NUVR 10-K & 10-Q changes, risk factors and insider trading
Nuvera Communications, Inc. · OTC · Telephone Communications (No Radiotelephone) · CIK 71557 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Largest changes
“The imposition of new duties, tariffs, trade barriers and retaliatory countermeasures implemented by the United States and other governments and resulting impact on customer demand may have a material adverse effect on our business, fiber build initiatives, financial condition and results of operations. …”see in full comparison
“The extent and duration of increased tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the United States and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply, and demand for our services.”see in full comparison
“As a result of these dynamics, we may find it difficult to predict the impact to our business of these and future changes to the trading relationships between the United States or other countries or the impact on our business of new laws or regulations adopted by the United States or other countries.”see in full comparison
We cannot predict future changes that may have an impact on the subsidies we receive. However, a reduction in subsidies support may directly affect our profitability and cash flows. In addition, the federal debt limit continues to be actively debated as plans for long-term national fiscal policy are discussed. Moreover, over the last decade, includingsee in full comparison35thedaysmostbeginningrecent government shut down which began onDecemberOctober22,1,2018,2025, the United States government has shut down several times and some regulatory agencies have had to furlough employees and stop some activities. Further, the outcome of any budget discussion could have a significant effect on programs that support us. The failure of Congress to approve future budgets or increase the debt ceiling of the of the United States on a timely basis or decrease funding for any of these programs could delay or result in the loss of support payments we receive.
Full comparison: every changed paragraph (7)
The wireless business has expanded significantly and has caused many subscribers with traditional telephone and land-based Internet access services to give up those services and rely exclusively on wireless service. In addition, consumers’ options for viewing TV shows have expanded as content becomes increasingly available through alternative sources. Some providers, including TV and CATV content owners, have initiated OTT services that deliver video content to TV, computers, and other devices over the Internet. OTT services can include episodes of highly rated TV series in their current broadcast seasons. They can also include original content and broadcast or sports content like those that we carry, but that is distinctive and exclusively available through the alternative source. Consumers can pursue each of these options without foregoing any of the other options. We may not be able to successfully anticipate and respond to many of the various competitive factors affecting the industry, including regulatory changes that may affect our competitors and us differently, new technologies, services and applications that may be introduced, changes in consumer preferences, demographic trends,trends and discount or bundled pricing strategies by competitors.
Our future growth is primarily dependent upon our expansion strategy, which may or may not be successful. We are strategically focused on driving growth by expanding our broadband network to provide services in communities that are in, near or adjacent to our network. This expansion strategy includes our FTTHFTTP broadband service. This strategy is relatively new in the marketplace and the success of our strategy will depend on the degree to which we are able to successfully establish and continue to enhance this build, which is not assured. This strategy requires considerable management resources and capital investment, and it is uncertain whether and when it will contribute to positive free cash flow and the degree to which we will otherwise achieve our strategic objectives, on a timely basis or at all. Additionally, we must obtain franchises, construction permits and other regulatory approvals to commence operations in these communities. Delays in entering into regulatory agreements, receiving the necessary franchises and construction permits, procuring needed contractors, materials or supplies, and conducting the construction itself could adversely impact our scheduled construction plans and, ultimately, our expansion strategy. Difficulty in obtaining necessary resources may also adversely affect our ability to expand into new marketsmarkets, as could our ability to adequately market a new brand to customers unfamiliar to us as we expand tointo markets where we do not currently operate. We may face resistance from competitors who are already in markets we wish to enter. If our expectations regarding our ability to attract customers in these communities are not met, or if the capital requirements to complete the network investment or the time required to attract our expected level of customers are incorrect, our financial performance and returns on investment may be negatively impacted.
We cannot predict future changes that may have an impact on the subsidies we receive. However, a reduction in subsidies support may directly affect our profitability and cash flows. In addition, the federal debt limit continues to be actively debated as plans for long-term national fiscal policy are discussed. Moreover, over the last decade, including 35the daysmost beginningrecent government shut down which began on DecemberOctober 22,1, 2018,2025, the United States government has shut down several times and some regulatory agencies have had to furlough employees and stop some activities. Further, the outcome of any budget discussion could have a significant effect on programs that support us. The failure of Congress to approve future budgets or increase the debt ceiling of the of the United States on a timely basis or decrease funding for any of these programs could delay or result in the loss of support payments we receive.
The imposition of new duties, tariffs, trade barriers and retaliatory countermeasures implemented by the United States and other governments and resulting impact on customer demand may have a material adverse effect on our business, fiber build initiatives, financial condition and results of operations. The implementation of significant changes to United States trade policies, sanctions, legislation, treaties and tariffs, including, but not limited to, significant new tariffs on goods imported into the United States, have introduced uncertainty to our business and may increase the cost of our services and fiber build initiatives, which could reduce our gross margin. The imposition of additional tariffs or other trade barriers by countries outside of the United States may increase our costs, and to the extent these increased costs result in increased prices for our customers, the demand for our services may decrease as our customers seek alternative options, making it more difficult for us to sell our services.
The extent and duration of increased tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the United States and affected countries, the responses of other countries or regions, exemptions or exclusions that may be granted, availability and cost of alternative sources of supply, and demand for our services.
As a result of these dynamics, we may find it difficult to predict the impact to our business of these and future changes to the trading relationships between the United States or other countries or the impact on our business of new laws or regulations adopted by the United States or other countries.
A cyber-attack may lead to unauthorized access to confidential customer, personnel and business information that could adversely affect our business. Attempts by others to gain unauthorized access to organizations' information technology systems are becoming more frequent and sophisticated and are sometimes successful. These attempts may include covertly introducing malware to companies' computers and networks, impersonating authorized users or "hacking" into systems. We seek to prevent, detect, and investigate all security incidents that do occur; however, we may be unable to prevent or detect a significant attack in the future. Significant information technology security failures could result in the theft, loss, damage, unauthorized useuse, or publication of our confidential business information, which could harm our competitive position, subject us to additional regulatory scrutiny, expose us to litigation or otherwise adversely affect our business. If a security breach results in misuse of our customers' confidential information, we may incur liability as a result.
Management's Discussion & Analysis (MD&A)
New heading “Communications Segment”
Largest changes
Insee in full comparison2024,2025, we tested theSETCHTC, Scott-Rice andScott-RiceSETC goodwill. Based on the DCF model approach that was used, we determined the estimated enterprise fair value of our reporting units exceeded the carrying amount of that reporting units by approximately26.9%7.3%, 29.7% and22.3%28.5% forSETCHTC, Scott-Rice andScott-Rice,SETC, respectively, which indicated that we had no impairment as of December 31,2024.2025. In 2024, we tested the HTC goodwill. Based on the DCF model approach that was used, we determined that the carrying amount of that reporting unit exceeded the enterprise’s fair value of that reporting unit and resulted in an impairment of $4.9 million.In 2023, we tested the HTC goodwill. Based on the DCF model approach that was used, we determined that the carrying amount of that reporting unit exceeded the enterprise’s fair value of that reporting unit and resulted in an impairment of $9.3 million. Future negative changes relating to our financial operations could result in a potential impairment of goodwill.
