| Acquisitions | Note
5 - Acquisitions Beckley
Acquisitions – March 2021 On
March 3, 2021, through majority owned subsidiaries, the Company acquired a group of West Virginia dealerships and related real estate
for a purchase price totaling approximately $43.4 million with approximately $41.6 million in cash and approximately $1.8 million in
rollover equity in certain subsidiaries. The fair value of rollover equity was determined based on the implied fair value of equity with
no discount for minority interest or lack of marketability. The dealerships operate under sales and service agreements with Buick-GMC,
Chevrolet, and Kia. The acquisition has been accounted for as a business combination and, accordingly, the operating results of the acquired
dealerships have been included in the Company’s financial statements since the date of acquisition. The fair value of the net assets
acquired was approximately $43.4 million. The Company incurred approximately $478,000 in acquisition costs, which were recognized in
general and administrative expense within the consolidated statements of operations. The
following table summarizes the total consideration.
Cash $ 41,595,574
Rollover equity 1,805,000
Total consideration $ 43,400,574 The
following table summarizes the allocation of the total consideration to the tangible and intangible assets acquired and the liabilities
assumed based on the respective fair values at the acquisition date. The Company is still reviewing fair values of the assets acquired
and the liabilities assumed, and rollover equity as provisional. Therefore, the fair values are provisional measurements and may be subject
to change. Net
Assets Acquired – March 2021 Beckley acquisitions
Assets acquired
New vehicles $ 11,464,250
Used vehicles 8,493,404
Parts & accessories 560,092
Property & equipment 940,958
Real property 10,600,000
Operating leases right of
use assets 3,066,886
Other assets 43,243
Franchise rights 8,200,000
Tradename 3,200,000
Goodwill 878,458
Total assets acquired 47,447,291
Liabilities assumed
Accrued personal property
tax 23,143
Accrued vacation 94,803
We owes 21,272
Intransit floorplan liability 840,613
Operating
lease liabilities 3,066,886
Total
liabilities assumed 4,046,717
Net
assets acquired $ 43,400,574 The
fair value of the franchise rights was based on the excess earnings method. The fair value of the tradename was based on the relief from
royalty method. The franchise rights and tradename are indefinite lived assets and not subject to amortization. The
excess of the consideration transferred in the acquisition over the net amounts assigned
to the fair value of the tangible assets and identifiable intangible assets acquired was
recorded as goodwill, which is attributable primarily to expected synergies and an assembled
workforce. Total goodwill is expected to be deductible for tax purposes. The
consolidated statements of operations include the following revenue and net income attributable to the acquired dealerships since the
date of the acquisition:
2021
Revenue $ 106,950,670
Net income $ 6,498,541 The following unaudited pro forma summary in the three and
nine month periods ended September 30, 2021 and 2020, respectively, presents consolidated information as if the acquisition had occurred
on January 1, 2020:
Pro Forma Pro Forma
For the Three Months For the Nine Months
September 30, September 30,
2021 2020 2021 2020
Net revenue $ 59,143,311 $ 55,931,011 $ 127,348,730 147,652,798
Net income 1,741,253 (1,982,654 ) (2,902,193 ) (5,102,432 ) These amounts have been calculated by applying our accounting
policies and estimates. The results of the acquired stores have been adjusted to reflect the following: accounting for inventory on a
specific identification method, compensation expense, recognition of interest expense for financing related to stores, and corporate income
taxes based on geographic location. No nonrecurring pro forma adjustments directly attributable to the acquisitions are included in the
reported pro forma revenues and earnings. Beckley
Subaru Acquisition – May 2021 On
May 5, 2021, through a majority-owned subsidiary, the Company acquired a Subaru dealership in West Virginia for a purchase price totaling
approximately $4.7 million as summarized in the table below. The fair value of rollover equity was determined based on the implied fair
value of equity with no discount for minority interest or lack of marketability. The dealership operates under a sales and service agreement
with Subaru. The acquisition has been accounted for as a business combination and, accordingly, the operating results of the acquired
dealership have been included in the Company’s financial statements since the date of acquisition. The Company incurred approximately
$18,500 in acquisition costs, which were recognized in general and administrative expense within the consolidated statements of operations. The
following table summarizes the total consideration.
