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Note 6 - Business Acquisitions | 12 Months Ended
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Dec. 31, 2018
Notes to Financial Statements |
Mergers, Acquisitions and Dispositions Disclosures [Text Block] |
NOTE 6. | BUSINESS ACQUISITIONS
2018 Acquisitions During the year ended December 31, 2018, we completed three acquisitions of billboards and related assets. These acquisitions were accounted for as business combinations under the provisions of ASC 805. A summary of the acquisitions is provided below. A summary of the revenues and earnings of each since the acquisition dates included in the consolidated statements of operations for the year ended December 31, 2018 is provided in the tables below. Billboard Acquisitions Tammy Lynn Outdoor, LLC On July 31, 2018, our subsidiary, LMSE, entered into a purchase agreement with Tammy Lynn Outdoor, LLC, which we refer to as “Tammy Lynn,” based in Bluefield, West Virginia. The assets acquired are primarily located in West Virginia with additional acquired assets located in Virginia. The purchase price consisted of $14,763,261 in cash, net of adjustments, and 85,170 shares of our Class A common stock, for a total purchase price of $16,463,254. The acquisition was completed for the purpose of expanding our presence in the outdoor advertising market in the Southeastern United States. The provisional purchase price allocation is based on internal information derived from our previous acquisitions in the Southeastern United States and will be revised when we have completed our evaluation. Due to the timing of the transaction, the initial accounting for the business acquisition is incomplete. We are still in the process of obtaining and assessing documentation of the contracts for customer relationships, and detailed reports for structures, permits, and easements; also, we are reviewing lease contracts for potentially favorable leases. Finite-lived intangible assets consist of customer relationships, permits, favorable leases, and a five year noncompetition agreement. We amortize the noncompetition agreement according to the terms of the asset purchase agreement. For other finite-lived assets, amortization is computed over the average period of expected benefit determined from internal information. Key Outdoor, Inc. On August 22, 2018, our subsidiary, LMM entered into a purchase agreement with Key Outdoor, Inc., which we refer to as “Key,” Angela K. Dahl, and Robert A. Dahl, by which LMM acquired over 700 billboard structures and related assets from Key. The billboards and related assets are located in Illinois, Iowa and Missouri. The purchase price for the acquired assets was $38,000,000, subject to certain post-closing adjustments, which totaled $233,894 and is still open for adjustments. A portion of the purchase price equal to $1,900,000 was held back by LMM and will be disbursed, subject to any claims for indemnification, over a 12 month period. Another $329,467 is being held back as required consent holdback. Both holdbacks, net of 2018 payments, are included in the caption “Short-term payables for business acquisitions” on our consolidated balance sheet as of December 31, 2018. Each of Key and Angela K. Dahl and Robert A. Dahl, Key’s principals, have also entered into five year noncompetition and nonsolicitation agreements in connection with the acquisition. Total cash paid at closing was $36,004,427. As of December 31, 2018, we made payments of $228,857 on the short-term payable for business acquisitions. The provisional purchase price allocation is based on internal information derived from our previous acquisitions in the Midwestern United States and will be revised when an independent appraisal has been completed. Due to the timing of the transaction, the initial accounting for the business combination is incomplete. We are still in the process of obtaining and assessing the documentation of the contracts for customer relationships and detailed reports for structures and permits; also we are reviewing lease contracts for potentially favorable leases and asset retirement obligations. Additionally, we are still in the process of verifying items in connection with the post closing adjustments which remain open. Finite-lived intangible assets consist of customer relationships, permits, and five year noncompetition and nonsolicitation agreements. We amortize the noncompetition and nonsolicitation agreements according to the terms of the asset purchase agreement. For other finite-lived assets, amortization is computed over the average period of expected benefit determined from internal information. Waitt Outdoor, LLC On August 31, 2018, our subsidiary, LMO entered into a purchase agreement with Waitt Outdoor, LLC, which we refer to as “Waitt,” by which LMO acquired over 1,600 billboard structures and related assets from Waitt. The billboards and related assets are located in Kansas, Illinois, Iowa, Missouri and Nebraska. The purchase price for the acquired assets was $82,000,000, subject to certain post-closing adjustments, which totaled $2,031,262, resulting in a total purchase price of $84,031,262. Cash paid at closing was $84,031,262 of which $4,102,500 is held in escrow, subject to any claims for indemnification. Waitt, WaittCorp Investments, LLC, and Mr. Michael J. Delich, the principal of Waitt, have also entered into five year noncompetition and nonsolicitation agreements in connection with the acquisition. The provisional purchase price allocation is based on internal information derived from our previous acquisitions in the Midwestern United States and will be revised when an independent appraisal has been completed. Due to the timing of the transaction, the initial accounting for the business combination is incomplete. We are still in the process of obtaining and assessing the documentation of the contracts for customer relationships and detailed reports for structures, permits, easements, and accounts receivable; also we are reviewing lease contracts for potentially favorable leases, asset retirement obligations, and other long-term liabilities. Finite-lived intangible assets consist of customer relationships, permits, and noncompetition and nonsolicitation agreements. We amortize the noncompetition and nonsolicitation agreements according to the terms of the asset purchase agreement. For other finite-lived assets, amortization is computed over the average period of expected benefit determined from internal information. We also acquired 17 easements. The easements are permanent easements which grant us the right to use real property not owned by us. Since the easements are perpetual, they are not amortized. The following tables present information for the 2018 business acquisitions for the year ended December 31, 2018, including amortization of finite intangible assets, revenues and earnings included in consolidated net loss for the year ended December 31, 2018, and the costs of acquisition included in professional fees on our consolidated statement of operations for year ended December 31, 2018.