Insee in full comparison20242025 and2023,2024, we engaged an independent valuation firm to aid in the completion of an annual impairment test for existing goodwill acquired. For20242025 and2023,2024, after the testing was completed,andwe determined that there was no impairment to goodwill for Scott-Rice and SETC as the determined fair value was sufficient to pass the impairment test. For 2025, after the testing, we determined that there was no impairment to goodwill for HTC as the determined fair value was sufficient to pass the impairment test. For 2024, after thetesting,testing was completed, we determined that there was an impairment to goodwill for HTC of $4.9million as the determined fair value was not sufficient to pass the impairment test. For 2023, after the testing, we determined that there was an impairment to goodwill for HTC of $9.3million as the determined fair value was not sufficient to pass the impairment test. We used a combination of Income (Discounted Cash Flow Method or DCF Method) and Market Approaches to estimate the fair value of the goodwill on our books related to prior acquisitions of communications company properties. The assumptions used in the estimates of fair value were based on projections provided by our management and a rate of return based on market information observed in debt and traded equity securities. Their Market Approaches considered market multiples observed in companies comparable to ours, traded on public exchange or over the counter, or transacted in a merger or acquisition transaction.
“¹ Includes the equity earnings from our investments, gain on sale of investment, patronage income, impairment of goodwill, interest during construction and certain other miscellaneous items.”see in full comparison
The most significant amount of goodwill recorded on our books was due to the acquisitions of HTC, SETC and Scott-Rice. The carrying value of the goodwill was $35,624,660 as of December 31,see in full comparison2024,2025, and$40,603,029 as of December 31, 2023. The reduction in goodwill was the result of the HTC impairment charge in 2024 and 2023, respectively.2024.
Income tax expense decreased bysee in full comparison$1,984,531$81,809 in20242025 compared to20232024 as we recorded income tax expense of$331,125$249,316 in20242025 and an income tax expense of$2,315,656$331,125 in2023.2024. This decrease was primarily due toaincreasedlowerinterestimpairmentexpense,chargepartiallyonoffsetourbyHTCCoBanksubsidiarypatronagein 2024 and reflects the taxable gain from the sale of our FiberComm equity investment on March 31, 2023, which affected the 2023 income taxes.dividends. The effective income tax rate was approximately 43.21% for 2025 and (8.08%) for2024 and (257.6%) for 2023.2024. The difference between the effective tax rate and the federal statutory tax rate are reconciled in Note 8 – “Income Taxes.”
Full comparison: every changed paragraph (50)
In 2024,2025, we have seensaw our overall revenues increase primarily due to increasedgrowth in governmental support revenues and Internet growth.Internet. However, we continue to see accelerated losses in our voice and video service customers as those customers make choices about their entertainment needs and personal finances. We have also experienced increased costs in 20242025 which have affected our margins. In addition, we had anticipated increased inflation and future supply chain issues in the inventory, equipment, and fiber we use in our business and had therefore purchased a large amount of these items to mitigate these potential issues and not disrupt our business operations.
With respect to liquidity, we continue to evaluate costs and spending across our organization. This includes evaluating discretionary spending and non-essential capital investment expenditures. As of December 31, 2024,2025, we had $11.5$8.9 million of our bank revolver available for use if the need arises. In addition, we have a $25.0 million delayed draw term loan available to fund our fiber expansion plans. The Company may seek additional financing to continue to fund its fiber expansion plans and meet current and future liquidity needs.
We will continue to actively monitor the situation and may take further actions that alter our operations as may be required by federal, state, or local authorities or that we determine are in the best interests of our employees, customers, suppliers, and shareholders.
In 2024, we planned to upgrade 10,400 passings with fiber services and faster broadband speeds. These passings will include upgrading current customers from our old copper network and new edge out passings. For the year ended December 31, 2024, we have succeeded in upgrading 10,166 passings with these fiber services. Project-to-date, we have upgraded a total of 45,339 overall passings with these fiber services.
Nuvera Communications, Inc.
Reporting by Technology
* Nuvera has experienced a decrease in its Fiber Gig-Cities Business ARPU. This is primarily due to the aggressive conversion of our smaller business customers from non-fiber to fiber.
Communications Segment
Voice Service – We receive recurring revenue for basic voice services that enable end-user customers to make and receive telephone calls within a defined local calling area for a flat monthly fee. In addition to subscribing to basic local voice services, our customers may choose from multiple voice service plans with a variety of custom calling features such as call waiting, call forwarding, caller identification and voicemail. Voice service revenue was $4,664,083,$4,253,818, which was $599,302$410,265 or 11.4%8.8% lower in 20242025 compared to 2023.2024. This decrease was primarily due to a decrease in access lines, which was the result of an accelerated industry trend of customers moving to other communications options or dropping their access lines altogether, partially offset by a combination of rate increases introduced into several of our markets in the past few years.
Data Service – We provide high speed Internet to business and residential customers depending on the nature of the network facilities that are available, the level of service selected and the location. Our revenue is earned based on the offering of various flat rate packages based on the level of service, data speeds and features. We also provide e-mail and managed services, such as web hosting,hosting and design, on-line file back up and on-line file storage. Data service revenue was $29,758,882$31,676,487 which was $2,249,809$1,917,605 or 8.2%6.4% higher in 20242025 compared to 2023.2024. This increase was primarily due to an increaseincreases in fiber customers,customers and customers upgrading their packages and speeds, and an increase in monthly equipment charges to our customers, partially offset by a decrease in non-fiber customers. We expect continued growth in this area will be driven by completing our advanced FTTP network, expansion of our service areas and marketing managed service solutions to businesses.
A-CAM/FUSF support totaled $15,507,401,$17,344,414, which was $3,028,025$1,837,013 or 24.3%11.8% higher in 20242025 compared to 2023.2024. This increase was primarily due to our new CBOL funding through USAC,USAC partiallyand offset by lowerhigher CAF support funding for our operating companies. On December 12, 2023, the Company announced that it confirmed eligibility for CBOL funding through USAC. The incremental funding is being used to continue to support the Company’s multi-year fiber construction initiative. The Company began receiving a monthly benefit in November of 2023, with the first payment received in December of 2023. On an annualized basis this new program initially provided $3.9 million of new funding based on the tariff filing and the Company’s expected line counts.December. The monthly CBOL subsidy formula is reviewed and subject to revision on an annual basis and subject to change based on updated USAC funding criteria July 1 of each year.
