NUVR 10-Q

Nuvera Communications, Inc. (NUVR)

10-Q 2023-11-14 For: 2023-09-30

View Original

Added on April 06, 2026

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock - $1.66 par value	NUVR	OTCQB Marketplace

PART I – FINANCIAL INFORMATION

Item 1	Financial Statements	4 - 10

	Consolidated Statements of Income (unaudited) for the Three and Nine Months Ended September 30, 2023 and 2022	4

	Consolidated Statements of Comprehensive Income (unaudited) for the Three and Nine Months Ended September 30, 2023 and 2022	5

	Consolidated Balance Sheets (unaudited) as of September 30, 2023 and December 31, 2022	6 - 7

	Consolidated Statements of Cash Flows (unaudited) for the Nine Months Ended September 30, 2023 and 2022	8

	Consolidated Statements of Stockholders’ Equity (unaudited) for the Three and Nine Months ended September 30, 2023 and 2022	9 - 10

	Condensed Notes to Consolidated Financial Statements (unaudited)	11 - 32

Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	32 - 46

Item 3	Quantitative and Qualitative Disclosures about Market Risk	46

Item 4	Controls and Procedures	46

PART II – OTHER INFORMATION

Item 1	Legal Proceedings	46

Item 1A	Risk Factors	47 - 55

Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	55

Item 3	Defaults upon Senior Securities	56

Item 4	Mine Safety Disclosures	56

Item 5	Other Information	56

Item 6	Exhibits Listing	56

	Signatures	57

	Exhibits

NUVERA COMMUNICATIONS, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
	Three Months Ended September 30,				Nine Months Ended September 30,
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
OPERATING REVENUES:
Voice Service	$	1,363,543	$	1,404,890	$	3,969,394	$	4,321,047
Network Access		876,186		1,190,870		2,926,937		3,685,145
Video Service		3,005,010		3,126,733		9,120,164		9,446,613
Data Service		6,881,965		6,797,329		20,573,084		20,288,217
A-CAM/FUSF		2,971,267		2,952,651		8,950,127		8,737,738
Other Non-Regulated		1,272,507		1,008,654		3,478,406		2,917,502
Total Operating Revenues		16,370,478		16,481,127		49,018,112		49,396,262

OPERATING EXPENSES:
Plant Operations (Excluding Depreciation and Amortization)		3,590,491		3,677,595		11,512,927		10,770,036
Cost of Video		2,346,037		2,505,185		7,229,269		7,604,067
Cost of Data		1,280,342		997,843		3,673,237		3,098,866
Cost of Other Nonregulated Services		485,149		393,212		1,275,125		1,181,518
Depreciation and Amortization		3,949,978		3,520,963		11,371,459		10,512,317
Selling, General and Administrative		2,372,515		2,264,090		7,608,787		7,571,025
Total Operating Expenses		14,024,512		13,358,888		42,670,804		40,737,829

OPERATING INCOME		2,345,966		3,122,239		6,347,308		8,658,433

OTHER INCOME (EXPENSE)
Interest Expense		(1,959,514)		(1,083,162)		(4,718,502)		(2,106,225)
Interest/Dividend Income		14,307		24,132		159,353		260,540
Interest During Construction		243,113		106,229		439,356		199,069
Gain on Sale of Investments		(38,096)		217,876		4,022,401		217,876
CoBank Patronage Dividends		-		-		692,371		567,468
Other Investment Income		65,269		144,140		216,256		431,517
Total Other Income (Expense)		(1,674,921)		(590,785)		811,235		(429,755)

INCOME BEFORE INCOME TAXES		671,045		2,531,454		7,158,543		8,228,678

INCOME TAXES EXPENSE		187,875		708,806		2,004,386		2,304,023

NET INCOME	$	483,170	$	1,822,648	$	5,154,157	$	5,924,655

NET INCOME PER SHARE
Basic	$	0.09	$	0.36	$	1.01	$	1.16
Diluted	$	0.09	$	0.36	$	1.00	$	1.16

DIVIDENDS PER SHARE	$	0.0000	$	0.1400	$	0.2800	$	0.4200

WEIGHTED AVERAGE SHARES OUTSTANDING
Basic		5,126,581		5,084,578		5,113,007		5,091,391
Diluted		5,211,382		5,115,477		5,175,507		5,112,358

The accompanying notes are an integral part of these consolidated financial statements.