|  | Billboards
|  | Tammy Lynn |  | Key Outdoor |  | Waitt Outdoor |  | Total
Assets Acquired |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property and Equipment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Structures, displays, and equipment |  | $ | 2,187,685 |  |  | $ | 9,603,838 |  |  | $ | 19,723,904 |  |  | $ | 31,515,427 |
Intangible Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  |  | 4,432,000 |  |  |  | 7,692,000 |  |  |  | 12,696,000 |  |  |  | 24,820,000 |
Permits, licenses, and lease acquisition costs |  |  | 893,000 |  |  |  | 1,184,000 |  |  |  | 5,341,000 |  |  |  | 7,418,000 |
Easements |  |  | 147,000 |  |  |  | - |  |  |  | 454,563 |  |  |  | 601,563 |
Favorable leases |  |  | 847,000 |  |  |  | - |  |  |  | - |  |  |  | 847,000 |
Noncompetition and nonsolicitation agreements |  |  | 10,000 |  |  |  | 100,000 |  |  |  | 219,000 |  |  |  | 329,000 |
Goodwill |  |  | 7,798,688 |  |  |  | 19,499,000 |  |  |  | 46,381,946 |  |  |  | 73,679,634 |
Total Intangible Assets |  |  | 14,127,688 |  |  |  | 28,475,000 |  |  |  | 65,092,509 |  |  |  | 107,695,197 |
Other Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable |  |  | 188,261 |  |  |  | - |  |  |  | 1,239,457 |  |  |  | 1,427,718 |
Prepaid expenses |  |  | - |  |  |  | 233,894 |  |  |  | 1,551,084 |  |  |  | 1,784,978 |
Total Other Assets |  |  | 188,261 |  |  |  | 233,894 |  |  |  | 2,790,541 |  |  |  | 3,212,696 |
Total Assets Acquired |  |  | 16,503,634 |  |  |  | 38,312,732 |  |  |  | 87,606,954 |  |  |  | 142,423,320 |
Liabilities Assumed |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable and accrued expenses |  |  | - |  |  |  | - |  |  |  | (761,779 | ) |  |  | (761,779 | )
Asset retirement obligations |  |  | (40,380 | ) |  |  | (78,838 | ) |  |  | (1,497,913 | ) |  |  | (1,617,131 | )
Other long-term liabilities |  |  | - |  |  |  | - |  |  |  | (1,316,000 | ) |  |  | (1,316,000 | )
Total Liabilities Assumed |  |  | (40,380 | ) |  |  | (78,838 | ) |  |  | (3,575,692 | ) |  |  | (3,694,910 | )
Total |  | $ | 16,463,254 |  |  | $ | 38,233,894 |  |  | $ | 84,031,262 |  |  | $ | 138,728,410 |
Measurement period adjustments recognized during the year ended December 31, 2018 are as follows:
|  | Tammy Lynn
|  | Dec. 31, 2018 |  | Adjustments |  | Sept. 30, 2018
Assets Acquired |  |  |  |  |  |  |  |  |  |  |  |
Property and Equipment: |  |  |  |  |  |  |  |  |  |  |  |
Structures, displays, and equipment |  | $ | 2,187,685 |  |  | $ | 40,380 |  |  | $ | 2,147,305 |
Intangible Assets: |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  |  | 4,432,000 |  |  |  | - |  |  |  | 4,432,000 |
Permits, licenses, and lease acquisition costs |  |  | 893,000 |  |  |  | - |  |  |  | 893,000 |
Easements |  |  | 147,000 |  |  |  | 147,000 |  |  |  | - |
Favorable leases |  |  | 847,000 |  |  |  | (578,000 | ) |  |  | 1,425,000 |
Noncompetition and nonsolicitation agreements |  |  | 10,000 |  |  |  | - |  |  |  | 10,000 |
Goodwill |  |  | 7,798,688 |  |  |  | 206,000 |  |  |  | 7,592,688 |
Total Intangible Assets |  |  | 14,127,688 |  |  |  | (225,000 | ) |  |  | 14,352,688 |