Other Revenue – Our customers are billed for toll and long-distance services on either a per call or flat-rate basis. This also includes the offering of directory assistance, operator service and long-distance private lines. We also generate revenue from directory publishing through an outside vendor, sales and service of CPE, bill processing, labor,processing and other customer services. Our directory publishing revenue in our telephone directories recurs monthly. We also provide retail sales and service of cellular phones and accessories through Telespire, a national wireless provider. We resell these wireless services as Nuvera Wireless, our branded product. We receive both recurring revenue for our wireless services, as well as revenue collected from the sales of wireless phones and accessories. Other revenue was $4,455,601,$4,608,641, which was $203,533$153,040 or 4.4%3.4% lowerhigher in 20242025 compared to 2023.2024. This decreaseincrease was primarily due to an increase in our paper billing revenue, partially offset by a decrease in directory publishing revenues,publishing, lower long-distance revenues, lower paperinside billwire feemaintenance revenuefees and a decrease in the sales and installation of CPE, partially offset by an increase in lease revenues and inside wire maintenance fees.CPE.
Cost of services (excluding depreciation and amortization expense) was $31,101,288,$31,176,149, which was $77,550$74,861 or 0.2% lowerhigher in 20242025 compared to 2023.2024. This decreaseincrease was primarily due to lower-than-expectedincreased labor costscosts, and maintenance and support agreements on our equipment and software. This increase is partially offset by lower programming costs from video content providers due to a lower numberloss of video customers. These decreases were partially offset by increased maintenancecustomers and supporta agreementsdecline onin our equipmentCPE and software.retail sales.
Operating income was $9,889,883,$9,878,608, which was $654,619$11,275 or 7.1%0.1% higherlower in 20242025 compared to 2023.2024. This increasedecrease was primarily due to increasedhigher data servicesdepreciation and governmentalselling, supportgeneral revenues,and administrative expenses, partially offset by increased operatinggovernmental expenses,support revenues and increased data services revenues, all of which are described above.
Other income in 20242025 and 2023,2024, included a patronage credit earned with CoBankCoBank, which was a result of our debt agreements with them. The patronage credit allocated and received in 20242025 was $1,196,948$1,656,597 compared to $692,371$1,196,948 allocated and received in 2023.2024. This increase was primarily due to higher outstanding debt balances and increased interest rates on our non-swapped debt in connection with our term debt credit facility and revolving credit facility with CoBank to support our fiber-build initiative. CoBank determines and pays the patronage credit annually, generally in the first quarter of the calendar year, based on its results from the prior year. We record these patronage credits as income whenin the period they are allocated and received.
Interest and dividend income decreasedincreased $11,865$54,822 in 20242025 compared to 2023.2024. This decreaseincrease was primarily due to decreasesincreases in dividend income earned on our investments.
Interest expense increased $4,420,996$889,161 in 20242025 compared to 2023.2024. This increase was primarily due to higher outstanding debt balances and increased interest rates on our non-swapped debt in connection with our term debt credit facility with CoBank to support our fiber-build initiative.
The gain on sale of investments in 20232025 reflects the final true up on the sale of FiberComm by Nuvera and the other owners of FiberComm to ImOn Communications LLC on March 31, 2023. The loss on sale of investments in 2024 reflects the settlement of the FiberComm escrow account and the loss on the sale of our RTFC patronage.
Other investment income decreasedincreased $219,991$188,425 in 20242025 compared to 2023.2024. Other investment income is primarily from our equity ownerships in several partnerships and limited liability companies. Other investment income was lowerhigher in 20242025 compared to 2023,2024, primarily due to thean saleimproved ofoperating FiberCommperformance by our equity investments in the first quarter of 2023.2025.
Income tax expense decreased by $1,984,531$81,809 in 20242025 compared to 20232024 as we recorded income tax expense of $331,125$249,316 in 20242025 and an income tax expense of $2,315,656$331,125 in 2023.2024. This decrease was primarily due to aincreased lowerinterest impairmentexpense, chargepartially onoffset ourby HTCCoBank subsidiarypatronage in 2024 and reflects the taxable gain from the sale of our FiberComm equity investment on March 31, 2023, which affected the 2023 income taxes.dividends. The effective income tax rate was approximately 43.21% for 2025 and (8.08%) for 2024 and (257.6%) for 2023.2024. The difference between the effective tax rate and the federal statutory tax rate are reconciled in Note 8 – “Income Taxes.”
¹ Includes the equity earnings from our investments, gain on sale of investment, patronage income, impairment of goodwill, interest during construction and certain other miscellaneous items.
² Includes other cash distributions received from our investments less dividend income.
³ Represents compensation expenses in connection with the issuance of stock awards, which, because of the non-cash nature of these expenses, are excluded from adjusted EBITDA.
Nuvera’s total capital structure (long-term and short-term debt obligations, net of unamortized loan fees plus stockholders’ equity) was $238,681,735 as of December 31, 2025, reflecting 39.6% equity and 60.4% debt. This compares to a capital structure of $234,715,909 as of December 31, 2024, reflecting 39.9% equity and 60.1% debt. This compares to a capital structure of $220,897,881 as of December 31, 2023, reflecting 44.4% equity and 55.6% debt. In the communications industry, debt financing is most often based on operating cash flows. Specifically, our current use of our credit facilities is in a ratio of approximately 5.174.97 times debt to EBITDA (as defined in the loan documents), which is well within acceptable limits for our agreements and our industry. Our maximum Total Leverage Ratio under our new loan facility is 6:00:1:00. Our management believes adequate operating cash flows and other internal and external resources, such as our cash on hand and new credit facilityfacility, are available to finance ongoing operating requirements, including capital expenditures, business development, debt service and temporary financing of trade accounts receivable.
Our primary sources of liquidity for the year ended December 31, 2024,2025, were proceeds from cash generated from operations and cash reserves held at the beginning of the period. As of December 31, 2024,2025, we had a working capital surplus of $16,603,132.$8,034,640. In addition, as of December 31, 2024,2025, we had $11.5$8.9 million available under our revolving credit facility to fund any short-term working capital needs. Also, we have a $25.0 million delayed draw term loan available to fund our fiber expansion plans. The working capital surplus as of December 31, 2024,2025, was primarily the result of increasedelevated inventoriesinventory levels to support our fiber-build initiative and a rescheduling of our principal payments to CoBank as a part of our new debt facility with them.
Cash generated by operations for the year ended December 31, 2024,2025, was $18,975,291,$19,170,540, compared to cash generated by operations of $18,985,481$18,975,291 in 2023.2024. The decreaseincrease in cash from operating activities in 20242025 was primarily due to the timing of the increase/decrease in assets and liabilities.
Cash generated by operations continues to be our primary source of funding for existing operations, debt service and dividend payments to stockholders, ifwhen declared.declared by our BOD. Cash as of December 31, 2024,2025, was $1,886,697,$349,857, compared to $1,259,904$1,886,697 on December 31, 2023.2024.
