EX-99.3 5 ex_234815.htm EXHIBIT 99.3

Exhibit 99.3

BOSTON OMAHA CORPORATION AND UTAH BROADBAND, LLC

Unaudited Pro Forma Consolidated Balance Sheet

and

Unaudited Pro Forma Consolidated Statements of Operations

BOSTON OMAHA CORPORATION AND UTAH BROADBAND, LLC

Unaudited Pro Forma Consolidated Balance Sheet

September 30, 2020

ASSETS

|  | Historical (unaudited) |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  | Pro Forma |  |  |  | Pro Forma |
|  | Boston Omaha |  |  | Utah Broadband |  |  | Adjustments |  | Notes |  | Consolidated |
Current Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 42,270,664 |  |  | $ | 1,959,558 |  |  | $ | (23,242,518 | ) | (2a) |  | $ | 20,987,704 |
Restricted cash |  |  | 381,113 |  |  |  | - |  |  |  | - |  |  |  |  | 381,113 |
Accounts receivable, net |  |  | 3,585,966 |  |  |  | 202,917 |  |  |  | (1,917 | ) | (2a) |  |  | 3,786,966 |
Interest receivable |  |  | 64,892 |  |  |  | - |  |  |  | - |  |  |  |  | 64,892 |
Short-term investments |  |  | 7,294,663 |  |  |  | - |  |  |  | - |  |  |  |  | 7,294,663 |
Marketable equity securities |  |  | 63,794,553 |  |  |  | - |  |  |  | - |  |  |  |  | 63,794,553 |
U. S. Treasury securities available for sale |  |  | 76,667,538 |  |  |  | - |  |  |  | - |  |  |  |  | 76,667,538 |
Funds held as collateral assets |  |  | 6,385,197 |  |  |  | - |  |  |  | - |  |  |  |  | 6,385,197 |
Prepaid expenses |  |  | 1,876,055 |  |  |  | - |  |  |  | - |  |  |  |  | 1,876,055 |
Total Current Assets |  |  | 202,320,641 |  |  |  | 2,162,475 |  |  |  | (23,244,435 | ) |  |  |  | 181,238,681 |
Property and Equipment, net |  |  | 41,379,338 |  |  |  | 6,352,004 |  |  |  | (182,004 | ) | (2a) |  |  | 47,549,338 |
Other Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  | 113,416,446 |  |  |  | - |  |  |  | 11,030,000 |  | (2a) |  |  | 124,446,446 |
Intangible assets, net |  |  | 35,418,574 |  |  |  | 81,050 |  |  |  | 9,558,950 |  | (2a) |  |  | 45,058,574 |
Investments |  |  | 19,698,400 |  |  |  | - |  |  |  | - |  |  |  |  | 19,698,400 |
Investments in unconsolidated affiliates |  |  | 16,026,812 |  |  |  | - |  |  |  | - |  |  |  |  | 16,026,812 |
Deferred policy acquisition costs |  |  | 975,276 |  |  |  | - |  |  |  |  |  |  |  |  | 975,276 |
Right of use assets |  |  | 50,242,563 |  |  |  | - |  |  |  | 3,226,355 |  | (2a) |  |  | 53,468,918 |
Other |  |  | 426,963 |  |  |  | - |  |  |  | - |  |  |  |  | 426,963 |
Total Other Assets |  |  | 236,205,034 |  |  |  | 81,050 |  |  |  | 23,815,305 |  |  |  |  | 260,101,389 |
Total Assets |  | $ | 479,905,013 |  |  | $ | 8,595,529 |  |  | $ | 388,866 |  |  |  | $ | 488,889,408 |

See accompanying notes to unaudited pro forma consolidated financial statements.