Cash $ 4,388,680
Rollover
equity 359,000
Total
consideration $ 4,747,680 The
following table summarizes the allocation of the total consideration to the tangible and intangible assets acquired and the liabilities
assumed based on the respective fair values at the acquisition date. The Company is still reviewing fair values of the assets acquired
and the liabilities assumed, and rollover equity as provisional. Therefore, the fair values are provisional measurements and may be subject
to change. Net
Assets Acquired – May 2021 Beckley Subaru acquisition
Assets acquired
New vehicles $ 594,058
Used vehicles 1,882,714
Property & equipment 654,872
Operating leases right of
use assets 3,671,546
Other assets 205,471
Franchise rights 1,300,000
Tradename 300,000
Goodwill 45,081
Total assets acquired 8,653,742
Liabilities assumed
Accrued personal property
tax 11,746
Accrued vacation 35,212
We owes 13,800
Assumed floorplan 173,758
Operating
lease liabilities 3,671,546
Total
liabilities assumed 3,906,062
Net
assets acquired $ 4,747,680 The
fair value of the franchise rights was based on the excess earnings method. The fair value of the trade name was based on the relief
from royalty method. The franchise rights and trade name are indefinite lived assets and not subject to amortization. The
excess of the consideration transferred in the acquisition over the net amounts assigned to the fair value of the tangible assets and
identifiable intangible assets acquired was recorded as goodwill, which is attributable primarily to expected synergies and an assembled
workforce. Total goodwill is expected to be deductible for tax purposes. The
consolidated statements of operations include the following revenue and net income attributable
to the acquired dealerships since the date of the acquisition:
2021
Revenue $ 17,648,747
Net income $ 701,168 The following unaudited pro forma summary in the three and
nine month periods ended September 30, 2021 and 2020, respectively, presents consolidated information as if the acquisition had occurred
on January 1, 2020:
Pro Forma Pro Forma
For the Three Months For the Nine Months
September 30, September 30,
2021 2020 2021 2020
Net revenue $ 23,791,269 $ 21,161,383 $ 36,169,519 49,057,907
Net income (675,672 ) (3,644,264 ) (8,958,267 ) (8,140,553 ) These amounts have been calculated by applying our accounting
policies and estimates. The results of the acquired stores have been adjusted to reflect the following: accounting for inventory on a
specific identification method, compensation expense, recognition of interest expense for financing related to stores, and corporate income
taxes based on geographic location. No nonrecurring pro forma adjustments directly attributable to the acquisitions are included in the
reported pro forma revenues and earnings. As
a result of the Beckley Acquisitions in March 2021, the Company issued noncontrolling interests in two of its wholly-owned subsidiaries,
LMP Beckley 001 Holdings, LLC (“001”) and LMP Beckley 002 Holdings, LLC (“002”), to the sellers of the Beckley
Acquisitions. The noncontrolling interests represent 15% of the outstanding equity interests of 001 and 002 and totaled approximately
$1.8 million as of March 3, 2021. As a result of the Beckley Subaru Acquisition on May 5, 2021, an additional approximately $359,000
of noncontrolling interest was issued to the sellers of Beckley Subaru. There were no additional changes in the outstanding equity interests
of 001 and 002 from the Beckley Acquisitions through September 30, 2021. The
sellers and the Company agreed to both put options exercisable by the noncontrolling interest holders and call options exercisable
by the Company for the remaining 15% minority interest based on a formulaic approach. In order to appropriately account for
the classification of the redeemable noncontrolling interest outside of the permanent equity, an evaluation of the contracts and ASC
480 and ASC 815 was performed. As the put option is outside of the Company’s control, the estimated redemption value of the minority
interest is presented as a redeemable noncontrolling interest outside of permanent equity on the condensed consolidated balance sheets.