Cash flows used in investing activities were $43,994,182$27,026,909 for the year ended December 31, 2024,2025, compared to $62,845,478$43,994,182 used in investing activities in 2023.2024. Capital expenditures relating to our fiber initiative and on-going operations were $33,228,372 in 2025 and $53,757,778 in 2024 and $55,547,283 in 2023.2024. Materials and supply expenditures decreased by $9,523,799$6,110,723 in 20242025 primarily due to the use of materials on hand to support our fiber-build initiatives. Our investing expenditures were financed with cash flows from our current operations andoperations, advances on our line of credit and delayedgrant draw term loan when needed.proceeds. We believe that our current operations and new debt financing from CoBank will provide adequate cash flows to fund our plant additions for the upcoming year; however, funding from our revolving credit facility and delayed draw term loan are available if the timing of our cash flows from operations does not match our cash flow requirements. As of December 31, 2024,2025, we had $11.5$8.9 million available under our existing revolving credit facility and $25.0 million on our delayed draw term loan to fund capital expenditures and other operating needs.
Cash provided by financing activities for the year ended December 31, 2025, was $6,319,529. This included changes in our revolving credit facility of $2,613,016, loan origination fees of $35,000, and grants received for plant construction of $3,741,513. Cash provided by financing activities for the year ended December 31, 2024, was $25,645,684. This included principal payments of $100,000,000, loan proceeds from our term loan of $125,000,000, loan origination fees of $1,709,522, changes in our revolving credit facility of $(5,665,450) and grants received for construction of plant of $8,020,656. Cash provided by financing activities for the year ended December 31, 2023, was $44,809,345. This included loan proceeds from our delayed draw term loan of $40,000,000, loan origination fees of $151,237, changes in our revolving credit facility and delayed draw term loan of $4,281,191, grants received for plant construction of $2,110,162 and the distribution of $1,430,771 of dividends to stockholders. The change in cash flows used in financing activities in 20242025 was primarily due to changes in our revolving credit facility with CoBank and grants received for construction to fund our fiber initiative.
We had a working capital surplus (i.e., current assets minus current liabilities) of $16,603,132$8,034,640 as of December 31, 2024,2025, with current assets of approximately $31.6$25.0 million and current liabilities of approximately $15.0$17.0 million, compared to a working capital surplus of $22,779,883$16,603,132 as of December 31, 2023.2024. The ratio of current assets to current liabilities was 2.111.47 and 2.232.11 as of December 31, 2024,2025, and 2023.2024. The working capital surplus as of December 31, 2024,2025, was primarily the result of elevated inventories to support our fiber-build initiative, a decrease in accounts payableinitiative and a rescheduling of our principal payments to CoBank as part of our new debt facility with them.
Our current Total Leverage Ratio as of December 31, 2024,2025, was 5.17.4.97. Our maximum Total Leverage Ratio under the new loan facility is 6:00:1.00.
Our long-term debt obligations as of December 31, 2025, were $146,113,839 (excluding loan origination fees). Our long-term debt obligations as of December 31, 2024, were $143,500,823 (excluding long-term loan origination fees). Our long-term debt obligations as of December 31, 2023, were $124,166,273 (excluding long-term loan origination fees).
On December 21, 2023, Nuvera and CoBank entered into (i) an Agreement Regarding Amendments to Loan Documents and (ii) an Amended and Restated Revolving Loan Promissory Note. The agreements amended our existing credit facility with CoBank and increased the Company’s existing credit facility from an aggregate principal amount of $130.0 million to $140.0 million. Under the Agreements, among other things, (i) the Company’s revolving loan was increased from $30.0 million to $40.0 million and (ii) the Company’s operating subsidiaries agreed to extend their previous guarantees, security interests and mortgages to cover the increased amount of the revolving note. The financing was secured to facilitate the Company’s advanced fiber-build plans announced on December 15, 2021. Refer to the Company’s 8-K filing with the SEC on December 21, 2023, for further details regarding these agreements.
Under the 2024 credit agreement, the Company and its respective subsidiaries have entered into security agreements under which substantially all the assets of Nuvera and its respective subsidiaries have been pledged to CoBank as collateral. In addition, Nuvera and its respective subsidiaries have guaranteed all the obligations under the credit facility. The credit agreement contains certain customary events of default, which include failure to make payments when due, the material inaccuracy of representations or warranties, failure to observe or perform certain covenants, cross-defaults, bankruptcy and insolvency-related events, certain judgments, certain ERISA-related events, or a change in control (as defined in the credit agreement).
New 2024 Credit Agreement
The term loan borrowings initially bear interest at a “Margin for SOFT Rate Loans” of 3.75% above the applicable base rate. The margin for SOFR rate loans for term loans increases as our “Leverage Ratio” increases and decreases as our “Leverage Ratio” decreases. The revolving loan borrowings initially bear interest at a “Margin for SOFR Rate Loans” of 3.75% above the applicable baseSOFR rate. The margin for SOFR rate loans for term and revolving loans increases as our “Leverage Ratio” increases and decreases as our “Leverage Ratio” decreases.
Under the new 2024 credit facility, Nuvera can enter into IRSAs in connection with amounts borrowed from CoBank. InOn connectionSeptember 30, 2025, $43,750,000 of our indebtedness was covered under an IRSA with theCoBank. closingSee ofNote the7 new credit facility, the Company– “rolledInterest overRate Swaps,” itsfor twodetails exitingregarding IRSAs.our IRSA.
As described in Note 7 – “Interest Rate Swaps,” on August 1, 2018, we entered into an IRSA with CoBank covering $16,137,500 of our aggregate indebtedness to CoBank. As of December 31, 2024, our IRSA covered $8,645,600 with a weighted average interest rate of 6.71%.
As described in Note 7 – “Interest Rate Swaps,” on August 29, 2019, we entered into a second IRSA with CoBank covering an additional $42,000,000 of our aggregate indebtedness to CoBank. As of December 31, 2024, our IRSA covered $24,232,074, with a weighted average interest rate of 5.04%.
As described in Note 7 – “Interest Rate Swaps,” on September 17, 2024, we entered into a third IRSA with CoBank covering an additional $21,813,892 of our aggregate indebtedness. As of December 31, 2024, our IRSA covered $19,622,326, with a weighted average interest rate of 7.77%.
Our loan agreements with CoBank require us to have a minimum of 35% of our existing debt under IRSAs. As of December 31, 2024, we were in compliance with the above stated covenant in our loan agreements.
Our loan agreements include restrictions on our ability to pay cash dividends to our stockholders. However, we are allowed to pay dividends in an amount up to $3,000,000 in any year as long as no default or event of default has occurred, and our current Total Leverage Ratio is equal to 4.25:1.00 or less. In addition, we are allowed to pay dividends in an unlimited amount in any year as long as no default or event of default has occurred, and our current Total Leverage Ratio is equal to 3.50:1.00 or less. Our current Total Leverage Ratio as of December 31, 2024,2025, was 5.17.4.97. Our maximum Total Leverage Ratio under the new loan facility is 6.00:1.00.
There are security and loan agreements underlying our current CoBank credit facility that contain restrictions on our distributions to stockholders and investment in, or loans, to others. Also, our credit facility contains restrictions that, among other things, limits or restrictsrestrict our ability to enter into guarantees and contingent liabilities, incur additional debt, issue stock, transact asset sales, transfers, or dispositions, and engage in mergers and acquisitions, without CoBank approval.