Other Assets: |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable |  |  | 188,261 |  |  |  | - |  |  |  | 188,261 |
Prepaid expenses |  |  | - |  |  |  | - |  |  |  | - |
Total Other Assets |  |  | 188,261 |  |  |  | - |  |  |  | 188,261 |
Total Assets Acquired |  |  | 16,503,634 |  |  |  | (184,620 | ) |  |  | 16,688,254 |
Liabilities Assumed |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable and accrued expenses |  |  | - |  |  |  | - |  |  |  | - |
Asset retirement obligations |  |  | (40,380 | ) |  |  | (40,380 | ) |  |  | - |
Other long-term liabilities |  |  | - |  |  |  | - |  |  |  | - |
Total Liabilities Assumed |  |  | (40,380 | ) |  |  | (40,380 | ) |  |  | - |
Total |  | $ | 16,463,254 |  |  | $ | (225,000 | ) |  | $ | 16,688,254 |
|  | Key Outdoor
|  | Dec. 31, 2018 |  | Adjustments |  | Sept. 30, 2018
Assets Acquired |  |  |  |  |  |  |  |  |  |  |  |
Property and Equipment: |  |  |  |  |  |  |  |  |  |  |  |
Structures, displays, and equipment |  | $ | 9,603,838 |  |  | $ | 38,357 |  |  | $ | 9,565,481 |
Intangible Assets: |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  |  | 7,692,000 |  |  |  | - |  |  |  | 7,692,000 |
Permits, licenses, and lease acquisition costs |  |  | 1,184,000 |  |  |  | - |  |  |  | 1,184,000 |
Easements |  |  | - |  |  |  | - |  |  |  | - |
Favorable leases |  |  | - |  |  |  | - |  |  |  | - |
Noncompetition and nonsolicitation agreements |  |  | 100,000 |  |  |  | - |  |  |  | 100,000 |
Goodwill |  |  | 19,499,000 |  |  |  | - |  |  |  | 19,499,000 |
Total Intangible Assets |  |  | 28,475,000 |  |  |  | - |  |  |  | 28,475,000 |
Other Assets: |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable |  |  | - |  |  |  | - |  |  |  | - |
Prepaid expenses |  |  | 233,894 |  |  |  | - |  |  |  | 233,894 |
Total Other Assets |  |  | 233,894 |  |  |  | - |  |  |  | 233,894 |
Total Assets Acquired |  |  | 38,312,732 |  |  |  | 38,357 |  |  |  | 38,274,375 |
Liabilities Assumed |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable and accrued expenses |  |  | - |  |  |  | - |  |  |  | - |
Asset retirement obligations |  |  | (78,838 | ) |  |  | (38,357 | ) |  |  | (40,481 | )
Other long-term liabilities |  |  | - |  |  |  | - |  |  |  | - |
Total Liabilities Assumed |  |  | (78,838 | ) |  |  | (38,357 | ) |  |  | (40,481 | )
Total |  | $ | 38,233,894 |  |  | $ | - |  |  | $ | 38,233,894 |
|  | Waitt Outdoor
|  | Dec. 31, 2018 |  | Adjustments |  | Sept. 30, 2018
Assets Acquired |  |  |  |  |  |  |  |  |  |  |  |
Property and Equipment: |  |  |  |  |  |  |  |  |  |  |  |
Structures, displays, and equipment |  | $ | 19,723,904 |  |  | $ | (377,726 | ) |  | $ | 20,101,630 |
Intangible Assets: |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  |  | 12,696,000 |  |  |  | - |  |  |  | 12,696,000 |
Permits, licenses, and lease acquisition costs |  |  | 5,341,000 |  |  |  | - |  |  |  | 5,341,000 |
Easements |  |  | 454,563 |  |  |  | - |  |  |  | 454,563 |
Favorable leases |  |  | - |  |  |  | - |  |  |  | - |
Noncompetition and nonsolicitation agreements |  |  | 219,000 |  |  |  | - |  |  |  | 219,000 |
Goodwill |  |  | 46,381,946 |  |  |  | - |  |  |  | 46,381,946 |
Total Intangible Assets |  |  | 65,092,509 |  |  |  | - |  |  |  | 65,092,509 |