As of September 30, 2021, the redemption value of the 15% noncontrolling interests was approximately $10.9 million, based on the
contractually-defined redemption values as of the balance sheet date. The
Company allocates income and losses to the noncontrolling interest holders based on the applicable membership interest percentage. At
each reporting period, the redeemable noncontrolling interests are recognized at the higher of (1) the initial carrying amounts of the
noncontrolling interests as adjusted for accumulated income or loss attributable to the noncontrolling interest holders, or (2) the contractually-defined
redemption values as of the balance sheet date, as long as the contractually-defined redemption values exceed the initial amounts of
the noncontrolling interests. If the contractually-defined redemption values exceed the carrying amounts of noncontrolling interests
as adjusted for accumulated income or loss attributable to noncontrolling interests holders, but not the initial amounts of the noncontrolling
interests, the noncontrolling interests are recorded at the initial amounts. Adjustments to the carrying amount of redeemable noncontrolling
interests are charged against retained earnings (or additional paid-in capital if there are no retained earnings). The
components of redeemable noncontrolling interests as of September 30, 2021 are as follows:
Beginning balance $ -
Noncontrolling interests issued in connection
with all Beckley Acquisitions 2,164,000
Net income attributable to noncontrolling interests
through September 30, 2021 1,080,050
Distributions to noncontrolling interests (864,209 )
Adjustments to redemption value through
September 30, 2021 8,569,546
Ending balance, September 30, 2021 $ 10,949,387 A
reconciliation of shareholders’ equity attributable to LMP Automotive Holdings, Inc., shareholders’ equity attributable to
noncontrolling interests, and total shareholders’ equity as of September 30, 2021 is as follows:
Shareholders’ equity attributable
to LMP Automotive Holdings, Inc. $ 36,917,102
Shareholders’
equity attributable to noncontrolling interests 10,949,387
Total shareholders’
equity $ 47,866,489 As
of December 31, 2020, there was no shareholders’ equity attributable to noncontrolling interests. Fuccillo
Acquisition On
March 4, 2021, through majority owned subsidiaries, the Company acquired two Southwest Florida dealerships and related real estate for
an aggregate purchase price of approximately $79.3 million in cash. The dealerships operate under sales and service agreements with KIA
Motors America, Inc. The acquisition expands the Company’s existing markets and access to new customers and creates revenue and
cost synergies which management believes will contribute to future profits. The acquisition has been accounted for as a business combination
and, accordingly, the operating results of the acquired dealerships have been included in the Company’s financial statements since
the date of acquisition. The Company incurred approximately $486,000 in acquisition costs, which were recognized in selling, general
and administrative expense within the consolidated statements of operations. The
following table summarizes the allocation of the total consideration to the tangible and intangible assets acquired and the liabilities
assumed based on the respective fair values at the acquisition date. The Company is still reviewing fair values of the assets acquired
and the liabilities assumed, including the noncontrolling interests as being provisional. Therefore, the fair values are provisional
measurements and may be subject to change.