NUVERA COMMUNICATIONS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022

Net Income	$	483,170	$	1,822,648	$	5,154,157	$	5,924,655

Other Comprehensive Gain (Loss):
Unrealized Gains (Losses) on Interest Rate Swaps		(125,051)		765,646		(222,693)		3,239,407
Income Tax Expense (Benefit) Related to Unrealized Gains (Losses) on Interest Rate Swaps		35,689		(218,515)		63,556		(924,526)
Other Comprehensive Gain (Loss):		(89,362)		547,131		(159,137)		2,314,881

Comprehensive Income	$	393,808	$	2,369,779	$	4,995,020	$	8,239,536

The accompanying notes are an integral part of these consolidated financial statements.

NUVERA COMMUNICATIONS, INC. CONSOLIDATED BALANCE SHEETS (Unaudited)

ASSETS
	September 30, 2023		December 31, 2022
	September 30, 2023		December 31, 2022
CURRENT ASSETS:
Cash	$	573,175	$	310,556
Receivables, Net of Allowance for Doubtful Accounts of $153,000 and $140,000		4,091,864		3,725,422
Income Taxes Receivable		-		283,665
Materials, Supplies, and Inventories		39,237,118		23,617,800
Prepaid Expenses and Other Current Assets		2,553,960		1,886,480
Total Current Assets		46,456,117		29,823,923

INVESTMENTS & OTHER ASSETS:
Goodwill		49,903,029		49,903,029
Intangibles		15,001,666		16,363,192
Other Investments		8,415,582		11,016,246
Right of Use Asset		1,276,743		1,341,029
Financial Derivative Instruments		1,991,769		2,214,462
Other Assets		889,708		461,445
Total Investments and Other Assets		77,478,497		81,299,403

PROPERTY, PLANT & EQUIPMENT:
Communications Plant		259,579,160		219,891,050
Other Property & Equipment		31,319,882		29,836,775
Video Plant		18,437,925		16,096,032
Total Property, Plant and Equipment		309,336,967		265,823,857
Less Accumulated Depreciation		169,642,226		159,632,293
Net Property, Plant & Equipment		139,694,741		106,191,564

TOTAL ASSETS	$	263,629,355	$	217,314,890

The accompanying notes are an integral part of these consolidated financial statements.

NUVR 10-Q

NUVERA COMMUNICATIONS, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Overview

Other Income (Expense) and Interest Expense

Income Taxes

NUVERA COMMUNICATIONS, INC. CONSOLIDATED BALANCE SHEETS (continued) (Unaudited)

LIABILITIES AND STOCKHOLDERS' EQUITY
	September 30, 2023		December 31, 2022
CURRENT LIABILITIES:
Current Portion of Long-Term Debt, Net of Unamortized Loan Fees	$	-	$	-
Accounts Payable		15,874,273		7,012,264
Accrued Income Taxes		1,350,222		-
Other Accrued Taxes		189,031		243,965
Accrued Compensation		1,977,903		2,051,316
Other Accrued Liabilities		1,622,245		2,354,395
Total Current Liabilities		21,013,674		11,661,940

LONG-TERM DEBT, Net of Unamortized Loan Fees		111,805,495		78,552,197

NONCURRENT LIABILITIES:
Loan Guarantees		-		169,565
Deferred Income Taxes		22,673,974		22,737,530
Unrecognized Tax Benefit		23,304		23,304
Other Accrued Liabilities		1,322,867		1,588,502
Total Noncurrent Liabilities		24,020,145		24,518,901

COMMITMENTS AND CONTINGENCIES:		-		-

STOCKHOLDERS' EQUITY:
Preferred Stock - $1.66 Par Value, 10,000,000 Shares Authorized, No Shares Issued and Outstanding		-		-
Common Stock - $1.66 Par Value, 90,000,000 Shares Authorized, 5,126,581 and 5,093,213 Shares Issued and Outstanding		8,544,302		8,488,689
Accumulated Other Comprehensive Gain		1,423,318		1,582,455
Unearned Compensation		79,750		79,892
Retained Earnings		96,742,671		92,430,816
Total Stockholders' Equity		106,790,041		102,581,852

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	263,629,355	$	217,314,890

Certain historical numbers have been changed to conform to the current year's presentation.

The accompanying notes are an integral part of these consolidated financial statements.

