0001445866-17-000146.txt : 20170213 0001445866-17-000146.hdr.sgml : 20170213 20170213171539 ACCESSION NUMBER: 0001445866-17-000146 CONFORMED SUBMISSION TYPE: S-1 PUBLIC DOCUMENT COUNT: 78 FILED AS OF DATE: 20170213 DATE AS OF CHANGE: 20170213 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOSTON OMAHA Corp CENTRAL INDEX KEY: 0001494582 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE OPERATORS (NO DEVELOPERS) & LESSORS [6510] IRS NUMBER: 270788438 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-1 SEC ACT: 1933 Act SEC FILE NUMBER: 333-216040 FILM NUMBER: 17600660 BUSINESS ADDRESS: STREET 1: 292 NEWBURY STREET, SUITE 333 CITY: BOSTON STATE: MA ZIP: 02115 BUSINESS PHONE: 857-256-0079 MAIL ADDRESS: STREET 1: 292 NEWBURY STREET, SUITE 333 CITY: BOSTON STATE: MA ZIP: 02115 FORMER COMPANY: FORMER CONFORMED NAME: REO PLUS, INC. DATE OF NAME CHANGE: 20100618 S-1 1 bostons102092017.htm S-1

 
As filed with the Securities and Exchange Commission on February 13, 2017
Registration No. 333-[_____]                

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

BOSTON OMAHA CORPORATION
(Exact name of registrant as specified in its charter)
         
Delaware
 
7389
 
27-0788438
(State or other jurisdiction of
incorporation or organization)
 
(Primary Standard Industrial
Classification Code Number)
 
(I.R.S. Employer
Identification No.)
 

292 Newbury Street, Suite 333
Boston, Massachusetts 02115
(857) 256-0079
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Alex B. Rozek and Adam K. Peterson
Co-Chief Executive Officers
Boston Omaha Corporation
292 Newbury Street, Suite 333
Boston, Massachusetts 02115
(857) 256-0079
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:
Neil H. Aronson, Esq.
Joseph B. Ramadei, Esq.
Gennari Aronson LLP
300 First Avenue, Suite 102
Needham, Massachusetts 02494
 Phone (781) 719-9900
Fax (781) 719-9853


Approximate date of commencement of proposed sale to the public: As soon as practicable after the effectiveness of this Registration Statement.
 
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  
 
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  
 
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):
             
Large accelerated filer
 
  
Accelerated filer
 
Non-accelerated filer
 
 (Do not check if a smaller reporting company)
  
Smaller reporting company
 
  

 


CALCULATION OF REGISTRATION FEE
 
 
Title of Each Class of
Securities to Be Registered
 
Amount
to Be
Registered
 
Proposed
Offering Price
per Share (1)
 
Proposed
Aggregate
Offering Price (1)
 
Amount of
Registration Fee
Common stock, par value $0.001 per share
 
2,389,611
 
$19.25
 
$46,000,012
 
$5,331.40
 
 
 
(1)
 
Estimated solely for the purpose of calculating the registration fee for the securities pursuant to Rule 457(c) under the Securities Act of 1933, as amended. The price per share and aggregate offering price are based on the closing price of the registrant's common stock on February 8, 2017, as reported on the OTCQX U.S. market.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said section 8(a), may determine.

 


The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where such offer or sale is not permitted.
 
SUBJECT TO COMPLETION, DATED FEBRUARY 13, 2017
 
 [_______] Shares
[BOSTON OMAHA CORPORATION]
Common Stock
 


 
 
We are offering up to [______] shares of our common stock.
 
We expect the initial public offering price to be between $[___] and $[___] per share. Currently, no public market exists for our common stock on any securities exchange other than the OTCQX on which we have experienced very limited trading of our securities.   We intend to list our common stock on the NASDAQ Global Market ("NASDAQ") under the symbol "BOMN." No assurance can be given that our application will be approved.  We have granted to the underwriters an option to purchase up to [______] additional shares of common stock at the initial public offering price, less the underwriting discount and commissions, within 30 days from the date of this prospectus.

Concurrently with this offering, we will have sold up to [____] shares of our common stock to existing shareholders under a rights offering (the "2017 Concurrent Offering") at a price equal to the offering price of [____] per share, for total proceeds of $[_______].  Each of our two largest stockholders, Magnolia Capital Fund, L.P. and Boulderado Partners, LLC and two of our directors, Brendan J. Keating and Bradford B. Briner will purchase [_________, ________________, ______________ and _______] shares of our common stock in the amount of $[________,______________, ______________, and $______________], respectively, as part of this 2017 Concurrent Offering.  We are offering these shares directly to these two stockholders and directors, and not through underwriters or any brokers or dealers. The shares offered to these two stockholders and two directors, will not be subject to any underwriting discounts or commissions. The shares will not be purchased unless the offering to the public is consummated.

We are an "emerging growth company," as that term is defined under the federal securities laws and, as such, may elect to comply with certain reduced public company reporting requirements.

Investing in our common stock involves a high degree of risk. See "Risk Factors" beginning on page 9 of this prospectus to read the factors you should consider before buying shares of the common stock.
 
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. 

 
 
 
Per Share
   
Total
 
Public offering price
 
$
     
$
   
Underwriting discount and commissions (1)
 
$
     
$
   
Proceeds, before expenses, to us
 
$
     
$
   
 
(1)  The underwriters will also be reimbursed for certain expenses incurred in the offering. See "Underwriting" for additional information regarding underwriting compensation.
  The underwriters expect to deliver the shares of our common stock to investors against payment on or about [_______], 2017. 
 
The date of this prospectus is [_______], 2017.





TABLE OF CONTENTS
 
Prospectus
 
 
Page
Prospectus Summary
1
Risk Factors
9
Special Note Regarding Forward-Looking Statements
 23
Use of Proceeds
24
Dividend Policy
25
Capitalization
26
Dilution
27
Selected Historical Financial Information of Boston Omaha Corporation
28
Unaudited Pro Forma Condensed Combined and Consolidated Financial Information
29
Management's Discussion and Analysis of Financial Condition and Results of Operations of Boston Omaha Corporation
38
Business
47
Management
56
Executive Compensation
61
Certain Relationships and Related Party Transactions
63
Principal Stockholders
67
Description of Capital Stock
68
Shares Eligible for Future Sale
72
Certain U.S. Federal Income and Estate Tax Considerations to Non-U.S. Holders
73
Underwriting  76
Legal Matters
76
Experts
76
Where You Can Find More Information
76
Index To Financial Statements
77
 
 
About This Prospectus
 
You should rely only on the information that we have provided in this prospectus. We have not authorized anyone to provide you with different information. No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. You must not rely on any unauthorized information or representation. This prospectus is an offer to sell only the securities offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. You should assume that the information in this prospectus is accurate only as of the date on the front of this document, regardless of the time of delivery of this prospectus, or any sale of a security registered under the registration statement of which this prospectus is a part.
 
This prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed, or will be filed as exhibits to the registration statement of which this prospectus is a part, and you may obtain copies of those documents as described below under the heading "Where You Can Find More Information."
 
As used in this prospectus, unless the context indicates or otherwise requires, "the Company," "our Company," "we," "us," and "our" refer to Boston Omaha Corporation, a Delaware corporation, and its consolidated subsidiaries.
 
Until [________], 2017 (25 days after the date of this prospectus), all dealers that buy, sell or trade shares of our common stock, whether or not participating in our public offering, may be required to deliver a prospectus. This delivery requirement is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
ii

 
Unless indicated otherwise, the information included in this prospectus assumes that (i) the shares of common stock to be sold in this offering are sold at $[___] per share, which is the midpoint of the estimated offering range set forth on the cover page of this prospectus and (ii) all shares offered by us in this offering are sold. 
 

 
We and the underwriters have not authorized anyone to provide any information other than that contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we have referred you. We and the underwriters take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the underwriters are offering to sell, and seeking offers to buy, shares of our common stock only in jurisdictions where offers and sales are permitted. The information in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of shares of our common stock.
 

 
BASIS OF PRESENTATION
 
Concurrently with this offering, we will have sold up to [____] shares of our common stock to existing shareholders under a rights offering (the "2017 Concurrent Offering") at a price equal to the offering price of [____] per share, for total proceeds of $[________].  Each of our two largest stockholders, Magnolia Capital Fund, L.P. and Boulderado Partners, LLC and two of our directors, Brendan J. Keating and Bradford B. Briner will purchase [_________, ________________, ______________ and _______] shares of our common stock in the amount of $[________,______________, ______________, and $______________], respectively, as part of this 2017 Concurrent Offering.

  We completed the acquisition of JAG, Inc. ("JAG") on February 16, 2016 and the acquisition of United Casualty and Surety Insurance Company ("UC&S") on December 7, 2016.  Accordingly, this prospectus also includes the audited balance sheets of each of JAG and UC&S as of December 31, 2015 and the related statements of operations and cash flow for the years then ended.
 
PRO FORMA INFORMATION
 
This prospectus contains unaudited pro forma financial information prepared in accordance with Article 11 of Regulation S-X. The unaudited pro forma condensed combined and consolidated statement of operations for the year ended December 31, 2015 gives pro forma effect to our acquisition of the operations of each of JAG and UC&S, which were acquired in 2016, and three billboard acquisitions we completed in 2015: Bell Media, LLC, Fair Outdoor, LLC, and I-85 Advertising, LLC.  The unaudited pro forma condensed combined and consolidated balance sheet as of September 30, 2016 gives pro forma effect to our acquisition of the operations of each of JAG and UC&S and the transactions related thereto, and the related use of proceeds as if such transactions had occurred on September 30, 2016. See "Unaudited Pro Forma Condensed Combined and Consolidated Financial Information."
 
MARKET, INDUSTRY AND OTHER DATA
 
This prospectus includes market and industry data and certain other statistical information based on third-party sources including independent industry publications, government publications and other published independent sources. Although we believe these third-party sources are reliable as of their respective dates, neither we nor the underwriters have independently verified the accuracy or completeness of this information. Some data is also based on our own good faith estimates which are supported by our management's knowledge of and experience in the markets and businesses in which we operate.
 
While we are not aware of any misstatements regarding any market, industry or similar data presented herein, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under the sections entitled "Special Note Regarding Forward-Looking Statements" and "Risk Factors" in this prospectus.  
 

iii

PROSPECTUS SUMMARY
 
This summary highlights the information contained elsewhere in this prospectus. This summary may not contain all of the information that may be important to you or that you should consider before investing in shares of our common stock. You should read the entire prospectus carefully before making an investment decision. The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information appearing elsewhere in this prospectus. In particular, you should read the sections entitled "Risk Factors," "Unaudited Pro Forma Condensed Combined and Consolidated Financial Information" and "Management's Discussion and Analysis of Financial Condition and Results of Operations of Boston Omaha Corporation" included elsewhere in this prospectus and our consolidated financial statements and the related notes attached hereto.
 
Our Company
 
We commenced our current business operations in June 2015 and currently operate three separate lines of business: outdoor billboards, surety insurance and related brokerage activities and investments in real estate management and related activities.

 Since June 2015, we have acquired numerous billboard structures, many with multiple faces, including both static and digital displays, in Alabama, Florida, Georgia and Wisconsin.  As of January 31, 2017, we owned 491 billboard structures containing a total of 819 faces, of which 26 are digital displays. We continue to evaluate possible acquisitions of additional billboard displays and expect to use a significant portion of our currently available cash and cash proceeds from this offering to expand our presence in our current markets and new regions of the United States.  We are attracted to the outdoor display market due to a number of factors, including the size of the market, estimated for billboards to exceed $4.8 billion in the U.S. alone, high regulatory barriers to building new billboards in some states, low maintenance and other costs for static billboards, and the ability to use our large number of locations to attract larger regional and national companies wishing to market their products and services.   In addition, unlike other advertising industries, the Internet has not had a material adverse impact on outdoor advertising revenues at this point as reported revenues for billboard advertising have continued to rise, in contrast to print and other advertising which compete with Internet-based digital advertising for the consumer's attention at home.  The billboard industry's three largest companies are estimated to generate more than 50% of the industry's total revenues and several industry sources estimate that there are a large number of other companies serving the remainder of the market, providing a potentially significant source of billboards which may be acquired in the future.

In October 2015, we established an insurance subsidiary, General Indemnity Group, LLC, designed to own and operate insurance businesses generally handling high volume lower policy limit commercial lines of property and casualty insurance.  Our first entry was into the surety insurance business, with the acquisition of a national surety brokerage firm in April 2016.  In December 2016, we completed the acquisition of United Casualty and Surety Insurance Company ("UC&S"), an AM Best "A – Excellent" rated primary insurance company with a 27-year history of providing surety bonds for contractors, small businesses and individuals.  Customers of UC&S are often required to obtain surety bonds to comply with the laws of states, municipalities and other agencies.  We are currently expanding UC&S's licensing from the nine states in which it was licensed when we acquired UC&S in December to all 50 states and the District of Columbia. We may in the future expand the reach of our insurance activities to other forms of high volume and low average policy premium insurance businesses which historically have similarly attractive underwriting profits.
1


Since September 2015, we have acquired a minority interest in a full service commercial real estate brokerage, property management and real estate services company located in Las Vegas, Nevada, and minority interests in several other commercial and residential real estate ventures. 

In addition to our activities in outdoor advertising, surety insurance, and commercial and residential real estate services, we will also consider other durable business opportunities which offer the potential for highly predictable and attractive returns on invested capital.  We have a robust pipeline of potential additional opportunities in and outside of our current lines of business, and we expect to continue to be opportunistic in exploring other opportunities which meet our investment criteria.  While we may pursue opportunities outside of our current lines of business, we plan to use the majority of the proceeds of this offering to fund continued acquisitions in the outdoor advertising and insurance markets, to support statutory capital requirements consistent with the growth of our insurance business, and to acquire positions in ongoing real estate service businesses.