Net Assets Acquired
Assets acquired
New vehicles $ 7,421,724
Used vehicles 878,000
Parts & accessories 927,012
Property & equipment 1,063,914
Real property 33,100,000
Other assets 198,373
Franchise rights 9,800,000
Goodwill 26,200,000
Total assets acquired 79,589,023
Liabilities assumed
We owes 25,477
Prepaid maintenance
program credit 226,709
Customer
deposits 10,000
Total liabilities assumed 262,186
Net Assets Acquired $ 79,326,837 The
fair value of the franchise rights was based on the excess earnings method. The franchise rights are indefinite lived assets and not
subject to amortization. The
excess of the consideration transferred in the acquisition over the net amounts assigned to the fair value of the tangible assets and
identifiable intangible assets acquired was recorded as goodwill, which is attributable primarily to expected synergies and an assembled
workforce. Total goodwill is expected to be deductible for tax purposes. The
consolidated statements of operations include the following revenue and net income attributable to the acquired dealerships since the
date of the acquisition:
2021
Revenue $ 151,279,270
Net income $ 11,924,083 The following unaudited pro forma summary in the three and nine month
periods ended September 30, 2021 and 2020, respectively, presents consolidated information as if the acquisition had occurred on January
1, 2020:
Pro Forma Pro Forma
For the Three Months For the Nine Months
September 30, September 30,
2021 2020 2021 2020
Net revenue $ 101,037,226 $ 53,435,457 $ 191,830,782 151,382,086
Net income 4,163,072 (1,562,287 ) 2,264,648 (2,395,820 ) These amounts have been calculated by applying our accounting policies
and estimates. The results of the acquired stores have been adjusted to reflect the following: accounting for inventory on a specific
identification method, compensation expense, recognition of interest expense for financing related to stores, and corporate income taxes
based on geographic location. No nonrecurring pro forma adjustments directly attributable to the acquisitions are included in the reported
pro forma revenues and earnings. Concurrent
with the Fuccillo acquisition, the Company sold 15% of the equity interests in the dealership divisions of the dealerships acquired in
the Fuccillo Acquisition to entities owned by certain members of the dealerships’ management, in exchange for cash of $550,000
and promissory notes of approximately $3.3 million. The notes mature in 7 years, bear interest at 5% annually and can be prepaid at any
time without penalty. The notes are secured by the equity interests and are without recourse. For accounting purposes, the purchase of
the equity interests with nonrecourse notes is accounted for as liabilities in accordance with ASC 710, Compensation - General Related
agreements were also executed which allow for the Company’s subsidiaries to repurchase the 15% equity interests at any time and
provide that the interest holders can put the equity interests to the Company’s subsidiaries upon termination of employment of
the interest holders’ owners. The repurchase and call price is computed based on a book value formula defined in the related agreements. The
Company is accounting for this arrangement as deferred compensation, and at September 30, 2021 has recognized a liability which represents
the computed purchase price less the outstanding principal and interest owed on the nonrecourse notes of approximately $10.0 million
and is included in deferred compensation liability in the accompanying consolidated balance sheets. The Company recorded compensation
expense of approximately $1.5 million and approximately $10.1 million for the three and nine months ended September 30, 2021, respectively,
associated with this arrangement which is included in selling, general and administrative expense in the consolidated statement of operations. Bachman
Acquisition On
March 23, 2021, through wholly owned subsidiaries, the Company acquired a Tennessee dealership and related real estate for approximately
$12.7 million in cash. The dealership operates under sales and service agreements with General Motors, LLC. The acquisition expands the
Company’s existing markets and access to new customers and creates revenue and cost synergies which management believes will contribute
to future profits. The acquisition has been accounted for as a business combination and, accordingly, the operating results of the acquired
dealership have been included in the Company’s financial statements since the date of acquisition. The Company incurred approximately
$284,000 in acquisition costs, which were recognized in selling, general and administrative expense within the consolidated statements
of operations. The
following table summarizes the allocation of the total consideration to the tangible and intangible assets acquired and the liabilities