Guarantees
We had previously guaranteed a portion of the obligations of our Nuvera subsidiary joint venture investment in FiberComm. See Note 13 – “Guarantees.”
In 20242025 and 2023,2024, we engaged an independent valuation firm to aid in the completion of an annual impairment test for existing goodwill acquired. For 20242025 and 2023,2024, after the testing was completed, and we determined that there was no impairment to goodwill for Scott-Rice and SETC as the determined fair value was sufficient to pass the impairment test. For 2025, after the testing, we determined that there was no impairment to goodwill for HTC as the determined fair value was sufficient to pass the impairment test. For 2024, after the testing,testing was completed, we determined that there was an impairment to goodwill for HTC of $4.9 million as the determined fair value was not sufficient to pass the impairment test. For 2023, after the testing, we determined that there was an impairment to goodwill for HTC of $9.3 million as the determined fair value was not sufficient to pass the impairment test. We used a combination of Income (Discounted Cash Flow Method or DCF Method) and Market Approaches to estimate the fair value of the goodwill on our books related to prior acquisitions of communications company properties. The assumptions used in the estimates of fair value were based on projections provided by our management and a rate of return based on market information observed in debt and traded equity securities. Their Market Approaches considered market multiples observed in companies comparable to ours, traded on public exchange or over the counter, or transacted in a merger or acquisition transaction.
The most significant amount of goodwill recorded on our books was due to the acquisitions of HTC, SETC and Scott-Rice. The carrying value of the goodwill was $35,624,660 as of December 31, 2024,2025, and $40,603,029 as of December 31, 2023. The reduction in goodwill was the result of the HTC impairment charge in 2024 and 2023, respectively.2024.
In 2024,2025, we tested the SETCHTC, Scott-Rice and Scott-RiceSETC goodwill. Based on the DCF model approach that was used, we determined the estimated enterprise fair value of our reporting units exceeded the carrying amount of that reporting units by approximately 26.9%7.3%, 29.7% and 22.3%28.5% for SETCHTC, Scott-Rice and Scott-Rice,SETC, respectively, which indicated that we had no impairment as of December 31, 2024.2025. In 2024, we tested the HTC goodwill. Based on the DCF model approach that was used, we determined that the carrying amount of that reporting unit exceeded the enterprise’s fair value of that reporting unit and resulted in an impairment of $4.9 million. In 2023, we tested the HTC goodwill. Based on the DCF model approach that was used, we determined that the carrying amount of that reporting unit exceeded the enterprise’s fair value of that reporting unit and resulted in an impairment of $9.3 million. Future negative changes relating to our financial operations could result in a potential impairment of goodwill.
Due to changes in financial and credit markets, and overall valuations of communications properties, the Company determined that the carrying value of the HTC reporting unit exceeded its fair value in 2024 and 2023, respectively,2024, which resulted in the impairmentsimpairment listed above. The non-cash impairment chargescharge of $4.9 million and $9.3 million did not and is not expected to have any impact on the Company’s operations.
On March 27, 2025, the Compensation Committee and the Board adopted a new cash-based long-term incentive plan (2025 Plan). The 2025 Plan is a 3-year, cash-based long-term incentive and retention arrangement which measures operating income before interest, taxes, depreciation, and amortization (OIBITDA) and entails continued service with Nuvera throughout a 3-year period. Awards will be made annually (subject to the Compensation Committee’s oversight on plan design, which may change from time to time) with 3-year overlapping cycles, and performance measured each individual year. Vesting is based (i) on achievement of predetermined OIBITDA targets set annually and (ii) on continued service with Nuvera through the end of the 3-year performance cycle. Cash payouts will be made at the end of the 3-year cycle. OIBITDA performance targets for each year within the 3-year period will be aligned with approved operating budget for that year.
What changed in the latest 10-Q
Risk Factors
Largest changes
We receivedsee in full comparison$4.27$8.02 million in the firstquartersix months of 2026, and$4.31$8.62 million in the firstquartersix months of 2025, in payments under the federal A-CAM and FUSF programs.
Full comparison: every changed paragraph (2)
We received $4.27$8.02 million in the first quartersix months of 2026, and $4.31$8.62 million in the first quartersix months of 2025, in payments under the federal A-CAM and FUSF programs.
We have a substantial amount of debt outstanding due to our FTTP initiatives, which could adversely affect our business and restrict our ability to fund working capital and planned capital expenditures. As of MarchJune 31,30, 2026, we had $147.0$146.5 million of debt outstanding. Our substantial amount of expected indebtedness could adversely impact our business, including:
Management's Discussion & Analysis (MD&A)
New heading “Financial Results”
Largest changes
“Our credit facility requires us to comply with specified financial ratios and tests. These financial ratios include the Total Leverage Ratio and debt service coverage ratio. On June 30, 2026, we were in compliance with the Total Leverage Ratio. Our debt service coverage ratio as of June 30, 2026, was 1.99, which was below our minimum debt service coverage ratio of 2.00 per our existing covenants with CoBank. …”see in full comparison
Cash flows used in investing activities weresee in full comparison$9,022,072$11,773,068 during the firstthreesix months of 2026 compared to$7,626,272$11,383,264 for the firstthreesix months of 2025. Capital expenditures relating to our fiber initiative and on-going operations were$9,714,471$12,427,392 for thethreesix monthsendingendedMarchJune31,30, 2026, compared to$8,640,431$13,408,635 for thethreesix monthsendingendedMarchJune31,30, 2025. Materials and supply expenditures decreased by$734,399$696,324 in the firstthreesix months of 2026 compared to a decrease of$881,419$1,934,631 for the firstthreesix months of 2025. The decreases for thethreesix monthsendingendedMarchJune31,30, 2026, and 2025, were primarily due to the use of materials on hand to support our fiber-build initiatives. Our investing expenditures were financed with cash flows from our current operations, advances on our line of credit, and grant proceeds. We believe that our current operations and debt financing from CoBank will provide adequate cash flows to fund our plant additions for theupcomingremainder of the year; however, funding from our revolving credit facilityand delayed draw term loan areis available if the timing of our cash flows from operations does not match our cash flow requirements. As ofMarchJune31,30, 2026, we had$8.0$27.6 million available under our existing revolving credit facilityand $25.0 million available on our delayed draw term loanto fund capital expenditures and other operating needs.
