in the future.
Outdoor Billboard Advertising . We currently own and operate approximately 4,000 billboard structures in the Southeast and Midwest United States containing approximately 7,600 advertising faces, of which approximately 90 are digital displays. In addition, we hold options to build additional billboards in a few of these states. Over 95% of our billboards reside on leased parcels of property.
Outdoor Billboard Advertising . We currently own and operate approximately 4,000 billboard structures in the Southeast and Midwest United States containing approximately 7,600 advertising faces, of which over 100 are digital displays. In addition, we hold options to build additional billboards in a few of these states. Over 95% of our billboards reside on leased parcels of property.
Consequently, we plan to wind down the BFR Fund earlier than originally targeted by returning the uninvested cash on hand to BFR Fund partners and, as we sell the BFR Fund's entitled land assets, returning that capital to BFR Fund partners as well. ● In July 2023, we invested approximately $3 million in voting preferred stock of MyBundle.TV Inc., which we refer to as "MyBundle," a company serving the broadband industry. 2 Table of Contents Additional Opportunities for Growth In addition to our activities in outdoor billboards, broadband services, surety insurance, asset management and the various industries in which we have made minority investments, we will also consider other industries which offer the potential for predictable and attractive returns on invested capital.
Consequently, we are winding down the BFR Fund earlier than originally targeted by returning the uninvested cash on hand to BFR Fund partners and, as we sell the BFR Fund's entitled land assets, returning that capital to BFR Fund partners as well. ● In July 2023, we invested approximately $3 million in voting preferred stock of MyBundle.TV Inc., which we refer to as "MyBundle," a company serving the broadband industry. 2 Table of Contents Additional Opportunities for Growth In addition to our activities in outdoor billboards, broadband services, surety insurance, asset management and the various industries in which we have made minority investments, we will also consider other industries which offer the potential for predictable and attractive returns on invested capital.
In addition, we hold minority investments in commercial real estate management and brokerage services, a bank focused on servicing the automotive loan market, a company serving the broadband industry, and a developer of private aviation infrastructure focused on building, leasing and managing business aviation hangars.
In addition, we hold minority investments in commercial real estate management and brokerage services, a bank focused on servicing the automotive loan market, a company serving the broadband industry, and a publicly-traded developer of private aviation infrastructure focused on building, leasing and managing business aviation hangars.
If certain investments fail to meet these criteria, these investments may be excluded or limited in calculating our compliance in meeting these and other testing criteria. 10 Table of Contents Regulation of Our Broadband Business Many but not all of our services and networks are regulated by the Federal Communications Commission, which we refer to as the “FCC,” and by state and local governments.
If certain investments fail to meet these criteria, these investments may be excluded or limited in calculating our compliance in meeting these and other testing criteria. Regulation of Our Broadband Business Many but not all of our services and networks are regulated by the Federal Communications Commission, which we refer to as the “FCC,” and by state and local governments.
We believe that we are a leading outdoor billboard advertising company in the markets we serve in the Midwest. As of December 31, 2023, we operate approximately 4,000 billboards with approximately 7,600 advertising faces.
We believe that we are a leading outdoor billboard advertising company in the markets we serve in the Midwest. As of December 31, 2024, we operate approximately 4,000 billboards with approximately 7,600 advertising faces.
We paid a combined purchase price of over $240 million for these billboards and related assets. As of March 1, 2024, we operated approximately 4,000 billboard structures containing approximately 7,600 advertising faces, of which over 90 are digital displays. Surety Insurance. Since September 2015, through six acquisitions, we have acquired one insurance company (UCS) and five insurance brokerage firms.
We paid a combined purchase price of over $240 million for these billboards and related assets. As of March 1, 2025, we operated approximately 4,000 billboard structures containing approximately 7,600 advertising faces, of which over 100 are digital displays. Surety Insurance. Since September 2015, through six acquisitions, we have acquired one insurance company (UCS) and five insurance brokerage firms.
Other outdoor advertising solutions, including street furniture (for example, bus shelters and benches), transit and other new alternative advertising signs at sports stadiums, malls, airports and other locations account for approximately an additional estimated $2.3 billion in revenues in 2022 according to industry sources. There is no concentration of industries to which we lease billboard space. Surety Insurance .
Other outdoor advertising solutions, including street furniture (for example, bus shelters and benches), transit and other new alternative advertising signs at sports stadiums, malls, airports and other locations account for approximately an additional estimated $2.4 billion in revenues in 2023 according to industry sources. There is no concentration of industries to which we lease billboard space. Surety Insurance .
Consequently, we plan to wind down the BFR Fund earlier than originally targeted by returning the uninvested cash on hand to BFR Fund partners and, as we sell the BFR Fund's entitled land assets, returning that capital to BFR Fund partners as well. ● In July 2023, we invested approximately $3 million in voting preferred stock of MyBundle, a company serving the broadband industry. 5 Table of Contents Industry Background We currently operate outdoor billboard advertising services, provide broadband services, and sell surety insurance products and have made minority investments in several commercial real estate management and brokerage companies, a bank focused on servicing the automotive loan market, a homebuilding company and a developer of private aviation infrastructure focused on building, leasing and managing business aviation hangars.
Consequently, we are winding down the BFR Fund earlier than originally targeted by returning the uninvested cash on hand to BFR Fund partners and, as we sell the BFR Fund's entitled land assets, returning that capital to BFR Fund partners as well. ● In July 2023, we invested approximately $3 million in voting preferred stock of MyBundle, a company serving the broadband industry. 5 Table of Contents Industry Background We currently operate outdoor billboard advertising services, provide broadband services, and sell surety insurance products and have minority investments in commercial real estate management and brokerage companies, a bank focused on servicing the automotive loan market, and a developer of private aviation infrastructure focused on building, leasing and managing business aviation hangars.
Finally, to deploy our networks, we frequently must obtain agreements from local power utilities to use their poles and in some cases easements from landowners. Acquisition and Financing Strategy Acquisition Selection . Our management will have broad discretion in identifying and selecting prospective target acquisitions.
Finally, to deploy our networks, we frequently must obtain agreements from local power utilities to use their poles and in some cases easements from landowners. 10 Table of Contents Acquisition and Financing Strategy Acquisition Selection . Our management will have broad discretion in identifying and selecting prospective target acquisitions.
Additionally, we will be returning capital to our fund partners during the wind-down process. 1 Table of Contents Minority Investments Since 2015, we have made minority investments in several different industries. ● 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.
Additionally, we will be returning capital to our fund partners during the wind-down process on the remaining portion of these assets. 1 Table of Contents Minority Investments Since 2015, we have made minority investments in several different industries. ● 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.
Surety insurers are highly regulated and scrutinized, through legal requirements for regular financial, market conduct and operational audits, and other means, in order to conduct business in the estimated $8.6 billi on surety market, based on 2022 industry reports.
Surety insurers are highly regulated and scrutinized, through legal requirements for regular financial, market conduct and operational audits, and other means, in order to conduct business in the estimated $9.6 billi on surety market, based on 2023 industry reports.
In October 2023, InfoWest acquired substantially all of the business assets of SunRiver Fiber Network from Cable Systems of Nevada, which we refer to as "Cable Systems," for a purchase price of approximately $4.4 million. 4 Table of Contents Minority Investments.
In October 2023, InfoWest acquired substantially all of the business assets of SunRiver Fiber Network from Cable Systems of Nevada, which we refer to as "Cable Systems," for a purchase price of approximately $4.4 million.
Our principal business address is 1601 Dodge Street, Suite 3300, Omaha, Nebraska 68102, and our telephone number is 857-256-0079. We registered as a reporting company under the Securities Exchange Act of 1934, as amended, which we refer to as the “Exchange Act,” on November 9, 2016.
Our principal business address is 1601 Dodge Street, Suite 3300, Omaha, Nebraska 68102, and our telephone number is 402-210-2633. We registered as a reporting company under the Securities Exchange Act of 1934, as amended, which we refer to as the “Exchange Act,” on November 9, 2016.
Since 2015, we have raised capital through private investments, public offerings and a bank term loan entered into by Link with a commercial lender. 3 Table of Contents Our Relationship with Magnolia and Boulderado In their roles as general partners of MCF, Magnolia BOC I, LP, which we refer to as "MBOC I" and BP, Magnolia and Boulderado, through their ownership of Class A common stock and all of our Class B common stock, control approximately 42% of the aggregate voting power and, as a result, will for the foreseeable future likely be able to continue to effectively control the election of our directors, determine our corporate and management policies and determine without the consent of our other stockholders the outcome of any corporate transaction or other matters submitted to our stockholders for approval, including potential mergers or acquisitions, asset sales and other significant corporate transactions.
Since 2015, we have raised capital through private investments, public offerings, a bank term loan and revolving loan entered into by Link with a commercial lender, and a bank term loan entered into by BOB with a commercial lender. 3 Table of Contents Our Relationship with Magnolia and Repurchase of Interests of Boulderado In its role as general partner of MCF and Magnolia BOC I, LP, which we refer to as "MBOC I", Magnolia, through its ownership of Class A common stock and all of our Class B common stock, controls approximately 31% of the aggregate voting power and, as a result, will for the foreseeable future likely be able to continue to effectively control the election of our directors, determine our corporate and management policies and determine without the consent of our other stockholders the outcome of any corporate transaction or other matters submitted to our stockholders for approval, including potential mergers or acquisitions, asset sales and other significant corporate transactions.
Our strategy focuses on investing in companies and lines of business that have consistently demonstrated earnings power over time, with attractive pre-tax historical returns on tangible equity capital, and that we believe are available at a reasonable price.
Our strategy focuses on investing in companies and lines of business that have demonstrated or which we believe have the potential to consistently demonstrate earnings power over time, with attractive pre-tax historical returns on tangible equity capital, and that we believe are available at a reasonable price.
UCS now has licenses to operate in all 50 states and the District of Columbia. In addition, over the last several years, we have also acquired additional surety insurance brokerage businesses located in various regions of the United States.
UCS now has licenses to operate in all 50 states and the District of Columbia. In addition, over the last several years, we have also acquired additional surety insurance brokerage businesses located in various regions of the United States. We currently operate our insurance brokerage businesses under our BOSS Bonds™ tradename.
We paid a combined purchase price of approximately $21.7 million. Additionally, we have contributed approximately $16.3 million in statutory capital to UCS. UCS is authorized to issue surety insurance in all 50 states and the District of Columbia, is approved by the United States Department of Treasury, and rated "A-" (Excellent) by A.M. Best Company. Broadband Services .
We paid a combined purchase price of approximately $21.7 million for these acquisitions. Additionally, we have contributed approximately $33.7 million in statutory capital to UCS. UCS is authorized to issue surety insurance in all 50 states and the District of Columbia, is approved by the United States Department of Treasury, and rated "A-" (Excellent) by A.M. Best Company.
Rozek, one of our Co-Chairmen and Co-Chief Executive Officers. On June 18, 2015, we amended and restated our certificate of incorporation and effected a 7:1 reverse stock split of our Class A common stock. We also created an additional series of our stock now named Class B common stock, par value $0.001 per share.
On June 18, 2015, we amended and restated our certificate of incorporation and effected a 7:1 reverse stock split of our Class A common stock. We also created an additional series of our stock now named Class B common stock, par value $0.001 per share.
Outdoor billboards were estimated as a $6.2 billion market in the U.S. in 2022 based on industry trade journals.
Outdoor billboards were estimated as a $6.3 billion market in the U.S. in 2023 based on industry trade journals.
MCF is managed by The Magnolia Group, LLC, which we refer to as “Magnolia,” and BP is managed by Boulderado Capital, LLC and Boulderado Group, LLC, which we collectively refer to as “Boulderado.” Magnolia is managed by Adam K. Peterson, one of our Co-Chairmen and Co-Chief Executive Officers. Boulderado is managed by Alex B.
MCF is managed by The Magnolia Group, LLC, which we refer to as “Magnolia,” and BP is managed by Boulderado Capital, LLC and Boulderado Group, LLC, which we collectively refer to as “Boulderado.” Magnolia is managed by Adam K. Peterson, our Chairmen and Chief Executive Officer.
Recent studies suggest that a large proportion of homes in the United States have not connected to high-speed broadband services as their communities lack all-fiber connectivity.
Recent studies suggest that a significant proportion of homes in the United States, particularly outside of major metropolitan areas, have not connected to high-speed broadband services as their communities lack all-fiber connectivity.
Upon the occurrence of an event of default the Lender may accelerate the loan. Upon the occurrence of certain insolvency and bankruptcy events of default the loan will automatically accelerate.
Upon the occurrence of certain insolvency and bankruptcy events of default the loan will automatically accelerate.
Requirements for Exiting Geographic Markets and/or Canceling or Nonrenewing Policies . Several states have laws and regulations which may impact the timing and/or the ability of an insurer to either discontinue or substantially reduce its writings in that state.
Several states have laws and regulations which may impact the timing and/or the ability of an insurer to either discontinue or substantially reduce its writings in that state.
Our internet services are expected to compete with wireless phone companies, satellite and other broadband providers, as well as wireline phone companies and other providers of wireline internet service and others seeking to build fiber-based network infrastructure.
Technological changes are further intensifying and may challenge existing business models. Our internet services are expected to compete with wireless phone companies, satellite and other broadband providers, as well as wireline phone companies and other providers of wireline internet service and others seeking to build fiber-based network infrastructure.
MBOC I is a private investment partnership in Omaha, Nebraska, which commenced operations in February 2018. Adam K. Peterson is the sole manager of Magnolia, an investment adviser registered with the SEC. Magnolia is the general partner and the manager of MCF and MBOC I. BP is a private investment partnership in Boston, Massachusetts, formed in June 2007. Alex B.
MBOC I is a private investment partnership in Omaha, Nebraska, which commenced operations in February 2018. Adam K. Peterson is the sole manager of Magnolia, an investment adviser registered with the SEC. Magnolia is the general partner and the manager of MCF and MBOC I. On May 9, 2024, the Company, Alex B.
In addition, over the last few years, we have also acquired additional smaller broadband businesses located in Utah. As of December 31, 2023, we have approximately 43,000 broadband customers. We hope to continue to expand in Arizona, Florida, Nevada, Utah, and other locales.
In addition, over the last few years, we have also acquired additional smaller broadband businesses located in Utah. As of December 31, 2024, we have approximately 46,900 broadband customers (15,600 fiber customers) and 39,800 fiber passings completed. We hope to continue to expand in Arizona, Florida, Nevada, Utah, and other locales.
Principal payments commenced on July 1, 2020 for amounts previously borrowed under Term Loan 1 and October 1, 2020 for amounts previously borrowed under Term Loan 2. The Term Loan is payable in full on December 6, 2028.
Principal payments commenced on July 1, 2020 for amounts previously borrowed under Term Loan 1 and October 1, 2020 for amounts previously borrowed under Term Loan 2. The Term Loan is payable in full on December 6, 2028. The Term Loan has a fixed interest rate of 4.00% per annum.
In April 2022, we acquired substantially all of the business assets of InfoWest, which are fiber and fixed wireless internet service providers with over 20,000 customers throughout Southern and Central Utah, Northern Arizona, and Moapa Valley, Nevada.
In June 2021, we purchased the 10% equity stake in AireBeam from FibAire's co-founder and chief executive for approximately $664,000. In April 2022, we acquired substantially all of the business assets of InfoWest, which are fiber and fixed wireless internet service providers with over 20,000 customers throughout Southern and Central Utah, Northern Arizona, and Moapa Valley, Nevada.
The interests of these funds managed by Magnolia and Boulderado may not coincide with the interests of other holders of our Class A common stock. Mr. Peterson and Mr. Rozek also receive compensation from Magnolia and Boulderado for their roles as managers of Magnolia and Boulderado, respectively.
The interests of these funds managed by Magnolia may not coincide with the interests of other holders of our Class A common stock. Mr. Peterson also receives compensation from Magnolia for his role as manager of Magnolia.
Hiring and developing our employees and building a work environment which they find fulfilling is an important goal for our business. We seek to promote a working environment which promotes the diversity of our workforce, respects the background of each employees and allows each employee to grow to his or her full potential.
We seek to promote a working environment which promotes the diversity of our workforce, respects the background of each employees and allows each employee to grow to his or her full potential.
In addition, each of Magnolia and Boulderado, as the holders of our Class B common stock, have the ability to limit our ability to take certain actions, notwithstanding the approval of a majority of our board of directors to take such action.
Adam K. Peterson, our Chief Executive Officer and one of our directors, is a principal in Magnolia. In addition, Magnolia as the only holder of our Class B common stock, has the ability to limit our ability to take certain actions, notwithstanding the approval of a majority of our board of directors to take such action.
We may in the future use a number of different sources to finance our acquisitions and operations, including cash flows from operations, seller financing, private financings (such as bank credit facilities, which may or may not be secured by our assets), 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.
Long-term debt included within our consolidated balance sheet as of December 31, 2024 consists of approximately $3,400,000 under BOB's credit facility, of which approximately $350,000 is classified as current, and $36,123,138 under Link's credit facility, of which $851,444 is classified as current and $9,600,000 is related to its revolving line of credit. 11 Table of Contents We may in the future use a number of different sources to finance our acquisitions and operations, including cash flows from operations, seller financing, private financings (such as bank credit facilities, which may or may not be secured by our assets), 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.
Any future decrease in the net tangible book value of such issued and outstanding shares could materially and adversely affect the market value of shares of our Class A common stock. Available Information You can find more information about us at our website, www.bostonomaha.com.
Any future decrease in the net tangible book value of such issued and outstanding shares could materially and adversely affect the market value of shares of our Class A common stock. Share repurchase program.
As a result, we are winding down BOAM's operations and implementing cost cutting measures since it will now only manage real estate funds. For our funds under management (the 24th Street Funds and the BFR Fund), we plan to sell the assets at the highest price the market will bear while maintaining the business plans for these assets.
For our funds under management (the 24th Street Funds and the BFR Fund), we plan to sell the assets at the highest price the market will bear while maintaining the business plans for these assets.