Other Assets: |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable |  |  | 1,239,457 |  |  |  | - |  |  |  | 1,239,457 |
Prepaid expenses |  |  | 1,551,084 |  |  |  | - |  |  |  | 1,551,084 |
Total Other Assets |  |  | 2,790,541 |  |  |  | - |  |  |  | 2,790,541 |
Total Assets Acquired |  |  | 87,606,954 |  |  |  | (377,726 | ) |  |  | 87,984,680 |
Liabilities Assumed |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable and accrued expenses |  |  | (761,779 | ) |  |  | - |  |  |  | (761,779 | )
Asset retirement obligations |  |  | (1,497,913 | ) |  |  | 377,726 |  |  |  | (1,875,639 | )
Other long-term liabilities |  |  | (1,316,000 | ) |  |  | - |  |  |  | (1,316,000 | )
Total Liabilities Assumed |  |  | (3,575,692 | ) |  |  | 377,726 |  |  |  | (3,953,418 | )
Total |  | $ | 84,031,262 |  |  | $ | - |  |  | $ | 84,031,262 |
|  | Billboards
|  | Dec. 31, 2018 |  | Adjustments |  | Sept. 30, 2018
Assets Acquired |  |  |  |  |  |  |  |  |  |  |  |
Property and Equipment: |  |  |  |  |  |  |  |  |  |  |  |
Structures, displays, and equipment |  | $ | 31,515,427 |  |  | $ | (298,989 | ) |  | $ | 31,814,416 |
Intangible Assets: |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  |  | 24,820,000 |  |  |  | - |  |  |  | 24,820,000 |
Permits, licenses, and lease acquisition costs |  |  | 7,418,000 |  |  |  | - |  |  |  | 7,418,000 |
Easements |  |  | 601,563 |  |  |  | 147,000 |  |  |  | 454,563 |
Favorable leases |  |  | 847,000 |  |  |  | (578,000 | ) |  |  | 1,425,000 |
Noncompetition and nonsolicitation agreements |  |  | 329,000 |  |  |  | - |  |  |  | 329,000 |
Goodwill |  |  | 73,679,634 |  |  |  | 206,000 |  |  |  | 73,473,634 |
Total Intangible Assets |  |  | 107,695,197 |  |  |  | (225,000 | ) |  |  | 107,920,197 |
Other Assets: |  |  |  |  |  |  |  |  |  |  |  |
Accounts receivable |  |  | 1,427,718 |  |  |  | - |  |  |  | 1,427,718 |
Prepaid expenses |  |  | 1,784,978 |  |  |  | - |  |  |  | 1,784,978 |
Total Other Assets |  |  | 3,212,696 |  |  |  | - |  |  |  | 3,212,696 |
Total Assets Acquired |  |  | 142,423,320 |  |  |  | (523,989 | ) |  |  | 142,947,309 |
Liabilities Assumed |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable and accrued expenses |  |  | (761,779 | ) |  |  | - |  |  |  | (761,779 | )
Asset retirement obligations |  |  | (1,617,131 | ) |  |  | 298,989 |  |  |  | (1,916,120 | )
Other long-term liabilities |  |  | (1,316,000 | ) |  |  | - |  |  |  | (1,316,000 | )
Total Liabilities Assumed |  |  | (3,694,910 | ) |  |  | 298,989 |  |  |  | (3,993,899 | )
Total |  | $ | 138,728,410 |  |  | $ | (225,000 | ) |  | $ | 138,953,410 |
During the year ended December 31, 2018, the provisional purchase price allocation was decreased by $225,000 for cash refunded from the seller as part of a post closing adjustment. The provisional purchase price allocation for Key and Waitt was adjusted based upon additional information determined in connection with the post closing adjustments. In connection with the above changes to the provisional purchase price allocation, amortization expense decreased by $9,633, depreciation decreased by $1,347 and accretion increased by $10,050.