1

BOSTON OMAHA CORPORATION AND UTAH BROADBAND, LLC

Unaudited Pro Forma Consolidated Balance Sheet

September 30, 2020

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS' EQUITY

|  | Historical (unaudited) |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  | Pro Forma |  |  |  | Pro Forma |
|  | Boston Omaha |  |  | Utah Broadband |  |  | Adjustments |  | Notes |  | Consolidated |
Current Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable and accrued expenses |  | $ | 5,964,495 |  |  | $ | 649,706 |  |  |  | (612,406 | ) | (2a) |  | $ | 6,001,795 |
Short-term payables for business acquisitions |  |  | 814,416 |  |  |  | - |  |  |  | - |  | (2a) |  |  | 814,416 |
Lease liabilities |  |  | 3,723,843 |  |  |  | - |  |  |  | - |  |  |  |  | 3,723,843 |
Funds held as collateral |  |  | 6,385,197 |  |  |  | - |  |  |  | - |  |  |  |  | 6,385,197 |
Unearned premiums |  |  | 4,775,163 |  |  |  | - |  |  |  | - |  |  |  |  | 4,775,163 |
Current maturities of long-term debt |  |  | 1,278,363 |  |  |  | 402,417 |  |  |  | (402,417 | ) | (2a) |  |  | 1,278,363 |
Deferred revenue |  |  | 1,612,915 |  |  |  | 428,026 |  |  |  | (28,026 | ) | (2a) |  |  | 2,012,915 |
Total Current Liabilities |  |  | 24,554,392 |  |  |  | 1,480,149 |  |  |  | (1,042,849 | ) |  |  |  | 24,991,692 |
Long-term Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Asset retirement obligations |  |  | 2,247,533 |  |  |  | - |  |  |  | - |  |  |  |  | 2,247,533 |
Lease liabilities |  |  | 45,366,930 |  |  |  | - |  |  |  | 3,226,355 |  | (2a) |  |  | 48,593,285 |
Long-term debt, less current maturities |  |  | 22,074,639 |  |  |  | 389,101 |  |  |  | (389,101 | ) | (2a) |  |  | 22,074,639 |
Other long-term liabilities |  |  | 120,595 |  |  |  | - |  |  |  | - |  |  |  |  | 120,595 |
Deferred tax liability |  |  | 57,000 |  |  |  | - |  |  |  | - |  |  |  |  | 57,000 |
Total Liabilities |  |  | 94,421,089 |  |  |  | 1,869,250 |  |  |  | 1,794,405 |  |  |  |  | 98,084,744 |
Redeemable Noncontrolling Interest: |  |  | 1,655,121 |  |  |  | - |  |  |  | 5,320,740 |  | (2a) |  |  | 6,975,861 |
Stockholders' Equity: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Preferred stock, $.001 par value, 1,000,000 shares authorized, 0 shares issued and outstanding |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  | - |
Class A common stock, $.001 par value, 38,838,884 shares authorized, 26,175,555 shares issued and outstanding, respectively |  |  | 26,176 |  |  |  | - |  |  |  | - |  |  |  |  | 26,176 |
Class B common stock, $.001 par value, 1,161,116 shares authorized, 1,055,560 shares issued and outstanding |  |  | 1,056 |  |  |  | - |  |  |  | - |  |  |  |  | 1,056 |
Additional paid-in capital |  |  | 423,481,777 |  |  |  | - |  |  |  | - |  |  |  |  | 423,481,777 |
Accumulated deficit |  |  | (39,680,206 | ) |  |  | 6,726,279 |  |  |  | (6,726,279 | ) | (2a) |  |  | (39,680,206 | )
Total Stockholders' Equity |  |  | 383,828,803 |  |  |  | 6,726,279 |  |  |  | (6,726,279 | ) |  |  |  | 383,828,803 |
Total Liabilities, Redeemable Noncontrolling interest and Stockholders' Equity |  | $ | 479,905,013 |  |  | $ | 8,595,529 |  |  | $ | 388,866 |  |  |  | $ | 488,889,408 |

See accompanying notes to unaudited pro forma consolidated financial statements.