There are currently 1,055,560 shares of our Class B common stock outstanding, which shares are owned in equal amounts by each of MCF and BP.
There are currently 580,558 shares of our Class B common stock outstanding, which are owned by MCF.
In December 2021, we agreed to provide Sky Harbour an additional $45 million through the purchase of 4,500,000 shares of Class A common stock upon the closing of the Sky Harbour business combination, which was consummated in January 2022. ● In 2021, we established the BFR Fund subsidiary within BOAM to operate a proposed build-for-rent business, focusing on developing, building, and managing single family detached and/or townhomes for long term rentals.
As of December 31, 2024, we held 12,401,589 shares of Sky Harbour Class A common stock and 7,719,779 Sky Harbour warrants. ● In 2021, we established the BFR Fund subsidiary within BOAM to operate a proposed build-for-rent business, focusing on developing, building, and managing single family detached and/or townhomes for long term rentals.
In December 2021, we agreed to provide Sky Harbour an additional $45 million through the purchase of 4,500,000 shares of Class A common stock upon the closing of the Sky Harbour business combination, which was consummated in January 2022. ● In 2021, we established the BFR Fund subsidiary within BOAM to operate a proposed build-for-rent business, focusing on developing, building, and managing single family detached and/or townhomes for long term rentals.
As of December 31, 2024, we held 12,401,589 shares of Sky Harbour Class A common stock and 7,719,779 Sky Harbour warrants. ● In 2021, we established the BFR Fund subsidiary within BOAM to operate a proposed build-for-rent business, focusing on developing, building, and managing single family detached and/or townhomes for long term rentals.
There were no amounts outstanding related to the revolving line of credit as of December 31, 2023. 11 Table of Contents Under the Term Loan, Link is required to comply with the following financial covenants: A consolidated leverage ratio for any test period ending on the last day of any fiscal quarter of Link (a) beginning with the fiscal quarter ended December 31, 2021 of not greater than 3.50 to 1.00, (b) beginning with the fiscal quarter ended December 31, 2022 of not greater than 3.25 to 1.00 and (c) beginning with the fiscal quarter ended December 31, 2023 and thereafter of not greater than 3.00 to 1.00.
Under the Term Loan, Link is required to comply with the following financial covenants: A consolidated leverage ratio for any test period ending on the last day of any fiscal quarter of Link (a) beginning with the fiscal quarter ended June 30, 2024 of not greater than 3.50 to 1.00, (b) beginning with the fiscal quarter ending December 31, 2026 of not greater than 3.25 to 1.00 and (c) beginning with the fiscal quarter ending December 31, 2027 and thereafter of not greater than 3.00 to 1.00, and a minimum consolidated fixed charge coverage ratio of not less than 1.15 to 1.00 measured quarterly, based on rolling four quarters.
We acquired AireBeam for approximately $12.3 million in cash and issued to FibAire’s co-founder and chief executive 10% of the equity in the newly formed entity. In June 2021, we purchased the 10% equity stake in AireBeam from FibAire's co-founder and chief executive for approximately $664,000.
We acquired AireBeam for approximately $12.3 million in cash and issued to FibAire’s co-founder and chief executive 10% of the equity in the newly formed entity. In December 2020, we acquired substantially all of the business assets of UBB, a rural broadband internet provider.
The revolving line of credit loan facility has a $10 million maximum availability. Interest payments are based on the 30-day U.S. Prime Rate minus an applicable margin ranging between 0.65% and 1.15% dependent on Link’s consolidated leverage ratio. The revolving line of credit is due and payable on August 12, 2025.
On May 30, 2024, Link entered into a Ninth Amendment to Credit Agreement, which modified the Credit Agreement by increasing the maximum availability under the revolving line of credit from $10,000,000 to $15,000,000. Interest payments are based on the U.S. Prime Rate minus an applicable margin ranging between 0.65% and 1.15% dependent on Link’s consolidated leverage ratio.
Our broadband services businesses provide high-speed internet connectivity and are aimed at rural and other underserved communities that need higher speed and greater internet capacity. In the future, leading cable operators, such as Comcast, Charter Communications and Altice USA, and other competitors may seek to enter the markets we serve.
Our broadband services businesses provide high-speed internet connectivity and are aimed at rural and other underserved communities that need higher speed and greater internet capacity.
After the surety assesses such factors, it makes a determination as to the appropriateness and the amount, if any, of surety credit.
After the surety assesses such factors, it makes a determination as to the appropriateness and the amount, if any, of surety credit. Unlike property and casualty insurance, surety insurance allows the surety insurance company to pursue the contractor or subcontractor which purchased the surety bond for any losses incurred if a claim is made.
As of December 31, 2023, ACS, Warnock and SSS were merged into SCS. We seek to reduce our risk by limiting policy amounts, following extensive underwriting processes, reviewing dashboards of critical metrics, and purchasing reinsurance coverage.
Our brokerage services currently operate under the name BOSS Bonds Insurance Agency, LLC. We seek to reduce our risk by limiting policy amounts, following extensive underwriting processes, reviewing dashboards of critical metrics, and purchasing reinsurance coverage.
We acquired UBB for approximately $21.3 million in cash and issued to Alpine Networks, Inc., UBB’s member, 20% of the equity in the newly formed entity. Steve McGhie, the president of Alpine Networks, Inc. currently serves as chief executive officer of Boston Omaha Broadband.
UBB provided high-speed internet to over 10,000 subscribers in Salt Lake City, Park City, Ogden, Provo and surrounding communities. We acquired UBB for approximately $21.3 million in cash and issued to Alpine Networks, Inc., UBB’s member, 20% of the equity in the newly formed entity.
A minimum consolidated fixed charge coverage ratio of not less than 1.15 to 1.00 measured quarterly, based on rolling four quarters. The Company was in compliance with these covenants as of December 31, 2023. 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.
Link was in compliance with these covenants as of December 31, 2024. The Credit Agreement includes representations and warranties, reporting covenants, affirmative covenants, negative covenants, financial covenants and events of default customary for financings of this type. Upon the occurrence of an event of default the Lender may accelerate the loan.
Of the 463 employees, 17 employees in broadband operations, 4 employees in insurance services, 2 employee in administrative or corporate related activities and 1 employee in asset management services were part time. The rest of our employees were full time. None of our employees are subject to collective bargaining agreements. We believe that our relationship with our employees is good.
As of March 1, 2025, we had 452 employees, of which 287 were in broadband operations, 93 were in billboard operations, 67 were in insurance services and 5 were in administrative or corporate related activities. Currently, more than 90% of our employees are full time. None of our employees are subject to collective bargaining agreements.
A significant portion of our business in 2019 and 2020 was selling bonds securing rental payments due to landlords, primarily in the greater New York City area. Due to the COVID-19 pandemic, we stopped issuing these surety bonds. A surety’s right of indemnification contrasts with property and casualty, or life insurance coverages, where no such recovery right exists.
A surety’s right of indemnification contrasts with property and casualty, or life insurance coverages, where no such recovery right exists.
Removed
Adam K. Peterson, our Co-Chief Executive Officer and one of our directors, is a principal in Magnolia and Alex B. Rozek, our other Co-Chief Executive Officer and a director of the Company, is a principal in Boulderado.
Added
We offer independent insurance agents the opportunity to purchase surety insurance through our computerized portal which offers speed and ease in application processing for the independent agent.
Removed
Rozek is the Managing Member of Boulderado, the management company of BP. On February 6, 2019, BP returned all outside capital and is continuing operations to manage family investments only. As a result of these distributions, Boulderado BOC, LP distributed all of its shares of Class A common stock and was subsequently dissolved.
Added
As a result, we are winding down BOAM's operations and over the past several months have implemented significant cost cutting measures as BOAM now only manage real estate funds.
Removed
On June 18, 2021, Magnolia BOC II LP distributed all shares of Class A common stock to its limited partner and was subsequently dissolved.
Added
In December 2021, we agreed to provide Sky Harbour an additional $45 million through the purchase of 4,500,000 shares of Class A common stock upon the closing of the Sky Harbour business combination, which was consummated in January 2022. During fiscal 2024, we sold 285,442 shares of Sky Harbour Class A common stock for gross proceeds of approximately $2.9 million.
Removed
In December 2020, we acquired substantially all of the business assets of UBB, a rural broadband internet provider. UBB provided high-speed internet to over 10,000 subscribers in Salt Lake City, Park City, Ogden, Provo and surrounding communities.
Added
Rozek, and certain other parties set forth therein, entered into a Separation and Stock Repurchase Agreement (the “Separation Agreement”). Effective as of May 9, 2024, Mr. Rozek resigned as an officer and director of the Company and all its direct and indirect subsidiaries, other than as a member of the board of directors of Sky Harbour.
Removed
Our investment now represents 15.6% of CB&T’s outstanding common stock. Crescent is located in New Orleans and generates the majority of its revenues from indirect subprime automobile lending across the United States. ● In October 2020, our subsidiary BOC Yellowstone served as sponsor for the underwritten initial public offering of a special purpose acquisition company named Yellowstone Acquisition Company.
Added
Pursuant to the Separation Agreement, the Company repurchased from Mr. Rozek and Boulderado Partners, LLC, an entity controlled by Mr. Rozek, in the aggregate, 210,000 shares of Company Class A Common Stock, 527,780 shares of Company Class B Common Stock, and 51,994 warrants to acquire 51,994 shares of Company Class B Common Stock.
Removed
Yellowstone sold in its public offering 13,598,898 units at a price of $10.00 per unit, each unit consisting of one share of Class A common stock and a redeemable warrant to purchase one-half of a share of Class A common stock at an exercise price of $11.50 per share.
Added
The price of the Class A shares repurchased was based on the 30-trading day volume-weighted average price of the Class A Common Stock for the 30 trading days ending two trading days prior to the execution of the Separation Agreement.
Removed
We also operate American Contracting Services, Inc., which we refer to as "ACS," South Coast Surety Insurance Services, LLC, which we refer to as "SCS," and The Warnock Agency, Inc., which we refer to as "Warnock," brokers with clients nationwide, and Surety Support Services, Inc., which we refer to as "SSS," another surety insurance brokerage with clients concentrated in several Midwestern states.
Added
The price of the Class B shares repurchased was based on the 30-trading day volume-weighted average price of the Class A Common Stock for the 30 trading days ending two trading days prior to the execution of the Separation Agreement plus a blocking/control premium, for which management employed a third-party valuation expert. The aggregate purchase price paid to Mr.
Removed
In addition, we may face competition from 5G in the home and other services incorporating new technologies. Technological changes are further intensifying and may challenge existing business models.
Added
Rozek was $9,175,605, comprised of cash payments of $8,800,480 and 36,705 shares of Class A Common Stock of Sky Harbour. The aggregate purchase price paid to Boulderado was $9,951,113, comprised of cash payments of $7,960,891 and 194,738 shares of Class A Common Stock of Sky Harbour. Pursuant to the Separation Agreement, (a) we transferred to Mr.

… 32 more changes not shown on this page.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

88 edited+15 added−16 removed274 unchanged
Biggest changeThe COVID-19 pandemic and other unforeseen events could result in insurance claims exceeding our loss and loss adjustment expense reserves. 26 Table of Contents The estimation of claims and claim adjustment expense reserves may also be more difficult during times of adverse or uncertain economic conditions due to unexpected changes in behavior of claimants and policyholders, including an increase in fraudulent reporting of exposures and/or losses, reduced maintenance of insured properties, increased frequency of small claims or delays in the reporting of claims, and the impact of inflation on the cost of services and materials.
Biggest changeWe also expect that claims and claim adjustment expense reserve estimation difficulties will also differ significantly by product line due to differences in claim complexity, the volume of claims, the potential severity of individual claims, the determination of occurrence date for a claim and reporting lags (the time between the occurrence of the policyholder event and when it is actually reported to the insurer). 26 Table of Contents The estimation of claims and claim adjustment expense reserves may also be more difficult during times of adverse or uncertain economic conditions due to unexpected changes in behavior of claimants and policyholders, including an increase in fraudulent reporting of exposures and/or losses, reduced maintenance of insured properties, increased frequency of small claims or delays in the reporting of claims, the impact of inflation on the cost of services and materials, and the ability of the principal to repay the surety company for any claims the surety company must pay.
The amount of leverage we use will vary depending on our available acquisition investment opportunities, our available capital, our ability to obtain and access financing arrangements with lenders, and the lenders’ and our estimates of the stability of our operating cash flows.
The amount of leverage we use will vary depending on our available acquisition and investment opportunities, our available capital, our ability to obtain and access financing arrangements with lenders, and the lenders’ and our estimates of the stability of our operating cash flows.
At any time when shares of Class B common stock are outstanding, we may not, without the affirmative vote of both of the Class B Directors: ● Amend, alter or otherwise change the rights, preferences or privileges of the Class B common stock, or amend, alter or repeal any provision of our certificate of incorporation or bylaws in a manner that adversely affects the powers, preferences or rights of the Class B common stock. ● Liquidate, dissolve or wind-up our business, effect any merger or consolidation or any other deemed liquidation event or consent to any of the foregoing. ● Create, or authorize the creation of, or issue additional shares of Class B common stock, or increase the authorized number of shares of any additional class or series of capital stock. ● Increase or decrease the authorized number of directors constituting the Board of Directors. ● Hire, terminate, change the compensation of, or amend the employment agreements of, our executive officers. ● Purchase or redeem (or permit any subsidiary to purchase or redeem) or pay or declare any dividend or make any distribution on, any shares of our capital stock. ● Create, or authorize the creation of, or issue, or authorize the issuance of any debt security, if our aggregate indebtedness for borrowed money following such action would exceed $10,000, or guarantee, any indebtedness except for our own trade accounts arising in the ordinary course of business. ● Make, or permit any subsidiary to make, any loan or advance outside of the ordinary course of business to any employee or director. ● Create, or hold capital stock in, any subsidiary that is not wholly owned (either directly or through one or more other subsidiaries) by us or permit any direct or indirect subsidiary to sell, lease, or otherwise dispose of all or substantially all of the assets of any subsidiary. ● Change our principal business, enter new lines of business, or exit the current line of business. ● Enter into any agreement involving the payment, contribution, or assignment by us or to us of money or assets greater than $10,000. ● Enter into or be a party to any transaction outside of the ordinary course of business with any of our directors, officers, or employees or any “associate” (as defined in Rule 12b-2 promulgated under the Exchange Act) of any such person or entity. ● Acquire, by merger, stock purchase, asset purchase or otherwise, any material assets or securities of any other corporation, partnership or other entity. 35 Table of Contents Provisions in our charter documents and Delaware law could make an acquisition of us more difficult and may prevent attempts by our stockholders to replace or remove our current management, even if beneficial to our stockholders.
At any time when shares of Class B common stock are outstanding, we may not, without the affirmative vote of the Class B Director: ● Amend, alter or otherwise change the rights, preferences or privileges of the Class B common stock, or amend, alter or repeal any provision of our certificate of incorporation or bylaws in a manner that adversely affects the powers, preferences or rights of the Class B common stock. ● Liquidate, dissolve or wind-up our business, effect any merger or consolidation or any other deemed liquidation event or consent to any of the foregoing. ● Create, or authorize the creation of, or issue additional shares of Class B common stock, or increase the authorized number of shares of any additional class or series of capital stock. ● Increase or decrease the authorized number of directors constituting the Board of Directors. ● Hire, terminate, change the compensation of, or amend the employment agreements of, our executive officers. ● Purchase or redeem (or permit any subsidiary to purchase or redeem) or pay or declare any dividend or make any distribution on, any shares of our capital stock. ● Create, or authorize the creation of, or issue, or authorize the issuance of any debt security, if our aggregate indebtedness for borrowed money following such action would exceed $10,000, or guarantee, any indebtedness except for our own trade accounts arising in the ordinary course of business. ● Make, or permit any subsidiary to make, any loan or advance outside of the ordinary course of business to any employee or director. ● Create, or hold capital stock in, any subsidiary that is not wholly owned (either directly or through one or more other subsidiaries) by us or permit any direct or indirect subsidiary to sell, lease, or otherwise dispose of all or substantially all of the assets of any subsidiary. ● Change our principal business, enter new lines of business, or exit the current line of business. ● Enter into any agreement involving the payment, contribution, or assignment by us or to us of money or assets greater than $10,000. ● Enter into or be a party to any transaction outside of the ordinary course of business with any of our directors, officers, or employees or any “associate” (as defined in Rule 12b-2 promulgated under the Exchange Act) of any such person or entity. ● Acquire, by merger, stock purchase, asset purchase or otherwise, any material assets or securities of any other corporation, partnership or other entity. 35 Table of Contents Provisions in our charter documents and Delaware law could make an acquisition of us more difficult and may prevent attempts by our stockholders to replace or remove our current management, even if beneficial to our stockholders.
In addition, prevailing interest rates or other factors at the time of refinancing could increase our interest expense, and if we grant a security interest in any of our properties, or the properties of our subsidiaries to secure payment of indebtedness and are unable to make loan payments, the lender could foreclose upon such property. 18 Table of Contents Restrictive covenants in Link's indebtedness may limit management’s discretion with respect to certain business matters.
In addition, prevailing interest rates or other factors at the time of refinancing could increase our interest expense, and if we grant a security interest in any of our properties, or the properties of our subsidiaries to secure payment of indebtedness and are unable to make loan payments, the lender could foreclose upon such property. 18 Table of Contents Restrictive covenants in Link's indebtedness and BOB's indebtedness may limit management’s discretion with respect to certain business matters.
New regulations and changes to existing regulations may also curtail our ability to expand our billboard business and adversely affect us by reducing our revenues or increasing our operating expenses. For example, settlements between major tobacco companies and all U.S. states and certain U.S. territories include a ban on the outdoor advertising of tobacco products.
New regulations and changes to existing regulations may also curtail our ability to expand our billboard business and adversely affect us by reducing our revenues or increasing our operating expenses. For example, settlements between major tobacco companies and all U.S. states and certain U.S. territories include a ban on the outdoor advertising of certain types of tobacco products.
