Attached files
| file | filename |
|---|---|
| EX-99.2 - EXHIBIT 99.2 - BOSTON OMAHA Corp | ex_124290.htm |
| EX-99.1 - EXHIBIT 99.1 - BOSTON OMAHA Corp | ex_124289.htm |
| EX-23.1 - EXHIBIT 23.1 - BOSTON OMAHA Corp | ex_125264.htm |
| 8-K/A - FORM 8-K/A - BOSTON OMAHA Corp | bomn20180919_8ka.htm |
Exhibit 99.3
BOSTON OMAHA CORPORATION AND WAITT OUTDOOR, LLC
(A Majority Owned Subsidiary of WaittCorp Investments, LLC)
Unaudited Pro Forma Consolidated Balance Sheet
and
Unaudited Pro Forma Consolidated Statements of Operations
BOSTON OMAHA CORPORATION AND WAITT OUTDOOR, LLC
(A Majority Owned Subsidiary of WaittCorp Investments, LLC)
Unaudited Pro Forma Consolidated Balance Sheet
June 30, 2018
ASSETS
|
Historical (unaudited) |
Pro Forma | Pro Forma | |||||||||||||||
| Boston Omaha |
Waitt Outdoor |
Adjustments |
Notes |
Consolidated |
|||||||||||||
|
Current Assets: |
|||||||||||||||||
|
Cash and cash equivalents |
$ | 88,166,783 | $ | 229,488 | $ | (84,260,750 | ) |
(2a) |
$ | 4,135,521 | |||||||
|
Restricted cash |
506,046 | - | - | 506,046 | |||||||||||||
|
Accounts receivable, net |
1,290,966 | 1,231,959 | 7,498 |
(2a) |
2,530,423 | ||||||||||||
|
Interest receivable |
692,109 | - | - | 692,109 | |||||||||||||
|
Short-term investments |
4,856,131 | - | - | 4,856,131 | |||||||||||||
|
U.S. Treasury securities available for sale |
150,346,440 | - | - | 150,346,440 | |||||||||||||
|
Prepaid expenses |
1,098,959 | 1,217,365 | 333,719 |
(2a) |
2,650,043 | ||||||||||||
|
Total Current Assets |
246,957,434 | 2,678,812 | (83,919,533 | ) | 165,716,713 | ||||||||||||
|
Property and Equipment, net |
10,280,773 | 5,522,986 | 12,703,005 |
(2a) |
28,506,764 | ||||||||||||
|
Other Assets: |
|||||||||||||||||
|
Goodwill |
25,006,161 | 3,217,498 | 43,164,448 |
(2a) |
71,388,107 | ||||||||||||
|
Intangible assets, net |
7,604,863 | - | 18,710,563 |
(2a) |
26,315,426 | ||||||||||||
|
Investments |
32,177,419 | - | - | 32,177,419 | |||||||||||||
|
Investments in unconsolidated affiliates |
847,146 | - | - | 847,146 | |||||||||||||
|
Funds held as collateral assets |
862,046 | - | - | 862,046 | |||||||||||||
|
Other |
707,560 | 219,321 | (219,321 | ) |
(2a) |
707,560 | |||||||||||
|
Total Other Assets |
67,205,195 | 3,436,819 | 61,655,690 | 132,297,704 | |||||||||||||
|
Total Assets |
$ | 324,443,402 | $ | 11,638,617 | $ | (9,560,838 | ) | $ | 326,521,181 | ||||||||
See accompanying notes to unaudited pro forma consolidated financial statements.