|  | Billboards
|  | LMSE |  | LMM |  | LMO |  | Total
Amortization of intangible assets acquired for the year ended December 31, 2018 |  | $ | 688,889 |  |  | $ | 900,800 |  |  | $ | 1,603,300 |  |  | $ | 3,192,989 |
Revenues since the acquisition date included in the consolidated statement of operations for the year ended December 31, 2018 |  | $ | 853,018 |  |  | $ | 1,947,895 |  |  | $ | 4,468,421 |  |  | $ | 7,269,334 |
Earnings since the acquisition date included in the consolidated statement of operations for the year ended December 31, 2018 |  | $ | (210,647 | ) |  | $ | (418,705 | ) |  | $ | (93,469 | ) |  | $ | (722,821 | )
Costs of acquisition included in professional fees in the consolidated statement of operations for the year ended December 31, 2018 |  | $ | 170,856 |  |  | $ | 177,658 |  |  | $ | 195,325 |  |  | $ | 543,839 |
During the year ended December 31, 2018, we had net cash outflows of $134,798,950 related to business acquisitions. During the year ended December 31, 2017, we had net cash outflows of $12,232,298 related to business acquisitions. 2017 Acquisitions During the year ended December 31, 2017, we completed six business acquisitions of billboards and related assets and three insurance company acquisitions. These acquisitions were accounted for as business combinations under the provisions of ASC 805. A summary of the acquisitions is provided below. A summary of the revenues and earnings of each since the acquisition dates included in the consolidated statements of operations for the year ended December 31, 2017 is provided in the tables below. Billboard Acquisitions Clear Channel Outdoor, Inc. On January 9, 2017, our subsidiary, LMG, entered into a purchase agreement with Clear Channel Outdoor, Inc., which we refer to as “CCO,” for the purchase of over thirty billboard structures and related assets. The assets acquired are located in Georgia. The cash purchase price for the acquired business was $2,983,444, of which $2,950,000 had been deposited into the seller’s escrow account in November 2016 and was subsequently applied to the purchase price. The assets were acquired for the purpose of expanding our presence in the outdoor advertising market. The purchase price allocation is based on an appraisal by an independent third party valuation firm. Finite-lived intangible assets consist of customer relationships and permits. Amortization is computed over the average period of expected benefit, determined from internal information. Hartlind Outdoor, LLC On January 31, 2017, our subsidiary, LMW, entered into a purchase agreement with Hartlind Outdoor, LLC, which we refer to as “Hartlind,” for the purchase of over ninety billboard structures and related assets. The assets acquired are located in Wisconsin. The cash purchase price for the acquired business was $2,817,000. The assets were acquired for the purpose of expanding our presence in the outdoor advertising market. The purchase price allocation is based on an appraisal by an independent third party valuation firm. Finite-lived intangible assets consist of customer relationships, permits, and a noncompetition agreement. We amortize the noncompetition agreement according to the terms of the asset purchase agreement. Amortization of the other finite-lived intangible assets is computed over the average period of expected benefit, determined from internal information. We also acquired six easements. The easements are permanent easements which grant us the right to use real property not owned by us. Since these rights are perpetual, they are not amortized. Southeastern United States Subsequent to the CCO business acquisition, we made additional business acquisitions in the Southeastern United States as presented below. Corey Companies, Inc. On June 8, 2017, our subsidiaries, LMG and LMA, entered into a purchase agreement with Corey Companies, Inc., which we refer to as “Corey,” for the purchase of approximately thirty billboard structures, a fifty percent interest in three billboard structures, and related assets. The assets acquired are located in Georgia and Alabama. The cash purchase price for the acquired business was $2,991,314. The assets were acquired for the purpose of expanding our presence in the outdoor advertising market in the Southeastern United States. The purchase price allocation for the structures, faces and permits is based on internal information derived from our previous acquisitions in Alabama and Georgia. The purchase price allocation for customer relationships is based on an appraisal by an independent third party valuation firm. As shown in the table below, the independent appraisal resulted in a decrease in customer relationships of $314,000 and an increase in goodwill of $314,000. The related decrease in amortization expense for the year ended December 31, 2018 was $64,965. Finite lived intangible assets consist of customer relationships and permits. Amortization of the finite-lived intangible assets is computed over the average period of expected benefit, determined from internal information. Vision Outdoor Media, LLC On June 16, 2017, our subsidiary, LMG, entered into a purchase agreement with Vision Outdoor Media, LLC, which we refer to as “Vision,” for the purchase of three billboard structures and related assets. The assets acquired are located in Georgia. The assets were acquired for the purpose of expanding our presence in the outdoor advertising market in the Southeastern United States. The cash purchase price for the acquired business was $3,199,036. The purchase price allocation is based on internal information derived from our previous acquisitions in Alabama and Georgia. Finite-lived intangible assets consist of customer relationships and permits. Amortization of the finite-lived intangible assets is computed over the average period of expected benefit, determined from internal information. View Media, LLC On July 11, 2017, our subsidiary, LMG, entered into a purchase agreement for the purchase of one billboard structure and related