We ma y raise additional capital pursuant to debt financing, and such debt financing arrangements may contain covenants, which, if not complied with, could have a material adverse effect on our financial condition. Other than the bank borrowings to Link, to date we have not had a significant debt financing.
We ma y raise additional capital pursuant to debt financing, and such debt financing arrangements may contain covenants, which, if not complied with, could have a material adverse effect on our financial condition. Other than the bank borrowings to Link and BOB, to date we have not had a significant debt financing.
If we were deemed to be an investment company and did not register as an investment company when required to do so, there would be a risk, among other material adverse consequences, that we could become subject to monetary penalties or injunctive relief, or both, that we would be unable to enforce contracts with third parties, and/or that third parties could seek to obtain rescission of transactions with us undertaken during the period in which we were an unregistered investment company. 17 Table of Contents The existing and future indebtedness incurred by our billboard business may adversely affect our ability to obtain additional funds and may increase our vulnerability to economic or business downturns.
If we were deemed to be an investment company and did not register as an investment company when required to do so, there would be a risk, among other material adverse consequences, that we could become subject to monetary penalties or injunctive relief, or both, that we would be unable to enforce contracts with third parties, and/or that third parties could seek to obtain rescission of transactions with us undertaken during the period in which we were an unregistered investment company. 17 Table of Contents The existing and future indebtedness incurred by our billboard and broadband businesses may adversely affect our ability to obtain additional funds and may increase our vulnerability to economic or business downturns.
These factors include, but are not limited to: ● actual or anticipated fluctuations in Sky Harbour's reported results of operations or financial position, including a significant impairment of goodwill, intangible assets, or other long lived assets; ● recommendations and reports by securities analysts; ● Sky Harbour's ability to timely complete the construction of its various airport hangar developments at originally projected costs and its ability to successfully lease these facilities at profitable rental rates; ● Sky Harbour’s ability to continue to access capital and debt on commercially reasonable terms; ● changes in the performance or market valuations of companies in Sky Harbour's industry; ● addition or departure of Sky Harbour's executive officers or other key personnel; 14 Table of Contents ● speculative trading activity by certain investors; ● the impact of inflation and any possible recession on Sky Harbour's operations, revenues, and ability to access financial markets as well as on the private jet hangar industry generally; ● fluctuations in the costs of construction, maintenance, and other materials and services; ● news reports relating to trends, concerns, economic or competitive developments, regulatory changes and other related issues in Sky Harbour’s industry or target markets; and ● announcement of developments and material events by Sky Harbour or its competitors.
These factors include, but are not limited to: ● actual or anticipated fluctuations in Sky Harbour's reported results of operations or financial position, including a significant impairment of goodwill, intangible assets, or other long lived assets; ● recommendations and reports by securities analysts; ● Sky Harbour's ability to timely complete the construction of its various airport hangar developments at originally projected costs and its ability to successfully lease these facilities at profitable rental rates; ● Sky Harbour’s ability to continue to access capital and debt on commercially reasonable terms; ● changes in the performance or market valuations of companies in Sky Harbour's industry; ● addition or departure of Sky Harbour's executive officers or other key personnel; ● speculative trading activity by certain investors; ● the impact of inflation and any possible recession on Sky Harbour's operations, revenues, and ability to access financial markets as well as on the private jet hangar industry generally; ● fluctuations in the costs of construction, maintenance, and other materials and services; ● news reports relating to trends, concerns, economic or competitive developments, regulatory changes and other related issues in Sky Harbour’s industry or target markets; and ● announcement of developments and material events by Sky Harbour or its competitors.
The market price for our Class A common stock may be influenced by many factors, many of which are beyond our control, including those discussed in this “ Risk Factors ” section and elsewhere in this Annual Report and the following: ● our operating and financial performance and prospects; ● success of our competitors' products or services; ● regulatory or legal developments in the United States, especially changes in laws or regulations applicable to our products and services, and changes in federal and state corporate tax laws; ● additions or departures of key management personnel; ● market and industry perception of our success, or lack thereof, in pursuing our growth strategy; ● introductions or announcements of new products and services offered by us or significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors and the timing of such introductions or announcements; ● our ability to effectively manage our growth; ● our quarterly or annual earnings or those of other companies in the industries in which we participate; ● actual or anticipated changes in estimates to or projections of financial results, development timelines or recommendations by securities analysts; ● publication of research reports about us or our industry or positive or negative recommendations or withdrawal of research coverage by securities analysts; ● the public’s potential adverse reaction to our intention not to publish any guidance with respect to future earnings; ● the public’s reaction to our press releases, other public announcements or our competitors’ businesses; 31 Table of Contents ● market conditions in the billboard, insurance, broadband, real estate and other sectors in which we may operate as well as general economic conditions; ● our ability or inability to raise additional capital through the issuance of equity or debt or other arrangements and the terms on which we raise it; ● trading volume of our Class A common stock; ● the resale of Class A common stock held by our affiliates; ● changes in accounting standards, policies, guidance or principles; ● significant lawsuits, including stockholder litigation; ● general economic, industry and market conditions, including those resulting from inflation, geopolitical issues; natural disasters, severe weather events, terrorist attacks, epidemics and pandemics (such as the COVID-19 pandemic) and responses to such events; ● accounting charges associated with reductions in the value of our investments in publicly traded securities and private companies; ● our income or losses in unconsolidated affiliates in which we have invested capital and our retention of specialized accounting for our investments in entities which qualify as investment companies and apply specialized industry accounting; and ● changes in other investment income or losses.
The market price for our Class A common stock may be influenced by many factors, many of which are beyond our control, including those discussed in this “ Risk Factors ” section and elsewhere in this Annual Report and the following: ● our operating and financial performance and prospects; ● success of our competitors' products or services; ● regulatory or legal developments in the United States, especially changes in laws or regulations applicable to our products and services, and changes in federal and state corporate tax laws; ● additions or departures of key management personnel; ● market and industry perception of our success, or lack thereof, in pursuing our growth strategy; ● introductions or announcements of new products and services offered by us or significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors and the timing of such introductions or announcements; ● our ability to effectively manage our growth; ● our quarterly or annual earnings or those of other companies in the industries in which we participate; ● actual or anticipated changes in estimates to or projections of financial results, development timelines or recommendations by securities analysts; ● publication of research reports about us or our industry or positive or negative recommendations or withdrawal of research coverage by securities analysts; ● the public’s potential adverse reaction to our intention not to publish any guidance with respect to future earnings; ● the public’s reaction to our press releases, other public announcements or our competitors’ businesses; 31 Table of Contents ● market conditions in the billboard, insurance, broadband, real estate and other sectors in which we may operate as well as general economic conditions; ● our ability or inability to raise additional capital through the issuance of equity or debt or other arrangements and the terms on which we raise it; ● trading volume of our Class A common stock; ● the resale of Class A common stock held by our affiliates; ● changes in accounting standards, policies, guidance or principles; ● significant lawsuits, including stockholder litigation; ● general economic, industry and market conditions, including those resulting from inflation, geopolitical issues; natural disasters, severe weather events, terrorist attacks, epidemics and pandemics (such as the COVID-19 pandemic) and responses to such events; ● accounting charges associated with operating losses at Sky Harbour as well as any reductions in the value of our investments in Sky Warrants, reductions in value for publicly traded securities which we mark to market, and impairment charges for our investments in private companies; ● our income or losses in unconsolidated affiliates in which we have invested capital and our retention of specialized accounting for our investments in entities which qualify as investment companies and apply specialized industry accounting; and ● changes in other investment income or losses.
However, due to the current trading volume of Sky Harbour Class A common stock, we anticipate that it would be difficult to sell any significant amount of our Sky Harbour Class A common stock and Warrants at the present time and for the foreseeable future.
Due to the current trading volume of Sky Harbour Class A common stock, we anticipate that it would be difficult to sell any significant amount of our Sky Harbour Class A common stock and Warrants at the present time and for the foreseeable future.
Our other stockholders will not have voting control over our actions, including the determination of other industries and markets that we may enter. The interests of the entities managed by Magnolia and Boulderado may not coincide with the interests of other holders of our Class A common stock.
Our other stockholders will not have voting control over our actions, including the determination of other industries and markets that we may enter. The interests of the entities managed by Magnolia may not coincide with the interests of other holders of our Class A common stock.
In May 2022, we updated the Registration Statement to reflect subsequent distributions of the Class A common stock owned by MBOC I to MIT, resulting in a reduction in the number of shares registered to 8,297,039 shares of our Class A common stock.
In May 2022, we updated the Registration Statement to reflect subsequent distributions of certain shares of Class A common stock owned by MBOC I to MIT, resulting in a reduction in the number of shares registered to 8,297,039 shares of our Class A common stock.
The entities managed by Magnolia and Boulderado may also pursue, for their own managers’ or members’ accounts, acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities may not be available to us.
The entities managed by Magnolia may also pursue, for their own managers’ or members’ accounts, acquisition opportunities that may be complementary to our business, and as a result, those acquisition opportunities may not be available to us.
Our management believes that our ability to achieve sustained profitability will depend primarily on our ability to consummate acquisitions of assets and businesses in competitive markets, skillfully allocate capital, and establish competitive advantages in each of our businesses.
Our management believes that our ability to achieve sustained profitability will depend primarily on our ability to consummate acquisitions of assets and businesses in competitive markets, skillfully allocate capital and manage our businesses, and establish competitive advantages in each of our businesses.
The entities managed by Magnolia and Boulderado are in the business of making investments in companies and may, from time to time, acquire and hold interests in businesses that compete directly or indirectly with us.
The entities managed by Magnolia are in the business of making investments in companies and may, from time to time, acquire and hold interests in businesses that compete directly or indirectly with us.
As of March 22, 2024, no shares of preferred stock have been issued. 37 Table of Contents Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware and the federal district courts of the United States are the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, our certificate of incorporation or our bylaws, (iv) any action to interpret, apply, enforce or determine the validity of our certificate of incorporation or our bylaws or (v) any action asserting a claim against us that is governed by the internal affairs doctrine.
As of March 27, 2025, no shares of preferred stock have been issued. 37 Table of Contents Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware and the federal district courts of the United States are the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by applicable law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, employees or agents to us or our stockholders, (iii) any action asserting a claim arising pursuant to any provision of the DGCL, our certificate of incorporation or our bylaws, (iv) any action to interpret, apply, enforce or determine the validity of our certificate of incorporation or our bylaws or (v) any action asserting a claim against us that is governed by the internal affairs doctrine.
Additionally, debt financing arrangements may be at the subsidiary level, but could include a guaranty by us, and could require a pledge of all or substantially all of our, and/or our subsidiaries’ assets.
Additionally, future debt financing arrangements may be at the subsidiary level, but could include a guaranty by us, and could require a pledge of all or substantially all of our, and/or our subsidiaries’ assets.
We will attempt to consider all significant facts and circumstances known at the time claims and claim adjustment expense reserves are established or reviewed.
We attempt to consider all significant facts and circumstances known at the time claims and claim adjustment expense reserves are established or reviewed.
Pursuant to the exercise of rights under a registration rights agreement, in September 2021, we registered a total of 9,698,705 shares of Class A common stock, including 6,437,768 shares of Class A common stock owned by MBOC I and beneficially owned by entities associated with the Massachusetts Institute of Technology and the remaining 3,260,937 shares owned directly by certain entities affiliated with MIT and also grants them the right to participate in future registrations of securities by us, subject to certain conditions.
Pursuant to the exercise of rights under a registration rights agreement, in September 2021, we registered a total of 9,698,705 shares of Class A common stock, including 6,437,768 shares of Class A common stock owned by MBOC I and beneficially owned by entities associated with MIT and the remaining 3,260,937 shares owned directly by certain entities affiliated with MIT and also grants them the right to participate in future registrations of securities by us, subject to certain conditions.
We currently account for our investment in Sky Harbour Class A common stock under the equity method. We have evaluated our investment in Sky Harbour as of December 31, 2023, and determined that there was not an other-than-temporary impairment.
We currently account for our investment in Sky Harbour Class A common stock under the equity method. We have evaluated our investment in Sky Harbour as of December 31, 2024, and determined that there was not an other-than-temporary impairment.
Furthermore, a failure to comply with the obligations contained in the loan agreements governing Link's indebtedness could result in an event of default under such agreements which could result in an acceleration of debt under other instruments evidencing indebtedness that contains cross-acceleration or cross-default provisions.
Furthermore, a failure to comply with the obligations contained in the loan agreements governing Link's indebtedness and BOB's indebtedness could result in an event of default under such agreements which could result in an acceleration of debt under other instruments evidencing indebtedness that contains cross-acceleration or cross-default provisions.
Moreover, it is possible that entities managed by Boulderado and Magnolia may increase their ownership in us if we sell additional shares of stock to them in connection with any future capital raise we may conduct.
Moreover, it is possible that entities managed by Magnolia may increase their ownership in us if we sell additional shares of stock to them in connection with any future capital raise we may conduct.
In addition to our review for possible impairment charges to securities we hold, we annually test goodwill for impairment and did so as of October 1, 2023. Based on our review at October 1, 2023, no impairment charge was required.
In addition to our review for possible impairment charges to securities we hold, we annually test goodwill for impairment and did so as of October 1, 2024. Based on our review at October 1, 2024, no impairment charge was required.
Upon the closing of the Sky Harbour business combination, our Class B common stock converted to Class A common stock of Sky Harbour and our private placement warrants are now exercisable to purchase 7,719,779 shares of Class A common stock of Sky Harbour.
Upon the closing of the Sky Harbour business combination, our Class B Preferred Units and Class B common stock converted to Class A common stock of Sky Harbour and our private placement warrants are now exercisable to purchase 7,719,779 shares of Class A common stock of Sky Harbour.
As a result of these factors, we may not achieve, sustain, or increase our profitability on an ongoing basis. We could suffer losses due to asset impairment charges for goodwill and other intangible assets.
As a result of these factors, we may not achieve, sustain, or increase our profitability on an ongoing basis. 14 Table of Contents We could suffer losses due to asset impairment charges for goodwill and other intangible assets.
We will continue to review our investment in Sky Harbour for an other-than-temporary impairment on a quarterly basis or upon the occurrence of certain events. If Sky Harbour's stock price drops below our carrying value of $7.15 per share for a sustained period of time, it will likely result in an impairment of our investment.
We will continue to review our investment in Sky Harbour for an other-than-temporary impairment on a quarterly basis or upon the occurrence of certain events. If Sky Harbour's stock price drops below our carrying value of $5.80 per share for a sustained period of time, it will likely result in an impairment of our investment.
The occurrence of any of these events could materially adversely affect Link, which would adversely affect our results of operations and financial condition and adversely affect our stock price.
The occurrence of any of these events could materially adversely affect Link or BOB, which would adversely affect our results of operations and financial condition and adversely affect our stock price.
Our net loss from operations for the fiscal years ended December 31, 2023 and 2022 was approximately $8.9 million and $5.2 million, respectively. We have funded our operations to date principally from the sale of securities.
Our net loss from operations for the fiscal years ended December 31, 2024 and 2023 was approximately $8.5 million and $8.9 million, respectively. We have funded our operations to date principally from the sale of securities.
So long as each of MCF and BP continue to own our Class B common stock or entities managed by Magnolia and Boulderado own a majority of our outstanding Class A common stock, they will continue to be able to strongly influence or effectively control our decisions, including potential mergers or acquisitions, asset sales and other significant corporate transactions. 34 Table of Contents Certain actions cannot be taken without the approval of MCF and BP due to their ownership of Class B common stock.
So long as MCF continues to own our Class B common stock or entities managed by Magnolia own a majority of our outstanding Class A common stock, they will continue to be able to strongly influence or effectively control our decisions, including potential mergers or acquisitions, asset sales and other significant corporate transactions. 34 Table of Contents Certain actions cannot be taken without the approval of MCF due to its ownership of Class B common stock.
If Link's indebtedness were to be accelerated, there can be no assurance that its future cash flow or assets would be sufficient to repay in full such indebtedness. We may in the future rely in part on Link to provide us with the funds necessary to make distributions to us to meet our financial obligations.
If Link's indebtedness or BOB's indebtedness were to be accelerated, there can be no assurance that their future cash flow or assets would be sufficient to repay in full such indebtedness. We may in the future rely in part on Link and BOB to provide us with the funds necessary to make distributions to us to meet our financial obligations.
Failure to comply with the terms of this indebtedness could result in a default by our billboard business that could have material adverse consequences for us.
Failure to comply with the terms of the indebtedness could result in a default by our billboard or broadband business that could have material adverse consequences for us.
In any such event, we could be required to make a significant investment to fix or replace our information technology systems, and we could experience interruptions in our ability to service our customers. These risks have been and may continue to be exacerbated as a result of remote working in response to the COVID-19 pandemic.
In any such event, we could be required to make a significant investment to fix or replace our information technology systems, and we could experience interruptions in our ability to service our customers. These risks have been and may continue to be exacerbated as a result of remote working.
Instruments governing Link's indebtedness contain restrictive covenants limiting Link's discretion with respect to certain business matters.
Instruments governing Link's indebtedness and BOB's indebtedness contain restrictive covenants limiting Link's and BOB's discretion with respect to certain business matters.
Our ability to be productive and profitable will depend upon our ability to employ and retain workers with certain backgrounds and experience, such as experienced sales professionals and workers with substantial experience with insurance underwriting and risk and financial analysis.
Our ability to be productive and profitable will depend upon our ability to employ and retain workers with certain backgrounds and experience, such as experienced sales professionals, workers with substantial experience in insurance underwriting, risk and financial analysis, and individuals with broadband operations experience.
As of March 22, 2024, MBOC I holds for the benefit of Massachusetts Institute of Technology ("MIT") and a pension fund managed by MIT 5,589,253 shares of our Class A common stock. In addition, the MIT affiliated pension fund separately reported that as of February 7, 2024, it owns an additional 2,444,473 shares of our Class A common stock.