 Our objective is to grow intrinsic value per share at an attractive rate by retaining capital to reinvest in the productive capabilities of our current subsidiaries, make opportunistic investments, and/or invest in new, anticipated durable earnings streams.  Each of these options for capital will be compared to one another on a regular basis, and capital will be deployed according to our management's judgment as to where it believes allocated capital has the potential to achieve the best return.

Since February 2015, our acquisitions and operations have been funded by equity investments and debt conversions totaling $66,872,500 (excluding the 2017 Concurrent Offering), of which $43,305,577 and $11,305,595 have been invested by Magnolia Capital Fund, LP ("Magnolia") and Boulderado Partners, LLC ("Boulderado"), respectively.  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. Of such $66,872,500 in invested capital, approximately $25 million has been used to fund billboard acquisitions to date, $14.3 million has been used to acquire UC&S and a nationwide surety insurance broker, and we have invested approximately $1 million in several real estate management businesses.  In addition, we have contributed $2.75 million in statutory capital to UC&S since the beginning of 2017.
 
Our History
 
Boston Omaha Corporation was originally incorporated as REO Plus, Inc. ("REO") on August 10, 2009 under the laws of the State of Texas.  On March 18, 2015, we reincorporated as a Delaware corporation and changed our name to Boston Omaha Corporation.  Our principal business address is 292 Newbury Street, Suite 333, Boston, Massachusetts 02115, and our telephone number is 857-256-0079.
 
 On February 13, 2015, Magnolia and Boulderado acquired from Richard Church, all of the shares of the company's common stock owned by Mr. Church, representing approximately 95% of our issued and outstanding shares.  Mr. Church also sold to each of Boulderado and Magnolia his interest in two promissory notes issued by us to Mr. Church in the principal amount of $398,224.  These notes were subsequently converted into our common stock.  As a result of these transactions, we have no debt outstanding. 

On February 19, 2015, Alex B. Rozek was elected as our sole Director and President.  On March 18, 2015, Mr. Rozek elected Adam K. Peterson, a principal of Magnolia as an additional Director and as our Executive Vice President. Mr. Rozek and Mr. Peterson serve as Co-Chief Executive Officers and Co-Chairmen of the Board of the Company.  Mr. Brendan J. Keating was subsequently elected to our Board of Directors in February 2016 and Mr. Bradford B. Briner was elected to our Board of Directors in April 2016.
 
On March 18, 2015, we converted from a Texas corporation to a Delaware corporation and adopted new bylaws.  On June 17, 2015, we amended and restated our Certificate of Incorporation, effecting a 7:1 reverse stock split of our common stock effective as of June 17, 2015.  We also created an additional series of our stock named Class A common stock.  Each share of Class A common stock is identical to the common stock in liquidation, dividend and similar rights.  The only differences between the Class A common stock and our common stock is that each Class A common stock has 10 votes for each share held, while the common stock has a single vote per share and certain actions cannot be taken without the approval of the holders of the Class A common stock. There are currently 1,055,560 shares of our Class A common stock outstanding, which shares are owned in equal amounts by Boulderado and Magnolia.
2


Our Financing Activities

Since February 2015, we have raised $66,872,500 in equity financing, of which $43,305,577 and $11,305,595 have been invested by Magnolia and Boulderado Partners, respectively.  We raised these funds primarily in three separate rounds of financing, each of which coincided with pending or anticipated acquisitions.

* Our June, 2015 financing raised $10,000,000 through the sale of Class A common stock, in which each of Magnolia and Boulderado acquired 500,000 shares at a price of $10 per share.  Each of Boulderado and Magnolia also extinguished all principal and interest due under two promissory notes, each in the principal amount of $149,112 (with accrued interest on each note of $2,533), assigned to Boulderado and Magnolia on February 13, 2015 from Richard Church, the original holder of the notes.  As a result of this note extinguishment, each of Boulderado and Magnolia received 15,164 additional shares of Class A common stock.  At the same time, Boulderado and Magnolia also converted all sums due under the $100,000 (with accrued interest on each note of $931) convertible promissory notes we issued to each of them on April 10, 2015, such that each of Boulderado and Magnolia received 12,616 shares of Class A common stock at a conversion price of $8.00 per share.  In addition, each of Boulderado and Magnolia received warrants to purchase one share of Class A common stock at a price of $10.00 per share for each 10 shares of Class A common stock purchased, resulting in each of Boulderado and Magnolia receiving warrants to purchase 52,778 shares of Class A common stock.  These warrants are exercisable at any time on or before June 18, 2025. Each of the two holders of these warrants are entitled to purchase 51,516 shares of Class A common stock at an exercise price of $10.00 per share and 1,262 shares of Class A common stock at an exercise price of $8.00 per share.

* On July 22, 2015, Boulderado purchased 250,000 shares of our common stock and Magnolia purchased 1,200,000 shares of our common stock, each at a purchase price of $10.00 per share, resulting in gross proceeds to us of $14,500,000.

  * In February, 2016, we commenced an offering of shares of our Common Stock to accredited investors, at an offering price of $10.15 per share (the "2016 Offering").  The 2016 Offering ended on June 30, 2016, and pursuant to the 2016 Offering, we received investments totaling $41,863,306 from 33 investors and issued 4,124,463 shares of common stock. Magnolia purchased $26,053,000 and Boulderado purchased $3,553,018 of our common stock in the 2016 Offering.  In addition, trusts controlled by each of Mr. Briner and Mr. Keating purchased $456,750 and another officer of General Indemnity Group, LLC, purchased $49,989 of our common stock in the 2016 Offering.

Our Acquisitions and Equity Investments

Since June, 2015, we have expended over $40 million in the acquisition of businesses in outdoor billboard advertising and in surety insurance and brokerage operations, as well as purchased equity interests in several real estate businesses.  We anticipate seeking further acquisitions in these business areas and to possibly expand into other businesses that we believe have the potential for durable profitability in a very competitive and changing world.

Link Media Holdings:  Since June 19, 2015, in eight unrelated acquisitions, we have acquired numerous billboard structures, many with multiple faces, and related easements, operating assets and rights in some instances to construct additional billboards.  As of January 31, 2017, we owned 491 billboard structures containing a total of 819 faces, of which 26 are digital displays. These billboards are located in Alabama, Florida, Georgia and Wisconsin.  To date, we have paid a combined purchase price of $24,988,460 for these billboards and related assets.
3


General Indemnity Group:  On April 20, 2016, our subsidiary, General Indemnity Group, Inc. ("GIG"), acquired the stock of The Warnock Agency for $1,345,000. The Warnock Agency is a leading innovator in online underwriting and issuance and brokerage of license and permit surety bonds. On May 19, 2016, GIG entered into a Stock Purchase Agreement with the shareholders of United Casualty and Surety Insurance Company ("UC&S"). On December 5, 2016, the Massachusetts Division of Insurance approved the transaction and the transaction was completed on December 7, 2016. The purchase price for the acquired stock was $13,000,000.  UC&S is an insurance company headquartered in Quincy, Massachusetts, specializing in providing surety bonds.  UC&S is authorized to conduct business in nine states and we are currently seeking approval to expand this authorization to all 50 states and the District of Columbia. 

Real Estate: We have made minority equity investments totaling $928,398 in four businesses involved in the acquisition, holding, operation, management, financing and sale of residential real estate and the management of commercial real estate.  The residential real estate investments are projects which we expect to be finite in duration while the two commercial real estate management services investments are anticipated to be perpetual with our share of any recurring earnings over time to accrue indefinitely as long as the management services companies remain in business.
 
 Our Strategy
 
Our principal business objective is to increase shareholder value by profitably growing our existing businesses in outdoor billboard advertising, insurance and real estate.  We believe that we will achieve this objective through organic growth of our existing asset base's ability to produce a growing stream of cash flow, continuing to acquire complementary businesses to expand our geographic reach while allowing us to achieve economies of scale, and acquiring other businesses which meet our investment criteria.  In addition to these completed acquisitions and investments, we are also seeking opportunities to acquire other businesses or significant interests in existing businesses.  We look to acquire businesses in their entirety that have consistently demonstrated earnings power over time, with attractive pretax historical returns on tangible equity capital, while utilizing minimal to no debt, and that are available at a reasonable price.  However, we may consider minority positions in businesses when the economics are favorable.  In certain circumstances, we may enter lines of business directly when the opportunities and economics of doing so are favorable in comparison to acquiring the business, although we have no current plans to commence a new line of business directly.

We carefully manage our liquidity by continuously monitoring cash flow and capital spending and while carrying no or little debt. We believe our focus on maintaining our financial strength and flexibility provides us with the ability to execute our strategy through periods of industry volatility and general economic cycles. We intend to maintain a conservative approach to managing our balance sheet to preserve operational and strategic flexibility. At September 30, 2016, on a pro forma basis, after deducting the $13,000,000 paid in December 2016 to acquire UC&S, we had cash of $31,054,312 and no debt. Subsequently in January 2017, we consummated two additional acquisitions of outdoor billboard assets, from Hartlind Outdoor, LLC in Wisconsin for $2,817,000 and from Clear Channel Outdoor, Inc. in Georgia for $2,983,444.
 
We believe that our ability to identify, execute and integrate acquisitions is a competitive advantage, particularly in businesses such as outdoor billboard advertising where there are a large number of smaller independent operators.  We intend to continue to evaluate potential acquisitions in both our current business sectors and in other lines of business on an opportunistic basis with the goal of acquiring businesses that would complement our existing service offerings, expand our geographic coverage and allow us to earn an appropriate return on invested capital.

Risks Related to Our Business and This Offering
An investment in shares of our common stock involves a high degree of risk, including our limited operating history, our history of operating losses to date, significant competition, the risks associated with acquiring businesses, and other material factors. You should carefully read and consider the section entitled "Risk Factors" following this prospectus summary before making an investment decision. The following considerations, among others, may offset our competitive strengths or have a negative effect on our strategy or operating activities, which could cause a decrease in the price of our common stock and a loss of all or part of your investment:
4


*
We have yet to achieve operating profitability
*
Our continued acquisitions of businesses will likely generate significant depreciation and amortization expense for a significant period of time, thereby reducing future potential profitability
*
We face competition in the markets we currently serve, and many of our competitors have greater market share and financial resources
*
Difficulties managing the growth of our business may adversely affect our financial condition, results of operations and cash
*
Our operations are subject to various governmental regulations that require compliance that can be burdensome, expensive and could adversely affect the feasibility of expanding our operations
*
Our failure to successfully identify, complete and integrate future acquisitions of assets or businesses could reduce future potential earnings, available cash and slow our anticipated growth

 
Corporate Information
 
Boston Omaha Corporation is a Delaware corporation.  Our principal executive offices are located at 292 Newbury Street, Suite 333, Boston, MA 02115. Our telephone number is (857) 256-0079.
 
Our website and the information contained thereon and accessible therefrom are not part of this prospectus and should not be relied upon by prospective investors in connection with any decision to purchase our common shares.
 
Our Relationship with Magnolia and Boulderado
 
We believe that one of our strengths is our relationship with each of Magnolia and Boulderado, which, through their ownership of a majority of our common stock and all of our Class A Common Stock, will continue to be able to 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 matter submitted to our stockholders for approval, including potential mergers or acquisitions, asset sales and other significant corporate transactions. Following the completion of the 2017 Concurrent Offering and this offering, Magnolia and Boulderado will own all of our Class A Common Stock and approximately [___]% and [___]%, respectively, of our common stock, or [___]% and [___]% of our common stock if the underwriters exercise their option to purchase additional shares in full. As a result of the ownership of the Class A common stock from Boulderado and Magnolia, as well as their ownership of our common stock and the voting agreement in place between Boulderado and Magnolia, we expect to be a "controlled company" within the meaning of the corporate governance standards of the NASDAQ on which we have been approved to list our shares and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements. As a result, our stockholders will not have the same protections afforded to stockholders of companies that are subject to such requirements.
 
The interests of Magnolia and Boulderado may not coincide with the interests of other holders of our common stock. Additionally, both 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.
 
See "Risk Factors—Risks Related to This Offering and Owning Our Common Stock."
 
5


Implications of Being An Emerging Growth Company
 
We qualify as an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include:
 
 
 
a requirement to have only two years of audited financial statements and only two years of related selected financial data and management's discussion and analysis of financial condition and results of operations disclosure;
 
 
 
an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002, as amended (the "Sarbanes-Oxley Act");
 
 
 
an exemption from new or revised financial accounting standards until they would apply to private companies and from compliance with any new requirements adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotation;
 
 
 
reduced disclosure about executive compensation arrangements; and
 
 
 
no requirement to seek non-binding advisory votes on executive compensation or golden parachute arrangements.
 
We have elected to adopt certain of the reduced disclosure requirements available to emerging growth companies. As a result of these elections, the information that we provide in this prospectus may be different than the information you may receive from other public companies in which you hold equity interests. In addition, it is possible that some investors will find our common stock less attractive as a result of our elections, which may result in a less active trading market for our common stock and more volatility in our stock price.
 
We may take advantage of these provisions for up to five years or until such earlier time that we are no longer an emerging growth company. We will cease to be an emerging growth company on the earlier of December 31, 2017 or when we have more than $1.0 billion in annual revenue, are deemed to be a large accelerated filer (as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act") or issue more than $1.0 billion of non-convertible debt securities over a three-year period.
 
 
6


The Offering

Issuer
Boston Omaha Corporation
Common stock outstanding immediately before this offering
5,841,815 shares
Common stock offered by us
[_____] shares
Common stock sold in the 2017 Concurrent Offering 
[_____] shares 
Common stock to be outstanding after this offering
[_____] shares
Class A common stock outstanding before and following this offering
1,055,560 shares
Option to purchase additional shares
We have granted to the underwriters a 30-day option to purchase up to [_____] additional shares of our common stock at the initial public offering price less the underwriting discount and commissions.
 