assets. The assets acquired are located in Georgia. The cash purchase price of the acquisition was $623,596. The assets were acquired for the purpose of expanding our presence in the outdoor advertising market in the Southeastern United States. The purchase price allocation is based on internal information derived from our previous acquisitions in Alabama and Georgia. Finite-lived intangible assets consist of customer relationships and permits. Amortization of the finite-lived intangible assets is computed over the average period of expected benefit, determined from internal information. In addition, we also made a small acquisition for a cash purchase price of $900,000. Insurance Acquisitions Surety Support Services, Inc. On July 11, 2017, our subsidiary, GIG, entered into a purchase agreement for the purchase of 100% of the stock of an insurance brokerage company, Surety Support Services, Inc., which we refer to as “SSS.” The purchase price of the stock was $450,000, of which $22,500 was paid at closing, with $427,500 due in 2018, and is included in the caption “Short-term payables for business acquisitions” on our consolidated balance sheet as of December 31, 2017. During the year ended December 31, 2018, we made payments of $427,500 on the short-term payable for business acquisition. The stock was acquired for the purpose of expanding our presence in the insurance market in the United States. The purchase price allocation is based on internal information derived from our previous insurance brokerage company acquisitions. Finite-lived intangible assets consist of customer relationships and a noncompetition agreement. We amortize the noncompetition agreement according to the terms of the asset purchase agreement. For other finite-lived assets, amortization is computed over the average period of expected benefit determined from internal information. South Coast Surety Insurance Services, LLC On October 31, 2017, our subsidiary, GIG, entered into a purchase agreement for the purchase of 70% of the membership units of an insurance brokerage company, South Coast Surety Insurance Services, LLC, which we refer to as ”SCS.” The cash purchase price of the units was $2,908,581, and was paid at closing. The units were acquired for the purpose of expanding our presence in the insurance market in the United States. The purchase price allocation, with the exception of customer relationships, is based on internal information derived from our previous insurance brokerage company acquisitions. The purchase price allocation for customer relationships is based on an appraisal from a third party valuation firm. The independent appraisal resulted in no change to the provisional purchase price allocation. The seller has agreed to remain as a principal of SCS. The purchase agreement contains an option for the seller to sell us the remaining units (a “put” option). The purchase agreement also contains an option for us to purchase the remaining units (a “call” option) upon the death, incapacitation, or termination of the seller’s employment. Upon exercise of the options by the seller or by us, the purchase price of the remaining units is to be calculated by a formula contained in the purchase agreement. Both the put and the call options are embedded in the purchase agreement, and are not legally detachable or separately exercisable. At any time following the closing date of our purchase, the seller has the option (the put option), but not the obligation to sell us all of the remaining 30% of the membership units. Should the seller exercise his option, we are obligated to purchase all of the remaining units, which we refer to as “redeemable NCI.” Since the put option is currently redeemable, in accordance with the guidance of ASC No. 480 - 10 (Subtopic- S99 - 30 ), Distinguishing Liabilities from Equity Overall, the redeemable NCI is presented on our consolidated balance sheets between liabilities and equity. Additionally, we are required to re-measure the value of the redeemable NCI as of the date of each balance sheet presented. We have calculated the value of the redeemable NCI based upon the redemption formula contained in the purchase agreement, and have adjusted the value of the redeemable NCI as of December 31, 2018. Finite-lived intangible assets consist of customer relationships, trade names and trademarks, and a noncompetition agreement. We amortize the noncompetition agreement according to the terms of the asset purchase agreement. For other finite-lived assets, amortization is computed over the average period of expected benefit determined from internal information. Freestate Bonds, Inc. On November 30, 2017, our subsidiary, Warnock entered into a purchase agreement for the purchase of 100% of the stock of an insurance brokerage company, Freestate Bonds, Inc., which we refer to as “Freestate.” The purchase price of the stock was $293,000, of which $223,500 was paid at closing, with $69,500 due on November 30, 2018, and is included in the caption “Short-term payables for business acquisitions” on our consolidated balance sheet as of December 31, 2017. The stock was acquired for the purpose of expanding our presence in the insurance market in the United States. The purchase price allocation is based on internal information derived from our previous insurance brokerage company acquisitions. During May 2018, Freestate was reorganized into Warnock and Freestate was subsequently dissolved. During the year ended December 31, 2018, we made payments of $68,500 on the short-term payable for business acquisition, and received a $1,000 discount in connection therewith. The following tables present information for the 2017 business acquisitions for the year ended December 31, 2017, including amortization of finite intangible assets, revenues and earnings included in consolidated net loss for the year ended December 31, 2017, and the costs of acquisition included in professional fees on our consolidated statement of operations for the year ended December 31, 2017.