As of March 27, 2025, MBOC I holds for the benefit of Massachusetts Institute of Technology ("MIT") and a pension fund managed by MIT 5,589,253 shares of our Class A common stock. In addition, the MIT affiliated pension fund separately reported that as of February 14, 2025, it owns an additional 2,444,473 shares of our Class A common stock.
In 2020, we acted as the sponsor for the initial public offering of Yellowstone, a special purpose acquisition company ("SPAC"). We purchased Yellowstone Class B common stock and private placement warrants at a cost of approximately $7.8 million.
In 2020, we acted as the sponsor for the initial public offering of Yellowstone, a special purpose acquisition company ("SPAC"). As sponsor, we purchased approximately 3,300,000 shares of Yellowstone Class B common stock at a cost of $25,000 and private placement warrants at a cost of approximately $7.8 million.
In addition to UCS, we also operate several surety insurance brokerage firms, and the surety insurance brokerage industry has relatively low barriers to entry. We may experience significant competition and our competitors may have greater financial, marketing and human resources than us. Broadband Services .
In addition to UCS, we also operate a nationwide surety insurance brokerage firm, and the surety insurance brokerage industry has relatively low barriers to entry. We may experience significant competition and our competitors may have greater financial, marketing and human resources than us. Broadband Services .
Peterson and Rozek and are available for resale under Rule 144 under the Securities Act. In addition, we have issued 80,912 shares of our Class A common stock under the 2022 Long-Term Incentive Plan and may issue additional shares in the future.
Peterson and are available for resale under Rule 144 under the Securities Act. In addition, we have issued 142,134 shares of our Class A common stock under the 2022 Long-Term Incentive Plan and may issue additional shares in the future.
In addition, state insurance regulators will limit the amount of dividends, if any, we can draw from our UCS insurance operations and Link’s credit agreement prohibits it from issuing dividends to us if as a result of any such dividend Link would be in violation of the financial covenants set forth in the credit agreement.
In addition, state insurance regulators will limit the amount of dividends, if any, we can draw from our UCS insurance operations and Link’s and BOB's credit agreements prohibits them from issuing dividends to us if as a result of any such dividend would be in violation of the financial covenants set forth in the credit agreements.
Our investments in publicly traded securities involve a substantial degree of risk . In addition to our investments in privately-held companies and our investment in the Sky Harbour Class A common stock and Sky Harbour Warrants, we may purchase publicly traded common stock and other equity securities, including warrants and corporate bonds.
In addition to our investments in privately-held companies and our investment in the Sky Harbour Class A common stock and Sky Warrants, we may purchase publicly traded common stock and other equity securities, including warrants and corporate bonds.
We may also incur indebtedness under future credit facilities. If we are unable to refinance our indebtedness on acceptable terms, or at all, we may need to dispose of one or more of our properties or other assets under disadvantageous terms.
If we are unable to refinance our indebtedness on acceptable terms, or at all, we may need to dispose of one or more of our properties or other assets under disadvantageous terms.
Also, upon the closing of the Sky Harbour business combination in January 2022, we purchased an additional 4,500,000 shares of Class A common stock for a purchase price of $45 million.
Also, upon the closing of the Sky Harbour business combination in January 2022, we purchased an additional 4,500,000 shares of Class A common stock.
Accordingly, these limitations may increase our federal income tax liability. NOLs generated during 2018 and thereafter do not expire. As of December 31, 2023, we had NOLs of a pproximately $72.5 million.
Accordingly, these limitations may increase our federal income tax liability. NOLs generated during 2018 and thereafter do not expire. As of December 31, 2024, we had NOLs of a pproximately $ 91.1 million.
Any additional industries or markets that we may enter, whether through future acquisitions or development of a new business line, such as our potential entry into the build for rent business, will also likely be occupied by established competitors. Many of our current competitors have substantially greater financial, marketing, product development, and human resources than we do.
Any additional industries or markets that we may enter, whether through future acquisitions or development of a new business line, will also likely be occupied by established competitors. Many of our current competitors have substantially greater financial, marketing, product development, and human resources than we do.
Peterson is a member of the board of directors of Nelnet, Inc. 22 Table of Contents Disruptions to our information technology systems and any cybersecurity breaches could disrupt our business operations and have a material adverse effect on our business, prospects, results of operations, financial condition and/or cash flows. The operation of our business depends on our information technology systems.
Peterson and David Graff serve as members of the board of directors of Nelnet, Inc. 22 Table of Contents Disruptions to our information technology systems and any cybersecurity breaches could disrupt our business operations and have a material adverse effect on our business, prospects, results of operations, financial condition and/or cash flows.
These covenants could place significant restrictions on, among other things, Link's ability to create liens or other encumbrances, to make distributions to us or make certain other payments, investments, loans and guarantees, and to sell or otherwise dispose of assets and merge or consolidate with another entity. Covenants also require Link to meet certain financial ratios and financial condition tests.
These covenants could place significant restrictions on, among other things, their ability to create liens or other encumbrances, to make distributions to us or make certain other payments, investments, loans and guarantees, and to sell or otherwise dispose of assets and merge or consolidate with another entity.
Interest rates have increased, which may result in lower consumer demand and higher borrowing costs, and may cause general economic conditions to deteriorate. If global economic conditions continue to deteriorate, economies could experience a recession, which may result in higher unemployment rates, lower disposable income, lower Company earnings and investment, and lower consumer spending.
If global economic conditions continue to deteriorate, economies could experience a recession, which may result in higher unemployment rates, lower disposable income, lower consumer spending, and lower Company earnings and investment.
Also while we intend to hold our Sky Harbour Class A common stock for the longer term, we may elect to sell all or a portion of our holdings for a variety of reasons resulting in realized losses or gains.
Also, while we intend to hold our Sky Harbour Class A common stock for the long term, we have sold a small percentage of our Sky Harbour Class A common stock in 2024 and 2025 and may elect to sell all or a portion of our holdings for a variety of reasons resulting in realized losses or gains.
Due to the size of our percentage ownership interest in Sky Harbour's common stock, approximately 20% as of December 31, 2023, and our right to elect one of the seven members of Sky Harbour's Board of Directors, our investment is recorded under the equity method using the fair market value of Sky Harbour's Class A common stock as of the date of the business combination and we do not include any unrealized gains or losses related to the change in Sky Harbour's stock price in our reported earnings.
Due to the size of our percentage ownership interest in Sky Harbour's Class A common stock and our right to elect one of the seven members of Sky Harbour's Board of Directors, our investment is recorded under the equity method and we do not include any unrealized gains or losses related to the change in Sky Harbour's stock price in our reported earnings.
The leverage on Link's assets may affect the funds available to us if the terms of the debt impose restrictions on the ability of Link to make distributions to us.
The leverage on Link's assets and BOB's assets may affect the funds available to us if the terms of the debt restrict the ability of Link and BOB to make distributions to us.
Accordingly, Link is subject to the risks associated with significant indebtedness, including: ● Link must dedicate a portion of its cash flows from operations to pay principal and interest and, as a result, it may have less funds available for operations and other purposes; ● Link may find it more difficult and expensive to obtain additional funds through financings, if available at all; ● Link is more vulnerable to economic downturns, less able to withstand competitive pressures and less flexible in reacting to changes in the billboard industry and general economic conditions; ● if Link defaults under the credit facility, including failing to pay the outstanding principal when due, and if the lender demands payment of a portion or all the indebtedness, it may not have sufficient funds to make such payments; ● if Link is unable to refinance indebtedness on its properties due to business and market factors, including disruptions in the capital and credit markets, lenders deem the estimated cash flows or values of Link's properties and other assets to be insufficient, and other adverse financial, competitive, business and other factors, including factors beyond Link's control; ● if refinanced, the terms of a refinancing may not be as favorable as the original terms of the related indebtedness; and ● if Link borrows any sums under the line of credit, the interest rate it pays on such debt will be subject to changes in interest rates.
Accordingly, Link and BOB are subject to the risks associated with significant indebtedness, including: ● Link and BOB must dedicate a portion of their cash flows from operations to pay principal and interest and, as a result, it may have less funds available for operations and other purposes; ● Link and BOB may find it more difficult and expensive to obtain additional funds through financings, if available at all; ● if Link or BOB defaults under their credit facilities, including failing to pay the outstanding principal when due, and if the lender demands payment of a portion or all the indebtedness, they may not have sufficient funds to make such payments; ● if Link or BOB are unable to refinance indebtedness due to business and market factors, including disruptions in the capital and credit markets, lenders deem the estimated cash flows and assets to be insufficient, and other adverse financial, competitive, business and other factors, including factors beyond Link's and BOB's control; ● if refinanced, the terms of a refinancing may not be as favorable as the original terms of the related indebtedness; and ● BOB's debt and Link's line of credit are subject to changes in interest rates.
Specifically, our management concluded that our disclosure controls and procedures and internal control over financial reporting were not effective related to the risk assessment of our investment in unconsolidated entities who are required to apply specialized industry accounting.
We identified a material weakness in the Company’s internal control over financial reporting existing as of December 31, 2022. Specifically, our management concluded that our disclosure controls and procedures and internal control over financial reporting were not effective related to the risk assessment of our investment in unconsolidated entities who are required to apply specialized industry accounting.
As a result, we, like other direct insurance companies, write insurance policies which to some extent do not have the benefit of reinsurance protection. These gaps in reinsurance protection expose us to greater risk and greater potential losses. Our insurance employees could take excessive risks, which could negatively affect our financial condition and business.
As a result, we, like other direct insurance companies, write insurance policies which to some extent do not have the benefit of reinsurance protection. These gaps in reinsurance protection expose us to greater risk and greater potential losses.
With respect to such affiliates, there may be an absence of arms’ length negotiations with respect to the terms, conditions and consideration with respect to goods and services provided to or by us. Brendan J. Keating, who is one of our directors, is also the Manager of both Logic and 24th Street and, along with Adam K.
With respect to such affiliates, there may be an absence of arms’ length negotiations with respect to the terms, conditions and consideration with respect to goods and services provided to or by us. Brendan J. Keating is also the Manager of Logic, 24th Street and Local Asset Management, LLC. Adam K. Peterson, Brendan J. Keating and Jeffrey C.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. 29 Table of Contents We identified a material weakness in the Company’s internal control over financial reporting existing as of December 31, 2022.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
We may be unable to employ a sufficient number of key employees and other experienced or qualified workers. The delivery of our services and products requires sales professionals and other personnel with substantial work experience in our lines of business. Workers may choose to pursue employment with our competitors or in fields that offer a more desirable work environment.
We may be unable to employ a sufficient number of key employees and other experienced or qualified workers. The delivery of our services and products requires sales, operations, financial, and underwriting professionals and other personnel with substantial work experience in our lines of business.
Our conclusion was based on several contributing factors, including: (i) our assessment that the underlying business and financial condition of Sky Harbour is favorable; (ii) the period of time for which the fair value was less than the carrying value during 2023, (iii) the recovery of Sky Harbour's stock price during the last few months of 2023, and (iv) our ability and intent to hold the investment.
Our conclusion was based on several contributing factors, including: (i) our assessment that the underlying business and financial condition of Sky Harbour is favorable, (ii) Sky Harbour's stock price trading above our carrying value for an extended period of time, and (iii) our ability and intent to hold the investment.
MCF and BP, the holders of record of the shares of Class B common stock, exclusively and as a separate class, are entitled to elect two directors to our Board of Directors, which we refer to as the “Class B Directors,” which number of Class B Directors may be reduced pursuant to the terms and conditions of the Amended and Restated Voting and First Refusal Agreement between MCF and BP entered into on June 19, 2015, which we refer to as the “Amended and Restated Voting and First Refusal Agreement.” Any Class B Director may be removed without cause by, and only by, the affirmative vote of the holders of eighty percent (80%) of the shares of Class B common stock exclusively and as a separate class, given either at a special meeting of such stockholders duly called for that purpose or pursuant to a written consent of such stockholders.
MCF, the holder of record of all of the shares of Class B common stock, exclusively and as a separate class, is entitled to elect a director to our Board of Directors, which we refer to as the “Class B Director.” The Class B Director may be removed without cause by, and only by, the affirmative vote of the holders of eighty percent (80%) of the shares of Class B common stock exclusively and as a separate class, given either at a special meeting of such stockholders duly called for that purpose or pursuant to a written consent of such stockholders.
We continue to assess the impact of the 2018 private placement, our “at the market” offerings, our 2020 public offering, our 2021 public offering and other transactions to determine whether an “ownership change,” as defined in Section 382 of the Internal Revenue Code, has occurred and, if so, the limitations on our ability to utilize NOLs.
We have assessed the impact of the 2018 private placement, our “at the market” offerings, our 2020 public offering, our 2021 public offering, and other transactions to determine whether an “ownership change,” as defined in Section 382 of the Internal Revenue Code, has occurred and do not anticipate that such shifts would result in any permanent limitation on our ability to utilize NOLs.
In the future, if our ownership interest in Sky Harbour's common stock drops below 20%, we may no longer be able to record our investment under the equity method and will be required to include any unrealized gains or losses related to the change in Sky Harbour's stock price in our reported earnings on a mark to market basis.
In the future, if we are deemed to no longer have significant influence, we may no longer be able to record our investment under the equity method and will be required to include any unrealized gains or losses related to the change in Sky Harbour's stock price in our reported earnings.
Additionally, Mr. Peterson and entities managed by Magnolia together with Mr. Rozek and entities managed by Boulderado collectively own 733,107 shares of our Class A common stock and 1,055,560 shares of our Class B common stock, which converts on a one for one basis into an equivalent number of shares of our Class A common stock.
Additionally, Mr. Peterson and entities managed by Magnolia own 587,031 shares of our Class A common stock and 580,558 shares of our Class B common stock, which converts on a one for one basis into an equivalent number of shares of our Class A common stock.
In several recent situations when the market price of a stock has been volatile, holders of that stock have instituted securities class action litigation against the company that issued the stock.
These broad market and industry fluctuations may adversely affect the market price of our Class A common stock, regardless of our operating performance. In several recent situations when the market price of a stock has been volatile, holders of that stock have instituted securities class action litigation against the company that issued the stock.
A failure to comply with any such covenants could result in a default which, if not cured or waived, could permit acceleration of the relevant indebtedness. If we are unable to manage our interest rate risk effectively, our cash flows and operating results may suffer. Advances under Link's $10 million revolving line of credit bear interest at a variable rate.
Covenants also require Link and BOB to meet certain financial ratios and financial condition tests. A failure to comply with any such covenants could result in a default which, if not cured or waived, could permit acceleration of the relevant indebtedness. If we are unable to manage our interest rate risk effectively, our cash flows and operating results may suffer.
Subsequent to the closing of the Sky Harbour business combination, we distributed 75,000 shares of Sky Class A common stock to the outside directors of Yellowstone and 206,250 shares of Sky Class A common stock to an investor in the Yellowstone IPO. As of March 22, 2024, we owned 13,118,474 shares of Sky Harbour Class A common stock.
Subsequent to the closing of the Sky Harbour business combination, we distributed 75,000 shares of Sky Class A common stock to the outside directors of Yellowstone and 206,250 shares of Sky Class A common stock to an investor in the Yellowstone IPO. To date, we have invested a total of $107.8 million in Sky Harbour.
Currently, MCF and BP collectively own all of our Class B common stock and entities managed by Magnolia and Boulderado own 19.5% of our Class A common stock, resulting in their holding 41.8% of the aggregate voting power of the company. As a result, Mr.
Currently, MCF owns all of our Class B common stock and entities managed by Magnolia own 18.1% of our Class A common stock, resulting in their holding 31.1% of the aggregate voting power of the company. As a result, Mr. Peterson and entities managed by Magnolia together control 32.7% of the aggregate voting power.
As of March 22, 2024, we had 8,539,476 shares of Class A common stock authorized but unissued under our certificate of incorporation.
As of March 27, 2025, we had 7,848,893 shares of Class A common stock authorized but unissued under our certificate of incorporation.
As of December 31, 2023, the closing price of Sky Harbour Class A common stock was $9.66 per share and we hold 13,118,474 shares of Sky Harbour Class A common stock and warrants to purchase 7,719,779 shares of Class A common Stock at a price of $11.50 per share, and the exercise price is subject to adjustment.
As of December 31, 2024, the closing price of Sky Harbour Class A common stock was $11.93 per share and we held 12,401,589 shares of Sky Harbour Class A common stock and warrants to purchase 7,719,779 shares of Class A common Stock at a price of $11.50 per share.
If one or more of the analysts who elect to cover us downgrade our shares, the market price of our Class A common stock would likely decline. Entities managed by Magnolia and Boulderado currently effectively control all voting matters brought before our stockholders .
If one or more of the analysts who elect to cover us downgrade our shares, the market price of our Class A common stock would likely decline.
To date, we have invested a total of $107.8 million in Sky Harbour. All the shares of Sky Harbour Class A common stock and Sky Harbour Warrants to purchase Class A common stock that we hold have been registered under the Securities Act.
All the shares of Sky Harbour Class A common stock and Sky Harbour Warrants to purchase Class A common stock that we hold have been registered under the Securities Act. In 2024 and early 2025, we have sold in the open market or otherwise transferred a total of 907,577 shares of Sky Harbour Class A stock.
The stock market in general, and market prices for the securities of companies like ours in particular, have from time to time experienced volatility that often has been unrelated to the operating performance of the underlying companies. These broad market and industry fluctuations may adversely affect the market price of our Class A common stock, regardless of our operating performance.
The stock market in general, and market prices for the securities of companies like ours in particular, as well as companies such as Sky Harbour, have from time to time experienced volatility that often has been unrelated to the operating performance of the underlying companies.
These two key employees may not be able to dedicate adequate time to our businesses and operations, and we could experience an adverse effect on our operations due to the demands placed on our management team by their other professional obligations. In addition, these key employees’ other responsibilities could cause conflicts of interest with us.