NUVERA COMMUNICATIONS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	Nine Months Ended
	September 30, 2023		September 30, 2022
	September 30, 2023		September 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income	$	5,154,157	$	5,924,655
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:
Depreciation and Amortization		11,526,448		10,627,533
Gains on Investments		(4,022,401)		(217,876)
Undistributed Earnings of Other Equity Investments		(219,912)		(408,613)
Noncash Patronage Refund		(123,745)		(133,467)
Stock Issued in Lieu of Cash Payment		373,175		300,507
Distributions from Equity Investments		28,048		210,917
Stock-based Compensation		172,820		81,273
Changes in Assets and Liabilities:
Receivables		(259,621)		130,198
Income Taxes Receivable		283,665		1,405,622
Inventory for Resale		30,767		13,252
Prepaid Expenses		(569,535)		(68,097)
Other Assets		(451,967)		(11,588)
Accounts Payable		(4,230)		358,289
Accrued Income Taxes		1,350,222		643,401
Other Accrued Taxes		(54,934)		(73,361)
Other Accrued Liabilities		(906,890)		1,154,325
Deferred Compensation		(100,022)		(30,098)
Net Cash Provided by Operating Activities		12,206,045		19,906,872

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to Property, Plant, and Equipment, Net		(33,397,721)		(22,407,662)
Materials and Supplies for Construction		(17,827,735)		(12,319,553)
Proceeds from Sale of Equity Investments		5,876,305		-
Other, Net		216,511		7,304
Net Cash Used in Investing Activities		(45,132,640)		(34,719,911)

CASH FLOWS FROM FINANCING ACTIVITIES:
Principal Payments of Long-Term Debt		-		(57,330,775)
Loan Proceeds		30,000,000		56,063,223
Loan Origination Fees		(17,811)		(1,055,773)
Changes in Revolving Credit Facility		3,116,119		22,216,303
Grants Received for Construction of Plant		1,521,677		396,360
Repurchase of Common Stock		-		(3,187,500)
Dividends Paid		(1,430,771)		(2,132,089)
Net Cash Provided by Financing Activities		33,189,214		14,969,749

NET CHANGE IN CASH		262,619		156,710

CASH at Beginning of Period		310,556		2,306,149

CASH at End of Period	$	573,175	$	2,462,859

Supplemental cash flow information:
Cash paid for interest	$	5,286,760	$	925,530
Net cash paid for income taxes	$	370,500	$	255,000

Certain historical numbers have changed to conform with the current year's presentation.

The accompanying notes are an integral part of these consolidated financial statements.

NUVERA COMMUNICATIONS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)

	THREE MONTHS ENDED SEPTEMBER 30, 2023
				Accumulated
				Other
	Common Stock			Comprehensive		Unearned Compensation		Retained Earnings		Total Equity
	Shares	Amount		Gain		Unearned Compensation		Retained Earnings		Total Equity

BALANCE on June 30, 2023	5,126,581	$	8,544,302	$	1,512,680	$	78,231	$	96,188,831	$	106,324,044


Restricted Stock Grant							1,519				1,519
Non-Cash, Share-Based Compensation									70,670		70,670
Net Income									483,170		483,170
Unrealized Loss on Interest Rate Swap					(89,362)						(89,362)

BALANCE on September 30, 2023	5,126,581	$	8,544,302	$	1,423,318	$	79,750	$	96,742,671	$	106,790,041


	THREE MONTHS ENDED SEPTEMBER 30, 2022
				Accumulated
				Other
	Common Stock			Comprehensive		Unearned Compensation		Retained Earnings		Total Equity
	Shares	Amount		Gain		Unearned Compensation		Retained Earnings		Total Equity
BALANCE on June 30, 2022	5,084,578	$	8,474,297	$	1,136,497	$	272,234	$	90,530,833	$	100,413,861


Restricted Stock Grant							34,882				34,882
Non-Cash, Share-Based Compensation							(28,792)		61,903		33,111
Net Income									1,822,648		1,822,648
Dividends									(711,841)		(711,841)
Unrealized Gain on Interest Rate Swap					547,131						547,131

BALANCE on September 30, 2022	5,084,578	$	8,474,297	$	1,683,628	$	278,324	$	91,703,543	$	102,139,792

The accompanying notes are an integral part of these consolidated financial statements.