BOSTON OMAHA CORPORATION AND WAITT OUTDOOR, LLC
(A Majority Owned Subsidiary of WaittCorp Investments, LLC)
Unaudited Pro Forma Consolidated Balance Sheet
June 30, 2018
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND EQUITY
| Historical (unaudited) | Pro Forma | Pro Forma | |||||||||||||||
| Boston Omaha | Waitt Outdoor | Adjustments | Notes | Consolidated | |||||||||||||
|
Current Liabilities: |
|||||||||||||||||
|
Accounts payable and accrued expenses |
$ | 1,843,475 | $ | 696,529 | $ | 65,250 |
(2a) |
$ | 2,605,254 | ||||||||
|
Short-term payables for acquisitions |
137,000 | - | - | 137,000 | |||||||||||||
|
Funds held as collateral |
862,046 | - | - | 862,046 | |||||||||||||
|
Unearned premiums and deferred revenue |
2,127,729 | 170,584 | (170,584 | ) |
(2a) |
2,127,729 | |||||||||||
|
Current portion of long-term debt |
- | 632,263 | (632,263 | ) |
(2a) |
- | |||||||||||
|
Total Current Liabilities |
4,970,250 | 1,499,376 | (737,597 | ) | 5,732,029 | ||||||||||||
|
Long-term Liabilities: |
|||||||||||||||||
|
Asset retirement obligations |
174,669 | - | - | 174,669 | |||||||||||||
|
Other long-term liabilities |
- | 1,316,000 | - | 1,316,000 | |||||||||||||
|
Deferred tax liability |
57,000 | - | - | 57,000 | |||||||||||||
|
Total Liabilities |
5,201,919 | 2,815,376 | (737,597 | ) | 7,279,698 | ||||||||||||
|
Redeemable Noncontrolling Interest: |
1,190,187 | - | - | 1,190,187 | |||||||||||||
|
Members' Equity: |
- | 8,823,241 | (8,823,241 | ) |
(2a) |
- | |||||||||||
|
Stockholders' Equity: |
|||||||||||||||||
|
Preferred stock, $.001 par value, 1,000,000 authorized, 0 shares issued and outstanding |
- | - | - | - | |||||||||||||
|
Class A common stock, $.001 par value, 38,838,884 shares authorized, 20,894,774 shares issued and outstanding, respectively |
20,895 | - | - | 20,895 | |||||||||||||
|
Class B common stock, $.001 par value, 1,161,116 shares authorized, 1,055,560 shares issued and outstanding |
1,056 | - | - | 1,056 | |||||||||||||
|
Additional paid-in capital |
332,907,911 | - | - | 332,907,911 | |||||||||||||
|
Accumulated deficit |
(14,878,566 | ) | - | - | (14,878,566 | ) | |||||||||||
|
Total Stockholders' Equity |
318,051,296 | - | - | 318,051,296 | |||||||||||||
|
Total Equity |
318,051,296 | 8,823,241 | (8,823,241 | ) | 318,051,296 | ||||||||||||
|
Total Liabilities, Redeemable Noncontrolling Interest, and Equity |
$ | 324,443,402 | $ | 11,638,617 | $ | (9,560,838 | ) | $ | 326,521,181 | ||||||||
See accompanying notes to unaudited pro forma consolidated financial statements.
BOSTON OMAHA CORPORATION AND WAITT OUTDOOR, LLC
(A Majority Owned Subsidiary of WaittCorp Investments, LLC)
Unaudited Pro Forma Consolidated Statement of Operations
For the Six Months Ended June 30, 2018
|
Historical (unaudited) |
Pro Forma |
Pro Forma |
|||||||||||||||
|
Boston Omaha |
Waitt Outdoor |
Adjustments |
Notes |
Consolidated |
|||||||||||||
|
Revenues: |
|||||||||||||||||
|
Billboard revenues |
$ | 3,249,459 | $ | 6,418,332 | $ | (11,529 | ) |
(2c) |
$ | 9,656,262 | |||||||
|
Premiums earned |
984,349 | - | - | 984,349 | |||||||||||||
|
Insurance commissions |
1,516,868 | - | - | 1,516,868 | |||||||||||||
|
Investment and other income |
62,027 | - | - | 62,027 | |||||||||||||
|
Total Revenues |
5,812,703 | 6,418,332 | (11,529 | ) | 12,219,506 | ||||||||||||
|
Costs and Expenses: |
|||||||||||||||||
|
Cost of billboard revenues (exclusive of depreciation and amortization) |
1,565,621 | 2,602,416 | (1,815 | ) |
(2c) |
4,166,222 | |||||||||||
|
Cost of insurance revenues |
477,536 | - | - | 477,536 | |||||||||||||
|
Employee costs |
3,706,024 | 972,641 | (170,508 | ) |
(2c) |
4,508,157 | |||||||||||
|
Professional fees |