Use of proceeds
We estimate that our net proceeds from this offering, after deducting underwriting discounts and approximately $[___] million of estimated offering expenses, will be approximately $[___] million, assuming the shares are offered at $[___] per share, which is the midpoint of the estimated offering range set forth on the cover page of this prospectus.
 
We intend to use the net proceeds from this offering for general corporate purposes, which may include additional acquisitions, increasing our reserves for insurance regulatory purposes, and minority investments in other businesses.  See "Use of Proceeds."
 
Dividend policy
We do not intend to pay dividends for the foreseeable future. The declaration and payment of any future dividends will be at the sole discretion of our board of directors and will depend upon, among other things, our earnings, financial condition, capital requirements, level of indebtedness, contractual restrictions, restrictions imposed by state insurance commissions with respect to payment of dividends, and other considerations that our board of directors deems relevant.
 
Proposed NASDAQ trading symbol
"BOMN"
Risk factors
For a discussion of risks relating to our company, our indebtedness, our business and an investment in our common stock, see "Risk Factors" and all other information set forth in this prospectus before investing in our common stock.


Unless otherwise indicated, all information in this prospectus excludes (i) up to [________] shares of our common stock that may be sold by us if the underwriters exercise in full their option to purchase additional shares of our common stock, and (ii) up to 105,556 shares of Class A Common Stock issuable upon the exercise of warrants issued to Magnolia and Boulderado.
 
7


Summary of Consolidated Historical and Pro Forma Financial and Other Data
 
The following tables summarize our consolidated historical and pro forma financial and other data and should be read together with "Selected Historical Financial Information of Boston Omaha Corporation," "Unaudited Pro Forma Condensed Combined and Consolidated Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations of Boston Omaha Corporation" and our consolidated financial statements and related notes included elsewhere in this prospectus. We have derived the summary balance sheet data as of December 31, 2015 and the consolidated statement of operations data for 2015 and 2014 from our audited consolidated financial statements included elsewhere in this prospectus. Our historical results set forth below are not necessarily indicative of results to be expected for any future period.
 
Our consolidated financial statements for the period from January 1, 2016 to September 30, 2016 reflect only the historical results of Boston Omaha Corporation prior to our completion of the UC&S transaction.  Our consolidated financial statements for the period from January 1, 2016 through September 30, 2016 include the financial position, results of operations and cash flows of JAG from February 16, 2016 through September 30, 2016.
 
Each of the UC&S and JAG transactions had a material impact on our results of operations in 2016.  The acquisitions of each of Bell Media, LLC, Fair Outdoor, LLC, and I-85 Advertising, LLC in 2015 (the "2015 Billboard Acquisitions") had a material impact on our results of operations in 2015. Accordingly, we have included in this prospectus pro forma financial information which gives effect to the acquisition of the each of UC&S and JAG in 2016, and the 2015 Billboard Acquisitions, as more fully described in the notes below. Our pro forma results set forth below are not necessarily indicative of results to be expected for any future period. See "Unaudited Pro Forma Condensed Combined and Consolidated Financial Information" for additional information.

Schedule of Consolidated Historical and Pro-Forma Financial and Other Data

   
Nine months ended
   
Year ended
   
Year ended
 
   
September 30, 2016
   
December 31 2015
   
December 31, 2014
 
 
                             
(in thousands, except for per share amounts)
 
Pro forma
   
Actual
   
Pro forma
   
Actual
   
Actual
 
Statement of Operations Data:
                             
Revenue
 
$
4,616
   
$
2,550
   
$
5,977
   
$
723
   
$
44
 
Costs of revenue (exclusive of
                                       
depreciation and amortization)
   
2,319
     
874
     
3,222
     
230
     
-
 
Leased employees and professional fees
   
2,210
     
2,114
     
1,714
     
979
     
67
 
Depreciation and amortization
   
1,342
     
1,251
     
1,503
     
458
     
-
 
General and administrative expenses
   
621
     
547
     
471
     
163
     
-
 
Total operating costs and expenses
   
6,492
     
4,786
     
6,910
     
1,830
     
67
 
Operating income (loss)
   
(1,876
)
   
(2,236
)
   
(933
)
   
(1,107
)
   
(23
)
Other income (expense), net
   
(31
)
   
(33
)
   
88
     
82
     
(16
)
Interest expense
   
(4
)
   
(2
)
   
(54
)
   
(22
)
   
(28
)
Total other income (expense)
   
(35
)
   
(35
)
   
34
     
60
     
(44
)
Pre-tax (loss)
   
(1,911
)
   
(2,271
)
   
(899
)
   
(1,047
)
   
(67
)
Provision for income taxes
   
(86
)
   
-
     
(8
)
   
-
     
-
 
Net (loss)
 
$
(1,997
)
 
$
(2,271
)
 
$
(907
)
 
$
(1,047
)
 
$
(67
)
Per Share Data
                                       
Net loss per share
                                       
Basic
 
$
(0.35
)
  $  (0.40  
$
(0.61
)
   (0.71    (0.25
Diluted
 
$
(0.35
)
   (0.40  
$
(0.61
)
   (0.71    (0.25
Weighted average shares outstanding
                                       
Basic
   
5,744,898
       5,744,898      
1,481,310
       1,481,310        266,954  
Diluted
   
5,744,898
       5,744,898      
1,481,310
       1,481,310        266,954  
Statement of Cash Flows Data:
                                       
Cash flows from operating activities
         
$
(1,098
)
         
$
(813
)
 
$
(50
)
Cash flows from investing activities
           
(11,476
)
           
(10,720
)
   
-
 
Cash flows from financing activities
           
41,761
             
24,721
     
24
 
Balance Sheet Data (at end of period):
                                       
Total assets
         
$
63,663
           
$
23,785
   
$
49
 
Long-term payable
           
127
             
-
     
-
 
Total liabilities
           
571
             
290
     
516
 
Total stockholders' equity (deficit)
           
63,092
             
23,495
     
(467
)

 

 

8


RISK FACTORS
 
An investment in our common stock involves a high degree of risk. You should carefully consider the following information, together with other information in this prospectus, before investing in shares of our common stock. If any of the following risks or uncertainties actually occur, our business, financial condition, prospects, results of operations and cash flow could be materially adversely affected. Additional risks or uncertainties not currently known to us, or that we deem immaterial, may also have a material adverse effect on our business financial condition, prospects or results of operations. We cannot assure you that any of the events discussed in the risk factors below will not occur. In that case, the market price of our common stock could decline and you may lose all or a part of your investment.
 
RISKS RELATED TO THE COMPANY AND OUR BUSINESS

We are reliant on the success of our expansion plans.

Our growth strategy depends to a significant degree upon our ability to successfully acquire, develop and profitably operate new businesses, in both the outdoor billboard and insurance industries and in other industries and markets which we may choose to enter. The successful acquisition and development of new businesses will depend on a number of factors, including the identification and availability of suitable assets, businesses or acquisition candidates, the determination of new industries in which to expand, the availability of adequate financing, the hiring, training and retention of qualified employees, the ability of management to effectively control the expansion process, and other factors, some or all of which may be beyond our control. As a result, there can be no assurance that we will be able to implement our growth strategy, to acquire new businesses on a timely and cost-efficient basis or to operate our new businesses profitably. If the expected operating efficiencies from such transactions do not materialize, if we fail to integrate new businesses into our existing portfolio, or if the costs of such integration exceed expectations, our operating results and financial condition would be adversely affected.

Increased operating expenses associated with the expansion of our business may negatively impact our operating income.

Increased operating expenses associated with any expansion of our business may negatively impact our income as we, among other things:
 
*
seek to acquire related businesses;
*
expand geographically;
*
make significant capital expenditures to support our ability to provide services in our existing businesses; and
*
incur increased general and administrative expenses as we grow.
 
As a result of these factors, we may not achieve, sustain or increase our profitability on an ongoing basis.

We have limited experience in acquiring other companies and businesses, and we may have difficulty integrating the operations of companies or businesses that we may acquire and may incur substantial costs in connection therewith.

A significant component of our growth strategy is the acquisition of other operations. Our experience acquiring companies has been relatively limited to date. We have evaluated, and expect to continue to evaluate, a wide array of potential strategic transactions. From time to time, we may engage in discussions regarding potential acquisitions. The costs and benefits of future acquisitions are uncertain. Any of these transactions could be material to our business, financial condition and results of operations. In addition, the process of integrating the operations of an acquired company may create unforeseen operating difficulties and expenditures. The key areas where we may face risks and uncertainties include:
9


*
the need to implement or remediate appropriate controls, procedures and policies at companies that, prior to the acquisition, lacked these controls, procedures and policies;
*
disruption of ongoing business, diversion of resources and of management time and focus from operating our business to acquisitions and integration challenges;
*
our ability to achieve anticipated benefits of acquisitions by successfully marketing the service offerings of acquired businesses to our existing partners and customers, or by successfully marketing our existing service offerings to customers and partners of acquired businesses;
*
the negative impact of acquisitions on our results of operations as a result of large one-time charges, substantial debt or liabilities acquired or incurred, amortization or write down of amounts related to deferred compensation, goodwill and other intangible assets, or adverse tax consequences, substantial depreciation or deferred compensation charges;
*
the need to ensure that we comply with all regulatory requirements in connection with and following the completion of acquisitions;
*
the possibility of acquiring unknown or unanticipated contingencies or liabilities;
*
retaining employees and clients and otherwise preserving the value of the assets of the businesses we acquire; and
*
the need to integrate each acquired business's accounting, information technology, human resource and other administrative systems to permit effective management.
 
If we identify appropriate acquisition targets, we may be unable to acquire businesses on terms that we consider acceptable due to a variety of factors, including competition from other strategic buyers or financial buyers. Furthermore, in order to achieve the growth we seek, we may acquire numerous smaller market participants, which could require significant attention from management and increase risks, costs and uncertainties associated with integration.

The businesses and other assets we acquire in the future may not achieve sufficient revenue or profitability to justify our investment, and any difficulties we may encounter in the integration process could interfere with our operations and reduce operating margins. Acquisitions could also result in dilutive issuance of our equity securities, incurrence of debt and contingent liabilities and fluctuations in quarterly results and expenses.

Adverse economic conditions could negatively affect our results of operations and financial condition.

Our results of operations are sensitive to changes in overall economic conditions that impact consumer and commercial spending, including discretionary spending. Future economic conditions such as employment levels, business conditions, interest rates and tax rates could reduce our revenues. A general reduction in the level of business activity could adversely affect our financial condition and/or results of operations.

Our unaudited pro forma condensed combined and consolidated financial information may not be representative of our future results.
 
The pro forma financial information included in this prospectus is constructed from our consolidated financial statements and the historical financial statements of JAG and UC&S prior to our acquisition of these businesses and does not purport to be indicative of the financial information that will result from our future operations. The pro forma financial information presented in this prospectus is based in part on certain assumptions that we believe are reasonable. We cannot assure you that our assumptions will prove to be accurate over time. Accordingly, the pro forma financial information included in this prospectus does not purport to be indicative of what our results of operations and financial condition would have been had we and these acquired businesses been a combined entity during the period presented, or what our results of operations and financial condition will be in the future. The challenges associated with integrating previously independent businesses makes evaluating our business and our future financial prospects difficult. Our potential for future business success and operating profitability must be considered in light of the risks, uncertainties, expenses and difficulties typically encountered by other companies following business combinations.
10


We have incurred losses since inception and we anticipate that we will continue to incur losses for the foreseeable future.

We have incurred losses in each year since our formation in 2009. Our net loss for the nine months ended September 30, 2016 was $2.27 million and for the fiscal years ended December 31, 2015 and 2014 were $1.0 million and $67,000, respectively. We have funded our operations to date principally from the sale of securities.  In addition, as we acquire other businesses, we incur ongoing depreciation and amortization charges, which are typically spread over several years, as well as the costs of completing such acquisitions, which are expensed as incurred.  For these reasons, we may continue to incur significant operating losses in the medium term. These losses, among other things, have had and will continue to have an adverse effect on our stockholders' equity and working capital.

We face intense competition, including competition from companies with significantly greater resources than us, and if we are unable to compete effectively with these companies, our market share may decline and our business could be harmed.

The outdoor billboard industry and insurance industries are highly competitive.  There is a concentration in the ownership of billboards in the geographic markets in which we compete and several larger companies dominate the surety insurance business.  Further, new competitors may regularly enter the market.  Any additional industries or markets that we may enter through future acquisitions will also likely be occupied by established competitors.  Many of our competitors have substantially greater financial, marketing, product development and human resources than us.  Accordingly, even if there is a large market for our products and services in the industries in which we compete, there can be no assurance that our products and services will be purchased by consumers at a rate sufficient for us to achieve our growth objectives.

Our management recognizes that we will, therefore, be forced to compete primarily on the basis of price, location, performance, service, and other factors.  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.  This approach requires that our management perform at a high level and is fraught with risks, many of which are beyond our control or ability to foresee.

Restrictions on outdoor advertising of tobacco, alcohol and other products may restrict the base of clients that can advertise with us.

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.  Alcohol products and other products may be future targets of advertising bans, and legislation, litigation or out-of-court settlements may result in the implementation of additional advertising restrictions that impact our business.  Any significant reduction in alcohol-related advertising or the advertising of other products due to content-related restrictions could negatively impact our revenues generated from such businesses and cause an increase in the existing inventory of available outdoor billboard space throughout the industry.

If actual insurance claims exceed our claims and claim adjustment expense reserves, or if changes in the estimated level of claims and claim adjustment expense reserves are necessary, our financial results could be materially and adversely affected.    