2

BOSTON OMAHA CORPORATION AND UTAH BROADBAND, LLC

Unaudited Pro Forma Consolidated Statement of Operations

For the Nine months Ended September 30, 2020

|  | Historical (unaudited) |  |  | Pro Forma |  |  |  | Pro Forma |
|  | Boston Omaha |  |  | Utah Broadband |  |  | Adjustments |  | Notes |  | Consolidated |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Billboard rentals, net |  | $ | 20,991,755 |  |  | $ | - |  |  | $ | - |  |  |  | $ | 20,991,755 |
Broadband services |  |  | 2,575,676 |  |  |  | 6,922,265 |  |  |  | - |  |  |  |  | 9,497,941 |
Premiums earned |  |  | 9,538,183 |  |  |  | - |  |  |  | - |  |  |  |  | 9,538,183 |
Insurance commissions |  |  | 1,065,013 |  |  |  | - |  |  |  | - |  |  |  |  | 1,065,013 |
Investment and other income |  |  | 338,953 |  |  |  | - |  |  |  | - |  |  |  |  | 338,953 |
Total Revenues |  |  | 34,509,580 |  |  |  | 6,922,265 |  |  |  | - |  |  |  |  | 41,431,845 |
Costs and Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost of billboard revenues (exclusive of depreciation and amortization) |  |  | 8,472,265 |  |  |  | - |  |  |  | - |  |  |  |  | 8,472,265 |
Cost of broadband revenues (exclusive of depreciation and amortization) |  |  | 379,073 |  |  |  | 1,224,986 |  |  |  | - |  |  |  |  | 1,604,059 |
Cost of insurance revenues (exclusive of depreciation and amortization) |  |  | 5,367,231 |  |  |  | - |  |  |  | - |  |  |  |  | 5,367,231 |
Employee costs |  |  | 9,542,845 |  |  |  | 1,775,705 |  |  |  | - |  |  |  |  | 11,318,550 |
Professional fees |  |  | 2,582,961 |  |  |  | - |  |  |  | - |  |  |  |  | 2,582,961 |
General and administrative |  |  | 4,655,960 |  |  |  | 1,139,472 |  |  |  | - |  |  |  |  | 5,795,432 |
Amortization |  |  | 3,012,641 |  |  |  | - |  |  |  | 651,375 |  | (2b) |  |  | 3,664,016 |
Depreciation |  |  | 2,744,376 |  |  |  | 546,621 |  |  |  | (117,409 | ) | (2b) |  |  | 3,173,588 |
Loss on disposition of assets |  |  | 89,685 |  |  |  | - |  |  |  | - |  |  |  |  | 89,685 |
Bad debt expense |  |  | 322,483 |  |  |  | - |  |  |  | - |  |  |  |  | 322,483 |
Accretion |  |  | 105,964 |  |  |  | - |  |  |  | - |  |  |  |  | 105,964 |
Total Costs and Expenses |  |  | 37,275,484 |  |  |  | 4,686,784 |  |  |  | 533,966 |  |  |  |  | 42,496,234 |
Net (Loss) Income from Operations |  |  | (2,765,904 | ) |  |  | 2,235,481 |  |  |  | (533,966 | ) |  |  |  | (1,064,389 | )
Other Income (Expense): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest income |  |  | 884,125 |  |  |  | - |  |  |  | - |  |  |  |  | 884,125 |
Dividend income |  |  | 967,864 |  |  |  | - |  |  |  | - |  |  |  |  | 967,864 |
Equity in income of unconsolidated affiliates |  |  | 2,406,151 |  |  |  | - |  |  |  | - |  |  |  |  | 2,406,151 |
Unrealized loss on securities |  |  | (24,413,748 | ) |  |  | - |  |  |  | - |  |  |  |  | (24,413,748 | )
Gain on disposition of investments |  |  | 5,696,068 |  |  |  | - |  |  |  | - |  |  |  |  | 5,696,068 |
Interest expense |  |  | (600,631 | ) |  |  | (12,781 | ) |  |  | - |  |  |  |  | (613,412 | )
Other |  |  | - |  |  |  | 18,000 |  |  |  | - |  |  |  |  | 18,000 |
Net (Loss) Income before Income Tax |  |  | (17,826,075 | ) |  |  | 2,240,700 |  |  |  | (533,966 | ) | (2b) |  |  | (16,119,341 | )
Income Tax (Provision) Benefit |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  | - |
Net (Loss) Income |  |  | (17,826,075 | ) |  |  | 2,240,700 |  |  |  | (533,966 | ) |  |  |  | (16,119,341 | )
Noncontrolling Interest in Subsidiary Income |  |  | (42,184 | ) |  |  | - |  |  |  | - |  |  |  |  | (42,184 | )
Net (Loss) Income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Attributable to Common Stockholders |  | $ | (17,868,259 | ) |  | $ | 2,240,700 |  |  | $ | (533,966 | ) |  |  | $ | (16,161,525 | )
Basic and Diluted Net Loss per Share |  | $ | (0.71 | ) |  |  |  |  |  |  |  |  | (3a) |  | $ | (0.64 | )
Basic and Diluted Weighted Average Class A and Class B Common Shares Outstanding |  |  | 25,145,700 |  |  |  |  |  |  |  |  |  | (3a) |  |  | 25,145,700 |