1,420,375 | 28,684 | (8,548 | ) |
(2c) |
1,440,511 | |||||||||||
|
General and administrative |
1,700,215 | 506,167 | (13,529 | ) |
(2c) |
2,192,853 | |||||||||||
|
Amortization |
1,451,240 | - | 2,404,950 |
(2b) |
3,856,190 | ||||||||||||
|
Depreciation |
635,407 | 741,536 | (61,131 | ) |
(2b) |
1,315,812 | |||||||||||
|
Loss (gain) on disposition of assets |
81,857 | (39,395 | ) | - | 42,462 | ||||||||||||
|
Bad debt expense |
14,515 | 4,100 | - | 18,615 | |||||||||||||
|
Accretion |
5,995 | - | - | 5,995 | |||||||||||||
|
Total Costs and Expenses |
11,058,785 | 4,816,149 | 2,149,419 | 18,024,353 | |||||||||||||
|
Net Income (Loss) from Operations |
(5,246,082 | ) | 1,602,183 | (2,160,948 | ) | (5,804,847 | ) | ||||||||||
|
Other Income (Expense): |
|||||||||||||||||
|
Interest income |
1,091,946 | - | - | 1,091,946 | |||||||||||||
|
Equity in income of unconsolidated affiliates |
385,091 | - | - | 385,091 | |||||||||||||
|
Unrealized gains (loss) on securities |
113,303 | - | - | 113,303 | |||||||||||||
|
Loss on disposition of assets |
(54,733 | ) | - | - | (54,733 | ) | |||||||||||
|
Interest Expense |
(1,804 | ) | (25,962 | ) | - | (27,766 | ) | ||||||||||
|
Net Income (Loss) Before Income Tax |
(3,712,279 | ) | 1,576,221 | (2,160,948 | ) | (4,297,006 | ) | ||||||||||
|
Income Tax (Provision) Benefit |
- | - | - |
(3b) |
- | ||||||||||||
|
Net Income (Loss) |
(3,712,279 | ) | 1,576,221 | (2,160,948 | ) | (4,297,006 | ) | ||||||||||
|
Noncontrolling Interest in Subsidiary Loss |
44,800 | - | - | 44,800 | |||||||||||||
|
Net Income (Loss) Attributable to Common Stockholders |
$ | (3,667,479 | ) | $ | 1,576,221 | $ | (2,160,948 | ) | $ | (4,252,206 | ) | ||||||
|
Basic and Diluted Net Loss per Share |
$ | (0.21 | ) |
(3a) |
$ | (0.24 | ) | ||||||||||
|
Basic and Diluted Weighted Average Class A and Class B Common Shares Outstanding |
17,780,454 |
(3a) |
17,780,454 | ||||||||||||||
See accompanying notes to unaudited pro forma consolidated financial statements.
BOSTON OMAHA CORPORATION AND WAITT OUTDOOR, LLC
(A Majority Owned Subsidiary of WaittCorp Investments, LLC)
Unaudited Pro Forma Consolidated Statement of Operations
For the Year Ended December 31, 2017
|
Historical |
Pro Forma |
Pro Forma |
|||||||||||||||
|
Boston Omaha |
Waitt Outdoor |
Adjustments |
Notes |
Consolidated |
|||||||||||||
|
Revenues: |
|||||||||||||||||
|
Billboard rentals |
$ | 5,265,746 | $ | 12,803,000 | $ | (31,690 | ) |
(2c) |
$ | 18,037,056 | |||||||
|
Premiums earned |
2,031,597 | - | - | 2,031,597 | |||||||||||||
|
Insurance commissions |
1,586,200 | - | - | 1,586,200 | |||||||||||||
|
Investment and other income |
130,802 | - | - | 130,802 | |||||||||||||
|
Total Revenues |
9,014,345 | 12,803,000 | (31,690 | ) | 21,785,655 | ||||||||||||
|
Costs and Expenses: |
|||||||||||||||||
|
Cost of billboard revenues (exclusive of depreciation and amortization) |
2,690,538 | 5,336,242 | (2,339 | ) |
(2c) |
8,024,441 | |||||||||||
|
Cost of insurance revenues |
739,657 | - | - | 739,657 | |||||||||||||
|
Employee costs |
4,420,231 | 1,984,369 | (278,284 | ) |
(2c) |
6,126,316 | |||||||||||
|
Professional fees |
2,183,647 | 132,198 | (23,453 | ) |
(2c) |
2,292,392 | |||||||||||
|
General and administrative |
1,889,531 | 1,012,902 | (52,039 | ) |
(2c) |
2,850,394 | |||||||||||
|
Amortization |
2,410,081 | - | 4,809,900 |
(2b) |
7,219,981 | ||||||||||||
|
Depreciation |
943,845 | 1,523,570 | (182,487 | ) |
(2b), (2c) |
2,284,928 | |||||||||||
|
Loss (gain) on disposition of assets |
362,575 | (131,508 | ) | - | 231,067 | ||||||||||||
|
Bad debt expense |
147,172 | 12,300 | - | 159,472 | |||||||||||||
|
Total Costs and Expenses |
