Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | Jun. 29, 2021 | |
Document Information Line Items | ||
Entity Registrant Name | LMP Automotive Holdings, Inc. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 10,087,336 | |
Amendment Flag | false | |
Entity Central Index Key | 0001731727 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Mar. 31, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | true | |
Entity File Number | 001-39150 | |
Entity Incorporation, State or Country Code | DE | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
ASSETS: | ||
Cash | $ 8,522,892 | $ 3,935,726 |
Restricted cash | 10,850,000 | |
Accounts receivable | 18,351,485 | 515,761 |
Inventories | 61,853,745 | 8,498,089 |
Net investment in sales-type leases | 6,811,132 | 11,743,576 |
Other current assets | 1,035,874 | 719,760 |
Total current assets | 107,425,128 | 25,412,912 |
Land | 49,435,700 | 435,700 |
Property, equipment and leasehold improvements, net | 6,095,833 | 3,781,119 |
Intangible assets, net | 1,010,196 | 1,110,823 |
Right-of-use asset | 3,427,867 | 422,501 |
Franchise rights | 19,500,000 | |
Trade names | 3,878,458 | |
Goodwill | 27,400,000 | |
Deposits held in escrow for acquisitions | 100,000 | 3,250,000 |
Other assets | 182,478 | |
TOTAL ASSETS | 218,455,660 | 34,413,055 |
LIABILITIES: | ||
Accounts payable | 3,849,882 | 273,835 |
Vehicle floorplan financing | 53,709,157 | |
Line of credit - related party | 500,000 | |
Premium finance contract | 363,352 | 543,098 |
Operating lease liability, current portion | 459,291 | 181,437 |
Vehicle financing and notes payable, current portion | 1,403,381 | 723,798 |
Bank term loan, current portion | 15,065,000 | |
Other current liabilities | 6,795,312 | 1,333,235 |
Total current liabilities | 82,145,375 | 3,055,403 |
Vehicle financing and notes payable, net of current portion | 2,134,273 | 1,929,447 |
Bank term loan, net of current portion | 79,973,181 | |
Deferred compensation liability | 1,883,954 | |
Warrant liability | 4,867,074 | |
Operating lease liability, net of current portion | 3,006,962 | 283,716 |
Other noncurrent liabilities | 385,826 | |
TOTAL LIABILITIES | 174,396,645 | 5,268,566 |
COMMITMENTS AND CONTINGENCIES | ||
Redeemable noncontrolling interest | 8,281,766 | |
SHAREHOLDERS’ EQUITY | ||
Preferred stock, $0.00001 par value; 1,000,000 shares authorized, 20,100 and nil shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively | 12,878,354 | |
Common stock, $0.00001 par value; 29,000,000 shares authorized; 10,075,336 and 10,029,040 shares issued, and 9,915,683 and 9,869,387 shares outstanding at March 31, 2021 and December 31, 2020, respectively | 101 | 101 |
Additional paid-in capital | 40,106,608 | 45,318,891 |
Treasury stock at cost, 159,653 shares at March 31, 2021 and December 31, 2020 | (758,352) | (758,352) |
Noncontrolling interest in consolidated subsidiaries | 1,291,017 | |
Accumulated deficit | (17,740,479) | (15,416,151) |
Total shareholders’ equity | 35,777,249 | 29,144,489 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 218,455,660 | $ 34,413,055 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock par value (in Dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 20,100 | |
Preferred stock, shares outstanding | 20,100 | |
Common stock, par value (in Dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 29,000,000 | 29,000,000 |
Common stock, shares issued | 10,075,336 | 10,029,040 |
Common stock, shares outstanding | 9,915,683 | 9,869,387 |
Treasury stock shares | 159,653 | 159,653 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues: | ||
Total revenues | $ 33,015,923 | $ 5,349,713 |
Cost of sales: | ||
Total cost of sales | 27,017,424 | 4,849,790 |
Gross profit | 5,998,499 | 499,923 |
Selling, general and administrative | 7,884,238 | 2,098,886 |
Depreciation and amortization | 207,841 | 78,434 |
Operating loss | (2,093,580) | (1,677,397) |
Floorplan interest expense | (50,094) | |
Other interest expense, net | (326,770) | (42,791) |
Other income, net | 947,572 | |
Loss before income taxes | (1,522,872) | (1,720,188) |
Income tax provision | ||
Net loss | (1,522,872) | (1,720,188) |
Net income attributable to noncontrolling interest | (145,632) | |
Net loss attributable to LMP Automotive Holdings | (1,668,504) | (1,720,188) |
Calculation of income for earnings per share: | ||
Net loss attributable to LMP Automotive Holdings | (1,668,504) | (1,720,188) |
Change in noncontrolling interest redemption value | (6,361,033) | |
Net loss attributable to common shareholders | $ (8,029,537) | $ (1,720,188) |
Basic net loss per share (in Dollars per share) | $ (0.80) | $ (0.18) |
Diluted net loss per share (in Dollars per share) | $ (0.80) | $ (0.18) |
Weighted average shares of common stock outstanding, basic (in Shares) | 10,040,542 | 9,326,054 |
Weighted average shares of common stock outstanding, diluted (in Shares) | 10,040,542 | 9,326,054 |
New vehicle retail | ||
Revenues: | ||
Total revenues | $ 15,925,296 | |
Cost of sales: | ||