|  | Billboards
|  | CCO Adjusted |  | Hartlind Adjusted |  | Southeastern US Adjusted |  | Subtotal
Assets Acquired |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property and Equipment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Structures, displays, and equipment |  | $ | 798,900 |  |  | $ | 960,350 |  |  | $ | 1,962,729 |  |  | $ | 3,721,979 |
Intangible Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  |  | 939,900 |  |  |  | 155,700 |  |  |  | 1,222,000 |  |  |  | 2,317,600 |
Permits, licenses, and lease acquisition costs |  |  | 112,100 |  |  |  | 85,300 |  |  |  | 136,500 |  |  |  | 333,900 |
Easements |  |  | - |  |  |  | 161,380 |  |  |  | - |  |  |  | 161,380 |
Goodwill |  |  | 1,132,544 |  |  |  | 1,454,270 |  |  |  | 4,392,717 |  |  |  | 6,979,531 |
Total Intangible Assets |  |  | 2,184,544 |  |  |  | 1,856,650 |  |  |  | 5,751,217 |  |  |  | 9,792,411 |
Total Assets Acquired |  | $ | 2,983,444 |  |  | $ | 2,817,000 |  |  | $ | 7,713,946 |  |  | $ | 13,514,390 |
|  | Insurance |  |  |  |
|  | SSS |  | SCS |  | Freestate |  | Subtotal |  | Total
Assets Acquired |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property and Equipment: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Structures, displays, and equipment |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 3,721,979 |
Other equipment |  |  | - |  |  |  | 4,236 |  |  |  | - |  |  |  | 4,236 |  |  |  | 4,236 |
Intangible Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  |  | 153,000 |  |  |  | 1,045,000 |  |  |  | 23,000 |  |  |  | 1,221,000 |  |  |  | 3,538,600 |
Permits, licenses, and lease acquisition costs |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 333,900 |
Easements |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 161,380 |
Tradenames and trademarks |  |  | - |  |  |  | 18,200 |  |  |  | - |  |  |  | 18,200 |  |  |  | 18,200 |
Noncompetition agreements |  |  | 20,000 |  |  |  | 110,000 |  |  |  | 10,000 |  |  |  | 140,000 |  |  |  | 140,000 |
Goodwill |  |  | 288,095 |  |  |  | 2,961,872 |  |  |  | 245,000 |  |  |  | 3,494,967 |  |  |  | 10,474,498 |
Total Intangible Assets |  |  | 461,095 |  |  |  | 4,135,072 |  |  |  | 278,000 |  |  |  | 4,874,167 |  |  |  | 14,666,578 |
Other Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash |  |  | 118,694 |  |  |  | 1,310,094 |  |  |  | 57,885 |  |  |  | 1,486,673 |  |  |  | 1,486,673 |
Accounts receivable |  |  | 45,355 |  |  |  | 318,264 |  |  |  | - |  |  |  | 363,619 |  |  |  | 363,619 |
Other current assets |  |  | - |  |  |  | 47,096 |  |  |  | - |  |  |  | 47,096 |  |  |  | 47,096 |
Total Other Assets |  |  | 164,049 |  |  |  | 1,675,454 |  |  |  | 57,885 |  |  |  | 1,897,388 |  |  |  | 1,897,388 |
Total Assets Acquired |  |  | 625,144 |  |  |  | 5,814,762 |  |  |  | 335,885 |  |  |  | 6,775,791 |  |  |  | 20,290,181 |
Liabilities Assumed |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable and accrued expenses |  |  | (164,701 | ) |  |  | (1,543,469 | ) |  |  | (42,885 | ) |  |  | (1,751,055 | ) |  |  | (1,751,055 | )
Deferred revenue |  |  | (10,443 | ) |  |  | (116,177 | ) |  |  | - |  |  |  | (126,620 | ) |  |  | (126,620 | )
Total Liabilities Assumed |  |  | (175,144 | ) |  |  | (1,659,646 | ) |  |  | (42,885 | ) |  |  | (1,877,675 | ) |  |  | (1,877,675 | )
Redeemable Noncontrolling Interest |  |  | - |  |  |  | (1,246,535 | ) |  |  | - |  |  |  | (1,246,535 | ) |  |  | (1,246,535 | )
Total |  | $ | 450,000 |  |  | $ | 2,908,581 |  |  | $ | 293,000 |  |  | $ | 3,651,581 |  |  | $ | 17,165,971 |
Measurement period adjustments recognized during the years ended December 31, 2018 and 2017 are as follows:
|  | Billboards
|  | Dec. 31, 2018 |  | Adjustments |  | Dec. 31, 2017 |  | Adjustments |  | Sept. 30, 2017
Assets Acquired |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property and Equipment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Structures, displays, and equipment |  | $ | 3,721,979 |  |  |  | - |  |  | $ | 3,721,979 |  |  | $ | (1,264,521 | ) |  | $ | 4,986,500 |
Intangible Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer relationships |  |  | 2,317,600 |  |  |  | (314,000 | ) |  |  | 2,631,600 |  |  |  | (325,663 | ) |  |  | 2,957,263 |
Permits, licenses, and lease acquisition costs |  |  | 333,900 |  |  |  | - |  |  |  | 333,900 |  |  |  | 142,215 |  |  |  | 191,685 |
Easements |  |  | 161,380 |  |  |  | - |  |  |  | 161,380 |  |  |  | (78,620 | ) |  |  | 240,000 |
Noncompetition and nonsolicitation agreements |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (5,000 | ) |  |  | 5,000 |
Goodwill |  |  | 6,979,531 |  |  |  | 314,000 |  |  |  | 6,665,531 |  |  |  | 1,531,589 |  |  |  | 5,133,942 |
Total Intangible Assets |  |  | 9,792,411 |  |  |  | - |  |  |  | 9,792,411 |  |  |  | 1,264,521 |  |  |  | 8,527,890 |
Total Assets Acquired |  | $ | 13,514,390 |  |  | $ | - |  |  | $ | 13,514,390 |  |  | $ | - |  |  | $ | 13,514,390 |
During the year ended December 31, 2018, the purchase price allocation for customer relationships was adjusted based on an appraisal by a third party valuation firm, resulting in a decrease in customer relationships of $314,000 and an increase in goodwill of $314,000. The related decrease in amortization expense was $64,965. For the year ended December 31, 2017, in connection with the revised purchase price allocations presented above, depreciation increased by $31,513 and amortization increased by $178,512, resulting in an increase to our consolidated net loss of $210,025 for the three months ended December 31, 2017.