15,787,277 | 9,870,073 | 4,271,298 | 29,928,648 | |||||||||||||
|
Net income (Loss) from Operations |
(6,772,932 | ) | 2,932,927 | (4,302,988 | ) | (8,142,993 | ) | ||||||||||
|
Other Income (Expense): |
|||||||||||||||||
|
Interest income |
95,779 | - | - | 95,779 | |||||||||||||
|
Equity in income of unconsolidated affiliates |
73,760 | - | - | 73,760 | |||||||||||||
|
Unrealized gains (loss) on securities |
132,191 | - | - | 132,191 | |||||||||||||
|
Interest Expense |
(8,255 | ) | (121,387 | ) | - | (129,642 | ) | ||||||||||
|
Net Income (Loss) Before Income Tax |
(6,479,457 | ) | 2,811,540 | (4,302,988 | ) | (7,970,905 | ) | ||||||||||
|
Income Tax (Provision) Benefit |
- | - | - |
(3b) |
- | ||||||||||||
|
Net Income (Loss) |
(6,479,457 | ) | 2,811,540 | (4,302,988 | ) | (7,970,905 | ) | ||||||||||
|
Noncontrolling Interest in Subsidiary Loss |
11,547 | - | - | 11,547 | |||||||||||||
|
Net Income (Loss) Attributable to Common Stockholders |
$ | (6,467,910 | ) | $ | 2,811,540 | $ | (4,302,988 | ) | $ | (7,959,358 | ) | ||||||
|
Basic and Diluted Net Loss per Share |
$ | (0.60 | ) |
(3a) |
$ | (0.74 | ) | ||||||||||
|
Basic and Diluted Weighted Average Class A and Class B Common Shares Outstanding |
10,817,198 |
(3a) |
10,817,198 | ||||||||||||||
See accompanying notes to unaudited pro forma consolidated financial statements.
BOSTON OMAHA CORPORATION AND WAITT OUTDOOR, LLC
(A Majority Owned Subsidiary of WaittCorp Investments, LLC)
Notes to Unaudited Pro Forma Consolidated Financial Statements
| NOTE 1. | BASIS OF PRESENTATION |
The unaudited pro forma consolidated balance sheet has been prepared by applying pro forma adjustments to Boston Omaha Corporation’s (“Boston Omaha”) (“the Company”) unaudited consolidated balance sheet as of June 30, 2018 and Waitt Outdoor, LLC's (“Waitt”) unaudited balance sheet as of June 30, 2018.
The unaudited pro forma consolidated statement of operations for the six months ended June 30, 2018 has been prepared from Boston Omaha’s unaudited interim consolidated statement of operations for the six months ended June 30, 2018 and from Waitt’s unaudited interim statement of operations for the six months ended June 30, 2018.
Boston Omaha’s audited consolidated financial statements and Waitt’s audited financial statements have been used in the preparation of the unaudited pro forma consolidated statement of operations for the year ended December 31, 2017.
The unaudited pro forma consolidated financial statements should be read in conjunction with the historical financial statements of Boston Omaha and Waitt as follows:
Boston Omaha’s audited consolidated financial statements for the years ended December 31, 2017 and 2016 and the notes relating thereto, as found in its Form 10-K which was filed with the Securities and Exchange Commission on March 30, 2018;
Boston Omaha’s unaudited consolidated financial statements for the six months ended June 30, 2018 and the notes relating thereto, as found in its Form 10-Q which was filed with the Securities and Exchange Commission on August 13, 2018;
Waitt’s audited financial statements for the years ended December 31, 2017 and 2016 and the notes relating thereto included in this Form 8-K/A and;
Waitt’s unaudited financial statements for the six months ended June 30, 2018 and the notes relating thereto included elsewhere in this Form 8-K/A.
|
NOTE 2. |
BUSINESS ACQUISITION |
On August 31, 2018, Link Media Omaha, LLC (“Link Omaha”) entered into an Asset Purchase Agreement with Waitt Outdoor, LLC, by which Link Omaha acquired over 1,600 billboard structures and related assets from Waitt Outdoor, LLC. The billboards and related assets are located in Kansas, Illinois, Iowa, Missouri and Nebraska.