As we grow our insurance operations, we will be establishing claims and claims adjustment expense reserves.  These reserves will not represent an exact calculation of liability, but instead will represent management estimates of what the ultimate settlement and administration of claims will cost, generally utilizing actuarial expertise and projection techniques, at a given accounting date.

The process of estimating claims and claim adjustment expense reserves involves a high degree of judgment and is subject to a number of variables. These variables can be affected by both internal and external events, such as: changes in claims handling procedures; adverse changes in loss cost trends, including inflationary pressures; economic conditions including general inflation; legal trends and legislative changes; and varying judgments and viewpoints of the individuals involved in the estimation process, among others. The impact of many of these items on ultimate costs for claims and claim adjustment expenses will be difficult to estimate. We 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).
11

 
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.

We will attempt to consider all significant facts and circumstances known at the time claims and claim adjustment expense reserves are established or reviewed. Due to the recent acquisition of our insurance subsidiary and the inherent uncertainty underlying claims and claim adjustment expense reserve estimates, the final resolution of the estimated liability for claims and claim adjustment expenses will likely be higher or lower than the related claims and claim adjustment expense reserves at the reporting date. Therefore, actual paid losses in the future may yield a materially different amount than will be currently reserved.

Because of the uncertainties set forth above, additional liabilities resulting from an accumulation of insured events, may exceed the current related reserves. In addition, our estimate of claims and claim adjustment expenses may change. These additional liabilities or increases in estimates, or a range of either, cannot now be reasonably estimated and could materially and adversely affect our results of operations and/or our financial position.

Our efforts to develop new products or expand in targeted markets may not be successful and may create enhanced risks.    

A number of our planned business initiatives in the insurance markets we intend to serve will involve developing new products or expanding existing products in targeted markets. This includes the following efforts, from time to time, to protect or grow market share:

*
We may develop products that insure risks we have not previously insured, contain new coverage or coverage terms or contain different commission terms. 
*
We may refine our underwriting processes.
*
We may seek to expand distribution channels.
*
We may focus on geographic markets within or outside of the United States where we have had relatively little or no market share.

We may not be successful in introducing new products or expanding in targeted markets and, even if we are successful, these efforts may create enhanced risks. Among other risks:

*
Demand for new products or in new markets may not meet our expectations. 
*
To the extent we are able to market new products or expand in new markets, our risk exposures may change, and the data and models we use to manage such exposures may not be as sophisticated or effective as those we use in existing markets or with existing products. This, in turn, could lead to losses in excess of our expectations.
*
Models underlying underwriting and pricing decisions may not be effective. 
*
Efforts to develop new products or markets have the potential to create or increase distribution channel conflict.
*
To develop new products or markets, we may need to make substantial capital and operating expenditures, which may also negatively impact results in the near term.

If our efforts to develop new products or expand in targeted markets are not successful, our results of operations could be materially and adversely affected.

We may lack operational control over certain companies in which we invest.

We have made, and may continue to make, certain strategic investments in various businesses without acquiring all or a majority ownership stake in those businesses.  To the extent that such investments represent a minority or passive stake in any business, we may have little to no participation, input or control over the management, policies, and operations of such business.  Further, we may lack sufficient ownership of voting securities to impact, without the vote of additional equity holders, any matters submitted to shareholders or members of such business for a vote.
12


There is inherent risk in making minority equity investments into companies over which we have little to no control.  Without control of the management and decision-making of these businesses, we cannot control their direction, strategy, policies and business plans, and we may be powerless to improve any declines in their performance, operating results and financial condition.  If any company in which we are a minority investor suffers adverse effects, it may not be able to continue as a going business concern, and we may lose our entire investment.

Governmental regulations could adversely affect our business, financial condition or results of operations.

Our billboard businesses are regulated by governmental authorities in the jurisdictions in which we operate.  These regulations could limit our growth by putting constraints on the number, location and timing of billboards we wish to erect.  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.

We will also be subject to maintaining compliance within the highly regulated insurance industry as we continue our pursuit of opportunities in that market, including the maintenance of certain levels of operating capital and reserves.  Generally, the extensive regulations are designed to benefit or protect policyholders, rather than our investors, or to reduce systemic financial risk.  Failure to comply with these regulations could lead to disciplinary action, the imposition of penalties and the revocation of our authorization to operate in the insurance industry.  Changes to the regulatory environment in the insurance industry may cause us to adjust our views or practices regarding regulatory risk management, and necessitate changes to our operations that may limit our growth or have an adverse impact on our business. 

In addition, certain of the other new markets and industries that we may choose to enter may be regulated by a variety of federal, state and local agencies.

We may need a significant amount of additional capital, which could substantially dilute your investment.

We may need significant additional capital in the future to continue our planned acquisitions.  No assurance can be given that we will be able to obtain such funds upon favorable terms and conditions, if at all.  Failure to do so could have a material adverse effect on our business.  To the extent we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution. We may sell common stock, convertible securities or other equity securities in one or more transactions that may include voting rights (including the right to vote as a series on particular matters), preferences as to dividends and liquidation, and conversion and redemption rights, subject to applicable law, and at prices and in a manner we determine from time to time.

Such issuances and the exercise of any convertible securities will dilute the percentage ownership of our stockholders, and may affect the value of our capital stock and could adversely affect the rights of the holders of such stock, thereby reducing the value of such stock.  Moreover, any exercise of convertible securities may adversely affect the terms upon which we will be able to obtain additional equity capital, since the holders of such convertible securities can be expected to exercise them at a time when we would, in all likelihood, be able to obtain any needed capital on terms more favorable to us than those provided in such convertible securities.

If we sell shares or other equity securities in one or more other transactions, or issue stock or stock options pursuant to any future employee equity incentive plan, investors may be materially diluted by such subsequent issuances.
 
We may be unable to employ a sufficient number of key employees, technical personnel and other skilled or qualified workers.
  The delivery of our services and products requires personnel with specialized skills and experience.  Workers may choose to pursue employment with our competitors or in fields that offer a more desirable work environment. Our ability to be productive and profitable will depend upon our ability to employ and retain skilled workers. In addition, our ability to further expand our operations according to geographic demand for our services depends in part on our ability to relocate or increase the size of our skilled labor force. The demand for skilled workers in our areas of operations can be high, the supply may be limited and we may be unable to relocate our employees from areas of lower utilization to areas of higher demand. A significant increase in the wages paid by competing employers could result in a reduction of our skilled labor force, increases in the wage rates that we must pay, or both. Further, a significant decrease in the wages paid by us or our competitors as a result of reduced industry demand could result in a reduction of the available skilled labor force, and there is no assurance that the availability of skilled labor will improve following a subsequent increase in demand for our services or an increase in wage rates. If any of these events were to occur, our capacity and profitability could be diminished and our growth potential could be impaired.
13

  We depend heavily on the efforts of executive officers, managers and other key employees to manage our operations. The unexpected loss or unavailability of key members of management or technical personnel may have a material adverse effect on our business, financial condition, prospects or results of operations.
 Disruptions or similar problems could increase our expenses.
A natural disaster or an act of terrorism could cause substantial delays in our operations, damage or destroy our equipment or facilities and cause us to incur additional expenses and lose revenue. The occurrence of such extraordinary events may impact our properties specifically or the economy generally, and may substantially decrease the use of and demand for advertising, the market for insurance or negatively impact other areas of our business.  The occurrence of future terrorist attacks, severe weather conditions, military actions, contagious disease outbreaks or similar events cannot be predicted, and their occurrence can be expected to cause local or nationwide disruptions of commercial activities, which may expose us to substantial liabilities, decrease our revenues or increase our expenses. The insurance we maintain against natural disasters may not be adequate to cover our losses in any particular case, which would require us to expend significant resources to replace any destroyed assets, thereby materially and adversely affecting our financial condition and prospects.

Cash and cash equivalents represent one of our largest assets and we may be at risk of being uninsured for a large portion of such assets.
 
A very significant portion of our assets are currently held in cash at a few banking institutions.  As a result, a significant portion of our cash and cash equivalents may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation ("FDIC") insurance limits. If the institution at which we have placed our funds were to become insolvent or fail, we could be at risk for losing a substantial portion of our cash deposits, or incur significant time delays in obtaining access to such funds. In light of the limited amount of federal insurance for deposits, even if we were to spread our cash assets among several institutions, we would remain at risk for the amount not covered by insurance. 

We are subject to extensive financial reporting and related requirements for which our accounting and other management systems and resources may not be adequately prepared.
 
We are subject to reporting and other obligations under the Securities Exchange Act of 1934, as amended, including the requirements of Section 404 of the Sarbanes-Oxley Act. Section 404 requires us to conduct an annual management assessment of the effectiveness of our internal controls over financial reporting. These reporting and other obligations place significant demands on our management, administrative, operational and accounting resources. In order to comply with these requirements, we may need to (i) upgrade our systems, (ii) implement additional financial and management controls, reporting systems and procedures, (iii) implement an internal audit function, and (iv) hire additional accounting, internal audit and finance staff. If we are unable to accomplish these objectives in a timely and effective manner, our ability to comply with our financial reporting requirements and other rules that apply to reporting companies could be impaired. Any failure to maintain effective internal controls could have a negative impact on our ability to manage our business and on our stock price.

 
14

We may be at risk to accurately report financial results or detect fraud if we fail to implement and maintain an effective system of internal controls.
 
As directed by Section 404 of the Sarbanes-Oxley Act of 2002, the SEC adopted rules requiring public companies to include a report that contains an assessment by management on our internal control over financial reporting in their annual and quarterly reports on Form 10-K and 10-Q. While we are consistently working on improvements and conducting rigorous reviews of our internal controls over financial reporting, our independent auditors may interpret Section 404 requirements and apply related rules and regulations differently. We are a smaller reporting company not currently subject to having our outside auditors attest to our internal controls. When we do become subject to these requirements, if our independent auditors are not satisfied with our internal control over financial reporting or with the level at which it is documented, operated or reviewed, they may decline to accept management's assessment and not provide an attestation report on our internal control over financial reporting. Additionally, if we are not able to meet all the requirements of Section 404 in a timely manner or with adequate compliance, we might be subject to sanctions or investigation by regulatory authorities such as the SEC.  We cannot assure you that significant deficiencies or material weaknesses in our disclosure controls and internal control over financial reporting will be identified in the future. Also, future changes in our accounting, financial reporting, and regulatory environment may create new areas of risk exposure. Failure to adequately implement our existing control environment accordingly may impair our controls over financial reporting and cause our investors to lose confidence in the reliability of our financial reporting which may adversely affect our stock price.

Our executive officers and directors may experience a conflict of interest between their duties to us and to affiliated parties.

Our Co-Chief Executive Officers, Adam K. Peterson and Alex B. Rozek, are each managing members of separate investment management entities, which are our two largest shareholders.  While we have deemed that the outside business endeavors of our management team do not currently constitute a conflict of interest, it is possible that a conflict of interest could arise between the performance of our executive management team and their roles as managing members of entities which together own a majority of our outstanding capital stock.  Such conflicts of interest could have a material adverse effect on our business and operations.  We have the authority to engage various contracting parties, which may be affiliates of ours or of our directors.  As such, our directors may have a conflict of interest between their fiduciary duties to manage the business for our benefit and our stockholders and their direct and indirect affiliates' interests in establishing and maintaining relationships with us and in obtaining compensation for services rendered to us.  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.
 
RISKS RELATED TO THIS OFFERING AND OWNERSHIP OF OUR COMMON STOCK

Investors should not rely on the accuracy of forward-looking statements made by us.

To the extent that we or any of our officers were to provide any projections, financial forecasts, or other forward-looking statements to investors in this offering, investors must recognize that any such forward-looking statements are based upon assumptions and estimates.  We cannot make any representations as to the accuracy and reasonableness of such assumptions or the forward-looking statements based thereon.  The validity and accuracy of those forward-looking statements will depend in large part on future events that we cannot foresee, and may or may not prove to be correct.  Consequently, there can be no assurance that our actual operating results will correspond to any of the projections or forecasts.  Accordingly, an investment in our common stock should not be made in reliance on projections or forecasts prepared by us.

We are a "controlled company" within the meaning of the NASDAQ rules and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements. You will not have the same protections afforded to stockholders of companies that are subject to such requirements.
 
Upon completion of this offering, Magnolia and Boulderado will control a majority of our outstanding common stock and, through their ownership of our Class A common stock, will control a majority of all voting. As a result, we are a "controlled company" within the meaning of the NASDAQ rules. Under the NASDAQ rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements, including:
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the requirement that a majority of the board of directors consist of independent directors;
 
 
 
the requirement that we have director nominees selected or recommended for the board's selection, either by a majority vote of only the independent directors or by a nominations committee comprised solely of independent directors, with a written charter or board resolution addressing the nominations process; and
 
 
 
the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities.
  
Following this offering, we intend to utilize these exemptions. As a result, we will not have a majority of independent directors nor will our nominating and corporate governance and compensation committees consist entirely of independent directors. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the NASDAQ corporate governance requirements.

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.
 
Provisions in our certificate of incorporation and our bylaws, may discourage, delay or prevent a merger, acquisition or other change in control that some stockholders may consider favorable, including transactions in which you might otherwise receive a premium for your shares of our common stock. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, possibly depressing the market price of our common stock.
 