This key employee may not be able to dedicate adequate time to our businesses and operations, and we could experience an adverse effect on our operations due to the demands placed on our management team by his other professional obligations. Our executive officers and directors may experience a conflict of interest between their duties to us and to affiliated parties.
In addition, Link will generally have to service its debt obligations before making distributions to us or any of our other subsidiaries and any such distributions may require the consent of the lender. Leverage may also result in a requirement for liquidity, which may force the sale of assets at times of low demand and/or prices for such assets.
In addition, Link and BOB will generally have to service their debt obligations before making distributions to us or any of our other subsidiaries and any such distributions may require the consent of the lender.
The number of shares of stock will also be adjusted for any stock dividend, stock split or combination of shares (including a reverse stock split), recapitalization or other change in our capital structure, plus any shares that are subject to awards that expire or are terminated or cancelled without the delivery of shares. 16 Table of Contents Our significant equity ownership in Sky Harbour Group Corporation's Class A common stock and warrants may make it difficult for us to resell a significant portion of our Sky Harbour Group Corporation securities in a short period of time.
The number of shares of stock will also be adjusted for any stock dividend, stock split or combination of shares (including a reverse stock split), recapitalization or other change in our capital structure, plus any shares that are subject to awards that expire or are terminated or cancelled without the delivery of shares.
From January through April 2023, we sold 1,532,065 shares of our Class A common stock through the ATM Program, raising gross proceeds of approximately $37.5 million. Our 2022 Incentive Plan allows us to issue up to a total of 1,575,000 shares of Class A common stock (as defined under the Plan).
Our 2022 Incentive Plan allows us to issue up to a total of 1,575,000 shares of Class A common stock (as defined under the Plan).
Link, which operates our billboard businesses, entered into a credit agreement in August 2019 with a commercial bank which provides Link and its subsidiaries the opportunity to borrow through a combination of long-term debt and a line of credit.
Link entered into a credit agreement in August 2019 with a commercial bank which provides Link and its subsidiaries the opportunity to borrow through a combination of long-term debt and a line of credit. Link's current borrowings under the bank credit facility as of December 31, 2024 totaled $36,123,138, of which $9,600,000 is related to its revolving line of credit.
We depend heavily on the efforts and services of our executive officers and other members of our management team to manage our operations, including our Co-Chief Executive Officers and our Chief Financial Officer. The unexpected loss or unavailability of key members of management may have a material adverse effect on our business, financial condition, results of operations, or prospects.
We depend heavily on the efforts and services of our executive officers and other members of our management team to manage our operations, including our Chief Executive Officer and our Chief Financial Officer and the senior management of our operating subsidiaries.
In 2023, we identified a material weakness in our internal control over financial reporting in connection with our previous accounting for our investment in the 24th Street Funds under Accounting Standards Codification 323, Equity Method and Joint Ventures.
The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our Board of Directors, our committees and as executive officers. 29 Table of Contents In 2023, we identified a material weakness in our internal control over financial reporting in connection with our previous accounting for our investment in the 24th Street Funds under Accounting Standards Codification 323, Equity Method and Joint Ventures for fiscal year 2022.
Although our Co-Chief Executive Officers devote most of their business time to us and are highly active in our management, they expend part of their time on other business ventures. Among other commitments, our Co-Chief Executive Officers are each managing members of separate investment management entities and are not obligated to devote any specific number of hours to our affairs.
Among other commitments, our Chief Executive Officer is a managing member of separate investment management entities and is not obligated to devote any specific number of hours to our affairs.
For the foreseeable future, entities managed by Magnolia and Boulderado will likely continue to control virtually all matters submitted to stockholders for a vote; may elect all of our directors; and, as a result, may control our management, policies, and operations.
For the foreseeable future, entities managed by Magnolia will likely continue to effectively make it more difficult for stockholder proposals not approved by Magnolia to pass; make it more difficult for director nominations not approved by Magnolia to succeed; and, as a result, Magnolia may effectively control our management, policies, and operations.
In May 2022, we also registered 1,018,660shares of Class A common stock held by Magnolia and Boulderado and their affiliates. As of December 31, 2023, certain of our stockholders still hold 8,359,850 registered shares of our Class A common stock.
In May 2022, we also registered 1,018,660shares of Class A common stock held by Magnolia and Boulderado and their affiliates. All the shares held by Boulderado were repurchased by the Company in May 2024 and, as a result, 522,231 shares of our Class A common stock are available for resale under that registration statement.

… 39 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

1 edited+0 added−0 removed16 unchanged
Biggest changeCommencing in 2024, our Audit and Risk Committee is taking the lead on behalf of the board of directors on oversight of our cybersecurity risk management program. 39 Table of Contents
Biggest changeCommencing in 2024, our Audit and Risk Committee, on behalf of the board of directors, is overseeing our cybersecurity risk management program. 39 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed1 unchanged
Biggest changeItem 2. Properties. Our corporate headquarters is located in Omaha, Nebraska. As of December 31, 2023, we maintained offices in various locations in the United States with leases expiring between 2024 and 2042.
Biggest changeItem 2. Properties. Our corporate headquarters is located in Omaha, Nebraska. As of December 31, 2024, we maintained offices in various locations in the United States with leases expiring between 2025 a nd 2042.
I n connection with the acquisition of various billboard sites, we own a small percentage of these sites and in most instances lease the sites from third parties. Land leases related to the structures are typically paid in advance for periods ranging from one to twelve months. The lease contracts include those with fixed payments and those with escalating payments.
In connection with the acquisition of various billboard sites, we own a small percentage of these sites and in most instances lease the sites from third parties. Land leases related to the structures are typically paid in advance for periods ranging from one to twelve months. The lease contracts include those with fixed payments and those with escalating payments.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+8 added−1 removed5 unchanged
Biggest changeAs of March 22, 2024, we also had 1,055,560 shares of Class B common stock held entirely by MCF and BP, as well as warrants held by MCF to purchase up to an additional 52,778 shares of our Class B common stock, warrants held by BP to purchase up to 51,994 shares of our Class B common stock, and warrants held by an unaffiliated investor to purchase up to 784 shares of our Class A common stock, each at exercise prices ranging from $8.00 to $10.00 per share. 40 Table of Contents Dividend Policy We have never declared or paid any cash dividends on our capital stock.
Biggest changeAs of March 27, 2025, we also had 580,558 shares of Class B common stock held entirely by MCF. 40 Table of Contents Dividend Policy We have never declared or paid any cash dividends on our capital stock. We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business.
Commencing in January 2023, we have issued stock grants under the 2022 Incentive Plan of our Class A common stock to our Chief Financial Officer, Chief Accounting Officer, the president of our billboard subsidiary, the president of our broadband subsidiary, three other employees, and the four independent directors totaling 80,912 shares.
Commencing in January 2023, we have issued stock grants under the 2022 Incentive Plan of our Class A common stock to our Chief Financial Officer, Chief Accounting Officer, the president of our billboard subsidiary, the president of our broadband subsidiary, other key employees, and our current and previous independent directors totaling 142,134 shares.
This number does not include stockholders for whom shares are held in “nominee” or “street” name. As of March 22, 2024, there were 30,299,408 shares of Class A common stock outstanding.
This number does not include stockholders for whom shares are held in “nominee” or “street” name. As of March 27, 2025, there were 30,872,876 shares of Class A common stock outstanding.
Certain of the grants to the employees and the four independent directors are subject to vesting periods of up to three years from the date of grant. Issuer Purchases of Equity Securities Not applicable.
Certain of the grants to the employees and the independent directors are subject to vesting periods of up to three years from the date of grant.
As of March 22, 2024, the closing price per share of our common stock was $16.64, as reported by the NYSE. Holders of Our Common Stock As of March 22, 2024, there were approximately 93 holders of record of shares of our Class A common stock.
As of March 27, 2025, the closing price per share of our common stock was $14.80, as reported by the NYSE. Holders of Our Common Stock As of March 27, 2025, there were approximately 100 holders of record of shares of our Class A common stock.
In addition, state insurance regulators will limit the amount of dividends, if any, we can draw from our UCS insurance operations. In addition, Link’s loan credit facility limits its ability to issue cash dividends to us during any period in which it is in default of any loan covenant.
In addition, state insurance regulators will limit the amount of dividends, if any, we can draw from our UCS insurance operations. In addition, the loan credit facilities at Link and BOB limit their ability to issue cash dividends to us during any period in which they are in default of any loan covenant.
We are not required to pay dividends, and our stockholders will not be guaranteed, or have contractual or other rights to receive, dividends.
We do not intend to pay any cash dividends to the holders of our common stock in the foreseeable future. We are not required to pay dividends, and our stockholders will not be guaranteed, or have contractual or other rights to receive, dividends.
Recent Sales of Unregistered Securities None. Equity Compensation Plans In August 2022, our shareholders approved the 2022 Incentive Plan.
No other warrants are issued and outstanding. Equity Compensation Plans In August 2022, our shareholders approved the 2022 Incentive Plan.
Removed
We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. We do not intend to pay any cash dividends to the holders of our common stock in the foreseeable future.
Added
Recent Sales of Unregistered Securities In addition to restricted stock grants issued to employees under the 2022 Incentive Plan in February 2025, on January 10, 2025, Magnolia Capital Fund exercised, in full, two warrants issued in 2015 and which expire in June 2025 to acquire 51,516 shares of our Class B common stock at an exercise price of $10.00 per share and to acquire 1,262 shares of our Class B common stock at an exercise price of $8.00 per share.
Added
The 2022 Incentive Plan currently is authorized to issue 1,575,000 shares of our Class A common stock and maintains an evergreen provision allowing for the issuance of a total of 5% of our issued and outstanding Class A common stock and Class B common stock, which amount is adjusted annually based on shares outstanding at the end of the fiscal year.
Added
We currently have 1,432,866 shares available for grant under the 2022 Incentive Plan.
Added
Issuer Purchases of Equity Securities On July 23, 2024, the Board approved and authorized a share repurchase program (the “Share Repurchase Program”), pursuant to which the Company intends to repurchase up to $20 million of its Class A common stock, from time to time, in the open market, privately negotiated transactions, or otherwise in compliance with Rule 10b-18 under the Securities Exchange Act of 1934.
Added
The Board also authorized the Company, in its discretion, to establish “Rule 10b5-1 trading plans” for these share repurchases. The Share Repurchase Program went into effect on or about August 15, 2024 and will terminate on September 30, 2025, unless earlier terminated in the discretion of the Board.
Added
The actual timing, number, and value of shares repurchased under the Share Repurchase Program will depend on a number of factors, including constraints specified in applicable SEC regulations, price, general business and market conditions, and alternative investment opportunities.
Added
Pursuant to the Share Repurchase Program, the Company is not obligated to repurchase any specific number of shares of its Class A common stock and shall not repurchase more than 25% of the average daily volume of its stock over the previous 20 trading days.
Added
During fiscal 2024, we repurchased 111,323 shares of our Class A common stock for a total cost of $1,589,322.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

90 edited+37 added−38 removed99 unchanged
Biggest changeThe increase in depreciation and amortization expense is mainly due to the InfoWest and Go Fiber acquisitions as well as continued capital investments across all of our broadband businesses. 49 Table of Contents Results of Insurance Operations For the Years Ended December 31, 2023 2022 Amount As a % of Segment Operating Revenues Amount As a % of Segment Operating Revenues Operating Revenues Premiums earned $ 13,932,659 78.7 % $ 10,649,089 79.7 % Insurance commissions 1,884,007 10.6 % 2,050,838 15.3 % Investment and other income 1,889,225 10.7 % 662,270 5.0 % Total operating revenues 17,705,891 100.0 % 13,362,197 100.0 % Cost of Revenues Commissions paid 4,387,088 24.8 % 2,934,022 21.9 % Premium taxes, fees, and assessments 376,828 2.1 % 289,268 2.2 % Losses and loss adjustment expense 2,044,251 11.6 % 1,532,293 11.5 % Total cost of revenues 6,808,167 38.5 % 4,755,583 35.6 % Gross margin 10,897,724 61.5 % 8,606,614 64.4 % Other Operating Expenses Employee costs 6,500,480 36.7 % 5,752,302 43.0 % Professional fees 596,245 3.4 % 259,535 1.9 % General and administrative 1,970,121 11.1 % 1,241,261 9.3 % Depreciation 152,388 0.9 % 87,855 0.7 % Amortization 160,246 0.9 % 182,414 1.4 % Total expenses 9,379,480 53.0 % 7,523,367 56.3 % Segment Income from Operations 1,518,244 8.5 % 1,083,247 8.1 % Other investment income (loss) 538,621 3.1 % (3,569,262 ) (26.7 %) Net Income (Loss) Attributable to Common Stockholders $ 2,056,865 11.6 % $ (2,486,015 ) (18.6 %) Comparison of Fiscal 2023 to Fiscal 2022.
Biggest changeThe increase in depreciation expense is mainly driven by continued capital investments across all of our broadband businesses. ● The $657,236 loss on disposition of assets in fiscal 2024 was mainly related to projects that we decided to pause indefinitely within our FFH business. 49 Table of Contents Results of Insurance Operations For the Years Ended December 31, 2024 2023 Amount As a % of Segment Operating Revenues Amount As a % of Segment Operating Revenues Operating Revenues Premiums earned $ 19,759,540 82.9 % $ 13,932,659 78.7 % Insurance commissions 1,962,692 8.2 % 1,884,007 10.6 % Investment and other income 2,129,218 8.9 % 1,889,225 10.7 % Total operating revenues 23,851,450 100.0 % 17,705,891 100.0 % Cost of Revenues Commissions paid 5,707,648 23.9 % 4,387,088 24.8 % Premium taxes, fees, and assessments 519,588 2.2 % 376,828 2.1 % Losses and loss adjustment expense 3,173,455 13.3 % 2,044,251 11.6 % Total cost of revenues 9,400,691 39.4 % 6,808,167 38.5 % Gross margin 14,450,759 60.6 % 10,897,724 61.5 % Other Operating Expenses Employee costs 8,499,669 35.6 % 6,500,480 36.7 % Professional fees 487,447 2.0 % 596,245 3.4 % General and administrative 2,647,495 11.1 % 1,970,121 11.1 % Depreciation 154,897 0.7 % 152,388 0.9 % Amortization 160,247 0.7 % 160,246 0.9 % Total expenses 11,949,755 50.1 % 9,379,480 53.0 % Segment Income from Operations 2,501,004 10.5 % 1,518,244 8.5 % Other investment income 218,015 0.9 % 538,621 3.1 % Net Income Attributable to Common Stockholders $ 2,719,019 11.4 % $ 2,056,865 11.6 % Comparison of Fiscal 2024 to Fiscal 2023.
Since DFH’s initial public offering through December 31, 2022, we have sold all 4,801,099 shares of DFH Class A common stock for gross proceeds of approximately $81 million. ● In May 2018, through one of our subsidiaries, we invested approximately $19 million through the purchase of common stock of CB&T, the privately-held parent company of Crescent.
Since DFH’s initial public offering through December 31, 2022, we have sold all our 4,801,099 shares of DFH Class A common stock for gross proceeds of approximately $81 million. ● In May 2018, through one of our subsidiaries, we invested approximately $19 million through the purchase of common stock of CB&T, the privately-held parent company of Crescent.
The 2021 Shelf Registration Statement expired on March 28, 2022 upon the filing of our 2021 Annual Report on Form 10-K as we no longer qualified as a well-known seasoned issuer. We sold a total of 122,246 shares of our Class A common stock resulting in gross proceeds of approximately $4.2 million under the the 2021 Shelf Registration Statement.
The 2021 Shelf Registration Statement expired on March 28, 2022 upon the filing of our 2021 Annual Report on Form 10-K as we no longer qualified as a well-known seasoned issuer. We sold a total of 122,246 shares of our Class A common stock resulting in gross proceeds of approximately $4.2 million under the 2021 Shelf Registration Statement.
We may use the proceeds of any future borrowings to acquire assets or for general corporate purposes. In determining when to use leverage, we will assess the appropriateness of new equity or debt capital based on market conditions, including assumptions regarding future cash flow, the creditworthiness of customers, and future rental rates.
We 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 and subscriber rates.
There may also be a future impairment of our investment if our expectations about Sky Harbour's prospective results of operations and cash flows decline, which could be influenced by a variety of factors including adverse market conditions. Net (Loss) Income Attributable to Common Stockholders.
There may also be a future impairment of our investment if our expectations about Sky Harbour's prospective results of operations and cash flows decline, which could be influenced by a variety of factors including adverse market conditions. Net Loss Attributable to Common Stockholders.
Net other loss included a loss of $7,888,765 from unconsolidated affiliates mainly related to $13,149,861in non-cash losses from our equity method position in Sky Harbour, which was partially offset by $4,630,610 in non-cash gains recognized in May 2023 due to our purchase of the membership interests in 24th Street held by third parties resulting in the remeasurement of our previously-held interest in 24th Street, and interest expense of $1,147,234 mainly incurred under Link's term loan.
Net other expense included a loss of $7,888,765 from unconsolidated affiliates mainly related to $13,149,861 in non-cash losses from our equity method position in Sky Harbour, which was partially offset by $4,630,610 in non-cash gains recognized in May 2023 due to our purchase of the membership interests in 24th Street held by third parties resulting in the remeasurement of our previously-held interest in 24th Street, and interest expense of $1,147,234 mainly incurred under Link's term loan.
Our operations are currently conducted entirely within the U.S.; therefore, we had no significant exposure to foreign currency exchange rate risk. 60 Table of Contents Recently Issued Accounting Pronouncements Management reviewed currently issued pronouncements during the year ended December 31, 2023, and believes that any other recently issued, but not yet effective, accounting standards, if currently adopted, would not have a material effect on the accompanying consolidated financial statements.
Our operations are currently conducted entirely within the U.S.; therefore, we had no significant exposure to foreign currency exchange rate risk. 60 Table of Contents Recently Issued Accounting Pronouncements Management reviewed currently issued pronouncements during the year ended December 31, 2024, and believes that any other recently issued, but not yet effective, accounting standards, if currently adopted, would not have a material effect on the accompanying consolidated financial statements.