NUVERA COMMUNICATIONS, INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited)

	NINE MONTHS ENDED SEPTEMBER 30, 2023
				Accumulated Other Comprehensive Gain

	Common Stock					Unearned Compensation		Retained Earnings		Total Equity
	Shares	Amount				Unearned Compensation		Retained Earnings		Total Equity

BALANCE on December 31, 2022	5,093,213	$	8,488,689	$	1,582,455	$	79,892	$	92,430,816	$	102,581,852

Directors' Stock Plan	27,716		46,193						341,277		387,470
Employee Stock Plan	5,652		9,420						74,230		83,650
Restricted Stock Grant							(142)				(142)
Non-Cash, Share-Based Compensation									172,962		172,962
Net Income									5,154,157		5,154,157
Dividends									(1,430,771)		(1,430,771)
Unrealized Loss on Interest Rate Swap					(159,137)						(159,137)

BALANCE on September 30, 2023	5,126,581	$	8,544,302	$	1,423,318	$	79,750	$	96,742,671	$	106,790,041


	NINE MONTHS ENDED SEPTEMBER 30, 2022
				Accumulated Other Comprehensive Gain (Loss)

	Common Stock					Unearned Compensation		Retained Earnings		Total Equity
	Shares	Amount				Unearned Compensation		Retained Earnings		Total Equity
BALANCE on December 31, 2021	5,210,053	$	8,683,422	$	(631,253)	$	259,620		90,338,806	$	98,650,595

Directors' Stock Plan	19,818		33,030						354,412		387,442
Employee Stock Plan	4,676		7,793						92,741		100,534
Restricted Stock Grant							19,371				19,371
Non-Cash, Share-Based Compensation									61,903		61,903
Exercise of RSU's	31		52				(667)		615		-
Repurchase of Common Stock	(150,000)		(250,000)						(2,937,500)		(3,187,500)
Net Income									5,924,655		5,924,655
Dividends									(2,132,089)		(2,132,089)
Unrealized Gain on Interest Rate Swap					2,314,881						2,314,881

BALANCE on September 30, 2022	5,084,578	$	8,474,297	$	1,683,628	$	278,324	$	91,703,543	$	102,139,792

The accompanying notes are an integral part of these consolidated financial statements.

	Three Months Ended September 30, 2023				Three Months Ended September 30, 2022				Nine Months Ended September 30, 2023				Nine Months Ended September 30, 2022
	Three Months Ended September 30, 2023				Three Months Ended September 30, 2022				Nine Months Ended September 30, 2023				Nine Months Ended September 30, 2022
	Basic		Diluted		Basic		Diluted		Basic		Diluted		Basic		Diluted

Net Income	$	483,170	$	483,170	$	1,822,648	$	1,822,648	$	5,154,157	$	5,154,157	$	5,924,655	$	5,924,655

Weighted-average common shares outstanding		5,126,581		5,211,382		5,084,578		5,115,477		5,113,007		5,175,507		5,091,391		5,112,358

Net income per share	$	0.09	$	0.09	$	0.36	$	0.36	$	1.01	$	1.00	$	1.16	$	1.16

	Three Months Ended September 30,
	2023		2022
Voice Service¹	$	1,505,320	$	1,550,057
Network Access¹		909,502		1,224,952
Video Service¹		3,005,010		3,126,733
Data Service¹		6,327,829		6,209,861
Directory²		151,562		165,094
Other Contracted Revenue³		653,417		683,973
Other⁴		600,171		317,974

Revenue from customers		13,152,811		13,278,644

Subsidy and other revenue outside scope of ASC 606⁵		3,217,667		3,202,483

Total revenue	$	16,370,478	$	16,481,127

¹ Month-to-Month contracts billed and cosumed in the same month.

² Directory revenue is contracted annually, however, this revenue is recognized monthly over the contract period as the advertising is used.

³ This includes long-term contracts where the revenue is recognized monthly over the term of the contract.

⁴ This includes CPE and other equipment sales.

⁵ This includes governmental subsidies and lease revenue outside the scope of ASC 606.

	Nine Months Ended September 30,
	2023		2022
Voice Service¹	$	4,373,187	$	4,748,380
Network Access¹		3,027,881		3,790,634
Video Service¹		9,120,164		9,446,473
Data Service¹		18,850,042		18,543,327
Directory²		454,852		490,832
Other Contracted Revenue³		2,019,130		2,048,531
Other⁴		1,497,123		917,181

Revenue from customers		39,342,379		39,985,358

Subsidy and other revenue outside scope of ASC 606⁵		9,675,733		9,410,904

Total revenue	$	49,018,112	$	49,396,262

¹ Month-to-Month contracts billed and cosumed in the same month.