In addition, these provisions may frustrate or prevent any attempts by our stockholders to replace members of our board of directors. Because our board of directors is responsible for appointing the members of our management team, these provisions could in turn affect any attempt by our stockholders to replace members of our management team.
    Our board of directors is authorized to issue preferred stock without stockholder approval, which could be used to institute a "poison pill" that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our board of directors.  Our certificate of incorporation authorizes our board of directors to issue up to 1,000,000 shares of preferred stock. The preferred stock may be issued in one or more series, the terms of which may be determined by our board of directors at the time of issuance or fixed by resolution without further action by the stockholders. These terms may include voting rights, preferences as to dividends and liquidation, conversion rights, redemption rights and sinking fund provisions. The issuance of preferred stock could diminish the rights of holders of our common stock, and, therefore, could reduce the value of our common stock. In addition, specific rights granted to holders of preferred stock could be used to restrict our ability to merge with, or sell assets to, a third party. The ability of our board of directors to issue preferred stock could delay, discourage, prevent or make it more difficult or costly to acquire or effect a change in control, thereby preserving the current stockholders' control.
Taking advantage of the reduced disclosure requirements applicable to "emerging growth companies" may make our common stock less attractive to investors.
 
As a company with less than $1.0 billion in revenue during our last fiscal year, we qualify as an "emerging growth company" as defined in the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include:
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we are not required to engage an auditor to report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;
 
 
 
we are not required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);
 
 
 
we are not required to submit certain executive compensation matters to stockholder advisory votes, such as "say-on-pay," "say-on-frequency" and "say-on-golden parachutes"; and
 
 
 
we are not required to disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer's compensation to median employee compensation.
 
We may take advantage of these provisions until the last day of our fiscal year following the fifth anniversary of the completion of this offering or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1.0 billion in annual revenue, have more than $700 million in market value of our common stock held by non-affiliates, or issue more than $1.0 billion of non-convertible debt over a three-year period. We may choose to take advantage of some but not all of these reduced burdens. We have elected to adopt the reduced disclosure in this prospectus.
 
The JOBS Act permits an emerging growth company like us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. Our qualification as an emerging growth company ends on December 31, 2017.
 
We cannot predict if investors will find our common stock less attractive if we elect to rely on these exemptions, or if taking advantage of these exemptions would result in less active trading or more volatility in the price of our common stock.
We expect that our stock price will fluctuate significantly and investors may not be able to resell their shares at or above the initial public offering price.
The trading price of our common stock following this offering may be highly volatile and could be subject to wide fluctuations in response to various factors, many of which are beyond our control. The stock market in general has experienced extreme volatility that has often been unrelated to the operating performance of particular companies. As a result of this volatility, you may not be able to sell your common stock at or above the initial public offering price. The market price for our common stock may be influenced by many factors, including those discussed in this "Risk Factors" section and elsewhere in this prospectus and the following: 
*
success of competitive products or services;
 
*
regulatory or legal developments in the United States, especially changes in laws or regulations applicable to our products and services; 

*
additions or departures of key management personnel; 

*
introductions or announcements of new products 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; 

*
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; 

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*
market conditions in the billboard, insurance, 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 common stock; 

*
significant lawsuits, including stockholder litigation; and 

*
general economic, industry and market conditions.

If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially. Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our stock to fluctuate substantially. We believe that quarterly comparisons of our financial results are not necessarily meaningful and should not be relied upon as an indication of our future performance.
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 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. If any of our stockholders were to bring a lawsuit against us, the defense and disposition of the lawsuit could be costly and divert the time and attention of our management and harm our operating results.
An active trading market for our common stock may not develop.
Prior to this offering, there has been no active trading market for our common stock and an active trading market for our shares may never develop or be sustained following this offering. The initial price to the public for our common stock was determined through negotiations with the underwriters, and the negotiated price may not be indicative of the market price of the common stock after the offering. The lack of an active market may impair investors' ability to sell their shares at the time they wish to sell them or at a price that they consider reasonable, may reduce the market value of their shares and may impair our ability to raise capital.
We will continue to incur increased costs as a result of operating as a public company in the United States.

As a newly public company in the United States, we have incurred and will continue to incur significant legal, accounting, insurance and other expenses, including costs associated with U.S. public company reporting requirements. We will also incur costs associated with listing requirements, the Sarbanes-Oxley Act and related rules implemented by the SEC. The expenses incurred by U.S. public companies generally for reporting and corporate governance purposes have been increasing. We expect these rules and regulations would increase our legal and financial compliance costs and to make some activities more time-consuming and costly, although we are currently unable to estimate these costs with any degree of certainty. In estimating these costs, we took into account expenses related to insurance, legal, accounting, and compliance activities, as well as other expenses not currently incurred. These laws and regulations could also make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as our executive officers. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our common stock, fines, sanctions and other regulatory action and potentially civil litigation.
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If a substantial number of shares becomes available for sale and are sold in a short period of time, the market price of our common stock could decline.
If our current shareholders sell substantial amounts of our common stock in the public market following this offering, the market price of our common stock could decrease. The perception in the public market that our current shareholders might sell shares of common stock could also create a perceived overhang and depress our market price. Upon completion of this offering, we will have [_______] shares of common stock outstanding of which [_______] shares will be held by our two largest current shareholders. Prior to this offering, we and our two largest shareholders will have agreed with the underwriters to a "lock-up" period, meaning that such parties may not, subject to certain exceptions, sell any of their existing shares of our common stock without the prior written consent of representatives of the underwriters for at least 180 days after the date of this prospectus. Pursuant to this agreement, among other exceptions, we may enter into an agreement providing for the issuance of our common stock in connection with the acquisition, merger or joint venture with another publicly traded entity during the 180-day restricted period after the date of this prospectus. In addition, all of our existing shareholders will be subject to the holding period requirement of Rule 144 under the Securities Act ("Rule 144"), as described in "Shares Eligible for Future Sale." When the lock-up agreements expire, these shares will become eligible for sale, in some cases subject to the requirements of Rule 144.
If equity research analysts do not publish research or reports about our business or if they issue unfavorable commentary or downgrade our common shares, the market price of our common stock could decline.
The trading market for our common shares likely will be influenced by the research and reports that equity and debt research analysts publish about the industry, us and our business. The market price of our common stock could decline if one or more securities analysts downgrade our shares or if those analysts issue a sell recommendation or other unfavorable commentary or cease publishing reports about us or our business. If one or more of the analysts who elect to cover us downgrade our shares, the market price of our common stock would likely decline.
Our directors have limited liability under Delaware law.

Pursuant to our Amended and Restated Certificate of Incorporation, as amended, and Delaware law, our directors are not liable to us or our stockholders for monetary damages for breach of fiduciary duty, except for: liability in connection with a breach of the duty of loyalty; acts or omissions not in good faith; acts or omissions that involve intentional misconduct or a knowing violation of law; dividend payments or stock repurchases that are illegal under Delaware law; or any transaction in which a director has derived an improper personal benefit. Accordingly, except in those circumstances, our directors will not be liable to us or our stockholders for breach of their duty.

Our two principal stockholders currently control all voting matters brought before our shareholders, account for half of the votes on our board of directors, and certain actions by our board of directors cannot be taken without the consent of these two directors .

Our board of directors, which currently consists of the two directors appointed by the holders of the Company's Class A common stock voting as a separate class and two additional directors, approves the Company's annual budget, compensation matters, and major agreements. Currently, our two largest shareholders, Boulderado and Magnolia, collectively own all of our Class A common stock and a majority of our common stock, and will continue to own all of the outstanding Class A common stock and a majority of the outstanding common stock following the completion of the offering.  On its own, Magnolia will own a majority of our outstanding capital stock upon completion of the offering.  Also, each share of Class A common stock is entitled to cast 10 votes for all matters on which our stockholders vote, while each share of common stock is entitled to cast only one vote.  For the foreseeable future, the two principal shareholders will likely continue to control virtually all matters submitted to shareholders for a vote; may elect all of our directors; and, as a result, may control our management, policies, and operations.  Our other shareholders will not have voting control over our actions, including the determination of other industries and markets that we may enter.
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The interests of Magnolia and Boulderado may not coincide with the interests of other holders of our common stock.  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.  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.  So long as each of the two principal shareholders continue to own our Class A common stock or a majority of our outstanding 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.

Certain actions cannot be taken without the approval of our principal stockholders due to their ownership of Class A common stock.

Magnolia and Boulderado, the holders of record of the shares of Class A Common Stock, exclusively and as a separate class, are entitled to elect two directors to our board of directors (the "Class A Directors"), which number of Class A Directors may be reduced pursuant to the terms and conditions of the Voting and First Refusal Agreement between Boulderado and Magnolia.  Any Class A 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 A 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.

 At any time when shares of Class A common stock are outstanding, we may not, without the affirmative vote of all of the Class A Directors:
 
*            Amend, alter or otherwise change the rights, preferences or privileges of the Class A 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 A 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 or issue additional shares of Class A 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.
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*            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 our directors, officers, or employees or any "associate" (as defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended) 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.

Our board of directors is not composed of a majority of independent directors which poses a significant risk for us from a corporate governance perspective.
 
Our co-chief executive officers serve as two of our four directors. A third director is the principal of a real estate brokerage and management company, in which we currently have a 30% ownership interest and a separate real estate entity in which we own a 15% equity interest, and is also trustee of a trust which owns shares of our common stock.  Our directors and executive officers are required to make interested party decisions, such as the approval of related party transactions, their level of compensation, and oversight of our accounting function. Our two majority shareholders also exercise control over all matters requiring stockholder approval, including the nomination of directors and the approval of significant corporate transactions. We have chosen not to implement various corporate governance measures at this time, the absence of which may cause stockholders to have more limited protections against transactions implemented by our board of directors, conflicts of interest and similar matters. Stockholders should bear in mind our current lack of corporate governance measures in formulating their investment decisions.

Delaware law and certain provisions in our certificate of incorporation and bylaws may prevent efforts by our stockholders to change the direction or management of the Company.

We are a Delaware corporation, and the anti-takeover provisions of Delaware law impose various impediments to the ability of a third party to acquire control of us, even if a change of control would be beneficial to our existing stockholders. In addition, our certificate of incorporation, as amended and bylaws contain provisions that may make the acquisition of the Company more difficult, including, but not limited to, the following:

*
setting forth specific procedures regarding how our stockholders may nominate directors for election at stockholder meetings;
*
permitting our board of directors to issue preferred stock without stockholder approval; and
*
limiting the rights of stockholders to amend our bylaws.
 
These provisions could discourage, delay or prevent a transaction involving a change in control of our company. These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing and cause us to take other corporate actions you desire. In addition, because our board of directors is responsible for appointing the members of our management team, these provisions could in turn affect any attempt by our stockholders to replace current members of our management team.
Because we do not intend to pay dividends for the foreseeable future, you may not receive any return on investment unless you sell your common stock for a price greater than that which you paid for it.
  We do not intend to pay dividends for the foreseeable future, and our stockholders will not be guaranteed, or have contractual or other rights, to receive dividends. Our board of directors may, in its discretion, modify or repeal our dividend policy. The declaration and payment of dividends depends on various factors, including: our net income, financial condition, cash requirements, future prospects and other factors deemed relevant by our board of directors.
  
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  Under the Delaware General Corporate Law (the "DGCL"), our board of directors may not authorize payment of a dividend unless it is either paid out of our surplus, as calculated in accordance with the DGCL, or if we do not have a surplus, it is paid out of our net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year.
If you purchase shares of common stock sold in this offering, you will experience immediate and substantial dilution.
Our existing shareholders have paid substantially less than the initial public offering price of our common stock. The public offering price of our common stock will be substantially higher than the tangible book value per share of our outstanding common stock. Assuming an initial public offering price of $[__] per share, the midpoint of the range on the cover of this prospectus, purchasers of our common stock will effectively incur dilution of $[__] per share in the net tangible book value of their purchased shares. The shares of our common stock owned by existing shareholders will receive a material decrease in the net tangible book value per share. You may experience additional dilution if we issue common stock in the future. As a result of this dilution, you may receive significantly less than the full purchase price you paid for the shares in the event of a liquidation. See "Dilution."
Our authorized preferred stock exposes holders of our common stock to certain risks.

Our certificate of incorporation, as amended, authorizes the issuance of up to 1,000,000 shares of preferred stock, par value $0.001 per share.  The authorized but un-issued preferred stock constitutes what is commonly referred to as "blank check" preferred stock.  This type of preferred stock may be issued by the board of directors from time to time on any number of occasions, without shareholder approval, as one or more separate series of shares comprised of any number of the authorized but un-issued shares of preferred stock, designated by resolution of the board of directors stating the name and number of shares of each series and setting forth separately for such series the relative rights, privileges and preferences thereof, including, if any, the: (i) rate of dividends payable thereon; (ii) price, terms and conditions of redemption; (iii) voluntary and involuntary liquidation preferences; (iv) provisions of a sinking fund for redemption or repurchase; (v) terms of conversion to common stock, including conversion price, and (vi) voting rights.  Such preferred stock may provide our board of directors the ability to hinder or discourage any attempt to gain control of us by a merger, tender offer at a control premium price, proxy contest or otherwise.  Consequently, the preferred stock could entrench our management.  The market price of our common stock could be depressed to some extent by the existence of the preferred stock.  As of the date of this offering, no shares of preferred stock had been issued.
You may be diluted by the future issuance of additional common stock in connection with acquisitions or otherwise.
  After this offering, we will have [________] shares of common stock authorized but unissued under our certificate of incorporation. We will be authorized to issue these shares of common stock and options, rights, warrants and appreciation rights relating to common stock for consideration and on terms and conditions established by our board of directors in its sole discretion, whether in connection with acquisitions or otherwise. Any common stock that we issue would dilute the percentage ownership held by the investors who purchase common stock in this offering.
  In the future, we may also issue our securities, including shares of our common stock, in connection with investments or acquisitions. We regularly evaluate potential acquisition opportunities, including ones that would be significant to us, and we are currently participating in processes regarding several potential acquisition opportunities, including ones that would be significant to us. We cannot predict the timing of any contemplated transactions, and none are currently probable, but any pending transaction could be entered into as soon as shortly after the closing of this offering. The amount of shares of our common stock issued in connection with an investment or acquisition could constitute a material portion of our then-outstanding shares of common stock. Any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to you.