Total cost of sales | 14,452,586 | |
Used vehicle retail | ||
Revenues: | ||
Total revenues | 7,749,213 | 95,560 |
Cost of sales: | ||
Total cost of sales | 7,052,744 | 89,605 |
Used vehicle wholesale | ||
Revenues: | ||
Total revenues | 2,665,602 | 541,900 |
Cost of sales: | ||
Total cost of sales | 2,451,412 | 661,983 |
Finance and insurance, net | ||
Revenues: | ||
Total revenues | 1,325,197 | |
Service, body and parts | ||
Revenues: | ||
Total revenues | 1,928,827 | |
Cost of sales: | ||
Total cost of sales | 1,140,523 | |
Fleet and other | ||
Revenues: | ||
Total revenues | 3,421,788 | 4,712,253 |
Cost of sales: | ||
Total cost of sales | $ 1,920,159 | $ 4,098,202 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) - USD ($) | Preferred Stock | Common Stock | Paid in Capital | Treasury Stock | Non-Controlling Interest | Accumulated Deficit | Total |
Balance at Dec. 31, 2019 | $ 87 | $ 27,106,058 | $ (658,350) | $ (10,600,358) | $ 15,847,437 | ||
Balance (in Shares) at Dec. 31, 2019 | 8,691,323 | ||||||
Issuance of shares for cash, including underwriter warrants, net of issuance costs | $ 12 | 17,328,565 | 17,328,577 | ||||
Issuance of shares for cash, including underwriter warrants, net of issuance costs (in Shares) | 1,200,000 | ||||||
Issuance of shares for purchase of assets | 487,454 | 487,454 | |||||
Issuance of shares for purchase of assets (in Shares) | 33,183 | ||||||
Share based compensation | 79,022 | 79,022 | |||||
Net income (loss) | (1,720,188) | (1,720,188) | |||||
Balance at Mar. 31, 2020 | $ 99 | 45,001,099 | (658,350) | (12,320,546) | 32,022,302 | ||
Balance (in Shares) at Mar. 31, 2020 | 9,924,506 | ||||||
Balance at Dec. 31, 2020 | $ 101 | 45,318,891 | (758,352) | (15,416,151) | 29,144,489 | ||
Balance (in Shares) at Dec. 31, 2020 | 10,029,040 | ||||||
Common stock issued for cashless warrant exercises | |||||||
Common stock issued for cashless warrant exercises (in Shares) | 942 | ||||||
Common stock issued for cashless option exercises | |||||||
Common stock issued for cashless option exercises (in Shares) | 23,462 | ||||||
Adjustment for redemption value of noncontrolling interests | (5,705,209) | (771,557) | (6,476,766) | ||||
Common stock issued for options exercised for cash | 19,490 | 19,490 | |||||
Common stock issued for options exercised for cash (in Shares) | 5,000 | ||||||
Convertible preferred stock issued for cash | $ 12,878,354 | 12,878,354 | |||||
Convertible preferred stock issued for cash (in Shares) | 20,100 | ||||||
Common stock issued for acquisitions | 304,394 | 304,394 | |||||
Common stock issued for acquisitions (in Shares) | 16,892 | ||||||
Noncontrolling interest in consolidated entities | 1,261,118 | 1,261,118 | |||||
Share based compensation | 169,042 | 169,042 | |||||
Net income (loss) | 29,899 | (1,552,771) | (1,522,872) | ||||
Balance at Mar. 31, 2021 | $ 12,878,354 | $ 101 | $ 40,106,608 | $ (758,352) | $ 1,291,017 | $ (17,740,479) | $ 35,777,249 |
Balance (in Shares) at Mar. 31, 2021 | 20,100 | 10,075,336 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (1,522,872) | $ (1,720,188) |
Depreciation and amortization | 331,930 | 307,197 |
Share based compensation | 169,042 | 79,022 |
Revaluation of redeemable warrants | (947,572) | |
Principal collections on investment in sales-type lease contracts | 179,739 | 269,809 |
Amortization of debt discount | 72,830 | |
Amortization of right-of-use asset | (4,365) | 1,841 |
Accounts receivable | (13,442,894) | 46,373 |
Vehicles purchased for investment in sales-type lease contracts | 4,752,705 | (4,053,556) |
Inventories | (14,560,171) | (335,941) |
Prepaid expenses and other assets | 2,924,629 | 224,862 |
Accounts payable | 3,576,047 | 222,483 |
Other current & noncurrent liabilities | 6,249,645 | (46,362) |
NET CASH USED IN OPERATING ACTIVITIES | (12,221,307) | (5,004,460) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property and equipment | (148,623) | (30,178) |
Acquisitions, net of cash acquired | (139,854,691) | |
Additions to intangible assets | (543,127) | |
NET CASH USED IN INVESTING ACTIVITIES | (140,003,314) | (573,305) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net cash received from issuance of common stock | 19,490 | 17,328,577 |
Proceeds from issuance of preferred stock | 14,285,354 | |
Payment of fees for the issuance of preferred stock | (1,407,000) | |
Proceeds from redeemable warrants | 5,814,646 | |
Proceeds received from sale of noncontrolling interest | 550,000 | |
Proceeds received from related party | 500,000 | |
Proceeds received from term loan, net of debt discount | 94,965,351 | |
Payments on insurance premium financing | (179,746) | |
Proceeds received from vehicle financing | 52,868,544 | |
Proceeds from vehicle financing and notes payable | 716,848 | |
Repayments of vehicle financing and notes payable | (471,700) | (235,589) |
NET CASH PROVIDED BY FINANCING ACTIVITIES | 167,661,787 | 17,092,988 |
NET INCREASE IN CASH & RESTRICTED CASH | 15,437,166 | 11,515,223 |
CASH & RESTRICTED CASH, BEGINNING OF PERIOD | 3,935,726 | 6,508,055 |