In order to ensure we avoid being deemed an investment company, we have taken, and may need to continue to take, steps to reduce the percentage of our assets that constitute investments assets under the Investment Company Act.
In order to ensure we avoid being deemed an investment company, we have taken, and may need to continue to take, steps to reduce the percentage of our assets that constitute investment assets under the Investment Company Act.
Such expansion may include future billboard acquisitions, broadband acquisitions, acquisitions of surety insurance companies and other growth of our insurance activities, additional investments in real estate management, homebuilding and other real estate service businesses, additional investments in subprime automobile lending, and acquisitions of other businesses.
Such expansion may include future billboard acquisitions, broadband acquisitions, acquisitions of surety insurance companies and other growth of our insurance activities, additional investments in real estate management and other real estate service businesses, additional investments in subprime automobile lending, and acquisitions of other businesses.
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. 57 Table of Contents Critical Accounting Policies and Estimates The preparation of the consolidated financial statements and related notes to the consolidated financial statements requires us to make estimates that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities.
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. 58 Table of Contents Critical Accounting Policies and Estimates The preparation of the consolidated financial statements and related notes to the consolidated financial statements requires us to make estimates that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities.
In December 2020, we acquired substantially all of the business assets of UBB, a broadband internet provider that provides high-speed internet to over 10,000 customers throughout Utah. In September 2021, we announced the launch of Fiber Fast Homes, LLC, which partners with builders, developers and build for rent communities to build fiber-to-the-home infrastructure and provide fiber internet service to residents.
In December 2020, we acquired substantially all of the business assets of UBB, a broadband internet provider that provided high-speed internet to over 10,000 customers throughout Utah. In September 2021, we announced the launch of Fiber Fast Homes, LLC, which partners with builders, developers and build for rent communities to build fiber-to-the-home infrastructure and provide fiber internet service to residents.
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. Additionally, we have evaluated our investment in Sky Harbour as of December 31, 2023, and determined that there was not an other-than-temporary impairment.
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. Additionally, we have evaluated our investment in Sky Harbour as of December 31, 2024, and determined that there was not an other-than-temporary impairment.
In March 2020, we commenced our broadband services business with the acquisition of substantially all of the business assets of FibAire, a rural broadband internet provider that serves over 8,000 customers in communities in southern Arizona with a high-speed fixed wireless internet service and is building an all fiber-to-the-home network in select Arizona markets.
In March 2020, we commenced our broadband services business with the acquisition of substantially all of the business assets of FibAire, a rural broadband internet provider that served over 8,000 customers in communities in southern Arizona with a high-speed fixed wireless internet service and is building an all fiber-to-the-home network in select Arizona markets.
In our surety business, direct cost of services includes commissions, premium taxes, fees and assessments, and losses and loss adjustment expenses. 44 Table of Contents Results of Operations Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 The following is a comparison of our results of operations for the year ended December 31, 2023, which we refer to as “fiscal 2023,” compared to the year ended December 31, 2022 which we refer to as “fiscal 2022.” Revenues.
In our surety business, direct cost of services includes commissions, premium taxes, fees and assessments, and losses and loss adjustment expenses. 44 Table of Contents Results of Operations Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 The following is a comparison of our results of operations for the year ended December 31, 2024, which we refer to as “fiscal 2024,” compared to the year ended December 31, 2023 which we refer to as “fiscal 2023.” Revenues.
In September 2017, we formed our asset management business. Throughout fiscal 2022 and fiscal 2023 we have been hiring within our asset management business to ensure adequate staffing for the anticipated demands and needs of the business. In May 2023, we acquired 100% of the membership interests in 24th Street from the members of 24th Street other than BOAM.
In September 2017, we formed our asset management business. Throughout fiscal 2022 and fiscal 2023 we had been hiring within our asset management business to ensure adequate staffing for the anticipated demands and needs of the business. In May 2023, we acquired 100% of the membership interests in 24th Street from the members of 24th Street other than BOAM.
In addition, we have made several billboard acquisitions on a smaller scale since that date. We believe that we are a leading outdoor billboard advertising company in the markets we serve in the Midwest. As of December 31, 2023, we operate approximately 4,000 billboards with approximately 7,600 advertising faces.
In addition, we have made several billboard acquisitions on a smaller scale since that date. We believe that we are a leading outdoor billboard advertising company in the markets we serve in the Midwest. As of December 31, 2024, we operate approximately 4,000 billboards with approximately 7,600 advertising faces.
The Company was in compliance with these covenants as of December 31, 2023. The Credit Agreement includes representations and warranties, reporting covenants, affirmative covenants, negative covenants, financial covenants and events of default customary for financings of this type. Upon the occurrence of an event of default the Lender may accelerate the loan.
The Company was in compliance with these covenants as of December 31, 2024. The Credit Agreement includes representations and warranties, reporting covenants, affirmative covenants, negative covenants, financial covenants and events of default customary for financings of this type. Upon the occurrence of an event of default the Lender may accelerate the loan.
Consequently, we plan to wind down the BFR Fund earlier than originally targeted by returning the uninvested cash on hand to BFR Fund partners and, as we sell the BFR Fund's entitled land assets, returning that capital to BFR Fund partners as well. ● In July 2023, we invested approximately $3 million in voting preferred stock of MyBundle, a company serving the broadband industry. 43 Table of Contents 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.
Consequently, we are winding down the BFR Fund earlier than originally targeted by returning the uninvested cash on hand to BFR Fund partners and, as we sell the BFR Fund's entitled land assets, returning that capital to BFR Fund partners as well. ● In July 2023, we invested approximately $3 million in voting preferred stock of MyBundle, a company serving the broadband industry. 43 Table of Contents 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.
Since the signing of the 2022 Sales Agreement, we sold 7,887 shares of Class A common stock in December 2022 for gross proceeds of approximately $205 thousand and 1,532,065 shares of our Class A common stock during fiscal 2023 for gross sale proceeds of approximately $37.5 million.
Since the signing of the 2022 Sales Agreement, we sold 7,887 shares of Class A common stock for gross proceeds of approximately $205,000 in December 2022 and 1,532,065 shares of our Class A common stock for gross sale proceeds of approximately $37.5 million during fiscal 2023.
As described below, we may raise additional funds through our shelf registration statement allowing us to raise up to $500 million through the sale of securities to fund future acquisitions and investments. 52 Table of Contents 2022 Shelf Registration Statement In April 2022, we filed a shelf registration statement on Form S-3 (File No. 333-264470) that was declared effective on May 11, 2022, which we refer to as the “2022 Shelf Registration Statement,” relating to the registration of Class A common stock, preferred stock, par value $0.001 per share, which we refer to as “preferred stock,” debt securities and warrants of the Company for up to $500 million.
As described below, we may raise additional funds through our current shelf registration statement allowing us to raise up to $500 million through the sale of securities to fund future acquisitions and investments, which we intend to renew in May 2025. 52 Table of Contents 2022 Shelf Registration Statement In April 2022, we filed a shelf registration statement on Form S-3 (File No. 333-264470) that was declared effective on May 11, 2022, which we refer to as the “2022 Shelf Registration Statement,” relating to the registration of Class A common stock, preferred stock, par value $0.001 per share, which we refer to as “preferred stock,” debt securities and warrants of the Company for up to $500 million.
Quantitative and Qualitative Disclosures about Market Risk At December 31, 2023, we held no significant derivative instruments that materially increased our exposure to market risks for interest rates, foreign currency rates, commodity prices or other market price risks.
Quantitative and Qualitative Disclosures about Market Risk At December 31, 2024, we held no significant derivative instruments that materially increased our exposure to market risks for interest rates, foreign currency rates, commodity prices or other market price risks.
In our billboard business, direct cost of services includes land leases, utilities, repairs and maintenance of equipment, sales commissions, contract services, and other billboard level expenses. In our broadband business, direct costs of services includes network operations and data costs, programming costs, cell site rent and utilities, and other broadband level expenses.
In our billboard business, direct cost of services includes land leases, utilities, repairs and maintenance of equipment, sales commissions, contract services, and other billboard level expenses. In our broadband business, direct costs of services includes network operations and data costs, software costs, cell site rent and utilities, and other broadband level expenses.
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.
We invest our available capital and the surplus capital from UCS in a wide range of securities, including equity securities of public companies, various corporate and government bonds and U.S. treasuries.
Crescent is located in New Orleans and generates the majority of its revenues from indirect subprime automobile lending across the United States. 42 Table of Contents ● In October 2020, our subsidiary BOC Yellowstone served as sponsor for the underwritten initial public offering of a special purpose acquisition company named Yellowstone Acquisition Company.
Crescent is located in New Orleans and generates the majority of its revenues from indirect subprime automobile lending across the United States. 42 Table of Contents ● In October 2020, our subsidiary BOC Yellowstone served as sponsor for the underwritten initial public offering of a special purpose acquisition company named Yellowstone Acquisition Company, which we refer to as "Yellowstone".
We will continue to review our investment in Sky Harbour for an other-than-temporary impairment on a quarterly basis or upon the occurrence of certain events. If Sky Harbour's stock price drops below our carrying value of $7.15 per share for a sustained period of time, it will likely result in an impairment of our investment.
We will continue to review our investment in Sky Harbour for an other-than-temporary impairment on a quarterly basis or upon the occurrence of certain events. If Sky Harbour's stock price drops below our carrying value of $5.80 per share for a sustained period of time, it will likely result in an impairment of our investment.
Under the Term Loan, Link is required to comply with the following financial covenants: A consolidated leverage ratio for any test period ending on the last day of any fiscal quarter of Link (a) beginning with the fiscal quarter ended December 31, 2021 of not greater than 3.50 to 1.00, (b) beginning with the fiscal quarter ended December 31, 2022 of not greater than 3.25 to 1.00 and (c) beginning with the fiscal quarter ended December 31, 2023 and thereafter of not greater than 3.00 to 1.00, and a minimum consolidated fixed charge coverage ratio of not less than 1.15 to 1.00 measured quarterly, based on rolling four quarters.
Under the Term Loan, Link is required to comply with the following financial covenants: A consolidated leverage ratio for any test period ending on the last day of any fiscal quarter of Link (a) beginning with the fiscal quarter ended June 30, 2024 of not greater than 3.50 to 1.00, (b) beginning with the fiscal quarter ending December 31, 2026 of not greater than 3.25 to 1.00 and (c) beginning with the fiscal quarter ending December 31, 2027 and thereafter of not greater than 3.00 to 1.00, and a minimum consolidated fixed charge coverage ratio of not less than 1.15 to 1.00 measured quarterly, based on rolling four quarters.
Link’s ability to comply with these loan covenants may be affected by factors beyond its control and a breach of any loan covenants would likely result in an event of default under the Credit Agreement, which would permit the Lender to declare all amounts incurred thereunder to be immediately due and payable and to terminate their commitment to make future extensions of credit.
Link’s ability as well as Boston Omaha Broadband's ability to comply with these loan covenants may be affected by factors beyond their control and a breach of any loan covenants would likely result in an event of default under either Credit Agreement, which would permit the Lender to declare all amounts incurred thereunder to be immediately due and payable and to terminate their commitment to make future extensions of credit.
We intend to use the net proceeds from the offering, after deducting WFS’ commissions and our offering expenses, for general corporate purposes, which may include financing our existing businesses and operations, and expanding our businesses and operations through additional acquisitions and minority investments, and additional hires.
We intend to use the net proceeds, if any, from any future offering under the ATM Program, after deducting WFS’ commissions and our offering expenses, for general corporate purposes, which may include financing our existing businesses and operations, and expanding our businesses and operations through additional acquisitions and minority investments, and additional hires.
Due to the size of our percentage ownership interest in Sky Harbour's Class A common stock and our right to elect one of the seven members of Sky Harbour's Board of Directors, our investment is recorded under the equity method using the fair market value of Sky Harbour's Class A common stock as of the date of the business combination and we do not include any unrealized gains or losses related to the change in Sky Harbour's stock price in our reported earnings.
Due to the size of our percentage ownership interest in Sky Harbour's Class A common stock and our right to elect one of the seven members of Sky Harbour's Board of Directors, our investment is recorded under the equity method and we do not include any unrealized gains or losses related to the change in Sky Harbour's stock price in our reported earnings.
On September 29, 2021, we entered into an "at the market" equity offering program pursuant to a Sales Agreement (the "2021 Sales Agreement") by and between us and WFS.
On September 29, 2021, we entered into an "at the market" equity offering program under the 2022 Shelf Registration Statement pursuant to a Sales Agreement (the "2021 Sales Agreement") by and between us and WFS.
Link’s existing credit facility imposes restrictions on Link that could increase our vulnerability to general adverse economic and industry conditions by limiting our flexibility in planning for and reacting to changes in our billboard, insurance, asset management, and broadband businesses.
Existing credit facilities at Link and Boston Omaha Broadband imposes restrictions that could increase our vulnerability to general adverse economic and industry conditions by limiting our flexibility in planning for and reacting to changes in our billboard, insurance, asset management, and broadband businesses.
We recognize revenues for written premium over the life of the surety bond and, as a result, increased sales activities are not fully reflected in the quarter in which the surety bond is issued. ● Insurance commissions generated by our surety brokerage operations decreased by 8.1% in fiscal 2023 when compared to fiscal 2022, mainly due to reduced production through outside insurance carriers. ● Commissions paid as a percentage of total segment operating revenues increased from 21.9% in fiscal 2022 to 24.8% in fiscal 2023, mainly due to increased production from non-affiliated insurance brokerage firms. ● Losses and loss adjustment expenses as a percentage of insurance revenues increased slightly from 11.5% in fiscal 2022 to 11.6% in fiscal 2023.
We recognize revenues for written premium over the life of the surety bond and, as a result, increased sales activities are not fully reflected in the quarter in which the surety bond is issued. ● Insurance commissions generated by our surety brokerage operations increased by 4.2% in fiscal 2024 when compared to fiscal 2023, mainly due to increased production through outside insurance carriers. ● Commissions paid as a percentage of total segment operating revenues decreased from 24.8% in fiscal 2023 to 23.9% in fiscal 2024. ● Losses and loss adjustment expenses as a percentage of insurance revenues increased from 11.6% in fiscal 2023 to 13.3% in fiscal 2024.
We designated October 1 as the date of our annual goodwill impairment test. We are required to identify our reporting units and determine the carrying value of each reporting unit. We analyze financial information of our operations to identify discrete segments that constitute a reporting unit. We assign assets acquired and liabilities assumed in business combinations to those reporting units.
We are required to identify our reporting units and determine the carrying value of each reporting unit. We analyze financial information of our operations to identify discrete segments that constitute a reporting unit. We assign assets acquired and liabilities assumed in business combinations to those reporting units.
As of December 31, 2023, we hold 13,118,474 shares of Sky Harbour Class A common stock and 7,719,779 Sky Harbour Warrants. ● All the shares of Sky Harbour Class A common stock and Sky Harbour Warrants to purchase Class A common stock that we hold have been registered under the Securities Act.
As of December 31, 2024, we hold 12,401,589 shares of Sky Harbour Class A common stock and 7,719,779 Sky Harbour Warrants. ● All the shares of Sky Harbour Class A common stock and Sky Harbour warrants to purchase Class A common stock that we hold have been registered under the Securities Act.
The key factors affecting our billboard operations results during fiscal 2023 were as follows: ● Ground rent expense decreased as a percentage of total segment operating revenues from 19.7% in fiscal 2022 to 18.6% in fiscal 2023. ● Commissions paid as a percentage of total segment operating revenues remained flat at 7.9% in fiscal 2022 and in fiscal 2023. ● Employee costs as a percentage of total segment operating revenues decreased from 17.1% in fiscal 2022 to 16.5% in fiscal 2023.
The key factors affecting our billboard operations results during fiscal 2024 were as follows: ● Ground rent expense decreased as a percentage of total segment operating revenues from 18.6% in fiscal 2023 to 18.3% in fiscal 2024. ● Commissions paid decreased as a percentage of total segment operating revenues from 7.9% in fiscal 2023 to 7.8% in fiscal 2024. ● Employee costs increased as a percentage of total segment operating revenues from 16.5% in fiscal 2023 to 17.3% in fiscal 2024.
Total costs and expenses as a percentage of revenues increased from 106.4% in fiscal 2022 to 109.2% in fiscal 2023. The key factors impacting costs and expenses across each of our businesses during fiscal 2023 were as follows: ● Cost of billboard revenues decreased as a percentage of billboard revenues from 36.7% in fiscal 2022 to 35.3% in fiscal 2023.
Total costs and expenses as a percentage of revenues decreased from 109.2% in fiscal 2023 to 107.8% in fiscal 2024. The key factors impacting costs and expenses across each of our businesses during fiscal 2024 were as follows: ● Cost of billboard revenues decreased as a percentage of billboard revenues from 35.2% in fiscal 2023 to 34.3% in fiscal 2024.
We hope to continue to expand in Arizona, Florida, Nevada, Utah, and other locales. Investments : ● Since September 2015, we have made a series of investments in commercial real estate, a commercial real estate management, brokerage and related services business as well as an asset management business. We currently own 30% of Logic.
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.
In the future, if our ownership interest in Sky Harbour's Class A common stock drops below 20%, we may no longer be able to record our investment under the equity method and will be required to include any unrealized gains or losses related to the change in Sky Harbour's stock price in our reported earnings.
In the future, if we are deemed to no longer have significant influence, we may no longer be able to record our investment under the equity method and will be required to include any unrealized gains or losses related to the change in Sky Harbour's stock price in our reported earnings.
Currently, the selling stockholders are the Massachusetts Institute of Technology, or “MIT,” as well as 238 Plan Associates LLC, an MIT pension and benefit fund, and a limited partnership holding our Class A common stock for the economic benefit of MIT.