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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
This prospectus contains forward-looking statements. All statements other than statements of historical facts contained in this prospectus, including statements regarding our future operating results and financial position, business strategy, and plans and objectives of management for future operations, are forward-looking statements. Our forward-looking statements are generally accompanied by words such as "may," "should," "expect," "believe," "plan," "anticipate," "could," "intend," "target," "goal," "project," "contemplate," "believe," "estimate," "predict," "potential," or "continue" or the negative of these terms or other similar expressions. Any forward-looking statements contained in this prospectus speak only as of the date on which we make them and are based upon our historical performance and on current plans, estimates and expectations. Forward-looking statements contained in this prospectus include, but are not limited to, statements about:
 
 
 
the competitive nature of the industries in which we conduct our business;
 
 
 
general business and economic conditions;
  
 
 
demand for services in our industry;
 
 
 
our ability to successfully integrate acquired businesses;
 
 
 
business strategy;
 
 
 
pricing pressures and competitive factors;
 
 
 
the effect of a loss of, or financial distress of, any reinsurance company which we rely on for our insurance operations;
 
 
 
our ability to obtain or renew customer contracts;
 
   
 
the market price and availability of materials or equipment;
 
 
 
increased costs as the result of being a public company;
 
 
 
planned acquisitions and future capital expenditures;
 
 
 
technology;
 
 
 
financial strategy, liquidity, capital required for our ongoing operations and acquisitions, and our ability to raise additional capital;
  
 
 
ability to obtain permits, approvals and authorizations from governmental and third parties, and the effects of government regulation;
 
 
 
dividends;
 
     
  
 
future operating results; and
 
 
 
plans, objectives, expectations and intentions.
 
We caution you that the foregoing list may not contain all of the forward-looking statements made in this prospectus.
 
You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this prospectus primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and other factors described in the section entitled "Risk Factors" and elsewhere in this prospectus. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this prospectus. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements.
 
The forward-looking statements made in this prospectus relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this prospectus to reflect events or circumstances after the date of this prospectus or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.
 
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 USE OF PROCEEDS
 
We will receive net proceeds from the offering of approximately $[_____] million, assuming that the common stock is offered at $[___] per share, the midpoint of the range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts and commissions and approximately $[____] million of our estimated expenses related to this offering (or approximately $[_____] million if the underwriters exercise their option to purchase additional shares from the selling stockholder in full). A $1.00 increase (decrease) in the assumed initial public offering price of $[____] per share would increase (decrease) the net proceeds to us from this offering by approximately $[____] million, after deducting the estimated underwriting discounts and commissions and estimated aggregate offering expenses payable by us and assuming that the underwriters' option to purchase additional shares is not exercised and no other change to the number of shares offered by us as set forth on the cover page of this prospectus.
 
Pursuant to an overallotment option, we may offer up to [______] shares of our common stock for sale in this offering.
 
We intend to use the net proceeds from this offering as follows:

* Funding future billboard acquisitions.  While we regularly consider possible acquisitions in billboard advertising, we are not currently subject to any binding agreement to acquire any such businesses.  However, our strategy is to continue to make acquisitions in this business sector at least consistent with the level of acquisitions conducted during the prior 18 months in which we completed eight acquisitions for a total purchase price of $24,988,460.  We anticipate that many of these acquisitions will be of smaller to medium-sized billboard operations, consistent with our prior acquisitions.

*  Expanding our insurance activities. We expect to use up to $20 million to provide additional capital reserves we anticipate may be needed in the next 24 months to expand the scope of our current surety insurance and related brokerage operations as we seek to expand our ability to conduct business in other states and expand the size of our surety insurance services.  To date, we have focused our efforts in the surety insurance field by acquiring both a nationwide broker of surety insurance and by completing last December the acquisition of UC&S, a Treasury Listed, A- rated surety insurance company.  We are currently filing applications with 41 states and the District of Columbia to expand UC&S's authority to write surety policies on a nationwide basis.  We may also consider making acquisitions in other insurance segments.  We anticipate that any such acquisitions would be of insurance businesses similar in many respects to surety, including but not limited to high volume and low policy limit insurance businesses.

* Expanding our investments in real estate management businesses. We also expect to expand our investments in real estate management businesses.  During the prior 18 months, we made investments totaling $928,398.

We also expect to pay $[_______] in fees and expenses related to this offering

We intend to use any remaining proceeds for general corporate purposes, which may include capital expenditures and other working capital needs.  We may also consider acquisitions of businesses other than those involved in billboards, surety insurance and real estate management.  In considering any such acquisition, our strategy is to acquire businesses with durable revenues and cash flow and that will produce an acceptable return on invested capital over time.
Based on our current plans, we believe our cash, cash equivalents and short-term investments, together with the net proceeds to us from this offering and the 2017 Concurrent Offering and the cash flows generated from our existing businesses, will be sufficient to fund our operations for at least the next 12 months.
This expected use of the net proceeds from this offering represents our intentions based upon our current plans and business conditions. As of the date of this prospectus, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the completion of this offering or the amounts that we will actually spend on the uses set forth above. The amounts and timing of our actual expenditures and the use of these proceeds may vary significantly depending on numerous factors, including the progress of our expansion efforts and acquisition activities, as well as any unforeseen cash needs. As a result, our management will retain broad discretion over the allocation of the net proceeds from this offering.
24

Pending our use of the net proceeds from this offering, we intend to invest the net proceeds in a variety of investment-grade, short-term, interest-bearing securities.
DIVIDEND POLICY
 
We do not intend to pay dividends for 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. The declaration and payment of any future dividends will be at the sole discretion of our board of directors and will depend upon, among other things, our earnings, financial condition, capital requirements, level of indebtedness, contractual restrictions with respect to the payment of dividends, opportunity set for retained capital, and other considerations that our board of directors deems relevant. Our board of directors may decide, in its discretion, at any time, to modify or repeal the dividend policy or discontinue entirely the payment of dividends.
 
The ability of our board of directors to declare a dividend is also subject to limits imposed by Delaware corporate law. Under Delaware law, our board of directors and the boards of directors of our corporate subsidiaries incorporated in Delaware may declare dividends only to the extent of our "surplus," which is defined as total assets at fair market value minus total liabilities, minus statutory capital, or if there is no surplus, out of net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. See "Risk Factors—Risks Related to This Offering and Owning Our Common Stock -- Because we do not intend to pay dividends for the foreseeable future, you may not receive any return on investment unless you sell your common stock for a price greater than that which you paid for it."
 
 
25


CAPITALIZATION
 
The following table sets forth our cash and cash equivalents and capitalization as of September 30, 2016:
 
 
 
on an actual basis; and
 
 
 
on a pro forma basis to reflect the 2017 Concurrent Offering and the completion of this offering and the application of the estimated net proceeds from this offering, as described in "Use of Proceeds."
 
The information below is illustrative only and our capitalization following this offering will be adjusted based on the actual public offering price and other terms of this offering determined at pricing. You should read this table together with "Selected Historical Financial Information of Boston Omaha Corporation" and "Management's Discussion and Analysis of Financial Condition and Results of Operations of Boston Omaha Corporation" and our consolidated financial statements and related notes included elsewhere in this prospectus.

   
September 30, 2016
 
As Adjusted
     
Cash and cash equivalents
 
$
42,376
   
             
Stockholders' equity:
          
Common stock, $.001 par value, 11,000,000 shares
          
authorized, 5,841,815 shares issued and outstanding and
          
[________] shares issued and outstanding on a pro forma basis
   
6
   
Class A common stock, $.001 par value, 1,161,161 shares authorized
          
1,055,560 shares issued and outstanding on both an actual and pro forma
          
basis
   
1
   
Additional paid-in capital
   
66,926
   
Deficit
   
(3,841
)
 
             
Total stockholders' equity
 
$
63,092
   
             
Total capitalization
 
$
63,092
   
 
(1)
 
A $1.00 increase (decrease) in the assumed initial public offering price of $[___] per share (the midpoint of the price range set forth on the cover of this prospectus) would increase (decrease) additional paid-in capital by $[___] million and increase (decrease) total stockholders' equity by $[___] million, assuming that the underwriters' option to purchase additional shares is not exercised. Similarly, a one million share increase (decrease) in the number of shares offered by us, as set forth on the cover of this prospectus, would increase (decrease) additional paid-in capital by $[____] million, increase (and increase (decrease) total stockholders' equity by $[____] million, assuming that the underwriters' option to purchase shares is not exercised and assuming the initial public offering price of $[___] per share (the midpoint of the price range set forth on the cover of this prospectus) remained the same and after deducting the underwriting discount and estimated offering expenses payable by us.
 
26


DILUTION
 
Purchasers of the common stock in this offering will suffer an immediate dilution. Dilution is the amount by which the price paid by the purchasers of common stock in this offering will exceed the net tangible book value per share of common stock immediately after this offering.
 
Our historical net tangible book value at September 30, 2016 was $52.3 million, or $7.58 per share of common stock and Class A common stock.  Net tangible book value per share represents our total assets, excluding goodwill, and intangibles, less total liabilities, divided by the number of shares of common stock and Class A Common Stock outstanding as of September 30, 2016.
 
After giving effect to the 2017 Concurrent Offering and the completion of this offering, assuming a public offering price of $[___] per share, the midpoint of the range on the cover of this prospectus, and the application of the net proceeds therefrom as described in this prospectus, our net tangible book value as of September 30, 2016 would have been $[___] million, or $[___] per share of common stock. This represents an immediate decrease in net tangible book value to existing stockholders of $[___] per share of common stock and Class A common stock and an immediate dilution to new investors of $[___] per share of common stock. The following table illustrates this per share dilution:
 
       
Assumed initial public offering price per share
 
$
   
Pro forma net tangible book value per share as of September 30, 2016 (1)
 
$
   
Increase in net tangible book value per share attributable to investors in this offering and the 2017 Concurrent Offering (2)
 
$
   
         
Pro forma net tangible book value per share after this offering and the Concurrent Offering
 
$
   
Dilution per share to new investors in this offering
 
$
   
 
(1)
 
Based on the historical book value of the company as of September 30, 2016.  This figure is not adjusted by the [$_______] to be received in the 2017 Concurrent Offering and divided by the number of shares of common stock issued and outstanding at September 30, 2016 and increased by the [___] shares of common stock expected to be issued in the 2017 Concurrent Offering but before giving effect to this offering.
 
(2)
 
This figure is adjusted by the [$_______] to be received in the 2017 Concurrent Offering and divided by the number of shares of common stock issued and outstanding at September 30, 2016 and increased by the [____________] shares of common stock expected to be issued in the 2017 Concurrent Offering and after giving effect to this offering.
 
A $[___] increase (decrease) in the assumed public offering price of $[___] per share, which is the midpoint of the price range set forth on the cover page of this prospectus, along with a sale of shares in the 2017 Concurrent Offering, would increase (decrease) our as adjusted pro forma net tangible book value per share after the offering by $[___] and increase (decrease) the dilution to new investors in this offering by $[___] per share, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us.
 
The following table summarizes, on the pro forma basis set forth above as of September 30, 2016, the difference between the total cash consideration paid and the average price per share paid by existing stockholders and the purchasers of common stock in this offering and the 2017 Concurrent offering with respect to the number of shares of common stock purchased from us, before deducting estimated underwriting discounts, commissions and offering expenses payable by us.
 
   Shares Purchased  
Total Consideration
   
Average Price
 
  Number   Percent      Amount   
Percent 
     
Per Share 
 
Existing stockholders
   
 
%
 
 $
 
%  
 
 
Purchasers of common stock in this offering and the 2017 Concurrent Offering
   
 
%
 
 $
 
%  
 
 
Total
     
100
%
 
 $
 
100
%
 
 
 
 
The tables above are based on [_______] shares of common stock outstanding as of September 30, 2016 and assumes a public offering price of $[___] per share, the midpoint of the range on the cover of this prospectus.
 
The tables above do not give effect to the exercise of outstanding warrants to purchase 103,032 shares of our Class A Common Stock at an exercise price of $10.00 per share and 2,524 shares of our Class A common stock at an exercise price of $8.00 per share. We do not currently have a stock option or similar equity plan and have no plans to establish such a plan.  If the underwriters' option to purchase additional shares is exercised in full, the number of shares held by new investors will be increased to [_________], or approximately [___]% of the total number of shares of common stock.
 

27


SELECTED HISTORICAL FINANCIAL INFORMATION OF BOSTON OMAHA CORPORATION
 
The information below should be read along with "Unaudited Pro Forma Condensed Combined and Consolidated Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations of Boston Omaha Corporation," "Business" and the historical financial statements and accompanying notes included elsewhere in this prospectus. Our historical results set forth below are not necessarily indicative of results to be expected for any future period.
 
The selected consolidated financial information set forth below is derived from Boston Omaha Corporation's annual consolidated financial statements for the periods indicated below, including the consolidated balance sheets at December 31, 2015 and December 31, 2014 and the related consolidated statements of operations and cash flows for the years ended December 31, 2015 and December 31, 2014 and notes thereto appearing elsewhere in this prospectus. The data for the first nine months of each of fiscal 2016 and fiscal 2015 is derived from our unaudited consolidated financial statements included elsewhere in this prospectus and which, in the opinion of management, include all adjustments necessary for a fair statement of the results of the applicable interim periods.
 