² Directory revenue is contracted annually, however, this revenue is recognized monthly over the contract period as the advertising is used.

³ This includes long-term contracts where the revenue is recognized monthly over the term of the contract.

⁴ This includes CPE and other equipment sales.

⁵ This includes governmental subsidies and lease revenue outside the scope of ASC 606.

	September 30, 2023		September 30, 2022
	September 30, 2023		September 30, 2022

Accounts receivable, net - beginning balance	$	1,477,692	$	1,512,369
Accounts receivable, net - ending balance		2,437,313		2,449,882

Contract assets - beginning balance		794,193		662,437
Contract assets - ending balance		1,445,577		735,482

Contract liabilities - beginning balance		626,306		602,007
Contract liabilities - ending balance		715,279		831,479

	Balance September 30, 2023		Balance December 31, 2023
Right of Use Assets	Balance September 30, 2023		Balance December 31, 2023
Operating Lease Right-Of-Use Assets	$	1,276,743	$	1,341,029

	Balance September 30, 2023		Balance December 31, 2022
Operating Lease Liabilities	Balance September 30, 2023		Balance December 31, 2022
Short-Term Operating Lease Liabilities	$	382,423	$	356,400
Long-Term Operating Lease Liabilities		928,271		1,026,978
Total	$	1,310,694	$	1,383,378

	Balance September 30, 2023
Maturity Analysis	Balance September 30, 2023
2023 (remaining)	$	126,735
2024		396,766
2025		208,414
2026		167,639
2027		131,626
Thereafter		572,681
Total		1,603,861
Less Imputed interest		(293,167)
Present Value of Operating Leases	$	1,310,694

Weighted Average Remaining Lease Term (Years)	6.35
Weighted Average Discount Rate	6.05%

		September 30, 2023					December 31, 2022
	Useful Lives	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount			Accumulated Amortization
Definite-Lived Intangible Assets
Customers Relationships	14-15 yrs	$	42,878,445		$	31,647,448		$	42,878,445		$	30,429,708
Regulatory Rights	15 yrs		4,000,000			4,000,000			4,000,000			4,000,000
Video Franchise	7 yrs		3,000,000			107,145			-			-
Trade Name	3-5 yrs		310,106			310,106			310,106			273,465
Indefinitely-Lived Intangible Assets
Video Franchise			-			-			3,000,000			-
Spectrum			877,814			-			877,814			-
Total		$	51,066,365		$	36,064,699		$	51,066,365		$	34,703,173

Net Identified Intangible Assets					$	15,001,666					$	16,363,192

• (October 1 – December 31)	$	513,059
• 2024	$	2,052,234
• 2025	$	2,047,312
• 2026	$	2,042,389
• 2027	$	1,335,247
• 2028	$	1,335,247

●	Communications Companies:
	•	Nuvera Communications, Inc., the parent company.
	•	Hutchinson Telephone Company (HTC), a wholly owned subsidiary of Nuvera.
	•	Peoples Telephone Company, a wholly owned subsidiary of Nuvera.
	•	Scott-Rice Telephone Co., a wholly owned subsidiary of Nuvera.
	•	Sleepy Eye Telephone Company, a wholly owned subsidiary of Nuvera.
	•	Western Telephone Company, a wholly owned subsidiary of Nuvera; and
	•	Hutchinson Telecommunications, Inc., a wholly owned subsidiary of HTC, located in Litchfield and Glencoe, Minnesota.
●	Our investments and interests in the following entities include some management responsibilities:
	•	Broadband Visions, LLC (BBV) – 24.30% subsidiary equity ownership interest. BBV provides video headend and Internet services.
	•	Independent Emergency Services, LLC (IES) – 14.29% subsidiary equity ownership interest. IES is a provider of E-911 services to the State of Minnesota as well as a number of counties located in Minnesota; and
	•	Fiber Minnesota, LLC (FM) – 7.54% subsidiary equity ownership interest. FM is a Minnesota state-wide network that provides connectivity for regional businesses.