assumed based on the respective fair values assumed at the acquisition date. The Company is still reviewing fair values of the assets
acquired and the liabilities assumed, including the noncontrolling interests as being provisional. Therefore, the fair values are provisional
measurements and may be subject to change. Net
Assets Acquired
Assets acquired
New vehicles $ 2,359,207
Used vehicles 2,062,522
Parts & accessories 210,625
Property & equipment 131,416
Real property 5,400,000
Other assets 31,248
Franchise rights 200,000
Tradenames 1,100,000
Goodwill 1,200,000
Total assets acquired 12,695,018
Liabilities assumed
Accrued personal property
tax 2,216
Customer deposits 13,474
We
owes 3,686
Total liabilities assumed 19,376
Net
assets acquired $ 12,675,642 The
fair value of the franchise rights was based on the excess earnings method. The fair value of the tradename was based on the relief from
royalty method. The franchise rights and tradename are indefinite lived assets and not subject to amortization. The
excess of the consideration transferred in the acquisition over the net amounts assigned to the fair value of the tangible assets and
identifiable intangible assets acquired was recorded as goodwill, which is attributable primarily to expected synergies and an assembled
workforce. Total goodwill is expected to be deductible for tax purposes. The
consolidated statements of operations include the following revenue and net income attributable to the acquired dealership since the
date of the acquisition:
2021
Revenue $ 20,925,392
Net income $ 1,524,670 The following unaudited pro forma summary in the three and nine month
periods ended September 30, 2021 and 2020, respectively, presents consolidated information as if the acquisition had occurred on January
1, 2020:
Pro Forma Pro Forma
For the Three Months For the Nine Months
September 30, September 30,
2021 2020 2021 2020
Net revenue $ 23,451,455 $ 22,656,391 $ 40,798,106 54,291,979
Net income (397,467 ) (3,623,681 ) (8,027,713 ) (7,673,768 ) These amounts have been calculated by applying our accounting policies
and estimates. The results of the acquired stores have been adjusted to reflect the following: accounting for inventory on a specific
identification method, compensation expense, recognition of interest expense for financing related to stores, and corporate income taxes
based on geographic location. No nonrecurring pro forma adjustments directly attributable to the acquisitions are included in the reported
pro forma revenues and earnings. On
March 23, 2021, concurrent with the Bachman acquisition, the Company sold 15% of the equity interests in the dealership to an entity
owned by an officer of the Company. The purchase price was $344,267 which was paid by the officer as an offset of accrued compensation
payable to the officer. Related
agreements were also executed which allow for the Company to repurchase the 15% equity interests at any time for the greater of a) the
equity holder’s positive capital account, if any, or b) $100. The Company is accounting for this arrangement as an equity award
under a share-based compensation arrangement and on the date of the transaction recorded equity of $455,000, which represents the fair
value of the equity interest, and compensation of $110,733, representing the difference between the fair value of the equity award and
the purchase price paid by the officer and is recorded in selling, general & administrative expenses of the accompanying consolidated
statement of operations. LTO
Acquisition On
March 9, 2021, through a wholly owned subsidiary, the Company acquired a 51% ownership interest in a Connecticut based vehicle leasing
company for $850,000 in cash and shares of the Company’s common stock. The acquisition expands the Company’s existing markets
and access to new customers and creates revenue and cost synergies which management believes will contribute to future profits. The acquisition
has been accounted for as a business combination and, accordingly, the operating results of the acquired entity have been included in
the Company’s financial statements since the date of acquisition. The Company incurred approximately $10,000 in acquisition costs,
which were recognized in selling, general and administrative expense within the consolidated statements of operations. The
purchase price consisted of $225,000 in cash and the issuance of 16,892 shares of the Company’s common stock at a deemed valuation
of $37.00 per share (the “Target Value”). If on September 9, 2021 the per share market value of the Company’s common
stock is less than the Target Value (such difference, if any, the “Valuation Shortfall”), the Company will be obligated to
pay the sellers, in cash, an amount equal to the product of 16,892 and the Valuation Shortfall (the “Supplemental Cash Consideration”).