 
(dollars in thousands)
 
Nine Months Ended
   
Year Ended
 
   
September 30,
   
December 31,
 
Statement of Operations Data
 
2016
   
2015
   
2015
   
2014
 
Revenue
 
$
2,550
   
$
359
   
$
723
   
$
44
 
Costs of revenue (exclusive of depreciation and
                               
amortization)
   
874
     
167
     
230
     
-
 
Leased employees and professional fees
   
2,114
     
626
     
979
     
67
 
Depreciation and amortization
   
1,251
     
211
     
458
     
-
 
General and administrative expenses
   
547
     
44
     
163
     
-
 
Total operating costs and expense
   
4,786
     
1,048
     
1,830
     
67
 
Operating income (loss)
   
(2,236
)
   
(689
)
   
(1,107
)
   
(23
)
Other income (expense), net
   
(33
)
   
13
     
82
     
(16
)
Interest expense
   
(2
)
   
(20
)
   
(22
)
   
(28
)
Total other income (expenses)
   
(35
)
   
(7
)
   
60
     
(44
)
Net (loss)
 
$
(2,271
)
 
$
(696
)
 
$
(1,047
)
 
$
(67
)
                                 
Balance Sheet Data (at end of period)
                               
Total assets
 
$
63,663
   
$
24,279
   
$
23,785
   
$
49
 
Long-term payable
   
127
     
-
     
-
     
-
 
Total liabilities
   
571
     
432
     
290
     
516
 
Total stockholders' equity (deficit)
   
63,092
     
23,847
     
23,495
     
(467
)


 
 

28


BOSTON OMAHA CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED COMBINED AND CONSOLIDATED FINANCIAL INFORMATION


The unaudited pro forma condensed combined and consolidated financial information presents Boston Omaha Corporation and Subsidiaries' ("Boston Omaha") unaudited pro forma condensed combined and consolidated balance sheet as of September 30, 2016, the unaudited pro forma condensed combined and consolidated statements of operations for the nine months ended September 30, 2016, and the unaudited pro forma condensed combined and consolidated statement of operations for the year ended December 31, 2015.  The pro forma financial information is based upon the consolidated historical financial statements of Boston Omaha ("the Company") after giving effect to the following transactions (collectively, the "Transactions"):

·
The Company's acquisition of the stock of United Casualty and Surety Insurance Company ("UC&S") and the transactions related thereto
·
The Company's multiple acquisitions of billboards and related assets from Jag, Inc. ("JAG"), Bell Media, LLC, Fair Outdoor, LLC, and I-85 Advertising, LLC.

The unaudited pro forma condensed combined and consolidated balance sheet as of September 30, 2016 gives pro forma effect to the Company's acquisition of the stock of UC&S.  The unaudited pro forma condensed combined and consolidated statement of operations for the nine months ended September 30, 2016 gives pro forma effect to the Company's acquisition of the stock of UC&S and the Company's acquisition of billboards and related assets from JAG.

The unaudited pro forma condensed combined and consolidated balance sheet as of September 30, 2016 and the unaudited pro forma condensed combined and consolidated statement of operations for the nine months ended September 30, 2016 are based upon the historical financial statements of Boston Omaha, UC&S, and JAG.

The unaudited pro forma condensed combined and consolidated statement of operations for the year ended December 31, 2015 gives pro forma effect to the Company's acquisition of the stock of UC&S and the Company's acquisition of billboards and related assets from JAG, Bell Media, LLC, Fair Outdoor, LLC, and I-85 Advertising, LLC.

The unaudited pro forma condensed combined and consolidated statement of operations for the year ended December 31, 2015 is based upon the historical financial statements of Boston Omaha, UC&S, JAG, Fair Outdoor, LLC, and I-85 Advertising, LLC and historical financial information of Bell Media, LLC.

The assumptions and estimates underlying the unaudited adjustments to the pro forma condensed combined and consolidated financial statements are described in the accompanying notes, which should be read together with the pro forma condensed combined and consolidated financial statements.

The unaudited pro forma condensed combined and consolidated financial information is prepared in accordance with Article 11 of Regulation S-X, using the assumptions set forth in the notes to the unaudited pro forma condensed combined and consolidated financial information.  The unaudited pro forma condensed combined and consolidated financial information includes adjustments that give effect to events that are directly attributable to the Transactions described above.  The unaudited pro forma condensed combined and consolidated financial information has been prepared using the acquisition method of accounting in accordance with Accounting Standards Codification ("ASC") 805, Business Combinations.

The unaudited pro forma condensed combined and consolidated financial information is provided for informational purposes only and is not necessarily indicative of the operating results that would have occurred if the Transactions had been completed as of the dates set forth above, nor is it indicative of the future results of the Company's operations.

The unaudited pro forma condensed combined and consolidated financial information should be read in conjunction with the consolidated financial statements of Boston Omaha and the financial statements of UC&S and JAG included elsewhere in this prospectus.
29

 
 BOSTON OMAHA CORPORATION AND SUBSIDIARIES  
   
UNAUDITED PRO FORMA CONDENSED COMBINED AND CONSOLIDATED BALANCE SHEET
 
                               
SEPTEMBER 30, 2016              
 
                               
         
Pro Forma
   
Elimination
         
Combined
and
 
   
Boston Omaha
   
Adjustments
   
Adjustments
   
Notes
   
Consolidated
 
                               
Current Assets:
                             
Cash
 
$
42,375,758
   
$
(11,321,446
)
         
(3a)
 
 
$
31,054,312
 
Restricted cash
   
227,943
     
-
     
-
             
227,943
 
Accounts receivable, net
   
469,796
     
674,880
     
-
     
(3a)
 
   
1,144,676
 
Investments, short-term
   
-
     
1,394,842
     
-
     
(3a)
 
   
1,394,842
 
Prepaid expense and deferred
                                   
-
 
  policy acquisition costs
   
377,091
     
434,659
     
-
     
(3a)
 
   
811,750
 
                                         
   Total Current Assets
   
43,450,588
     
(8,817,065
)
   
-
             
34,633,523
 
                                         
Property and equipment, net
   
8,440,113
     
11,905
     
-
     
(3a)
 
   
8,452,018
 
Goodwill
   
7,917,853
     
7,198,930
     
-
     
(3a), (3c)
 
   
15,116,783
 
Intangible assets, net
   
2,887,800
     
450,000
     
-
     
(3a), (3c)
 
   
3,337,800
 
Investment in subsidiary
   
-
     
5,351,070
     
(5,351,070
)
   
(3d)
 
   
-
 
Investments, long-term
   
-
     
2,839,725
     
-
     
(3a)
 
   
2,839,725
 
Other noncurrent assets
   
966,221
     
1,687,676
     
-
     
(3a)
 
   
2,653,897
 
                                         
   Total Assets
 
$
63,662,575
   
$
8,722,241
   
$
(5,351,070
)
         
$
67,033,746
 
                                         
Current Liabilities:
                                       
Accounts payable and
                                       
accrued expenses
   
342,505
     
130,285
     
-
     
(3a)
 
   
472,790
 
Unearned premiums
   
-
     
1,343,739
     
-
     
(3a)
 
   
1,343,739
 
Federal income taxes payable
   
-
     
60,000
     
-
     
(3a)
 
   
60,000
 
Funds held as collateral
   
-
     
1,682,147
     
-
     
(3a)
 
   
1,682,147
 
Deferred revenue
   
101,536
     
-
     
-
             
101,536
 
                                         
     Total Current Liabilities
   
444,041
     
3,216,171
     
-
             
3,660,212
 
                                         
Long-term payable for acquisition
   
126,500
     
-
                     
126,500
 
Deferred tax liability
   
-
     
155,000
     
-
     
(3a)
 
   
155,000
 
                                         
   Total Liabilities
   
570,541
     
3,371,171
     
-
             
3,941,712
 
                                         
Total Stockholders' Equity
   
63,092,034
     
5,351,070
     
(5,351,070
)
   
(3d)
 
   
63,092,034
 
                                         
Total Liabilities and
                                       
  Stockholders' Equity
 
$
63,662,575
   
$
8,722,241
   
$
(5,351,070
)
         
$
67,033,746
 
 
See accompanying notes to unaudited condensed combined and consolidated financial statements.
30


 BOSTON OMAHA CORPORATION AND SUBSIDIARIES  
   
UNAUDITED PRO FORMA CONDENSED COMBINED AND CONSOLIDATED STATEMENT OF OPERATIONS
 
                               
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016
 
                               
         
Pro Forma Adjustments
for Acquisitions
   
Combined
and
 
   
Boston Omaha
   
Billboards
   
UC&S
   
Notes
   
Consolidated
 
                               
Revenue
 
$
2,550,060
   
$
246,221
   
$
1,819,641
     
(3b)
 
 
$
4,615,922
 
                                         
 Cost of revenue (exclusive of
                                       
   depreciaton and amortization)
   
874,174
     
86,526
     
-
     
(3b)
 
   
960,700
 
 Underwriting, acquisition
                                       
   and insurance expenses
   
-
     
-
     
1,358,578
     
(3b)
 
   
1,358,578
 
 Employee cost
   
1,140,009
     
95,830
     
-
     
(3b)
 
   
1,235,839
 
 Professional fees
   
974,214
     
-
     
-
             
974,214
    
 Depreciation and amortization
   
1,250,726
     
66,698
     
24,106
     
(3c)
 
   
1,341,530
 
 General and administrative
   
546,567
     
19,629
     
-
     
(3b)
 
   
566,196
 
 Losses and loss
                                       
   adjustment expenses
   
-
     
-
     
54,993
     
(3b)
 
   
54,993
 
                                         
Net (Loss) Income from Operations
   
(2,235,630
)
   
(22,462
)
   
381,964
             
(1,876,128
)
                                     
-
 
Other income (expense)
   
(32,958
)
   
-
     
2,054
     
(3b)
 
   
(30,904
)
Interest expense
   
(2,240
)
   
(1,593
)
   
-
     
(3b)
 
   
(3,833
)
                                         
(Loss) Income Before Income Tax
   
(2,270,828
)
   
(24,055
)
   
384,018
             
(1,910,865
)
                                         
Income Tax (Provision) Benefit
   
-
     
10,079
     
(96,500
)
   
(3f)
 
   
(86,421
)
                                         
Net (Loss) Income
 
$
(2,270,828
)
 
$
(13,976
)
 
$
287,518
           
$
(1,997,286
)
                                         
Basic and Diluted Net
                                       
  (Loss) Income per share
 
$
(0.40
)
                   
(3e)
 
 
$
(0.35
)
                                         
Basic and Diluted Weighted
                                       
  Average Shares Outstanding
   
5,744,898
                     
(3e)
 
   
5,744,898
 
 
See accompanying notes to unaudited condensed combined and consolidated financial statements.
31


 BOSTON OMAHA CORPORATION AND SUBSIDIARIES  
   
UNAUDITED PRO FORMA CONDENSED COMBINED AND CONSOLIDATED STATEMENT OF OPERATIONS
 
                               
FOR THE YEAR ENDED DECEMBER 31, 2015
 
                               
         
Pro Forma Adjustments
for Acquisitions
   
Combined
and
 
   
Boston Omaha
   
Billboards
   
UC&S
   
Notes
   
Consolidated
 
                               
Revenue
 
$
722,912
   
$
2,553,298
   
$
2,701,144
     
(3b)
 
 
$
5,977,354
 
                                         
 Cost of revenue (exclusive of
                                       
   depreciaton and amortization)
   
229,507
     
989,968
     
-
     
(3b)
 
   
1,219,475
 
 Underwriting, acquisition
                                       
   and insurance expenses
   
-
     
-
     
2,002,230
     
(3b)
 
   
2,002,230
 
 Employee cost
   
241,803
     
731,276
     
-
     
(3b)
 
   
973,079
 
 Professional fees
   
737,451
     
3,537
     
-
     
(3b)
 
   
740,988
 
 Depreciation and amortization
   
457,803
     
1,013,524
     
32,141
     
(3c)
 
   
1,503,468
 
 General and administrative
   
163,226
     
288,219
     
-
     
(3b)
 
   
451,445
 
 Losses and loss
                                       
   adjustment expenses
   
-
     
-
     
19,283
     
(3b)
 
   
19,283
 
                                         
Net (Loss) Income from Operations
   
(1,106,878
)
   
(473,226
)
   
647,490
             
(932,614
)
                                         
Other income (expense)
   
81,963
     
586
     
5,378
     
(3b)
 
   
87,927
 
Interest expense
   
(22,508
)
   
(31,997
)
   
-
     
(3b)
 
   
(54,505
)
                                         
Net (Loss) Income
                                       
  Before Income Tax
   
(1,047,423
)
   
(504,637
)
   
652,868
             
(899,192
)
                                         
Income Tax (Provision) Benefit
   
-
     
211,137
     
(219,200
)
   
(3f)
 
   
(8,063
)
                                         
Net (Loss) Income
 
$
(1,047,423
)
 
$
(293,500
)
 
$
433,668
           
$
(907,255
)
                                         
Basic and Diluted Net
                                       
  (Loss) Income per share
 
$
(0.71
)
                   
(3g)
 
 
$
(0.61
)
                                         
Basic and Diluted Weighted
                                       
  Average Shares Outstanding
   
1,481,310
                     
(3e)
 
   
1,481,310
 
 
See accompanying notes to unaudited condensed combined and consolidated financial statements.
32

BOSTON OMAHA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED AND CONSOLIDATED FINANCIAL INFORMATION

NOTE 1.  Basis of Presentation

The unaudited pro forma condensed combined and consolidated financial information is derived by applying pro forma adjustments to Boston Omaha's historical consolidated financial statements as of September 30, 2016, the nine months then ended, and the year ended December 31, 2015.  Boston Omaha completed its acquisition of UC&S and the assets of JAG on December 7, 2016 and February 16, 2016, respectively.  Acquisitions of billboards and related assets completed during the year ended December 31, 2015 ("the 2015 billboard acquisitions") are as follows:

Bell Media LLC
June 19, 2015
Fair Outdoor, LLC
July 23, 2015
I-85 Advertising, LLC
August 31, 2015

The historical consolidated financial statements have been adjusted in the pro forma condensed combined and consolidated financial statements to give effect to pro forma events that are directly attributable to the business combinations and factually supportable, as if such combination and consolidation had occurred at the beginning of the presentation period.  With respect to the pro forma condensed combined and consolidated statements of operations, the pro forma events are expected to have a continuing impact on the combined and consolidated results of operations following the business combinations.