	Time-Based RSU's	Targeted Performance-Based RSU's	Closing Stock Price		Vesting Date


Balance at December 31, 2021	9,440	13,270
Forfeited	(1,685)	(4,325)
Exercised	(4,391)	(4,244)	$	17.18	12/31/2022
Balance at December 31, 2022	3,364	4,701
Forfeited	-	-
Exercised	-	-
Balance at September 30, 2023	3,364	4,701

		Closing Stock Price
				Vesting Date
	Options			Vesting Date
Balance at December 31, 2021	-
Issued	40,577	$	21.20	4/11/2023
Issued	40,583	$	21.20	4/11/2024
Issued	40,583	$	21.20	4/11/2025
Balance at December 31, 2022	121,743
Issued	51,431	$	14.70	3/31/2024
Issued	51,431	$	14.70	3/31/2025
Issued	51,432	$	14.70	3/31/2026
Balance at September 30, 2023	276,037

	2023 Grants		2022 Grants
Exercise Price	$	14.70	$	21.20
Risk-Free Rate of Interest		2.957%		1.515%
Expected Term (Years)		10		10
Expected Stock Price Volatility		20.7%		18.1%
Dividend Yield		2.83%		2.44%

	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Term (Years)	Aggregate Intrinsic Value (in Thousands)



Outstanding as of December 31, 2021	-	$	-	-	$	-
Granted	121,743		21.20	9.00		-
Forfeited	-		-	-		-
Outstanding as of December 31, 2022	121,743	$	21.20	9.00	$	-
Granted	154,294		14.70	9.75		-
Forfeited	-		-	-		-
Outstanding as of September 2023	276,037	$	17.57	9.42	$	-

●	On September 29, 2023, the BOD of Nuvera announced that it is suspending dividend payments to its shareholders and will not declare or pay a dividend in the 2023 third quarter. The BOD’s action reflects the Company’s commitment to maximize available capital for the foreseeable 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.
●	On March 31, 2023, Nuvera and the other owners of FiberComm sold 100% of their interest in FiberComm to ImOn Communications, LLC. FiberComm has been providing high quality Internet and voice services to businesses in the Sioux City, Iowa market for over 20 years. Nuvera owned a 20% interest in FiberComm through its wholly owned subsidiary Peoples Telephone Company. Nuvera announced the execution of the FiberComm sale agreement in January 2023. Nuvera initially recognized a net gain of $4,087,207 in book value in connection with the sale of the FiberComm interest. Prior to the sale of Nuvera’s equity investment in FiberComm, Nuvera had guaranteed a portion of a ten-year loan owed by FiberComm, set to mature on April 30, 2026. On March 31, 2023, upon closing of the sale, the loan was paid and Nuvera was released from their guarantee of loan.
●	On December 8, 2022, the Company was awarded four broadband grants from the DEED. The grants will provide up to 45.0% to 50.0% of the total cost of building fiber connections to homes and businesses for improved high-speed Internet in unserved and underserved communities and businesses in the Company’s service area. The Company is eligible to receive $8,594,688 of approximately $18,139,749 total project costs. The Company will provide the remaining 55.0% to 50% matching funds. Construction and expenditures for these projects will begin in the spring of 2023. We have not received any funds for these projects as of September 30, 2023.