The Supplemental Cash Consideration has been accounted for as a contingent consideration liability and recognized at the acquisition
date at fair value as part of the consideration transferred in the acquisition. The contingent consideration is remeasured to fair value
at each reporting date until the contingency is resolved. At the acquisition date, the market price per share of the Company’s
common stock was $18.02 and the total value of the shares issued amounted to $304,394. The contingent consideration liability recorded
at the acquisition date amounted to $320,606. The amount as of September 9, 2021 is $351,691 and is in other current liabilities in the
consolidated balance sheets. Prior
to the acquisition, LTO had acquired vehicles from the Company pursuant to sales-type leases. At the acquisition date, the Company had
receivable balances of approximately $6,768,731 and LTO had corresponding payables. The receivables and payables were effectively settled
in the acquisition. Accordingly, the Company increased the consideration transferred by the amount of the settled receivables. There
was no gain or loss recognized in the effective settlement of the receivables. The
following table summarizes the total consideration:
Cash $ 140,000
Acquisition holdback due seller 85,000
Common stock 625,000
Rollover equity 816,667
Effective settlement
of receivables 6,768,731
Total consideration $ 8,435,398 The
following table summarizes the allocation of the total consideration to the tangible and intangible assets acquired and the liabilities
assumed based on the respective fair values assumed at the acquisition date. The Company is still reviewing fair values of the assets
acquired and the liabilities assumed, including the noncontrolling interest as provisional. Therefore, the fair values are provisional
measurements and may be subject to change. Net
Assets Acquired
Assets acquired
Cash $ 46,415
Leased vehicles 7,394,695
Vehicles 987,294
Property & equipment 40,329
Operating leases right of
use assets 111,337
Other assets 10,904
Intangible assets 621,000
Goodwill 164,946
Total assets acquired 9,376,920
Liabilities assumed
Customer deposits 118,800
Operating lease liabilities 111,337
Notes payable 639,360
Accrued
liabilities 72,025
Total
liabilities assumed 941,522
Net
assets acquired $ 8,435,398 The
fair value of in place leases was based on the direct costs associated with obtaining a new lessee and the opportunity costs associated
with lost rentals. In place leases have a useful life of thirty months and is subject to amortization. The
excess of the consideration transferred in the acquisition over the net amounts assigned to the fair value of the tangible assets and
identifiable intangible assets acquired was recorded as goodwill, which is attributable primarily to expected synergies and an assembled
workforce. Total goodwill is expected to be deductible for tax purposes. The
consolidated statements of operations include the following revenue and net income attributable to the acquired entity since the date
of the acquisition:
2021
Revenue $ 3,334,115
Net income $ 446,692 The following unaudited pro forma summary in the three and nine month
periods ended September 30, 2021 and 2020, respectively, presents consolidated information as if the acquisition had occurred on January
1, 2020:
Pro Forma Pro Forma
For the Three Months For the Nine Months
September 30, September 30,
2021 2020 2021 2020
Net revenue $ 10,225,838 $ 13,694,239 $ 17,798,239 27,405,522
Net income (885,690 ) (3,847,801 ) (9,212,743 ) (8,346,126 ) These amounts have been calculated by applying our accounting policies
and estimates. The results of the acquired stores have been adjusted to reflect the following: accounting for inventory on a specific
identification method, compensation expense, recognition of interest expense for financing related to stores, and corporate income taxes
based on geographic location. No nonrecurring pro forma adjustments directly attributable to the acquisitions are included in the reported
pro forma revenues and earnings. White
Plains Chrysler Dodge Jeep RAM Acquisition On
October 6, 2021, the Company closed on the acquisition of assets related to the ownership and operation of the White Plains Chrysler
Jeep Dodge Ram (“White Plains CDJR) as contemplated by that certain Dealership Asset Purchase Agreement, dated as of March 31,
2021, by and among the Company and Chrysler Jeep of White Plains, Inc. The consideration paid by the Company for the acquisition was
55,134 shares of the Company’s common stock and approximately $6.3 million in cash. This acquisition complements the Company’s
growth and expansion into the greater New York City marketplace. The acquisition qualifies as a business combination and will be accounted
for using the acquisition method of accounting. As
a result of limited access to White Plains CDJR information required to prepare initial accounting, together with the limited time since
the acquisition date and the effort required to conform the financial statements to the Company's practices and policies, the initial