Currently, the selling stockholders are the Massachusetts Institute of Technology, or “MIT,” as well as 238 Plan Associates LLC, an MIT pension and benefit fund, and a limited partnership holding our Class A common stock for the economic benefit of MIT. No officer or director has any beneficial interest in any shares eligible for resale by the selling shareholders.
These investments are subject to the risk of loss in value depending upon market conditions and factors outside of our control. 50 Table of Contents Results of Asset Management Operations For the Years Ended December 31, 2023 2022 Amount As a % of Segment Operating Revenues Amount As a % of Segment Operating Revenues Operating Revenues Investment and other income $ 266,974 100.0 % - - Cost of Revenues Total cost of revenues - - - - Gross margin 266,974 100.0 % - - Other Operating Expenses Employee costs 1,574,332 589.7 % 746,235 - Professional fees 321,363 120.4 % 813,142 - General and administrative 753,320 282.1 % 278,256 - Depreciation - - - - Amortization - - - - Total expenses 2,649,015 992.2 % 1,837,633 - Segment Loss from Operations (2,382,041 ) (892.2 %) (1,837,633 ) - Interest and dividend income 1,058,527 396.5 % - - Equity in income of unconsolidated affiliates 4,630,610 1734.5 % - - Other investment income 980,410 367.2 % - - Noncontrolling interest in subsidiary (income) loss (911,292 ) (341.4 %) 290,932 - Net Income (Loss) Attributable to Common Stockholders $ 3,376,214 1264.6 % $ (1,546,701 ) - Comparison of Fiscal 2023 to Fiscal 2022.
These investments are subject to the risk of loss in value depending upon market conditions and factors outside of our control. 50 Table of Contents Results of Asset Management Operations For the Years Ended December 31, 2024 2023 Amount As a % of Segment Operating Revenues Amount As a % of Segment Operating Revenues Operating Revenues Investment and other income $ 172,147 100.0 % $ 266,974 100.0 % Cost of Revenues Total cost of revenues - - - - Gross margin 172,147 100.0 % 266,974 100.0 % Other Operating Expenses Employee costs 766,064 445.0 % 1,574,332 589.7 % Professional fees 754,253 438.2 % 321,363 120.4 % General and administrative 562,824 326.9 % 753,320 282.1 % Depreciation - - - - Amortization - - - - Total expenses 2,083,141 1210.1 % 2,649,015 992.2 % Segment Loss from Operations (1,910,994 ) (1110.1 %) (2,382,041 ) (892.2 %) Interest and dividend income 536,524 311.6 % 1,058,527 396.5 % Equity in income of unconsolidated affiliates - - 4,630,610 1734.5 % Other investment income 7,815,912 4540.3 % 980,410 367.2 % Noncontrolling interest in subsidiary income (4,599,100 ) (2671.6 %) (911,292 ) (341.4 %) Net Income Attributable to Common Stockholders $ 1,842,342 1070.2 % $ 3,376,214 1264.6 % Comparison of Fiscal 2024 to Fiscal 2023.
Our conclusion was based on several contributing factors, including: (i) our assessment that the underlying business and financial condition of Sky Harbour is favorable; (ii) the period of time for which the fair value was less than the carrying value during 2023, (iii) the recovery of Sky Harbour's stock price during the last few months of 2023, and (iv) our ability and intent to hold the investment.
Our conclusion was based on several contributing factors, including: (i) our assessment that the underlying business and financial condition of Sky Harbour is favorable, (ii) Sky Harbour's stock price trading above our carrying value for an extended period of time, and (iii) our ability and intent to hold the investment.
In April 2022, we acquired substantially all of the business assets of InfoWest, which are fiber and fixed wireless internet service providers with over 20,000 customers throughout Southern and Central Utah, Northern Arizona and Moapa Valley, Nevada. As of December 31, 2023, we have approximately 43,000 broadband customers.
In April 2022, we acquired substantially all of the business assets of InfoWest, which are fiber and fixed wireless internet service providers with over 20,000 customers throughout Southern and Central Utah, Northern Arizona and Moapa Valley, Nevada. In addition, over the last few years, we have also acquired additional smaller broadband businesses located in Utah.
The decrease was mainly related to lower ground rent expense as a percentage of billboard revenues. ● Cost of broadband revenues increased as a percentage of broadband revenues from 26.3% in fiscal 2022 to 28.2% in fiscal 2023.
The decrease was mainly related to lower ground rent expense and other costs of revenues as a percentage of billboard revenues. ● Cost of broadband revenues decreased as a percentage of broadband revenues from 28.2% in fiscal 2023 to 24.2% in fiscal 2024.
In addition to Link’s current credit facility, any future debt that we incur may be recourse or non-recourse and may be secured or unsecured.
In addition to current credit facilities at Link and Boston Omaha Broadband, any future debt that we incur may be recourse or non-recourse and may be secured or unsecured.
We recognize revenues for written premium over the life of the surety bond and, as a result, increased sales activities are not fully reflected in the quarter in which the surety bond is issued. ● Revenue from insurance commissions generated by our surety brokerage operations decreased by 8.1% in fiscal 2023 when compared to fiscal 2022, mainly due to reduced production through outside insurance carriers. ● Investment and other income at UCS and BOAM increased from $662,270 in fiscal 2022 to $2,156,199 in fiscal 2023, mainly due to the increase in interest rates over the past 12 to 18 months for assets held by UCS and the consolidation of 24th Street during the second quarter of fiscal 2023. 45 Table of Contents Expenses.
We recognize revenues for written premium over the life of the surety bond and, as a result, increased sales activities are not fully reflected in the quarter in which the surety bond is issued. ● Revenue from insurance commissions generated by our surety brokerage operations increased by 4.2% in fiscal 2024 when compared to fiscal 2023, mainly due to increased production through outside insurance carriers. ● Investment and other income at UCS and BOAM increased by 6.7% from $2,156,199 in fiscal 2023 to $2,301,365 in fiscal 2024. 45 Table of Contents Expenses.
Therefore, comparisons of our asset management results for fiscal 2023 to fiscal 2022 may not be meaningful. In addition, as previously mentioned, we are winding down BOAM's operations and implementing cost cutting measures.
As previously mentioned, we are winding down BOAM's operations and have implemented significant cost cutting measures, which occurred principally in the second half of fiscal 2024. Therefore, comparisons of our asset management results for fiscal 2024 to fiscal 2023 may not be meaningful.
The discounted cash flow approach that we use for valuing goodwill as part of the impairment testing approach involves estimating future cash flows expected to be generated from the related assets, discounted to their present value using a risk-adjusted discount rate.
The discounted cash flow approach that we use for valuing goodwill as part of the impairment testing approach involves estimating future cash flows expected to be generated from the related assets, discounted to their present value using a risk-adjusted discount rate. 59 Table of Contents Losses and Loss Adjustment Expenses Unpaid losses and loss adjustment expenses represent estimates for the ultimate cost of unpaid reported and unreported claims incurred and related expenses.
In the future, we expect to expand the range of services we provide in the insurance sector, seek to continue to expand our billboard operations and broadband services and to possibly consider acquisitions of other businesses, as well as investments, in other sectors.
In the future, we expect to expand the range of services we provide in the insurance sector, seek to continue to expand our billboard operations and broadband services and to possibly consider acquisitions of other businesses, as well as investments, in other sectors, although we expect to place a primary emphasis on growing our existing business lines over the next several years.
Our net loss from operations included $19,781,536 from non-cash amortization, depreciation and accretion expenses in fiscal 2023, as compared to $15,330,216 in fiscal 2022. 46 Table of Contents Other Income (Expense). In fiscal 2023, we had a net other loss of $294,060.
Our net loss from operations included $22,398,171 from non-cash amortization, depreciation and accretion expenses in fiscal 2024, as compared to $19,781,536 in fiscal 2023. 46 Table of Contents Other Income (Expense). During fiscal 2024, we had net other income of $11,564,072.
The key factors impacting revenue across each of our businesses during fiscal 2023 were as follows: ● Net billboard rentals increased by 9.4% in fiscal 2023, when compared to fiscal 2022, reflecting an improvement in rental and occupancy rates across a number of our markets as well as the acquisition of billboards from Elevation during the fourth quarter of fiscal 2022. ● Revenue from broadband services in fiscal 2023 increased 23.5% from fiscal 2022, mainly reflecting revenues generated from the InfoWest and Go Fiber acquisitions completed in April 2022 as well as subscriber growth across a number of our markets. ● Premiums earned from our UCS insurance subsidiary increased 30.8% in fiscal 2023 when compared to the fiscal 2022.
The key factors impacting revenue across each of our businesses during fiscal 2024 were as follows: ● Net billboard rentals increased by 5.2% in fiscal 2024 when compared to fiscal 2023, reflecting an improvement in rental and occupancy rates across a number of our markets. ● Revenue from broadband services increased by 10.6% in fiscal 2024 when compared to fiscal 2023, mainly reflecting subscriber growth across a number of our markets. ● Premiums earned from our UCS insurance subsidiary increased by 41.8% in fiscal 2024 when compared to the fiscal 2023.
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.
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.
Treasury securities. Net Cash Provided by (Used in) Financing Activities . Net cash provided by financing activities was $32,940,258 during fiscal 2023 as compared to net cash used in financing activities of $109,725,630 during fiscal 2022.
Net Cash (Used in) Provided by Financing Activities . Net cash used in financing activities was $47,557,174 during fiscal 2024 as compared to net cash provided by financing activities of $32,940,258 during fiscal 2023.
The increase in premiums earned was primarily due to increases in production throughout fiscal 2022 and fiscal 2023.
The increase in premiums earned was primarily due to increases in gross written premium production throughout fiscal 2024.
We had a net loss attributable to common stockholders in the amount of $7,004,009 in fiscal 2023, or a loss per share of $0.23, based on 31,092,850 diluted weighted average shares outstanding.
We had a net loss attributable to common stockholders in the amount of $1,292,450 in fiscal 2024, or a loss per share of $0.04, based on 31,496,857 diluted weighted average shares outstanding.
Specifically, these restrictions place limits on Link and its subsidiaries’ ability to, among other things, incur additional indebtedness, make additional acquisitions and investments, pay dividends, repurchase stock, create liens, enter into transactions with affiliates, merge or consolidate or transfer or sell our billboard assets. Link’s credit facility requires it to meet a fixed charge coverage ratio and other financial covenants.
Specifically, these restrictions place limits on Link, Boston Omaha Broadband, and their 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, consolidate, transfer or sell assets.
Losses and Loss Adjustment Expenses Unpaid losses and loss adjustment expenses represent estimates for the ultimate cost of unpaid reported and unreported claims incurred and related expenses. Estimates for losses and loss adjustment expenses are based on past experience of investigating and adjusting claims and consideration of the level of premiums written during the current and prior year.
Estimates for losses and loss adjustment expenses are based on past experience of investigating and adjusting claims and consideration of the level of premiums written during the current and prior year. Since the reserves are based on estimates, the ultimate liability may differ from the estimated reserve.
This is compared to net income attributable to common stockholders of $10,233,400 in fiscal 2022, or income per share of $0.34, based on 29,766,247 diluted weighted average shares outstanding. 47 Table of Contents The following tables report results for the following four segments in which we operate: billboards, broadband, insurance and asset management for fiscal 2023 and fiscal 2022: Results of Billboard Operations For the Years Ended December 31, 2023 2022 Amount As a % of Segment Operating Revenues Amount As a % of Segment Operating Revenues Operating Revenues Billboard rentals, net $ 42,940,369 100.0 % $ 39,244,726 100.0 % Cost of Revenues Ground rents 7,981,107 18.6 % 7,753,495 19.7 % Utilities 1,790,349 4.2 % 1,672,420 4.3 % Commissions paid 3,409,923 7.9 % 3,103,413 7.9 % Other costs of revenues 1,955,438 4.5 % 1,866,299 4.8 % Total cost of revenues 15,136,817 35.2 % 14,395,627 36.7 % Gross margin 27,803,552 64.8 % 24,849,099 63.3 % Other Operating Expenses Employee costs 7,072,960 16.5 % 6,724,871 17.1 % Professional fees 804,203 1.9 % 521,377 1.3 % General and administrative 3,902,279 9.1 % 3,591,370 9.2 % Depreciation 5,075,358 11.8 % 4,581,316 11.7 % Amortization 3,933,290 9.1 % 3,674,411 9.4 % Accretion 199,211 0.5 % 196,099 0.5 % Loss (gain) on disposition of assets 206,832 0.5 % (175,262 ) (0.5 %) Total expenses 21,194,133 49.4 % 19,114,182 48.7 % Segment Income from Operations 6,609,419 15.4 % 5,734,917 14.6 % Interest expense, net (956,251 ) (2.2 %) (1,138,242 ) (2.9 %) Net Income Attributable to Common Stockholders $ 5,653,168 13.2 % $ 4,596,675 11.7 % Comparison of Fiscal 2023 to Fiscal 2022.
This is compared to a net loss attributable to common stockholders of $7,004,009 in fiscal 2023, or a loss per share of $0.23, based on 31,092,850 diluted weighted average shares outstanding. 47 Table of Contents The following tables report results for the following four segments in which we operate: billboards, broadband, insurance and asset management for fiscal 2024 and fiscal 2023: Results of Billboard Operations For the Years Ended December 31, 2024 2023 Amount As a % of Segment Operating Revenues Amount As a % of Segment Operating Revenues Operating Revenues Billboard rentals, net $ 45,153,076 100.0 % $ 42,940,369 100.0 % Cost of Revenues Ground rents 8,241,212 18.3 % 7,981,107 18.6 % Utilities 1,846,056 4.1 % 1,790,349 4.2 % Commissions paid 3,543,865 7.8 % 3,409,923 7.9 % Other costs of revenues 1,865,672 4.1 % 1,955,438 4.5 % Total cost of revenues 15,496,805 34.3 % 15,136,817 35.2 % Gross margin 29,656,271 65.7 % 27,803,552 64.8 % Other Operating Expenses Employee costs 7,812,497 17.3 % 7,072,960 16.5 % Professional fees 223,165 0.5 % 804,203 1.9 % General and administrative 4,033,121 8.9 % 3,902,279 9.1 % Depreciation 5,151,286 11.4 % 5,075,358 11.8 % Amortization 3,902,738 8.7 % 3,933,290 9.1 % Accretion 204,659 0.5 % 199,211 0.5 % Loss on disposition of assets 63,455 0.1 % 206,832 0.5 % Total expenses 21,390,921 47.4 % 21,194,133 49.4 % Segment Income from Operations 8,265,350 18.3 % 6,609,419 15.4 % Interest expense, net (1,410,216 ) (3.1 %) (956,251 ) (2.2 %) Net Income Attributable to Common Stockholders $ 6,855,134 15.2 % $ 5,653,168 13.2 % Comparison of Fiscal 2024 to Fiscal 2023.
These items were partially offset by operating costs within our FFH business and our asset management business. Net Cash (Used in) Provided by Investing Activities . Net cash used in investing activities was $64,252,691 during fiscal 2023 as compared with net cash provided by investing activities of $87,862,907 during fiscal 2022.
These items were partially offset by costs associated with our former Co-CEO's separation agreement as well as operating costs within our FFH business. Net Cash Provided by (Used in) Investing Activities . Net cash provided by investing activities was $28,099,816 during fiscal 2024 as compared with net cash used in investing activities of $64,252,691 during fiscal 2023.
Since the reserves are based on estimates, the ultimate liability may differ from the estimated reserve. The effects of changes in estimated reserves are included in the results of operations in the period in which the estimates are updated.
The effects of changes in estimated reserves are included in the results of operations in the period in which the estimates are updated.
The increase in net loss from operations in dollars was primarily due to an increase in depreciation and amortization expense related to our InfoWest and Go Fiber acquisitions and capital investments within our other broadband businesses as well as costs associated with hiring within our broadband and asset management businesses, which were partially offset by improved operations within our billboard and insurance businesses.
The decrease in net loss from operations was primarily due to improved operations within our billboard, broadband and insurance businesses, which were partially offset by one-time costs associated with our former Co-CEO's separation agreement and an increase in depreciation expense related to continued capital investments within our broadband businesses.
In fiscal 2023, there was a 9.4% increase in net billboard revenues from fiscal 2022, reflecting an improvement in rental and occupancy rates across a number of our markets as well as the acquisition of billboards from Elevation during the fourth quarter of fiscal 2022.
In fiscal 2024, there was a 5.2% increase in net billboard revenues from fiscal 2023, reflecting an improvement in rental and occupancy rates across a number of our markets.
The table below summarizes our cash flows in dollars for fiscal 2023 and fiscal 2022: 2023 2022 Net cash provided by (used in) operating activities $ 16,059,125 $ (5,165,165 ) Net cash (used in) provided by investing activities (64,252,691 ) 87,862,907 Net cash provided by (used in) financing activities 32,940,258 (109,725,630 ) Net (decrease) increase in cash, cash equivalents, and restricted cash $ (15,253,308 ) $ (27,027,888 ) Net Cash Provided by (Used in) Operating Activities.
The table below summarizes our cash flows in dollars for fiscal 2024 and fiscal 2023: 2024 2023 Net cash provided by operating activities $ 21,241,580 $ 16,059,125 Net cash provided by (used in) investing activities 28,099,816 (64,252,691 ) Net cash (used in) provided by financing activities (47,557,174 ) 32,940,258 Net increase (decrease) in cash, cash equivalents, and restricted cash $ 1,784,222 $ (15,253,308 ) Net Cash Provided by Operating Activities.
The key factors affecting our broadband operations results during fiscal 2023 were as follows: ● Total cost of revenues increased as a percentage of total segment operating revenues from 26.3% in fiscal 2022 to 28.2% in fiscal 2023.
The key factors affecting our broadband operations results during fiscal 2024 were as follows: ● Network operations and data costs decreased as a percentage of total segment operating revenues from 14.9% in fiscal 2023 to 13.0% in fiscal 2024.
The key factors affecting our insurance operations results during fiscal 2023 were as follows: ● Premiums earned from our UCS insurance subsidiary increased 30.8% in fiscal 2023 when compared to fiscal 2022. The increase in premiums earned was primarily due to increases in production throughout fiscal 2022 and fiscal 2023.