Link Omaha is a wholly-owned subsidiary of Link Media Holdings, LLC, a wholly-owned subsidiary of Boston Omaha Corporation (the “Company”).
The purchase price for the acquired assets was $82,000,000, subject to certain post-closing adjustments, which totaled $2,031,262, resulting in a total purchase price of $84,031,262. Cash paid at closing was $79,928,762 and $4,102,500, which was disbursed and will be held in escrow, subject to any claims for indemnification. Waitt Outdoor, LLC, WaittCorp Investments, LLC, and Mr. Michael J. Delich, the principal of Waitt Outdoor, LLC, have also entered into a five year non-competition and non-solicitation agreement in connection with the acquisition.
BOSTON OMAHA CORPORATION AND WAITT OUTDOOR, LLC
(A Majority Owned Subsidiary of WaittCorp Investments, LLC)
Notes to Unaudited Pro Forma Consolidated Financial Statements
| NOTE 2. | BUSINESS ACQUISITION (Continued) |
Recognized Amount of Identifiable Assets Acquired and Liabilities Assumed
The Company has performed a preliminary valuation analysis of the fair market value of Waitt’s assets to be acquired and liabilities to be assumed. Using the total consideration for the acquisition, the Company has estimated the allocations to such assets and liabilities. The following table summarizes the allocation of the preliminary purchase price as of the transaction’s closing date, August 31, 2018:
|
Identifiable Assets: |
||||
|
Accounts receivable |
$ | 1,239,457 | ||
|
Prepaid expenses |
1,551,084 | |||
|
Property and equipment |
18,225,991 | |||
|
Subtotal |
21,016,532 | |||
|
Intangible Assets: |
||||
|
Goodwill |
46,381,946 | |||
|
Intangible assets |
18,710,563 | |||
|
Total Identifiable Assets Acquired |
86,109,041 | |||
|
Liabilities Assumed: |
2,077,779 | |||
|
Total Liabilities Assumed |
2,077,779 | |||
|
Total Identifiable Net Assets |
$ | 84,031,262 |
This preliminary purchase price allocation has been used to prepare pro forma adjustments, (2a), in the pro forma balance sheet and statement of operations. The statement of operations has been adjusted through pro forma adjustments, (2c), for Waitt Consulting, which was not purchased by the Company. The final purchase price allocation will be determined when the Company has completed the detailed valuations and necessary calculations. The final allocation could differ materially from the preliminary allocation used in the pro forma adjustments. The final allocation may include (1) changes in fair values of property and equipment, (2) changes in allocations to intangible assets such as permits, noncompetition agreements, and customer relationships as well as goodwill and (3) other changes to assets and liabilities.
Depreciation and amortization, (2b), have been provided for property and equipment and finite intangible assets based on the preliminary purchase price allocation. Property and equipment have been depreciated on a straight-line basis over their estimated useful lives of five, ten or fifteen years. Intangible assets having a finite life have been amortized on a straight-line basis over their estimated useful lives of three, five or ten years.
All significant intercompany balances have been eliminated in consolidation.
BOSTON OMAHA CORPORATION AND WAITT OUTDOOR, LLC
(A Majority Owned Subsidiary of WaittCorp Investments, LLC)
Notes to Unaudited Pro Forma Consolidated Financial Statements
| NOTE 3. | PRO FORMA ADJUSTMENTS |
Earnings per share
(3a) The basic net income (loss) per common share is computed by dividing the net income (loss) by the weighted average number of Class A and Class B common shares outstanding.
Income Tax (Provision) Benefit
(3b) Federal and state income taxes have not been provided as the Company has experienced net operating losses for federal tax purposes and state income taxes have not been significant.
8