●	On July 15, 2022, 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 secured a new credit facility in the aggregate principal amount of $130.0 million. Under the Agreements, among other things, (i) the Company received a $50.0 million term loan to replace existing debt, (ii) a $50.0 million delayed draw term loan, (iii) the Company’s revolving loan was increased from $20.0 million to $30.0 million, (iv) the maturity date of the term loans were set at July 15, 2029, and the maturity day of the revolving loan was set at July 15, 2027, and (iii) the Company 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 July 20, 2022, for further details regarding the new credit agreements with CoBank.
●	On December 15, 2021, the Company announced plans to build and deploy Gig fiber Internet across its network creating crucial access to the fastest speeds available for rural communities, small cities and suburban areas across Minnesota. “This is a transformational moment for Nuvera as we make a future-focused investment in the communities we serve by providing the most reliable FTTP access to Gig-speed services,” said Glenn Zerbe, CEO. “Our homes, businesses and communities need reliable and affordable connections to school, workplaces and entertainment, as an important and growing part of everyday life.” “Nuvera’s investment in fiber-to-the-home (FTTH) network infrastructure will allow more underserved communities across Minnesota to leverage the quality of life and economic opportunity that access to a state-of-the-art fiber network provides now and for years to come.” said State Sen. Nick Frentz, DFL-North Mankato. The company will continue to build and deploy the Gig-speed service over the next few years. “We’re excited to create ‘Nuvera Gig Cities’ in the communities we serve while also expanding access to fiber-based Internet service at a range of speeds,” said Zerbe. “Nuvera’s fiber network gives customers affordable access to a range of speeds from 100 megabytes per second to 1 Gig at prices that are the same whether you’re in rural Goodhue or suburban Prior Lake.” Nuvera’s goal is to bring Gig-speed service to as many communities as possible.
	Nuvera’s fiber Internet prices range from $50 per month to $100 per month for Gig-speed services. Customers can choose the right speed at an affordable price, including low-income households through Federal programs.
	In 2023, we plan upgrade 17,000 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. As of September 30, 2023, we have upgraded 9,388 of the planned 17,000 passings with these fiber services.
●	On January 29, 2021, the Company was awarded five broadband grants from the DEED. The grants will provide up to 35.4% of the total cost of building fiber connections to homes and businesses for improved high-speed Internet in unserved or underserved communities and businesses in the Company’s service area. The Company is eligible to receive $1,918,037 of the approximately $5,419,617 total project costs. The Company will provide the remaining 64.6% of the matching funds. Construction and expenditures for these projects began in the spring of 2021. We have received $1,918,037 for these projects as of September 30, 2023.
●	Net income for the third quarter of 2023 totaled $483,170, which was a $1,339,478, or 73.49% decrease compared to the third quarter of 2022. This decrease was primarily due to an increase in interest expense and a decrease in operating income, all of which are described below.
●	Consolidated revenue for the third quarter of 2023 totaled $16,370,478, which was a $110,649 or 0.67% decrease compared to the third quarter of 2022. This decrease was primarily due to decreases in voice service, network access revenues, and video services, partially offset by increases in data revenues, FUSF subsidies and other revenues.

Nuvera Communications, Inc. Reporting by Technology
	Q4 2022				Q1 2023				Q2 2023				Q3 2023
Premise Passings
Fiber - NuFiber/Gig-Cities		18,041				19,714				22,135				27,429
Non-Fiber		44,572				43,512				41,389				37,436
Total Passings		62,613				63,226				63,524				64,865
% Fiber Coverage		28.8%				31.2%				34.8%				42.3%

Internet/Broadband Connections/Share
Fiber Gig-Cities
Residential		5,290				6,333				6,922				7,728
Business		634				653				721				772
Totals		5,924		32.8%		6,986		35.4%		7,643		34.5%		8,500	*	31.0%
Non-Fiber
Residential		19,827				18,820				18,333				17,613
Business		1,691				1,661				1,583				1,499
Totals		21,518		48.3%		20,481		47.1%		19,916		48.1%		19,112		51.1%
Total Broadband Connections		27,442		43.8%		27,467		43.4%		27,559		43.4%		27,612		42.6%
% Broadband on Fiber		21.6%				25.4%				27.7%				30.8%

* 451 fiber customers with multiple services are not included in this number until all services are converted.

Broadband Customer Revenue/ARPU
Internet/BB Revenue/ARPU
Fiber Gig-Cities
Residential	$	920,803	$	66.36	$	1,188,519	$	65.16	$	1,336,368	$	65.84	$	1,472,337	$	66.62
Business	$	418,805	$	226.14	$	423,173	$	219.15	$	448,394	$	213.52	$	496,503	$	219.40
Totals	$	1,339,608	$	85.18	$	1,611,692	$	79.90	$	1,784,762	$	79.69	$	1,968,840	$	79.69
Non-Fiber	$				$				$				$
Residential	$	3,634,461	$	59.15	$	3,438,274	$	60.11	$	3,311,883	$	59.69	$	3,189,103	$	59.33
Business	$	510,427	$	99.10	$	525,717	$	104.45	$	513,860	$	105.97	$	491,036	$	107.05
Totals	$	4,144,888	$	62.24	$	3,963,991	$	63.70	$	3,825,743	$	63.41	$	3,680,139	$	63.41
Total Internet/BB Revenue	$	5,484,496			$	5,575,683			$	5,610,505			$	5,648,979
% Revenue from Fiber		24.4%				28.9%				31.8%				34.9%