See accompanying notes to unaudited pro forma consolidated financial statements.

3

BOSTON OMAHA CORPORATION AND UTAH BROADBAND, LLC

Unaudited Pro Forma Consolidated Statement of Operations

For the Year Ended December 31, 2019

|  | Historical |  |  | Pro Forma |  |  |  | Pro Forma |
|  | Boston Omaha |  |  | Utah Broadband |  |  | Adjustments |  | Notes |  | Consolidated |
Revenues: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Billboard rentals, net |  | $ | 28,429,167 |  |  | $ | - |  |  | $ | - |  |  |  | $ | 28,429,167 |
Broadband services |  |  | - |  |  |  | 8,881,366 |  |  |  | - |  |  |  |  | 8,881,366 |
Premiums earned |  |  | 10,944,313 |  |  |  |  |  |  |  |  |  |  |  |  | 10,944,313 |
Insurance commissions |  |  | 1,567,331 |  |  |  | - |  |  |  | - |  |  |  |  | 1,567,331 |
Investment and other income |  |  | 448,327 |  |  |  | - |  |  |  | - |  |  |  |  | 448,327 |
Total Revenues |  |  | 41,389,138 |  |  |  | 8,881,366 |  |  |  | - |  |  |  |  | 50,270,504 |
Costs and Expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost of billboard revenues (exclusive of depreciation and amortization) |  |  | 11,321,149 |  |  |  | - |  |  |  | - |  |  |  |  | 11,321,149 |
Cost of broadband revenues (exclusive of depreciation and amortization) |  |  | - |  |  |  | 1,253,071 |  |  |  | - |  |  |  |  | 1,253,071 |
Cost of insurance revenues (exclusive of depreciation and amortization) |  |  | 6,290,218 |  |  |  | - |  |  |  | - |  |  |  |  | 6,290,218 |
Employee costs |  |  | 11,945,895 |  |  |  | 2,019,380 |  |  |  | - |  |  |  |  | 13,965,275 |
Professional fees |  |  | 3,664,370 |  |  |  | - |  |  |  | - |  |  |  |  | 3,664,370 |
General and administrative |  |  | 6,346,698 |  |  |  | 1,628,533 |  |  |  | - |  |  |  |  | 7,975,231 |
Amortization |  |  | 10,471,973 |  |  |  | - |  |  |  | 868,500 |  | (2b) |  |  | 11,340,473 |
Depreciation |  |  | 3,102,168 |  |  |  | 619,760 |  |  |  | (47,477 | ) | (2b) |  |  | 3,674,451 |
Loss on disposition of assets |  |  | 223,890 |  |  |  | - |  |  |  | - |  |  |  |  | 223,890 |
Bad debt expense |  |  | 299,881 |  |  |  | - |  |  |  | - |  |  |  |  | 299,881 |
Accretion |  |  | 134,992 |  |  |  | - |  |  |  | - |  |  |  |  | 134,992 |
Total Costs and Expenses |  |  | 53,801,234 |  |  |  | 5,520,744 |  |  |  | 821,023 |  |  |  |  | 60,143,001 |
Net (Loss) Income from Operations |  |  | (12,412,096 | ) |  |  | 3,360,622 |  |  |  | (821,023 | ) |  |  |  | (9,872,497 | )
Other Income (Expense): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest income |  |  | 3,198,527 |  |  |  | - |  |  |  | - |  |  |  |  | 3,198,527 |
Dividend income |  |  | 710,169 |  |  |  |  |  |  |  |  |  |  |  |  | 710,169 |
Equity in income of unconsolidated affiliates |  |  | 479,366 |  |  |  | - |  |  |  | - |  |  |  |  | 479,366 |
Unrealized gain on securities |  |  | 6,273,337 |  |  |  | - |  |  |  | - |  |  |  |  | 6,273,337 |
Gain on disposition of investments |  |  | 572,181 |  |  |  | - |  |  |  | - |  |  |  |  | 572,181 |
Interest expense |  |  | (302,749 | ) |  |  | (22,196 | ) |  |  | - |  |  |  |  | (324,945 | )
Other |  |  | - |  |  |  | 65,729 |  |  |  | - |  |  |  |  | 65,729 |
Net (Loss) Income before Income Tax |  |  | (1,481,265 | ) |  |  | 3,404,155 |  |  |  | (821,023 | ) | (2b) |  |  | 1,101,867 |
Income Tax (Provision) Benefit |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  | - |
Net (Loss) Income |  |  | (1,481,265 | ) |  |  | 3,404,155 |  |  |  | (821,023 | ) |  |  |  | 1,101,867 |
Noncontrolling Interest in Subsidiary Income |  |  | (5,658 | ) |  |  | - |  |  |  | - |  |  |  |  | (5,658 | )
Net (Loss) Income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Attributable to Common Stockholders |  | $ | (1,486,923 | ) |  | $ | 3,404,155 |  |  | $ | (821,023 | ) |  |  | $ | 1,096,209 |
Basic and Diluted Net (Loss) Income per Share |  | $ | (0.07 | ) |  |  |  |  |  |  |  |  | (3a) |  | $ | 0.05 |
Basic and Diluted Weighted Average Class A and Class B Common Shares Outstanding |  |  | 22,778,405 |  |  |  |  |  |  |  |  |  | (3a) |  |  | 22,778,405 |