CASH & RESTRICTED CASH, END OF PERIOD | 19,372,892 | 18,023,278 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||
Cash paid during the period for interest | 53,250 | 40,749 |
Accrued acquisition contingent consideration | 320,606 | |
Issuance of common stock for acquisitions | $ 304,394 | |
Purchase of software license for debt and equity | 823,994 | |
Purchase of vehicles for debt and equity | $ 3,673,260 |
Nature of Operations and Princi
Nature of Operations and Principles of Consolidation | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Nature of Operations and Principles of Consolidation | Note 1 - Nature of Operations and Principles of Consolidation Business Activity In this Quarterly Report on Form 10-Q, “we,” “our,” “us,” “LMP”, “Automotive”, and “the Company” refer to LMP Automotive Holdings, Inc. and its consolidated subsidiaries, unless the context requires otherwise. LMP Motors.com, LLC (“LMP Motors”) is engaged in the buying and selling of vehicles in the automotive industry and operates in the state of Florida. LMP Motors is a limited liability company and was organized in the state of Delaware. 601 NSR, LLC (“NSR”) was formed to enter into future potential strategic acquisitions and is currently inactive. NSR is a limited liability company and was organized in the state of Delaware. LMP Finance, LLC (“LMP Finance”) is engaged in the purchasing and subscribing of vehicles. LMP Finance operates in the state of Florida. LMP Finance is a limited liability company and was organized in the state of Delaware. LMP Automotive Holdings, LLC (“LMP Automotive”) was formed to acquire the assets from LMP Motors.com LLC, LMP Finance, LLC, and other subsidiary companies. LMP Automotive operates in the state of Florida. LMP Automotive is a limited liability company and was organized in the state of Delaware. Automotive is a holding company incorporated in the state of Delaware on December 15, 2017. On December 15, 2017, the common ownership contributed 100% of its interest in LMP Motors, NSR, LMP Finance and LMP Automotive to Automotive. In the first quarter of 2021, Automotive, through LMP Automotive, acquired majority interests in 10 new vehicle franchises, comprising of 6 new dealership locations. Automotive, through LMP Finance, also acquired a majority interest in LTO Holdings, LLC, a Connecticut based automotive leasing company with an associated collision center. These acquisitions transformed the Company enabling us to offer a wide array of products and services fulfilling the entire vehicle ownership lifecycle, including new and used vehicles, finance and insurance products and automotive repair and maintenance. On March 3, 2021, the Company completed certain acquisitions which resulted in the acquisition of Beckley Buick GMC, King Coal Chevrolet, Hometown Kia, Princeton Pre-owned, Lewisburg Pre-owned and Summerville Pre-Owned in West Virginia. On March 4, 2021, the Company completed certain acquisitions which resulted in the acquisition of Fuccillo Kia of Port Charlotte and Cape Coral located in Florida, both operating under sales and service agreements with KIA Motors America, Inc. On March 9, 2021, LMP Finance, acquired a 51% interest in LTO Holdings, LLC for consideration of cash and 16,892 shares of common stock with a future committed value of $625,000. As of March 31, 2021, the future committed value totaled approximately $320,000 and is recorded in other current liabilities in the condensed consolidated balance sheet. On March 23, 2021, the Company completed the acquisition of Bachman-Bernard Chevrolet-Buick-GMC-Cadillac, along with its associated real estate. The aggregate purchase price of these acquisitions during the first quarter of 2021 totaled $143.6 million consisting of cash and other consideration (see Note 5 below), subject to adjustment based on net working capital or inventory amounts as of the closing dates of the respective acquisitions. The Company used borrowings under its $192.0 million credit facility for these targeted transactions. Transaction and integration costs related to the acquisitions totaled approximately $1.3 million and are included in selling, general and administrative expenses in the consolidated statement of operations. The allocations of the purchase price for these first quarter 2021 acquisitions are preliminary. The allocations will be revised during the one year allocation period as management obtains additional information about the estimated fair values of the acquired assets, identification and quantification of assumed liabilities and finalization of working capital amounts related to these acquisitions. Principles of Consolidation These condensed consolidated financial statements include the amounts of Automotive and its subsidiaries, collectively referred to as the “Company.” All significant intercompany balances and transactions are eliminated in consolidation. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 - Summary of Significant Accounting Policies Liquidity The Company has sustained net losses and has an accumulated deficit of approximately $17.7 million as of March 31, 2021. Management plans to make strategic acquisitions of new and pre-owned automobile dealerships to expedite the Company’s growth and to produce positive margins. The Company completed an initial public offering (“IPO”) in December 2019 and a secondary public offering in February 2020 to help facilitate business growth and execute management’s plans to become profitable through acquisitions. Through these two public offerings, the Company received net proceeds of approximately $27.8 million. The Company completed a Securities Purchase Agreement (“SPA”) in connection with a February 2021 private placement to help facilitate business growth and dealership acquisitions. The Company received net proceeds of approximately $18.7 million from the issuance of Series A convertible preferred stock and warrants (“Series A Preferred Stock” and “2021 Warrants”, respectively). Management plans to continue to obtain funding through 2021 for strategic dealership acquisitions. Basis of Presentation These accompanying condensed consolidated financial statements contain unaudited information as of March 31, 2021, and for the three months ended March 31, 2021 and 2020. The unaudited interim financial statements have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for annual financial statements are not included herein. In management’s opinion, these unaudited financial statements reflect all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the information when read in conjunction with our 2020 audited Consolidated Financial Statements and the related notes thereto. The financial information as of December 31, 2020, is derived from our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 25, 2021. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the full year. Reclassifications Certain immaterial reclassifications of amounts previously reported have been made to the accompanying condensed consolidated financial statements to maintain consistency and comparability between periods presented. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Fair Value of Assets Acquired and Liabilities Assumed We estimate the fair value of the assets acquired and liabilities assumed in a business combination using various assumptions. The most significant assumptions used relate to determining the fair value of property and equipment, and intangible franchise rights. We estimate the fair value of property and equipment based on a market valuation approach. We use prices and other relevant information generated primarily by recent market transactions involving similar or comparable assets, as well as our historical experience in divestitures, acquisitions and real estate transactions. Additionally, we may use a cost valuation approach to value long-lived assets when a market valuation approach is unavailable. Under this approach, we determine the cost to replace the service capacity of an asset, adjusted for physical and economic obsolescence. When available, we use valuation inputs from independent valuation experts, such as real estate appraisers and brokers, to corroborate our estimates of fair value. We estimate the fair value of our franchise rights primarily using the Multi-Period Excess Earnings (MPEE) model. The forecasted cash flows used in the MPEE model contain inherent uncertainties, including significant estimates and assumptions related to growth rates, margins, general operating expenses, and cost of capital. We use primarily internally-developed forecasts and business plans to estimate the future cash flows that each franchise will generate. We have determined that only certain cash flows of the store are directly attributable to the franchise rights. We estimate the appropriate interest rate to discount future cash flows to their present value equivalent taking into consideration factors such as a risk-free rate, a peer group average beta, an equity risk premium and a small stock risk premium. Additionally, we also may use a market approach to determine the fair value of our franchise rights. These market data points include our acquisition and divestiture experience and third-party broker estimates. We use a relief-from-royalty method to determine the fair value of a trade name. Future cost savings associated with owning, rather than licensing, a trade name is estimated based on a royalty rate and management’s forecasted sales projections. The discount rate applied to the future cost savings factors an equity market risk premium, small stock risk premium, an average peer group beta, a risk-free interest rate and a premium for forecast risk. Accounts Receivable The Company carries its accounts receivable at cost. Accounts receivable consist of amounts due from customers, financial institutions, manufacturers and insurance providers. Management has determined that no allowance for uncollectible accounts for accounts receivable is necessary