Other Data Service Revenue	$	1,255,619			$	1,240,866			$	1,264,065			$	1,232,986

Total Data Service Revenue	$	6,740,115			$	6,816,549			$	6,874,570			$	6,881,965

All Other Revenue	$	9,578,092			$	9,546,398			$	9,410,117			$	9,488,513

Total Revenue	$	16,318,207			$	16,362,947			$	16,284,687			$	16,370,478

Communications Segment	Three Months Ended September 30,				Increase (Decrease)
Communications Segment	2023		2022		Increase (Decrease)
Operating Revenues
Voice Service	$	1,363,543	$	1,404,890	$	(41,347)	-2.94%
Network Access		876,186		1,190,870		(314,684)	-26.42%
Video Service		3,005,010		3,126,733		(121,723)	-3.89%
Data Service		6,881,965		6,797,329		84,636	1.25%
A-CAM/FUSF		2,971,267		2,952,651		18,616	0.63%
Other		1,272,507		1,008,654		263,853	26.16%
Total Operating Revenues		16,370,478		16,481,127		(110,649)	-0.67%

Cost of Services, Excluding Depreciation and Amortization		7,702,019		7,573,835		128,184	1.69%
Selling, General and Administrative		2,372,515		2,264,090		108,425	4.79%
Depreciation and Amortization Expenses		3,949,978		3,520,963		429,015	12.18%
Total Operating Expenses		14,024,512		13,358,888		665,624	4.98%

Operating Income	$	2,345,966	$	3,122,239	$	(776,273)	-24.86%

Net Income	$	483,170	$	1,822,648	$	(1,339,478)	-73.49%

Capital Expenditures	$	18,305,302	$	12,395,515	$	5,909,787	47.68%

Communications Segment	Nine Months Ended September 30,				Increase (Decrease)
Communications Segment	2023		2022		Increase (Decrease)
Operating Revenues
Voice Service	$	3,969,394	$	4,321,047	$	(351,653)	-8.14%
Network Access		2,926,937		3,685,145		(758,208)	-20.57%
Video Service		9,120,164		9,446,613		(326,449)	-3.46%
Data Service		20,573,084		20,288,217		284,867	1.40%
A-CAM/FUSF		8,950,127		8,737,738		212,389	2.43%
Other		3,478,406		2,917,502		560,904	19.23%
Total Operating Revenues		49,018,112		49,396,262		(378,150)	-0.77%

Cost of Services, Excluding Depreciation and Amortization		23,690,558		22,654,487		1,036,071	4.57%
Selling, General and Administrative		7,608,787		7,571,025		37,762	0.50%
Depreciation and Amortization Expenses		11,371,459		10,512,317		859,142	8.17%
Total Operating Expenses		42,670,804		40,737,829		1,932,975	4.74%

Operating Income	$	6,347,308	$	8,658,433	$	(2,311,125)	-26.69%

Net Income	$	5,154,157	$	5,924,655	$	(770,498)	-13.00%

Capital Expenditures	$	33,397,721	$	22,407,662	$	10,990,059	49.05%

Key metrics
Access Lines		13,870		15,888		(2,018)	-12.70%
Video Customers		8,406		9,336		(930)	-9.96%
Data Customers		32,931		32,606		325	1.00%

	●	The presence of contamination can adversely affect the value of our properties and make it difficult to sell any affected property or to use it as collateral; and

	●	We could be held responsible for third-party property damage claims, personal injury claims or natural resource damage claims relating to contamination found at any of our current or past properties.

Exhibit Number	Description

10.1*	Second Amendment to Credit Agreement and Waiver dated November 10, 2023, amending Credit Agreement dated July 15, 2022 by and among Nuvera Communications, Inc. as Borrower, Nuvera Subsidiaries as Guarantors, and CoBank, ACB, as Lender and as Administrative Agent.

31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS	XBRL Instance Document

101.SCH	XBRL Taxonomy Extension Schema Document

101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

101.LAB	XBRL Taxonomy Extension Label Linkbase Document

101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

*Pursuant to Item 601(b)(2) of Regulation S-K, exhibits and schedules to this agreement has been omitted from this Report and will be furnished supplementally to the SEC upon request; provided, however, that the Company may request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934 for any exhibits or schedules so furnished.

	NUVERA COMMUNICATIONS, INC.

Dated: November 14, 2023	By	/s/ Glenn H. Zerbe
	Glenn H. Zerbe, President and Chief Executive Officer

Dated: November 14, 2023	By	/s/ Curtis O. Kawlewski
	Curtis O. Kawlewski, Chief Financial Officer