See accompanying notes to unaudited pro forma consolidated financial statements.

4

BOSTON OMAHA CORPORATION AND UTAH BROADBAND, LLC

Notes to Unaudited Pro Forma Consolidated Financial Statements

NOTE 1. BASIS OF PRESENTATION

The unaudited pro forma consolidated balance sheet has been prepared by applying pro forma adjustments to Boston Omaha Corporation’s (“Boston Omaha”) (“the Company”) unaudited consolidated balance sheet as of September 30, 2020 and Utah Broadband, LLC.’s (“UBB”) unaudited balance sheet as of September 30, 2020.

The unaudited pro forma consolidated statement of operations for the nine months ended September 30, 2020 has been prepared from Boston Omaha’s unaudited interim consolidated statement of operations for the nine months ended September 30, 2020 and from UBB’s unaudited interim statement of operations for the nine months ended September 30, 2020.

Boston Omaha’s audited consolidated financial statements and UBB’s audited financial statements have been used in the preparation of the unaudited pro forma consolidated statement of operations for the year ended December 31, 2019. The assumed timing of the transaction for the unaudited pro forma consolidated statements of operations and balance sheet presented is January 1, 2019 and September 30, 2020, respectively.

The unaudited pro forma consolidated financial statements should be read in conjunction with the historical financial statements of Boston Omaha and UBB as follows:

Boston Omaha’s audited consolidated financial statements for the year ended December 31, 2019 and the notes relating thereto, as found in its Form 10-K which was filed with the Securities and Exchange Commission on March 13, 2020;

Boston Omaha’s unaudited consolidated financial statements for the nine months ended September 30, 2020 and the notes relating thereto, as found in its Form 10-Q which was filed with the Securities and Exchange Commission on November 9, 2020;

UBB’s audited financial statements for the year ended December 31, 2019 and the notes relating thereto included in this Form 8-K and;

UBB’s unaudited financial statements for the nine months ended September 30, 2020 and the notes relating thereto included elsewhere in this Form 8-K.