A-CAM/FUSF support totaledsee in full comparison$4,268,229,$3,756,686, which was$40,429$557,118 or0.94%12.91% lower in the three monthsendingendedMarchJune31,30, 2026, compared to the three monthsendingendedMarchJune31,30, 2025.ThisA-CAM/FUSFdecreasesupport totaled $8,024,915, which was $597,547 or 6.93% lower in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. These decreases were primarily due tolower CAF support funding forouroperating companies, partially offset by an increase in ourlower CBOL funding through USAC. On December 12, 2023, the Company announced that it confirmed eligibility for CBOL funding through USAC. The incremental funding will be used to continue to support the Company’s multi-year fiber construction initiative. The Company began receiving a monthly benefit in November of 2023, with the first payment receipt confirmed in December. The monthly CBOL subsidy formula is reviewed and subject to revision on an annual basis and subject to change based on updated USAC funding criteria July 1 of each year.
Income taxsee in full comparisonexpensebenefit was$613,444$62,132, which was$213,309$102,772 or53.31%62.32%higherlower in the three monthsendingendedMarchJune31,30, 2026, compared to the three monthsendingendedMarchJune31,30, 2025. This decrease was primarily due to increased operating income. Income tax expense was $551,312, which was $316,081 or 134.37% higher in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. This increase was primarily due to increased operating income, partially offset by lower CoBank patronage dividends. The effective income tax rate for thethreesix months endingMarchJune31,30, 2026, and2025,2025 was approximately 28.0%, respectively. The effective income tax rate differs from the federal statutory income tax rate primarily due to state income taxes and other permanent differences.
“Interest and dividend income was $42,100, which was $4,325 or 11.45% higher in the three months ended June 30, 2026, compared to the three months ended June 30, 2025, and was $162,067, which was $22,984 or 12.42% lower in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The three-month increase and six-month decrease were primarily due to the amount and timing of dividend income earned from our investments.”see in full comparison
Full comparison: every changed paragraph (37)
In the first quartersix months of 2026, we have seen our overall revenues increase primarily due to growth in Internet and other revenuerevenues mentioned below. However, we continue to see accelerated losses in our voice and video service customers as those customers make choices about their entertainment needs and personal finances. We have also experienced increased costs in the first quartersix months of 2026, which have affected our margins. In addition, we had anticipated increased inflation and supply chain issues in the inventory, equipment, and fiber we use in our business and had therefore purchased a large amount of these items to mitigate these potential issues and not disrupt our business operations.
With respect to liquidity, we continue to evaluate costs and spending across our organization. This includes evaluating discretionary spending and non-essential capital investment expenditures. As of MarchJune 31,30, 2026, we had $8.0$27.6 million of our bank revolver available for use if the need arises. In addition, we have a $25.0 million delayed draw term loan available to fund our fiber expansion plans. The Company may seek additional financing to continue to fund its fiber expansion plans and meet current and future liquidity needs.
Financial Results
Voice and switched access revenues are expected to continue to be adversely impacted by future declines in access lines due to competition in the communications industry from CATV providers, VoIP providers, wireless, other competitors, and emerging technologies. As we experience access line losses, our switched access revenue will continue to decline consistent with industry-wide trends. A combination of changing minutes of use, carriers optimizing their network costs, lower demand for dedicated lines and downward rate pressures may affect our future voice and switched access revenues. Access line losses totaled 1,6391,514 or 14.69%14.10% for the twelve months ending MarchJune 31,30, 2026, due to the reasons mentioned above.
The table below presents our revenue by technology and advanced fiber-build progress for the last five quarters:quarters.
Nuvera Communications, Inc.
Reporting by Technology
Financial results for the Communications Segment for the three and six months endingended MarchJune 31,30, 2026, and 2025 are included below:
Certain historical numbers have been changed to conform to the current year's presentation.
Voice Service – We receive recurring revenue for basic voice services that enable customers to make and receive telephone calls within a defined local calling area for a flat monthly fee. In addition to subscribing to basic local voice services, our customers may choose from multiple voice service plans with a variety of custom calling features such as call waiting, call forwarding, caller identification, and voicemail. Voice service revenue was $955,923,$928,302, which was $165,513$155,130 or 14.76%14.32% lower in the three months endingended MarchJune 31,30, 2026, compared to the three months endingended MarchJune 31,30, 2025, and was $1,884,225 which was $320,643 or 14.54% lower in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. ThisThese decreasedecreases waswere primarily due to a decrease in access lines, which was the result of an accelerated industry trend of customers moving to other communications options or dropping their access lines altogether, partially offset by a combination of rate increases introduced into several of our markets in the past few years.
Network Access – We provide access services to other communications carriers for the use of our facilities to terminate or originate long distance calls on our fiber network. Additionally, we bill SLCs to substantially all of our customers for access to the public switched network. These monthly SLCs are regulated and approved by the FCC. In addition, network access revenue is derived from several federally administered pooling arrangements designed to provide network support and distribute funding to communications companies. Network access revenue was $694,764,$544,692, which was $31,281$69,944 or 4.31%11.38% lower in the three months endingended MarchJune 31,30, 2026, compared to the three months endingended MarchJune 31,30, 2025, and was $1,239,456, which was $101,225 or 7.55% lower in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. ThisThese decreasedecreases waswere primarily due to lower minutes of use on our network and lower special access revenues, which was the result of an accelerated industry trend of customers moving to other communications options or dropping their access lines altogether.
Video Service – We provide a variety of enhanced video services on a monthly recurring basis to our customers. We receive monthly recurring revenue from our subscribers for providing commercial TV programming in competition with local CATV, satellite dish TV and off-air TV service providers. We serve twenty-twotwenty-four communities with our IPTV services and fivethree communities with our CATV services. Video service revenue was $2,714,001,$2,682,557, which was $166,679$179,938 or 5.79%6.29% lower in the three months endingended MarchJune 31,30, 2026, compared to the three months endingended MarchJune 31,30, 2025, and was $5,396,558, which was $346,617 or 6.04% lower in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. ThisThese decreasedecreases waswere primarily due to a decrease in video customers, partially offset by a combination of rate increases introduced into several of our markets over the past few years. The decrease in video customers continues to be an accelerated industry trend of customers moving to other video options.
Data Service – We provide high speed Internet to business and residential customers depending on the nature of the network facilities that are available, the level of service selected and the location. Our revenue is earned based on the offering of various flat rate packages based on the level of service, data speeds, and features. We also provide e-mail and managed services, such as web hosting and design, online file backupback up and online file storage. Data serviceService revenue was $8,377,714,$8,448,818, which was $689,596$627,266 or 8.97%8.02% higher in the three months endingended MarchJune 31,30, 2026, compared to the three months endingended MarchJune 31,30, 2025, and was $16,826,532, which was $1,316,862 or 8.49% higher in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. ThisThese increaseincreases waswere primarily due to increases in fiber customers and customers upgrading their packages and speeds, partially offset by a decrease in non-fiber data customers. We expect continued growth in this area will be driven by completing our advanced FTTP network, expansion of service areas and marketing managed service solutions to businesses.
