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Note 17 - Special Purpose Acquisition Company

12 Months Ended

Dec. 31, 2021

Special Purpose Acquisition Company [Text Block]

NOTE 17.

SPECIAL PURPOSE ACQUISITION COMPANY

On September 25, 2020, we filed a Registration Statement on Form S-1 with the Securities and Exchange Commission for a proposed initial public offering of units of a special purpose acquisition company (“SPAC”) named Yellowstone Acquisition Company, which we refer to as “Yellowstone.” Our subsidiary, BOC Yellowstone LLC, which we refer to as “BOC Yellowstone,” served as the sponsor of Yellowstone. The purpose of the offering is to pursue a business combination in an industry other than the three industries in which we currently own and operate businesses: outdoor advertising, surety insurance and broadband services businesses.

Prior to the filing of Yellowstone's Registration Statement on Form S-1, BOC Yellowstone purchased 5,750,000 shares of Yellowstone's Class B common stock, par value $0.0001 per share, for an aggregate price of $25,000. Between October 9, 2020, and December 31, 2020, BOC Yellowstone surrendered 2,350,276 shares of Class B common stock to Yellowstone for no consideration, resulting in an aggregate of 3,399,724 shares of Yellowstone's Class B common stock outstanding as of December 31, 2021 and 2020. The shares of Class B common stock will automatically convert into shares of Yellowstone's Class A common stock on a one-for-one basis at the time of the closing of the Sky business combination and are subject to certain transfer restrictions.

On October 26, 2020, Yellowstone consummated its initial public offering (the "IPO"), of 12,500,000 units (the “Units”). Each Unit consisted of one share of Class A common stock of Yellowstone, par value $0.0001 per share, and one-half of one redeemable warrant of Yellowstone, each whole warrant entitling the holder thereof to purchase one whole share of Yellowstone's Class A Common Stock at an exercise price of $11.50 per share. The Units were sold at a price of $10.00 per unit, generating gross proceeds to Yellowstone of $125,000,000, and trade on the NASDAQ Stock Market, LLC under the ticker symbol “YSACU”. After the securities comprising the units began separate trading, the shares of Class A common stock and warrants were listed on NASDAQ under the symbols “YSAC” and “YSACW,” respectively.

Also on October 26, 2020, simultaneously with the closing of the IPO, BOC Yellowstone purchased 7,500,000 warrants at a purchase price of $1.00 per warrant, for a total purchase price of $7,500,000. In the event that Yellowstone does not consummate a business combination within 15 months of its initial public offering, our shares of Yellowstone's Class B common stock and warrants will be used to redeem the shares of Class A common stock sold to the public.

On November 16, 2020, BOC Yellowstone transferred to BOC Yellowstone II LLC, which we refer to as “BOC Yellowstone II,” 206,250 shares of Class B common stock for no consideration. All other shares of Class B common stock are owned by BOC Yellowstone. BOC Yellowstone sold to the lead investor in Yellowstone’s IPO a membership interest in BOC Yellowstone II for a purchase price of $309,375. Upon the completion of any business combination, BOC Yellowstone has agreed to transfer the 206,250 shares of Class B common stock to this investor. Any Class B common stock ultimately distributed to the investor is subject to all restrictions imposed on BOC Yellowstone, including but not limited to, waiver of redemption rights in connection with completion of any initial business combination and rights to liquidating distributions from Yellowstone's trust account if Yellowstone fails to complete an initial business combination. Any shares held by such investor will be subject to the anti-dilution provisions for the Class B common stock and the impact thereof. BOC Yellowstone is the sole managing member of BOC Yellowstone II.

On December 1, 2020, the underwriters' over-allotment option was exercised resulting in the purchase of an additional 1,098,898 Units. In connection with the underwriter's exercise of the over-allotment option on December 1, 2020, BOC Yellowstone purchased warrants at a price of $1.00 per whole warrant to purchase an additional 219,779 shares of Class A common stock at a price of $11.50 per share.

On August 1, 2021, Yellowstone entered into a business combination agreement with Sky Harbour LLC, which we refer to as “SHG,” a developer of private aviation infrastructure focused on building, leasing and managing business aviation hangars. Upon closing of the business combination, which is subject to a number of closing conditions, including but limited to approval of the transaction by Yellowstone’s shareholders, SHG will become a publicly traded company, and it is expected that its common stock will be listed on the NYSE exchange. It is currently anticipated that the combined company will have an implied pro forma equity market value of approximately $777 million at closing, assuming none of Yellowstone’s public shareholders request that their shares be redeemed.

On September 14, 2021, our subsidiary BOC YAC Funding LLC completed the previously-announced investment of $55 million in Series B Preferred Units of SHG. Upon the successful consummation of the business combination, these units will convert into 5,500,000 shares of the post-combination public company’s Class A common stock, at a price of $10 per share. In addition to our $55 million investment, we have also agreed to provide to SHG an additional $45 million through the purchase of additional shares of Yellowstone Class A common stock at a price of $10 per share through a private placement investment (“PIPE”). In the event the business combination is not consummated, our investment will remain as Series B Preferred Units of SHG.

All of the 13,598,898 shares of Class A Common Stock sold as part of the Units in Yellowstone's public offering contain a redemption feature which allows for the redemption of such public shares in connection with the Company’s liquidation, if there is a stockholder vote or tender offer in connection with a business combination and in connection with certain amendments to Yellowstone’s second amended and restated certificate of incorporation. In accordance with SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within the control of the Company require common stock subject to redemption to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of ASC 480.

The Company classifies all shares of Yellowstone's Class A Common Stock as redeemable noncontrolling interest within temporary equity and recognizes changes in redemption value immediately as they occur and adjusts the carrying value of redeemable noncontrolling interest to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are effected through charges against retained earnings or accumulated deficit. Earnings and losses are shared pro rata between Yellowstone's Class A common stock and Class B common stock.

Yellowstone’s assets that are measured at fair value on a recurring basis at December 31, 2021 are comprised of $69,378,000 of marketable U.S. treasury securities and $69,382,121 of money market funds, both of which are held in the Trust Account, and $11,908,671 of Public and Private Placement warrants issued in connection with Yellowstone's Initial Public Offering, all of which are classified as Level 1 within the fair value hierarchy and are measured using quoted prices in active markets for identical assets or liabilities.

We have determined that (i) Yellowstone is a Variable Interest Entity, (ii) we are the primary beneficiary, and (iii) it is appropriate to consolidate Yellowstone under applicable accounting guidance outlined within ASC 810, Consolidation. As a result, both the Founders Shares and Private Placement Warrants are eliminated in consolidation. See further discussion of Yellowstone's proposed business combination with SHG within Note 20.