NOTE 2. BUSINESS ACQUISITION

On December 29, 2020 (the “Closing Date"), Boston Omaha Corporation (the “Company”), through its wholly-owned subsidiary FIF Utah, LLC (“FIF Utah”) completed its previously announced acquisition (the “Acquisition”) of the assets of Utah Broadband, LLC (“UBB”).

On December 11, 2020, FIF Utah entered into an Asset Purchase and Contribution Agreement (the "Agreement") by and among (i) UBB, (ii) its members Alpine Networks, Inc., a Utah corporation and The Community Trust of Utah; (iii) Steven C. McGhie, and (iv) FIF Utah. Under the terms of the Agreement, FIF Utah acquired substantially all of the assets of UBB and assumed only certain liabilities of UBB. The total purchase price of $26,603,700 was paid 80% in cash and the remaining 20% of the purchase price was paid by issuing to UBB 20% of the outstanding equity of FIF Utah. A portion of the cash purchase price will be held in escrow to provide a source of indemnification for any breaches of the representations and warranties, covenants and other obligations of UBB, its members and Mr. McGhie under the Agreement.

5

BOSTON OMAHA CORPORATION AND UTAH BROADBAND, LLC

Notes to Unaudited Pro Forma Consolidated Financial Statements

NOTE 2. BUSINESS ACQUISITION, (Continued)

Recognized Amount of Identifiable Assets Acquired and Liabilities Assumed

The Company has performed a preliminary valuation analysis of the fair market value of UBB’s assets to be acquired and liabilities to be assumed. Using the total consideration for the acquisition, the Company has estimated the allocations to such assets and liabilities. The following table summarizes the allocation of the preliminary purchase price as of the transaction’s closing date, December 29, 2020:

Identifiable Assets:

PP&E |  | $ | 6,170,000 |
Customer Relationships |  |  | 7,400,000 |
Permits |  |  | 330,000 |
Tradenames and Trademarks |  |  | 1,910,000 |
Goodwill |  |  | 11,030,000 |
Right of Use Assets |  |  | 3,226,355 |
Other |  |  | 201,000 |
Total Identifiable Assets Acquired |  |  | 30,267,355 |
Liabilities Assumed: |  |  |  |
Accounts Payable and Deferred Revenue |  |  | 437,300 |
Lease Liabilities |  |  | 3,226,355 |
Total Liabilities Assumed |  |  | 3,663,655 |
Total Identifiable Net Assets |  | $ | 26,603,700 |

This preliminary purchase price allocation has been used to prepare pro forma adjustments, (2a), in the pro forma balance sheet and statement of operations. The final purchase price allocation will be determined when the Company has completed the detailed valuations and necessary calculations. The final allocation could differ materially from the preliminary allocation used in the pro forma adjustments. The final allocation may include (1) changes in fair values of property and equipment, (2) changes in allocations to intangible assets such as permits, noncompetition agreements, and customer relationships as well as goodwill and (3) other changes to assets and liabilities.

Depreciation and amortization, (2b), have been provided for property and equipment and finite intangible assets based on the preliminary purchase price allocation. Property and equipment have been depreciated on a straight-line basis over their estimated useful lives ranging from of five to twenty years. Intangible assets having a finite life have been amortized on a straight-line basis over their estimated useful lives ranging from ten to twenty years.

All significant intercompany balances have been eliminated in consolidation.

6

BOSTON OMAHA CORPORATION AND UTAH BROADBAND, LLC

Notes to Unaudited Pro Forma Consolidated Financial Statements

NOTE 3. PRO FORMA ADJUSTMENTS

Earnings per share

(3a) The basic net income (loss) per common share is computed by dividing the net income (loss) by the weighted average number of Class A and Class B common shares outstanding.

Income Tax (Provision) Benefit

(3b) Federal and state income taxes have not been provided as the Company has experienced net operating losses for federal tax purposes and state income taxes have not been significant.

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