In fiscal 2024, total operating revenues increased by 34.7% when compared to fiscal 2023, mainly due to increased earned premiums at our UCS insurance subsidiary. The key factors affecting our insurance operations results during fiscal 2024 were as follows: ● Premiums earned from our UCS insurance subsidiary increased 41.8% in fiscal 2024 when compared to fiscal 2023.
Long-term debt included within our consolidated balance sheet as of December 31, 2023 consists of Link’s Term Loan borrowings of $27,337,766, of which $814,667 is classified as current. There were no amounts outstanding related to the revolving line of credit as of December 31, 2023.
Long-term debt included within our consolidated balance sheet as of December 31, 2024 consists of Link’s Term Loan borrowings of approximately $26,500,000, of which approximately $900,000 is classified as current, and $9,600,000 related to the revolving line of credit as of December 31, 2024.
The foregoing summary of the Credit Agreement and the transactions contemplated thereby does not purport to be a complete description and is qualified in its entirety by reference to the terms and conditions of the Credit Agreement and Security Agreement, copies of which are attached as Exhibit 10.1 and Exhibit 10.2, respectively to our Form 8-K as filed with the SEC on August 13, 2019, a First Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on October 29, 2019, a Second Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on June 30, 2020, a Third Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on August 24, 2021, a Fourth Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on December 9, 2021, a Fifth Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on June 3, 2022, a Sixth Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on April 11, 2023, a Seventh Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on September 26, 2023, and an Eighth Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on February 16, 2024. 55 Table of Contents Investments in Yellowstone Acquisition Company and Sky Harbour In 2020, we acted as the sponsor for the initial public offering of Yellowstone and purchased 3,399,724 shares of Yellowstone Class B common stock and 7,719,799 private placement warrants at a combined cost of approximately $7.8 million.
The foregoing summary of the Credit Agreement and the transactions contemplated thereby does not purport to be a complete description and is qualified in its entirety by reference to the terms and conditions of the Credit Agreement and Security Agreement, copies of which are attached as Exhibit 10.1 and Exhibit 10.2, respectively to our Form 8-K as filed with the SEC on August 13, 2019, a First Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on October 29, 2019, a Second Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on June 30, 2020, a Third Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on August 24, 2021, a Fourth Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on December 9, 2021, a Fifth Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on June 3, 2022, a Sixth Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on April 11, 2023, a Seventh Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on September 26, 2023, an Eighth Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on February 16, 2024, and a Ninth Amendment to Credit Agreement with the Lender as filed as Exhibit 10.1 on Form 8-K as filed with the SEC on June 5, 2024. 55 Table of Contents Boston Omaha Broadband Credit Agreement On September 17, 2024, three operating subsidiaries of Boston Omaha Broadband, LLC ("BOB") entered into a Credit Agreement (the “BOB Credit Agreement”) with First National Bank of Omaha (the “Lender”) under which certain subsidiaries of BOB can borrow up to $20,000,000 in the aggregate in term loans (the “BOB Credit Facility”).
In December 2021, we agreed to provide Sky Harbour an additional $45 million through the purchase of 4,500,000 shares of Class A common stock upon the closing of the Sky Harbour business combination, which was consummated in January 2022. ● In 2021, we established the BFR Fund subsidiary within BOAM to operate a proposed build-for-rent business, focusing on developing, building, and managing single family detached and/or townhomes for long term rentals.
As of December 31, 2024, we held 12,401,589 shares of Sky Harbour Class A common stock and 7,719,779 Sky Harbour warrants. ● In 2021, we established the BFR Fund subsidiary within BOAM to operate a proposed build-for-rent business, focusing on developing, building, and managing single family detached and/or townhomes for long term rentals.
On September 22, 2023, the maximum availability under the revolving line of credit loan facility was increased from $5,000,000 to $10,000,000. Interest payments are based on the U.S. Prime Rate minus an applicable margin ranging between 0.65% and 1.15% dependent on Link’s consolidated leverage ratio. The new revolving line of credit is due and payable on August 12, 2025.
Prime Rate minus an applicable margin ranging between 0.65% and 1.15% dependent on Link’s consolidated leverage ratio. The new revolving line of credit is due and payable on August 12, 2026.
For fiscal 2023 and fiscal 2022, our revenues in dollars and as a percentage of total revenues were as follows: For the Years Ended December 31, 2023 2022 2023 vs 2022 Amount As a % of Total Revenues Amount As a % of Total Revenues $ Variance Revenues: Billboard rentals, net $ 42,940,369 44.6 % $ 39,244,726 48.3 % $ 3,695,643 Broadband services 35,340,502 36.7 % 28,627,271 35.3 % 6,713,231 Premiums earned 13,932,659 14.5 % 10,649,089 13.1 % 3,283,570 Insurance commissions 1,884,007 2.0 % 2,050,838 2.5 % (166,831 ) Investment and other income 2,156,199 2.2 % 662,270 0.8 % 1,493,929 Total Revenues $ 96,253,736 100.0 % $ 81,234,194 100.0 % $ 15,019,542 We realized total revenues of $96,253,736 during fiscal 2023, an increase of 18.5% over revenues of $81,234,194 during fiscal 2022.
For fiscal 2024 and fiscal 2023, our revenues in dollars and as a percentage of total revenues were as follows: For the Years Ended December 31, 2024 2023 2024 vs 2023 Amount As a % of Total Revenues Amount As a % of Total Revenues $ Variance Revenues: Billboard rentals, net $ 45,153,076 41.7 % $ 42,940,369 44.6 % $ 2,212,707 Broadband services 39,098,228 36.1 % 35,340,502 36.7 % 3,757,726 Premiums earned 19,759,540 18.2 % 13,932,659 14.5 % 5,826,881 Insurance commissions 1,962,692 1.8 % 1,884,007 2.0 % 78,685 Investment and other income 2,301,365 2.2 % 2,156,199 2.2 % 145,166 Total Revenues $ 108,274,901 100.0 % $ 96,253,736 100.0 % $ 12,021,165 We realized total revenues of $108,274,901 during fiscal 2024, an increase of 12.5% over revenues of $96,253,736 during fiscal 2023.
Losses and loss adjustment expenses are reserved monthly based on a percentage of earned premium. ● Employee costs in fiscal 2023 increased by 13.0% from fiscal 2022.
Losses and loss adjustment expenses are reserved monthly based on a percentage of earned premium. ● Employee costs decreased as a percentage of total segment operating revenues from 36.7% in fiscal 2023 to 35.6% in fiscal 2024.
If industry and economic conditions deteriorate, we may be required to assess goodwill impairment before the next annual test, which could result in impairment charges.
If industry and economic conditions deteriorate, we may be required to assess goodwill impairment before the next annual test, which could result in impairment charges. The fair value of each of our goodwill reporting units is generally estimated using a combination of public company multiples and discounted cash flow methodologies.
Treasury securities. 48 Table of Contents Results of Broadband Operations For the Years Ended December 31, 2023 2022 Amount As a % of Segment Operating Revenues Amount As a % of Segment Operating Revenues Operating Revenues Broadband revenues $ 35,340,502 100.0 % $ 28,627,271 100.0 % Cost of Revenues Network operations and data costs 5,181,917 14.7 % 4,319,410 15.1 % Programming costs 61,646 0.2 % 90,139 0.3 % Cell site rent and utilities 1,597,681 4.5 % 1,111,487 3.9 % Other costs of revenues 3,114,274 8.8 % 2,017,465 7.0 % Total cost of revenues 9,955,518 28.2 % 7,538,501 26.3 % Gross margin 25,384,984 71.8 % 21,088,770 73.7 % Other Operating Expenses Employee costs 14,527,407 41.1 % 10,892,844 38.1 % Professional fees 823,969 2.3 % 659,025 2.3 % General and administrative 7,093,277 20.1 % 5,166,722 18.1 % Depreciation 6,816,929 19.3 % 3,869,994 13.5 % Amortization 3,316,403 9.4 % 2,617,966 9.1 % Accretion 17,290 0.0 % 10,260 0.0 % (Gain) loss on disposition of assets (122,418 ) (0.3 %) 113,885 0.4 % Total expenses 32,472,857 91.9 % 23,330,696 81.5 % Segment Loss from Operations (7,087,873 ) (20.1 %) (2,241,926 ) (7.8 %) Interest income (expense), net 17,664 0.1 % (19,831 ) (0.1 %) Noncontrolling interest in subsidiary loss (income) 75,008 0.2 % (436,648 ) (1.5 %) Net Loss Attributable to Common Stockholders $ (6,995,201 ) (19.8 %) $ (2,698,405 ) (9.4 %) Comparison of Fiscal 2023 to Fiscal 2022.
The increase is mainly driven by the additional borrowings on the revolving line of credit. 48 Table of Contents Results of Broadband Operations For the Years Ended December 31, 2024 2023 Amount As a % of Segment Operating Revenues Amount As a % of Segment Operating Revenues Operating Revenues Broadband revenues $ 39,098,228 100.0 % $ 35,340,502 100.0 % Cost of Revenues Network operations and data costs 5,081,153 13.0 % 5,268,526 14.9 % Software costs 798,992 2.1 % 722,198 2.1 % Cell site rent and utilities 1,415,053 3.6 % 1,597,681 4.5 % Other costs of revenues 2,148,832 5.5 % 2,367,113 6.7 % Total cost of revenues 9,444,030 24.2 % 9,955,518 28.2 % Gross margin 29,654,198 75.8 % 25,384,984 71.8 % Other Operating Expenses Employee costs 15,541,832 39.7 % 14,527,407 41.1 % Professional fees 850,528 2.2 % 823,969 2.3 % General and administrative 7,418,184 19.0 % 7,093,277 20.1 % Depreciation 9,078,651 23.2 % 6,816,929 19.3 % Amortization 3,509,856 9.0 % 3,316,403 9.4 % Accretion 13,813 0.0 % 17,290 0.0 % Loss (gain) on disposition of assets 657,236 1.7 % (122,418 ) (0.3 %) Total expenses 37,070,100 94.8 % 32,472,857 91.9 % Segment Loss from Operations (7,415,902 ) (19.0 %) (7,087,873 ) (20.1 %) Interest (expense) income, net (32,019 ) (0.1 %) 17,664 0.1 % Noncontrolling interest in subsidiary loss - - 75,008 0.2 % Net Loss Attributable to Common Stockholders $ (7,447,921 ) (19.1 %) $ (6,995,201 ) (19.8 %) Comparison of Fiscal 2024 to Fiscal 2023.
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 expect to expand our broadband services in Arizona, Florida, Nevada, Utah and in other locations.
We have expanded the licensing of the UCS business to all 50 states and the District of Columbia and developed and brought to market an electronic portal allowing independent insurance agents to more easily and efficiently purchase surety insurance. In outdoor advertising, our plan is to continue to grow this business through acquisitions of billboard assets.
Key assumptions utilized in estimating the future cash flows expected to be generated by each reporting unit primarily relate to forecasted revenues and premiums earned. Goodwill Goodwill represents future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is subject to an annual impairment test.
Goodwill Goodwill represents future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Goodwill is subject to an annual impairment test. We designated October 1 as the date of our annual goodwill impairment test.
The terms of the Sky Harbour business combination prohibited us from selling any of our securities in Sky Harbour prior to January 25, 2023 and has since expired. 56 Table of Contents We believe that our existing cash and short-term investments, funds available through the Credit Agreement Link entered into on August 12, 2019, as amended, and any funds that we may receive from cash flows from operations will be sufficient to meet working capital requirements and anticipated capital expenditures for the next 12 months.
However, our ability to resell any significant portion of these shares is limited by the large number of Sky Harbour shares and warrants we hold relative to the average trading volume of these securities. 57 Table of Contents We believe that our existing cash and short-term investments, funds available through the Credit Agreement Link entered into on August 12, 2019, as amended, funds available through the Credit Agreement Boston Omaha Broadband entered into on September 17, 2024, any funds that we may receive from cash flows from operations, and any funds that we may receive through the sale of real estate assets in the 24th Street and BFR Funds will be sufficient to meet working capital requirements and anticipated capital expenditures for the next 12 months.
These items were partially offset by $6,132,791 in other investment income mainly related to public securities held by Boston Omaha and UCS and interest and dividend income of $2,609,148. During fiscal 2022, we had net other income of $13,104,078.
These items were partially offset by $6,132,791 in other investment income mainly related to public securities held by Boston Omaha and UCS and interest and dividend income of $2,609,148. Generally accepted accounting principles ("GAAP") requires us to include the unrealized changes in market prices of investments in public equity securities in our reported earnings.
For fiscal 2023 and fiscal 2022, our expenses in dollars and as a percentage of total revenues were as follows: For the Years Ended December 31, 2023 2022 2023 vs 2022 Amount As a % of Total Revenues Amount As a % of Total Revenues $ Variance Costs and Expenses: Cost of billboard revenues $ 15,136,817 15.7 % $ 14,395,627 17.7 % $ 741,190 Cost of broadband revenues 9,955,518 10.3 % 7,538,501 9.3 % 2,417,017 Cost of insurance revenues 6,808,167 7.1 % 4,755,583 5.9 % 2,052,584 Employee costs 32,561,929 33.8 % 26,343,272 32.4 % 6,218,657 Professional fees 4,665,515 4.9 % 5,300,275 6.5 % (634,760 ) General and administrative 16,112,243 16.8 % 12,861,992 15.8 % 3,250,251 Depreciation 12,155,096 12.6 % 8,649,066 10.6 % 3,506,030 Amortization 7,409,939 7.7 % 6,474,791 8.0 % 935,148 Accretion 216,501 0.2 % 206,359 0.3 % 10,142 Loss (gain) on disposition of assets 84,414 0.1 % (61,377 ) (0.1 %) 145,791 Total Costs and Expenses $ 105,106,139 109.2 % $ 86,464,089 106.4 % $ 18,642,050 During fiscal 2023, we had total costs and expenses of $105,106,139, as compared to total costs and expenses of $86,464,089 in fiscal 2022.
For fiscal 2024 and fiscal 2023, our expenses in dollars and as a percentage of total revenues were as follows: For the Years Ended December 31, 2024 2023 2024 vs 2023 Amount As a % of Total Revenues Amount As a % of Total Revenues $ Variance Costs and Expenses: Cost of billboard revenues $ 15,496,805 14.3 % $ 15,136,817 15.7 % $ 359,988 Cost of broadband revenues 9,444,030 8.7 % 9,955,518 10.3 % (511,488 ) Cost of insurance revenues 9,400,691 8.7 % 6,808,167 7.1 % 2,592,524 Employee costs 38,146,193 35.2 % 32,561,929 33.8 % 5,584,264 Professional fees 4,898,144 4.5 % 4,665,515 4.9 % 232,629 General and administrative 16,237,654 15.0 % 16,112,243 16.8 % 125,411 Depreciation 14,495,747 13.4 % 12,155,096 12.6 % 2,340,651 Amortization 7,683,952 7.1 % 7,409,939 7.7 % 274,013 Accretion 218,472 0.2 % 216,501 0.2 % 1,971 Loss on disposition of assets 720,691 0.7 % 84,414 0.1 % 636,277 Total Costs and Expenses $ 116,742,379 107.8 % $ 105,106,139 109.2 % $ 11,636,240 During fiscal 2024, we had total costs and expenses of $116,742,379, as compared to total costs and expenses of $105,106,139 in fiscal 2023.
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.
As of December 31, 2024, UCS had $2,393,260 in publicly held securities (marked to market) and $8,859,330 in Sky Harbour Class A common stock (equity method). We expect to continue to invest a portion of our excess capital in accordance with insurance regulatory limitations in both publicly traded equity securities and bonds.
The key factors affecting our asset management operations results during fiscal 2023 were as follows: ● Employee costs in fiscal 2023 increased by 111.0% from fiscal 2022 as we hired for key roles within the business. ● Professional fees in fiscal 2023 decreased by 60.5% from fiscal 2022. ● General and administrative expenses in fiscal 2023 increased by 170.7% from fiscal 2022. ● Equity in income of unconsolidated affiliates in fiscal 2023 included non-cash gains recognized related to the remeasurement of our previously-held interest in 24th Street. ● Other investment income in fiscal 2023 primarily included the changes in the fair value of the special purpose entities ("SPEs") held within the 24th Street Funds, mainly driven by unrealized gains related to the commercial real estate properties held by the SPEs, offset by operating costs and commissions associated with the sale of commercial real estate properties. ● Noncontrolling interest in subsidiary income in fiscal 2023 mainly included the external limited partners' share of GAAP income within the 24th Street Funds, mainly driven by the change in fair value referenced above. 51 Table of Contents Cash Flows Cash Flows for Fiscal 2023 compared to Fiscal 2022.
The Services Agreement provides for consulting fees which reduce over time as assets managed within the funds are sold. ● General and administrative expenses decreased by 25.3% in fiscal 2024 when compared to fiscal 2023 as we wind down BOAM's operations and implemented cost-cutting measures. ● Equity in income of unconsolidated affiliates in fiscal 2023 included non-cash gains recognized related to the remeasurement of our previously-held interest in 24th Street. ● Other investment income in fiscal 2024 primarily included the changes in the fair value of the 24th Street and BFR Funds mainly driven by the underlying real estate properties. ● Noncontrolling interest in subsidiary income in fiscal 2024 consists of the external limited partners' share of GAAP income within the 24th Street and BFR Funds, mainly driven by the change in fair value referenced above. 51 Table of Contents Cash Flows Cash Flows for Fiscal 2024 compared to Fiscal 2023.
At December 31, 2023, we had approximately $22 million in unrestricted cash and $18 million in short-term treasury securities (excludes $29 million of short-term treasury securities held by funds consolidated by BOAM).
At December 31, 2024, we had approximately $28.3 million in unrestricted cash and $11 million in short-term treasury securities.

… 85 more changes not shown on this page.

Other BOC 10-K year-over-year comparisons