The business combinations were accounted for under the acquisition method of accounting in accordance with ASC Topic 805.  As the acquirer for accounting purposes, the Company has estimated the fair value of the assets acquired and the liabilities assumed from UC&S and JAG.  Additionally, the pro forma financial information reflects adjustments required to conform UC&S's and JAG's accounting policies to Boston Omaha's accounting policies.

The condensed combined and consolidated pro forma financial information does not reflect the realization of any expected cost savings or other synergies from the acquisition of UC&S, JAG, and the 2015 billboard acquisitions.

 
33


NOTE 2.  Preliminary Purchase Price Allocations

The following table presents the preliminary purchase price allocation of UC&S as of December 7, 2016, the acquisition date:
 
 
BOSTON OMAHA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED AND CONSOLIDATED FINANCIAL INFORMATION

 
     
       
Cash
 
$
1,678,554
 
Accounts receivable
   
674,880
 
Investments, short-term
   
1,394,842
 
Prepaid expense
   
99,153
 
Deferred policy acquisition costs
   
335,506
 
Property and equipment
   
11,905
 
Investments, long-term
   
2,839,725
 
Funds held as collateral assets
   
1,682,147
 
Other noncurrent assets
   
5,529
 
Identifiable intangible assets
   
450,000
 
Goodwill
   
7,198,930
 
Accrued expenses
   
(130,285
)
Unearned premiums
   
(1,343,739
)
Federal income taxes payable
   
(60,000
)
Funds held as collateral
   
(1,682,147
)
Deferred tax liability
   
(155,000
)
         
  Total Consideration
 
$
13,000,000
 

 

This preliminary purchase price allocation is based on internal information and will be revised when the independent appraisal has been completed.  The preliminary purchase price allocation has been used to prepare pro forma adjustments in the pro forma condensed combined and consolidated balance sheet and the pro forma condensed combined and consolidated statement of operations.  The Company is still assessing the impact of deferred taxes.

34


BOSTON OMAHA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED AND CONSOLIDATED FINANCIAL INFORMATION

NOTE 3.  PRO FORMA ADJUSTMENTS

The adjustments in each of the statements presented give effect to the following:

a.
Adjustments associated with the acquisition of UC&S

Unaudited Pro Forma Condensed Combined and Consolidated Balance Sheet

Represents the consolidation of UC&S upon acquisition as if the acquisition had occurred as of September 30, 2016.  The presentation is based upon the preliminary purchase price allocation for UC&S discussed in Note 2.  Boston Omaha purchased the stock of UC&S on December 7, 2016 for a cash purchase price of $13,000,000.

b.
Adjustments associated with the combination of billboard historical amounts and the consolidation of UC&S historical amounts

Unaudited Pro Forma Condensed Combined and Consolidated Statement of Operations

Nine Months Ended September 30, 2016

Billboards

Represents the historical operating revenues and expenses attributable to the billboards acquired from JAG for the period from January 1, 2016 through February 16, 2016.  Depreciation and amortization have been provided based upon the provisional purchase price allocation.

UC&S

Represents the historical revenues and expenses of UC&S for the nine months ended September 30, 2016, with the exception of depreciation and amortization, as found in UC&S unaudited statement of operations for the nine months ended September 30, 2016, included elsewhere in this prospectus.  Depreciation and amortization have been provided based upon the provisional purchase price allocation.

35


BOSTON OMAHA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED AND CONSOLIDATED FINANCIAL INFORMATION

NOTE 3.  PRO FORMA ADJUSTMENTS (Continued)

b.
Adjustments associated with the combination of billboard historical amounts and the consolidation of UC&S historical amounts (continued)

Unaudited Pro Forma Condensed Combined and Consolidated Statement of Operations

Year Ended December 31, 2015

Billboards

Represents the historical operating revenues and expenses attributable to the 2015 billboard acquisitions for the periods shown below.  Depreciation and amortization have been provided based upon the purchase price allocation for the 2015 billboard acquisitions.  For JAG the provisional purchase price allocation is the basis for depreciation and amortization.

Acquisition
 
Period Included
     
Jag, Inc. ("Jag")
 
January 1 - December 31, 2015
I-85 Advertising, LLC ("I-85")
 
January 1 - August 31, 2015
Fair Outdoor, LLC ("Fair")
 
January 1 - July 23, 2015
Bell Media LLC ("Bell")
 
January 1 - June 19, 2015

   
Jag
     
I-85
   
Fair
   
Bell
   
Total
 
                                 
Revenue
 
$
1,671,688
   
$
36,000
   
$
207,324
   
$
638,286
   
$
2,553,298
 
                                         
 Cost of revenue (exclusive of
                                       
   depreciaton and amortization)
   
617,252
     
10,738
     
72,713
     
289,265
     
989,968
 
 Employee cost
   
731,276
     
-
     
-
     
-
     
731,276
 
 Professional fees
   
-
     
1,187
     
2,350
     
-
     
3,537
 
 Depreciation and amortization
   
533,580
     
29,593
     
127,926
     
322,425
     
1,013,524
 
 General and administrative
   
263,162
     
-
     
529
     
24,528
     
288,219
 
                                         
Net (Loss) Income
                                       
  from Operations
   
(473,582
)
   
(5,518
)
   
3,806
     
2,068
     
(473,226
)
                                         
Other income (expense)
   
586
     
-
     
-
     
-
     
586
 
Interest expense
   
(16,751
)
   
-
     
(15,246
)
   
-
     
(31,997
)
                                         
(Loss) Income
                                       
  Before Income Tax
   
(489,747
)
   
(5,518
)
   
(11,440
)
   
2,068
     
(504,637
)
Income Tax (Provision) Benefit
   
205,221
     
2,235
     
4,519
     
(838
)
   
211,137
 
                                         
Net (Loss) Income
 
$
(284,526
)
 
$
(3,283
)
 
$
(6,921
)
 
$
1,230
   
$
(293,500
)
 

36


BOSTON OMAHA CORPORATION AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED AND CONSOLIDATED FINANCIAL INFORMATION

 
NOTE 3.  PRO FORMA ADJUSTMENTS (Continued)
 
UC&S

Represents the historical revenues and expenses of UC&S for the year ended December 31, 2015, with the exception of depreciation and amortization, as found in UC&S audited statement of operations for the year ended December 31, 2015, included elsewhere in this prospectus.

c.
Adjustments associated with the effects of adjusting the historical book values of assets acquired and liabilities assumed to their estimated fair values, including revised depreciation expense on property and equipment and amortization on newly acquired intangible assets.

Depreciation and amortization

Pro forma depreciation and amortization are comprised of the following:

   
Nine months
       
   
ended
   
Year ended
 
   
September 30,
   
December 31,
 
   
2016
   
2015
 
             
Billboard acquisitions:
           
             
Depreciation and amortization per
           
  historical financial statements
 
$
5,612
   
$
89,438
 
Depreciation and amortization adjustment
               
  for fair value of assets acquired
   
61,086
     
924,086
 
                 
Pro forma depreciaton and amortization
 
$
66,698
   
$
1,013,524
 
                 
UC&S acquisition:
               
                 
Depreciation and amortization per
               
  historical financial statements
 
$
10,606
   
$
14,141
 
Depreciation and amortization adjustment
               
  for fair value of assets acquired
   
13,500
     
18,000
 
                 
Pro forma depreciaton and amortization
 
$
24,106
   
$
32,141
 
 
d.
Adjustments to consolidate the balances of UC&S with the balances of Boston Omaha.

e.
Adjustments for earnings (loss) per share:

Earnings per share

The basic net income (loss) per common share is computed by dividing the net income (loss) by the weighted average number of common shares outstanding.

f.
Adjustments to provide federal and state income taxes at statutory rates:

Income Tax (Provision) Benefit

Federal and state income taxes have been provided at statutory rates.
37

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF BOSTON OMAHA CORPORATION
 
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with "Selected Historical Financial Information of Boston Omaha Corporation," "Unaudited Pro Forma Condensed Combined and Consolidated Financial Information" and our consolidated financial statements and related notes included elsewhere in this prospectus. This discussion contains forward-looking statements based upon current expectations that involve numerous risks and uncertainties, including those described in the "Risk Factors" section of this prospectus. Our actual results may differ materially from those contained in any forward-looking statements.
 
Overview
 
We are currently engaged in three areas of business: outdoor billboards, surety insurance and related brokerage activities, and investing in the real estate management business.  We commenced our current billboard business operations in June 2015, our surety insurance business in May 2016 and have made a series of investments in the real estate management and related services business commencing in September 2015.  In December 2016, we completed the acquisition of UC&S, a surety insurance company.  We expect to continue to acquire additional billboard assets through acquisitions of existing billboard businesses in the United States and to expand the licensing of the UC&S business beyond the nine states in which it is currently licensed to provide insurance.  We also expect to continue to make additional investments in real estate management service businesses.  In the future, we expect to expand the range of services we provide in each of these sectors and to possibly consider acquisition of other businesses in different sectors.  Our decision to expand outside of these current business sectors we serve will be based on the opportunity to acquire businesses which we believe provide the opportunity for sustainable earnings at an attractive level relative to capital employed.
 
In each of our businesses, we hope to expand our geographic reach and to develop a brand name for our services which we hope will be a differentiating factor for customers.  Our insurance market primarily services small contractors, businesses and individuals required to provide surety bonds in connection with their work for government agencies and others, and to meet regulatory licensing and other needs.  Our plan is to expand our insurance offerings and underwriting in all 50 states and the District of Columbia.  In outdoor billboards, our plan is to continue to grow this business through acquisitions of billboard companies.

Although several large companies control a majority of the outdoor billboard market, industry reports estimate that there are a large number of other companies servicing the remainder of the market.  In the surety industry, total industry direct-written premium reached $5.62 billion in 2015.  While the top 10 surety insurance companies were estimated to write approximately 64% of all premiums, there were approximately 200 insurers issuing surety bonds in 2015.

We seek to enter markets where we believe demand for our services will grow in the coming years due to certain barriers to entry and to anticipated long term demand for these services.  In the outdoor billboard business, government restrictions often limit the number of additional billboards which may be constructed.  At the same time, advances in billboard technology provide the opportunity to improve revenues through the use of digital display technologies and other new technologies.  In the surety insurance business, new insurance companies must be licensed by state agencies which impose capital, management and other strict requirements on these insurers.  These hurdles are at the individual state level, with statutes often providing wide latitude to regulators to impose judgmental requirements upon new entrants.  In addition, new distribution channels in certain areas of surety may provide a new opportunity.  In the real estate management services market, we believe the continued growth of commercial real estate in many sections of the United States will provide opportunities for management services for the foreseeable future.

How We Generate Our Revenues and Evaluate Our Business
 
We currently generate revenues through billboard advertising and related services and from the sale of surety insurance and related brokerage activities.  In the real estate management services market, our current model is to make investments in existing management services to provide them with the needed capital to expand the breadth and scope of the services they provide. These real estate management services companies are typically established as partnerships for tax purposes and offer the potential to distribute earnings to us on a quarterly basis.
38

 
Segment gross profit is a key metric that we use to evaluate segment operating performance and to determine resource allocation between segments. We define segment gross profit as segment revenues less segment direct and indirect cost of services. In the billboard business, costs of services include direct and indirect sales and labor costs, land costs, maintenance of equipment, contract services, and other miscellaneous expenses. In addition, our billboard operations gross margins are impacted by both depreciation and amortization charges associated with acquisitions and with the legal, accounting and other costs of completing these acquisitions.  As we expect to continue to expand our billboard business, these depreciation and amortization charges and costs of completing these transactions will continue to impact our gross margins.  Our insurance business incurs direct costs for general and administrative expenses, brokerage commissions, regulatory compliance costs, costs of reinsurance and, in connection with our acquisitions of UC&S and The Warnock Agency, Inc., certain one-time legal, accounting and other costs associated with completing these acquisitions.  In addition, we also incur costs operating as a public company.  As we anticipate growing our business, we expect that the costs of operating as a public company as a percentage of our revenues will decrease significantly.
 
Results of Operations
 
Nine Months Ended September 30, 2016 Compared to Nine Months Ended September 30, 2015
 
The following is a comparison of our results of operations for the nine months ended September 30, 2016 compared to the nine months ended September 30, 2015. Our results for the nine months ended September 30, 2016 include the financial and operating results of JAG for the period from February 16, 2016 through September 30, 2016. Results for the period prior to February 16, 2016 reflect the financial and operating results of Boston Omaha Corporation only. Accordingly, comparisons of our results for the nine months ended September 30, 2016 to the comparable prior year period may not be meaningful.  In addition, these results exclude the results of operations of UC&S, Inc., which we acquired on December 7, 2016.

The following table sets forth our results for the nine months ended September 30, 2016 compared to the nine months ended September 30, 2015
 
(dollars in thousands)
 
Nine Months Ended
 
   
September 30,
 
Statement of Operations Data
 
2016
   
2015
 
Revenue
 
$
2,550
   
$
359
 
Costs of revenue (exclusive of depreciation and
               
amortization)
   
874
     
167
 
Leased employees and professional fees
   
2,114
     
626
 
Depreciation and amortization
   
1,251
     
211
 
General and administrative expenses
   
547
     
44
 
Total operating costs and expense
   
4,786
     
1,048
 
Operating income (loss)
   
(2,236
)
   
(689
)
Other income (expense), net
   
(33
)
   
13