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Item 3 — Quantitative and Qualitative Disclosures About Market Risk
Boston Omaha Corporation · 10-Q · Q2 FY2026 · Period ended Jun 30, 2026
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As of June 30, 2026, we held no significant derivative instruments that materially increased our exposure to market risks for interest rates, foreign currency rates, commodity prices, or other market price risks. Because our operations are currently conducted entirely within the U.S., we had no significant exposure to foreign currency exchange rate risk.
As of June 30, 2026, we had cash and cash equivalents, U.S. Treasury securities that are bought and held principally for the purpose of selling them in the near-term and short-term U.S. Treasury securities which we intend to hold to maturity. Interest-earning instruments carry a degree of interest rate risk, and the values for these instruments can fluctuate.
As of June 30, 2026, all of Link's $25.2 million in long-term debt is at a fixed interest rate. Link also had $9.1 million in borrowings under its revolving line of credit, which is subject to interest rate risk. BOB's long-term debt of $13.2 million is subject to interest rate risk. A hypothetical 100 basis point change in variable interest rates would impact our interest expense for both Link's revolving line of credit and BOB's long-term debt by approximately $220 thousand over the next twelve months. Additional information regarding our outstanding debt can be found in Note 11 - Long-Term Debt included in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report. Any long-term debt under the ReConnect Program will be set at the Treasury Rate then in effect at the time of any drawdown under the Loan and Grant Agreement.
As of June 30, 2026, our investment in the 11,339,994 shares of Sky Harbour Class A common stock is recorded under the equity method of accounting. We also hold warrants to purchase up to 7,719,779 shares of Sky Harbour Class A common stock, which are measured at fair value using observable inputs for similar assets in an active market. We also occasionally hold relatively small amounts in other publicly traded securities. We hold interests in several private companies including our investments in CB&T and Logic. Our investments in privately held securities may be difficult to value given the lack of publicly available information about the issuers of these securities. These investments may increase the volatility in our net income (loss) in future periods due to changes in the fair value of these instruments. In certain cases, our ability to sell these investments may be impacted by certain contractual obligations or otherwise.
As a result of inflationary pressures, there have been and may continue to be additional pressures on the ongoing increases in supply chain and logistics costs, material costs and labor costs. The effect of U.S. and global tariffs may spur inflationary conditions and create further pressure on costs. Additionally, ongoing and future global conflicts may further drive inflationary pressures throughout the global economy and lead to potential market disruptions. We have been and may continue to be impacted by inflation in the future which could have an adverse effect on our business.