|  | Billboards |
|  | CCO |  | Hartlind |  | Southeastern US |  | Subtotal |
Amortization of intangible assets acquired for the year ended December 31, 2017 |  | $ | 324,510 |  |  | $ | 55,389 |  |  | $ | 301,036 |  |  | $ | 680,935 |  |
Revenues since the acquisition date included in the consolidated statement of operations for the year ended December 31, 2017 |  | $ | 863,463 |  |  | $ | 321,745 |  |  | $ | 503,169 |  |  | $ | 1,688,377 |  |
Earnings since the acquisition date included in the consolidated statement of operations for the year ended December 31, 2017 |  | $ | (20,972 | ) |  | $ | 142,693 |  |  | $ | (101,945 | ) |  | $ | 19,776 |  |
Costs of acquisition included in professional fees in the consolidated statement of operations for the year ended December 31, 2017 |  | $ | 23,218 |  |  | $ | 17,395 |  |  | $ | 50,993 |  |  | $ | 91,606 |  |
|  | Insurance |  |  |  |  |  |  |  |
|  | SSS |  | SCS |  | Freestate |  | Subtotal |  | Total
Amortization of intangible assets acquired for the year ended December 31, 2017 |  | $ | 27,497 |  |  | $ | 63,240 |  |  | $ | 806 |  |  | $ | 91,543 |  |  | $ | 772,478 |
Revenues since the acquisition date included in the consolidated statement of operations for the year ended December 31, 2017 |  | $ | 182,907 |  |  | $ | 362,871 |  |  | $ | - |  |  | $ | 545,778 |  |  | $ | 2,234,155 |
Earnings since the acquisition date included in the consolidated statement of operations for the year ended December 31, 2017 |  | $ | (56,548 | ) |  | $ | (101,858 | ) |  | $ | (18,365 | ) |  | $ | (176,771 | ) |  | $ | (156,995 | )
Costs of acquisition included in professional fees in the consolidated statement of operations for the year ended December 31, 2017 |  | $ | 28,293 |  |  | $ | 64,945 |  |  | $ | 728 |  |  | $ | 93,966 |  |  | $ | 185,572 |
Pro Forma Information The following is the unaudited pro forma information assuming all business acquisitions occurred on January 1, 2017. For all of the business acquisitions depreciation and amortization have been included in the calculation of the below pro forma information based upon the actual acquisition costs. Depreciation is computed on the straight-line method over the estimated remaining economic lives of the assets, ranging from two years to fifteen years. Amortization is computed on the straight-line method over the estimated useful lives of the assets ranging from two to fifty years.
|  | For the Years Ended
|  | December 31,
|  | 2018 |  | 2017
Revenue |  | $ | 33,512,852 |  |  | $ | 32,458,401 |
Net Loss |  | $ | (12,893,108 | ) |  | $ | (12,077,257 | )
Basic and Diluted Loss per Share |  | $ | (0.65 | ) |  | $ | (1.11 | )
Basic and Diluted Weighted Average Class A and Class B Common Shares Outstanding |  |  | 19,983,169 |  |  |  | 10,902,368 |
The information included in the pro forma amounts is derived from historical information obtained from the sellers of the businesses. With respect to CCO, Corey, Vision, and View, the above pro forma does not contain allocation of management overhead and other shared expenses for lines of business under common ownership, that were not acquired. The pro forma amounts above for basic and diluted weighted average shares outstanding have been adjusted to include the stock issued in connection with the acquisition of Tammy Lynn.

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- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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