A-CAM/FUSF support totaled $4,268,229,$3,756,686, which was $40,429$557,118 or 0.94%12.91% lower in the three months endingended MarchJune 31,30, 2026, compared to the three months endingended MarchJune 31,30, 2025. ThisA-CAM/FUSF decreasesupport totaled $8,024,915, which was $597,547 or 6.93% lower in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. These decreases were primarily due to lower CAF support funding for our operating companies, partially offset by an increase in ourlower CBOL funding through USAC. On December 12, 2023, the Company announced that it confirmed eligibility for CBOL funding through USAC. The incremental funding will be used to continue to support the Company’s multi-year fiber construction initiative. The Company began receiving a monthly benefit in November of 2023, with the first payment receipt confirmed in December. The monthly CBOL subsidy formula is reviewed and subject to revision on an annual basis and subject to change based on updated USAC funding criteria July 1 of each year.
Other Revenue – Our customers are billed for toll and long-distance services on either a per call or flat-rate basis. This also includes the offering of directory assistance, operator service, and long-distance private lines. We also generate revenue from directory publishing through an outside vendor, sales and service of CPE, bill processing, and other customer services. Our directory publishing revenue in our telephone directories recurs monthly. We also provide retail sales and service of cellular phones and accessories through Telispire, a national wireless provider. We resell these wireless services as Nuvera Wireless, our branded product. We receive both recurring revenue for our wireless services, as well as revenue collected from the sales of wireless phones and accessories. Other revenue was $1,422,049,$1,302,187, which was $266,217$191,567 or 23.03%17.25% higher in the three months endingended MarchJune 31,30, 2026, compared to the three months endingended MarchJune 31,30, 2025, and was $2,724,236 which was $457,784 or 20.20% higher in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. ThisThese increaseincreases waswere primarily due to an increase in the sales and installation of CPE, miscellaneous sales, billed labor, and paper billing fee revenue, partially offset by a decrease in directory publishing, lower long-distance revenues, and lower inside wire maintenance fees.
Cost of services (excluding depreciation and amortization) was $8,033,393,$8,158,690, which was $357,696$395,274 or 4.66%5.09% higher in the three months endingended MarchJune 31,30, 2026, compared to the three months endingended MarchJune 31,30, 2025, and was $16,192,083, which was $752,970 or 4.88% higher in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. ThisThese increaseincreases waswere primarily due to costs associated with increased CPE, retail and other miscellaneous sales, and increased costs for maintenance and support agreements on our equipment and software. ThisThese increaseincreases waswere partially offset by a decrease in programming costs from our video content providers due to a loss of video customers.
Selling, general and administrative expenses were $2,852,279,$2,751,961 which was $102,045$205,525 or 3.45%6.95% lower in the three months endingended MarchJune 31,30, 2026, compared to the three months endingended MarchJune 31,30, 2025, and were $5,604,240, which was $307,570 or 5.20% lower in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. ThisThese decreasedecreases waswere primarily due to decreased labor costs and cost containment measures taken by the Company.
Depreciation and amortization were $4,163,993,$4,141,961, which was $671,854$713,177 or 13.89%14.69% lower in the three months endingended MarchJune 31,30, 2026, compared to the three months endingended MarchJune 31,30, 2025, and were $8,305,954, which was $1,385,031 or 14.29% lower in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. TheThese decreasedecreases in depreciation expense waswere primarily due to portions of our legacy copper network becoming fully depreciated in 2025, partially offset by an increase in our FTTP network assets to aid in our transition to aour new advanced FTTP network, reflecting our continual investment in technology and infrastructure in order to meet our customers’customer’s demands for our products and services.
Operating income was $3,383,015,$2,610,630, which was $968,114$380,131 or 40.09%17.04% higher in the three months endingended MarchJune 31,30, 2026, compared to the three months endingended MarchJune 31,30, 2025, and was $5,993,645, which was $1,348,245 or 29.02% higher in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. ThisThese increaseincreases waswere primarily due to increased data services, other revenue, and lower depreciation expenses, partially offset by lower governmental support revenues and higher cost of services expenses,services, all of which are described above.
Interest expense increasedwas $4,204$2,957,406, which was $4,597 or 0.16% higher in 2026the three months ended June 30, 2026, compared to the three months ended June 30, 2025, and was $5,934,286, which was $8,801 or 0.15% higher in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. ThisThese increaseincreases waswere primarily due to higher outstanding debt balances, partially offset withby decreased interest rates on our non-swapped debt in connection with our term debt credit facility with CoBank to support our fiber-build initiative.
Interest and dividend income was $42,100, which was $4,325 or 11.45% higher in the three months ended June 30, 2026, compared to the three months ended June 30, 2025, and was $162,067, which was $22,984 or 12.42% lower in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. The three-month increase and six-month decrease were primarily due to the amount and timing of dividend income earned from our investments.
Interest and dividend income decreased $27,309 in 2026 compared to 2025. This decrease was primarily due to decreases in dividend income earned from our investments.
Other income for the threesix months endingended MarchJune 31,30, 2026, and 20252025, included a patronage credit earned with CoBank, which was a result of our debt agreements with them. The patronage credit allocated and received in 2026 was $1,488,941, compared to $1,656,597 allocated and received in 2025. This decrease was primarily due to a decrease in the special patronage distribution. CoBank determines and pays the patronage credit annually, generally in the first quarter of the calendar year, based on its results from the prior year. We record these patronage credits as income in the period they are allocated and received.
Other investment income decreasedwas $17,614$57,471, which was $14,265 or 19.89% lower in 2026the three months ended June 30, 2026, compared to the three months ended June 30, 2025, and was $156,632, which was $31,879 or 16.91% lower in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. Other investment income is primarily from our equity ownerships in several partnerships and limited liability companies. Other investment income was lower in 2026 compared to 2025, primarily due to lower operating performance by our equity investments in 2026.
Income tax expensebenefit was $613,444$62,132, which was $213,309$102,772 or 53.31%62.32% higherlower in the three months endingended MarchJune 31,30, 2026, compared to the three months endingended MarchJune 31,30, 2025. This decrease was primarily due to increased operating income. Income tax expense was $551,312, which was $316,081 or 134.37% higher in the six months ended June 30, 2026, compared to the six months ended June 30, 2025. This increase was primarily due to increased operating income, partially offset by lower CoBank patronage dividends. The effective income tax rate for the threesix months ending MarchJune 31,30, 2026, and 2025,2025 was approximately 28.0%, respectively. The effective income tax rate differs from the federal statutory income tax rate primarily due to state income taxes and other permanent differences.
Nuvera’s total capital structure (long-term and short-term debt obligations, net of unamortized loan fees plus stockholders’ equity) was $241,344,508$241,186,909 as of MarchJune 31,30, 2026, reflecting 39.8%40.0% equity and 60.2%60.0% debt. This compares to a capital structure of $238,681,735 as of December 31, 2025, reflecting 39.6% equity and 60.4% debt. In the communications industry, debt financing is most often based on operating cash flows. Specifically, our current use of our credit facilities is in a ratio of approximately 4.954.99 times debt to earnings before interest, taxes, depreciation, and amortization (as defined in the loan documents), which is well within acceptable limits for our agreements and our industry. Our maximum Total Leverage Ratio under our new loan facility is 66.00:00:1:00.1.00. Our management believes adequate operating cash flows and other internal and external resources, such as our cash on hand and our credit facility, are available to finance ongoing operating requirements, including capital expenditures, business development, debt service, and temporary financing of trade accounts receivable.
