NOTE

BUSINESS ACQUISITIONS

There were

business acquisitions for the

six

months ended

June 30, 2019

and

2018.

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.

Billboard Acquisitions

Tammy Lynn Outdoor, LLC

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. The acquisition was completed for the purpose of expanding our presence in the outdoor advertising market in the Southeastern United States. During the

second

quarter of

2019,

we completed our assessment of customer relationships, structures, permits, and easements; as well as our review of lease contracts which allowed us to finalize the purchase price allocation.

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.

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 are 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

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

June 30, 2019,

we made payments of

$1,064,990

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

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. Finite-lived intangible assets consist of customer relationships, permits, and noncompetition and nonsolicitation agreements. 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.

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 several 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.

Pro Forma Information

The following is the unaudited pro forma information assuming all business acquisitions occurred on

January 1, 2018.

For all of the business acquisitions depreciation and amortization have been included in the calculation of the pro forma information provided below, 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

fifty

years.

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2019			2018			2019			2018

Revenue	$	10,139,561		$	8,181,142		$	19,250,286		$	16,195,469

Net Loss Attributable to Common Stockholders	$	(2,114,348	)	$	(2,793,947	)	$	(6,192,734	)	$	(6,059,179	)

Basic and Diluted Loss per Share	$	(0.09	)	$	(0.15	)	$	(0.28	)	$	(0.34	)

Basic and Diluted Weighted Average Class A and Class B Common Shares Outstanding		22,452,540			19,250,323			22,320,114			17,865,624

The information included in the pro forma amounts is derived from historical information obtained from the sellers of the businesses. 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.