Note 14 - Discontinued Operations

6 Months Ended

Jun. 30, 2026

Notes to Financial Statements

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

NOTE 14. DISCONTINUED OPERATIONS

On May 18, 2026, the Company entered into a Securities Purchase Agreement with CopperPoint Insurance Company under which CopperPoint will acquire 100% of the equity interests in GIG for approximately $84.3 million. The transaction has received approval from the board of directors of both Boston Omaha and CopperPoint and is expected to close in the second half of 2026 following receipt of all regulatory and other approvals required under the Securities Purchase Agreement. The Company classified the results of operations and cash flows of GIG as discontinued operations in its Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Cash Flows for all periods presented. The Company classified the assets and liabilities of GIG as held for sale in the Condensed Consolidated Balance Sheet. Additionally, beginning June 30, 2026, the Company ceased recording depreciation and amortization for GIG's property and equipment, finite-lived intangible assets, and operating lease ROU assets.

The following table represents the major classes of assets and liabilities of discontinued operations as of June 30, 2026 and December 31, 2025:

		*June 30,*				*December 31,*
		*2026*				*2025*

Carrying amounts of the major classes of assets included in discontinued operations:
Cash and cash equivalents		$	13,288			$	12,568
Cash held by BOAM funds and other			642				1,181
Accounts receivable, net			7,279				6,440
Short-term investments			22,611				23,198
Marketable equity securities			-				868
Funds held as collateral assets			11,126				13,910
Prepaid expense and other current assets			2,054				3,299
Property and equipment, net			260				329
Goodwill			11,325				11,325
Intangible assets, net			1,138				1,217
Investments			4,785				5,118
Deferred policy acquisition costs			3,188				2,945
Right of use assets			2,215				2,376
Other			54				54
Total assets held for sale		$	79,965			$	84,828


Carrying amounts of the major classes of liabilities included in discontinued operations:
Accounts payable and accrued expenses		$	3,837			$	5,868
Lease liabilities			2,491				2,569
Funds held as collateral			11,126				13,910
Unpaid losses and loss adjustment expenses			7,310				6,539
Unearned premiums			13,588				13,577
Deferred revenue			156				120
Deferred tax liability			2,622				2,676
Total liabilities held for sale		$	41,130			$	45,259

Assets held for sale include short-term investments of $22.6 million. Short-term investments consist of U.S. Treasury securities held by UCS, which are classified as held to maturity, mature in less than twelve months, and are reported at amortized cost which approximates fair value.

The following table presents the major components of discontinued operations in the Company's Consolidated Statements of Operations:

		*For the Three Months Ended*								*For the Six Months Ended*
		*June 30,*								*June 30,*
		*2026*				*2025*				*2026*				*2025*

Major classes of line items constituting income (loss) of discontinued operations before provision for income taxes:
Premiums earned		$	6,256			$	5,565			$	11,713			$	11,129
Insurance commissions			760				448				1,391				1,027
Investment and other income			416				512				853				1,002
Cost of insurance revenues (exclusive of depreciation and amortization)			3,417				3,549				8,139				6,412
Employee costs			2,597				2,277				5,018				4,784
Professional fees			164				118				340				216
General and administrative			740				795				1,507				1,653
Depreciation and amortization			79				94				149				177

Net Income (Loss) from Discontinued Operations before Other Income (Expense) and Income Taxes			435				(308	)			(1,196	)			(84	)

Other Income (Expense):
Other investment income			1				38				957				321

Net Income (Loss) Before Income Taxes			436				(270	)			(239	)			237
Income tax benefit (provision)			54				(59	)			54				(59	)

Net Income (Loss) from Discontinued Operations		$	490			$	(329	)		$	(185	)		$	178

We recorded expenses related to the sale of GIG of approximately $280 thousand for the six months ended June 30, 2026, and $678 thousand during the year ended December 31, 2025. During 2026 and 2025, these charges were recorded in professional fees, and consisted primarily of legal and professional fees.

Premiums ceded of approximately $2.5 million and $2.4 million for the six months ended June 30, 2026 and 2025, respectively, are included within “Premiums earned” in the table of major components of discontinued operations.

The following table provides a reconciliation of the beginning and ending reserve balances at UCS for losses and loss adjustment expenses (“LAE”) for the six months ended June 30, 2026 and 2025.

		*2026*				*2025*
Gross reserves for unpaid losses and loss adjustment expenses, beginning of period		$	6,539			$	5,873
Less: reinsurance recoverable on unpaid losses			999				1,804
Net reserve for unpaid losses and loss adjustment expenses, beginning of period			5,540				4,069

Incurred losses and loss adjustment expenses:
Current year			3,307				3,299
Prior year			488				(342	)
Total net losses and loss adjustment expenses incurred			3,795				2,957

Payments:
Current year			1,632				1,644
Prior year			1,284				904
Total payments			2,916				2,548

Net reserves for unpaid losses and loss adjustment expenses, end of period			6,419				4,478
Reinsurance recoverable on unpaid losses, net of allowance			891				2,095

Gross reserves for unpaid losses and loss adjustment expenses, end of period		$	7,310			$	6,573

For the six months ended June 30, 2026, there was an unfavorable prior year loss development. For the six months ended June 30, 2025, there was a favorable prior year loss development. Favorable and unfavorable prior year loss developments are the result of a re-estimation of amounts ultimately to be paid on prior year losses and loss adjustment expense. Original estimates are increased or decreased as additional information becomes known regarding individual claims.