Our primary sources of liquidity for the threesix months endingended MarchJune 31,30, 2026, were proceeds from cash generated from operations and cash reserves held at the beginning of the period. As of MarchJune 31,30, 2025,2026, we had a working capital surplus of $13,527,638.$11,988,380. In addition, as of MarchJune 31,30, 2026, we had $8.0$27.6 million available under our revolving credit facility to fund any short-term working capital needs. Also, we have a $25.0 million delayed draw term loanneeds available to fund our fiber expansion plans. The working capital surplus as of MarchJune 31,30, 2026, was primarily the result of elevated inventory levels to support our fiber-build initiative and a rescheduling of our principal payments to CoBank as a part of our new debt facility with them.initiative.
Cash generated by operations in the first threesix months of 2026 was $6,972,954,$10,328,787, compared to cash generated by operations of $4,962,822$8,569,072 in the first threesix months of 2025. The increase in cash from operating activities in 2026 was primarily due to the timing of the increase/decrease in assets and liabilities.liabilities and distributions from our equity investments.
Cash generated by operations continues to be our primary source of funding for existing operations, debt service, and dividend payments, when declared by our BOD, to stockholders. Cash onas Marchof 31,June 30, 2026, was $262,157,$281,392, compared to $349,857 onas of December 31, 2025.
Cash flows used in investing activities were $9,022,072$11,773,068 during the first threesix months of 2026 compared to $7,626,272$11,383,264 for the first threesix months of 2025. Capital expenditures relating to our fiber initiative and on-going operations were $9,714,471$12,427,392 for the threesix months endingended MarchJune 31,30, 2026, compared to $8,640,431$13,408,635 for the threesix months endingended MarchJune 31,30, 2025. Materials and supply expenditures decreased by $734,399$696,324 in the first threesix months of 2026 compared to a decrease of $881,419$1,934,631 for the first threesix months of 2025. The decreases for the threesix months endingended MarchJune 31,30, 2026, and 2025, were primarily due to the use of materials on hand to support our fiber-build initiatives. Our investing expenditures were financed with cash flows from our current operations, advances on our line of credit, and grant proceeds. We believe that our current operations and debt financing from CoBank will provide adequate cash flows to fund our plant additions for the upcomingremainder of the year; however, funding from our revolving credit facility and delayed draw term loan areis available if the timing of our cash flows from operations does not match our cash flow requirements. As of MarchJune 31,30, 2026, we had $8.0$27.6 million available under our existing revolving credit facility and $25.0 million available on our delayed draw term loan to fund capital expenditures and other operating needs.
Cash provided by financing activities for the threesix months endingended MarchJune 31,30, 2026, was $1,961,418.$1,375,816. This included long-term debt repayments of $906,250, proceeds from issuance of long-term debt of $20,000,000, loan fees of $35,000, changes in our revolving credit facility of $923,854,$18,720,498, and grants received for plant construction of $1,037,564. Cash provided by financing activities for the threesix months endingended MarchJune 31,30, 2025, was $1,234,233.$1,871,574. This included changes in our revolving credit facility of $558,274,$141,650, and grants received for construction of plant of $675,959.$1,729,924. The change in cash flows provided by financing activities in 2026 was primarily due to long-term debt payments, changes in our revolving credit facility with CoBank and grants received for construction to fund our fiber initiative.
We had a working capital surplus (i.e., current assets minus current liabilities) of $13,527,638$11,988,380 as of MarchJune 31,30, 2026, with current assets of approximately $24.1$25.3 million and current liabilities of approximately $10.6$13.3 million, compared to a working capital surplus of $8,034,640 as of December 31, 2025. The ratio of current assets to current liabilities was 2.281.90 and 1.47 as of MarchJune 31,30, 2026, and December 31, 2025. The working capital surplus as of MarchJune 31,30, 2026, was primarily the result of elevated inventories to support our fiber-build initiative and a rescheduling of our principal payments to CoBank as part of our new debt facility with them.initiative.
Our credit facility requires us to comply with specified financial ratios and tests. These financial ratios include the Total Leverage Ratio and debt service coverage ratio. On June 30, 2026, we were in compliance with the Total Leverage Ratio. Our debt service coverage ratio as of June 30, 2026, was 1.99, which was below our minimum debt service coverage ratio of 2.00 per our existing covenants with CoBank. On August 6, 2026, Nuvera received a waiver from CoBank to decrease our minimum debt service coverage ratio to 1.75 to accommodate our decreased debt service coverage ratio as of June 30, 2026.
As of March 31, 2026, and December 31, 2025, we were in compliance with all stipulated financial ratios in our loan agreements.
Our current Total Leverage Ratio as of MarchJune 31,30, 2026, was 4.95.4.99. Our maximum Total Leverage Ratio under the new loan facility is 66.00:00:1:00.1.00.
Nuvera did not declare or pay a dividend in the first quartertwo quarters of 2026 or in 2025. The BOD’s action reflects the Company’s commitment to maximize available capital for the foreseeablenear future as it executes on its Nuvera Gig Cities project. This decision focuses available capital on deploying fiber and capturing the growth opportunity in new and existing markets in southern Minnesota. Nuvera believes this investment in the largest infrastructure project in Company history is strengthening its competitive position as a regional provider.
Our loan agreements include restrictions on our ability to pay cash dividends to our stockholders. However, we are allowed to pay dividends in an amount up to $3,000,000 in any year as long as no default or event of default has occurred, and our current Total Leverage Ratio is equal to 4.25:1.00 or less. In addition, we are allowed to pay dividends in an unlimited amount in any year as long as no default or event of default has occurred, and our current Total Leverage Ratio is equal to 3.50:1.00 or less. Our Total Leverage Ratio as of MarchJune 31,30, 2026, was 4.95.4.99.
NUVR insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-05-28 | Schultz Wesley E |
Grant/award | 2,461 | $16.25 | $40.0K |
| 2026-05-28 | Spellacy Suzanne M. |
Grant/award | 2,461 | $16.25 | $40.0K |
| 2026-05-28 | Seifert James J |
Grant/award | 2,461 | $16.25 | $40.0K |
| 2026-05-28 | Miller Dennis |
Grant/award | 2,461 | $16.25 | $40.0K |
| 2026-05-28 | Skillings Colleen R. |
Grant/award | 2,461 | $16.25 | $40.0K |
| 2026-05-28 | Olsem Brian |
Grant/award | 2,461 | $16.25 | $40.0K |
| 2026-05-28 | Otis Bill D |
Grant/award | 2,461 | $16.25 | $40.0K |
Well-known investors holding NUVR (13F)
None of the 59 investors we track reported a position in their latest 13F.