accounting for the business combination is incomplete at the time of this filing. As a result, the Company is unable to provide the amounts
recognized as of the acquisition date for the major classes of assets acquired and liabilities assumed, pre-acquisition contingencies
and goodwill. Also, the Company is unable to provide pro forma revenues and earnings of the combined entity. This information will be
included in the Company's annual report on Form 10-K for the year ended December 31, 2021. Central
Avenue Chrysler Dodge Jeep RAM Acquisition On
April 1, 2021, the Company entered into a dealership asset purchase agreement effective as of March 31, 2021 (the “Central Avenue
DAPA”), for the acquisition of the assets of a Chrysler Dodge Jeep RAM dealership located in Yonkers, New York. In exchange for
the acquisition of such assets, the Company will pay to the sellers an aggregate amount of $14.5 million, with up to 25% of the purchase
price payable, at the Company’s election, in shares of the Company’s common stock. The acquisition is subject to certain
customary conditions, as set forth in the Central Avenue DAPA, including approval by Stellantis, N.V. The Company anticipates consummating
the acquisitions during the fourth quarter of 2021. Houston
Nissan and Cadillac Acquisitions On
July 16, 2021, the Company entered into a dealership asset purchase agreement (the “Houston DAPA”) to acquire the assets
of a franchised Nissan and Cadillac dealership in Houston, Texas. In exchange for the acquisition of such assets, the Company will pay
to the sellers an aggregate amount of $120.0 million, with up to $42.0 million of the purchase price payable, at the Company’s
election, in shares of the Company’s common stock. The acquisitions are subject to certain customary conditions, as set forth in
the Houston DAPA, including approval by Toyota Nissan North America and General Motors Company. The parties also intend to enter into
a real estate contract pursuant to which the Company, or a subsidiary thereof, will purchase the real property on which the dealerships
are located. The Company anticipates consummating this acquisition during the fourth quarter of 2021. East
Hartford KIA Acquisition On
July 21, 2021, the Company entered into a dealership asset purchase agreement (the “Hartford DAPA”) to acquire the assets
of a franchised KIA dealership in East Hartford, Connecticut. In exchange for the acquisition of such assets, the Company will pay to
the sellers an aggregate amount of $2.8 million. The acquisition is subject to certain customary conditions, as set forth in the Hartford
DAPA, including approval by KIA Motors America, Inc. In addition, on July 21, 2021, the Company entered into a real estate contract providing
for the purchase of the real estate upon which the dealership is located for $6.5 million. The Company anticipates consummating this
acquisition during the fourth quarter of 2021. Clifton
Park Chrysler Dodge Jeep RAM Acquisition On
July 23, 2021, the Company entered into a dealership asset purchase agreement (the “Clifton DAPA”) to acquire the assets
of a franchised Chrysler Jeep Dodge Ram dealership in Clifton Park, New York. In exchange for the acquisition of such assets, the Company
will pay to the sellers an aggregate amount of $11.0 million, with up to $5.6 million of the purchase price payable, at the Company’s
election, in shares of the Company’s common stock. The acquisition is subject to certain customary conditions, as set forth in
the Clifton DAPA, including approval by Stellantis, N.V. The parties also intend to enter into a real estate contract pursuant to which
the Company, or a subsidiary thereof, will purchase the real property on which the dealership is located. The Company anticipates consummating
this acquisition during the fourth quarter of 2021. Yonkers
KIA Acquisition On
August 5, 2021, the Company entered into a dealership asset purchase agreement (the “Yonkers DAPA”) to acquire the assets
of a franchised KIA dealership located on Central Avenue in Yonkers, New York. In exchange for the acquisition of such assets, the Company
will pay to the sellers an aggregate amount of $14.0 million, with up to $5.0 million of the purchase price payable, at the Company’s
election, in shares of the Company’s common stock. The acquisition is subject to certain customary conditions, as set forth in
the Yonkers DAPA, including approval by KIA Motors America, Inc. The Company anticipates consummating this acquisition during the fourth
quarter of 2021. Greeneville
Chrysler Dodge Jeep RAM Acquisition On
August 24, 2021, the Company entered into a dealership asset purchase agreement (the “Greeneville DAPA”) to acquire the assets
of a franchised Chrysler Jeep Dodge Ram dealership located in Greeneville, Tennessee. In exchange for the acquisition of such assets,
the Company will pay to the sellers an aggregate amount of $5.0 million, with up to $2.5 million of the purchase price payable, at the
Company’s election, in shares of the Company’s common stock. The acquisition is subject to certain customary conditions,
as set forth in |