as of March 31, 2021 and December 31, 2020. Such estimates are based on management’s assessments of the creditworthiness of its customers, the aged basis of its receivables, as well as current economic conditions and historical information. Inventories Inventories are valued at the lower of net realizable value or cost, using the specific identification method for new vehicles, pooled approach for used vehicles, and the first-in, first out method for parts. The cost of new and used vehicle inventories includes the cost of any equipment added, reconditioning and transportation. Inventories as of March 31, 2021 and December 31, 2020 are recorded based on perpetual inventory records. The Company launched its subscription business in 2018, at which time it started to depreciate the corresponding fleet inventory using a monthly rate of 1% of initial cost. Fleet vehicle depreciation was $124,089 and $229,000 for the three months ended March 31, 2021 and 2020, respectively. Company management periodically reviews its inventories to determine whether any inventories have declined in value. The Company has a reserve recorded for impairment to reflect inventory at net realizable value of $48,043 and $141,762 at March 31, 2021 and December 31, 2020, respectively. Inventories consisted of the following as of March 31, 2021 and December 31, 2020: March 31, December 31, 2021 2020 New vehicles $ 30,901,264 $ - Used vehicles 21,043,967 4,320,444 Parts & accessories 1,901,920 - Fleet vehicles 8,353,524 4,707,709 62,200,675 9,028,153 Accumulated depreciation (346,930 ) (530,064 ) Total inventories $ 61,853,745 $ 8,498,089 Property, Equipment and Leasehold Improvements Property, equipment, and leasehold improvements are stated at cost. The costs of additions and betterments are capitalized and expenditures for repairs and maintenance are expensed in the period incurred. When items included in property and equipment are sold or retired, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is included in selling, general and administrative expenses. Vehicles and equipment are depreciated utilizing the straight-line method over the estimated useful lives of the respective assets as follows: Vehicles 5 years Furniture and fixtures 10 years Buildings 39 years Equipment 7 years Leasehold improvements are amortized over the shorter of the remaining term of the lease or the useful life of the improvement utilizing the straight-line method. Intangible Assets Intangible assets are stated at their historical cost and amortized on a straight-line basis over their expected useful lives. Through acquisition, we have agreements (Franchise Rights) with our manufacturers. Franchise Rights represents a right received under Franchise Agreements with manufacturers and is identified on an individual dealership basis. The Company evaluates the useful lives of our Franchise Rights based on the following factors: As evidenced by our acquisitions, there is an active market for most automotive dealership franchises within the United States. We attribute value to the Franchise Rights acquired with the dealerships we purchase based on the understanding and industry practice that the Franchise Rights will be renewed indefinitely by the manufacturer. Accordingly, we have determined that our Franchise Agreements will continue to contribute to our cash flows indefinitely and, therefore, have indefinite lives. As an indefinite-lived intangible asset, franchise value is tested for impairment at least annually, and more frequently if events or circumstances indicate the carrying value may exceed fair value. The impairment test for indefinite-lived intangible assets requires the comparison of estimated fair value to carrying value. An impairment charge is recorded to the extent the fair value is less than the carrying value. We have the option to qualitatively or quantitatively assess indefinite-lived intangible assets for impairment. We will evaluate our indefinite-lived intangible assets using a qualitative assessment process. We have determined the appropriate unit of accounting for testing Franchise Rights for impairment is each individual store. The testing of our indefinite-lived intangible assets for impairment will be performed on or before December 31 of each year and more frequently if events or circumstances indicate the carrying amount of the reporting unit more likely than not exceeds fair value. Long-lived Assets The Company reviews long-lived assets and certain identifiable intangibles held and used for possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In evaluating the fair value and future benefits of its long lived and intangible assets, management performs an analysis of the anticipated undiscounted future net cash flow of the individual assets over the remaining amortization period. The Company recognizes an impairment loss if the carrying value of the asset exceeds the expected future cash flows. There were no deemed impairments of long-lived assets as of March 31, 2021 and December 31, 2020. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measurements, a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies, is as follows: Level 1 - Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2 - Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3 - Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. As of March 31, 2021, and December 31, 2020, the fair value of these financial instruments, including cash and restricted cash, accounts receivable, notes receivable, net investment in sales-type leases, and accounts payable, approximated book value due to the short maturity of these instruments. Vehicle financing and notes payable and related party notes payable approximate fair value due to market interest rates. Our fair value measurements related to goodwill, intangible assets and contingent consideration are recognized in connection with acquisitions. Goodwill and intangible assets are valued using Level 3 inputs, and contingent consideration is valued using level 2 inputs. The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis as of March 31, 2021 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value. As of March 31, 2021 the fair value of warrant liabilities is as follows: Description Quoted Priced in Significant Other Significant Other Warrant liabilities $ - $ - $ 4,867,074 Warrant Liability – The 2021 Warrants are accounted for as derivative liabilities in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 815-40 Derivatives and Hedging Initial Measurement – The Company established the initial fair value for the 2021 Warrants on February 25, 2021, the date of the closing. The 2021 Warrants are measured at fair value on a recurring basis, using a Monte Carlo simulation, Option Pricing Model (“OPM”). The Company allocated the proceeds received from (i) the sale of the preferred units, first to the 2021 Warrants based on their fair values as determined at initial measurement, with the remaining proceeds allocated to Series A convertible preferred stock. The 2021 Warrants were classified as Level 3 at the initial measurement date due to the use of unobservable inputs. The Company utilizes the OPM to value the 2021 Warrants at each reporting period, with any subsequent changes in fair value recognized in the consolidated statement of operations. The estimated fair value of the warrant liability is determined using Level 3 inputs. Inherent in the OPM are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its shares of common stock based on historical volatility that matches the expected remaining life of the 2021 Warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the issuance date for a maturity similar to the expected remaining life of the 2021 Warrants. The expected life of the 2021 Warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero. The aforementioned warrant derivative liability is not subject to qualified hedge accounting. The following table provides quantitative information regarding Level 3 fair value measurements: February 25, March 31, Risk-free interest rate .46 % .46 % Expected term (years) 3.5 3.4 Expected volatility 61 % 58 % Exercise Price $ 21.00 $ 21.00 Stock Price $ 17.71 $ 16.63 Dividend yield 0 % 0 % The following table presents the changes in the fair value of the warrant liability: Warrant Fair value as of February 25, 2021 $ 5,814,646 Change in valuation inputs or other assumptions (1) (947,572 ) Fair value as of March 31, 2021 $ 4,867,074 (1) Changes in valuation inputs or other assumptions are recognized in other income, net in the statement of operations for the three months ended March 31, 2021. Share-Based Compensation The Company recognizes the cost of employee services received in exchange for awards of stock options, based on the fair value of those awards at the date of grant over the requisite service period, which generally is the vesting period of the award. The Company uses the Black-Scholes option pricing model to determine the fair value of stock option awards. Revenue Recognition The Company recognizes revenue in accordance with the FASB ASC 606, Revenue from Contracts with Customers The Company leases vehicles to third parties that are accounted for in accordance with FASB ASC 842, Leases . Revenue on sales-type leases is recognized at the inception of the lease and the related interest income is recognized over the term of the lease using the effective interest method. Revenues on the sales of vehicles at the end of a lease are recognized at the inception of the lease, and any net gain or loss on sales of such vehicles is presented within vehicle sales revenues and vehicle sales cost of revenues in the condensed consolidated statements of operations. Interest income is derived from the discounted cash flows of the lease payments. Investments in sales-type leases are comprised of the minimum lease payments receivable and guaranteed residual at their present value. New Retail Vehicle and Used Retail Vehicle Revenues Revenue from the retail sale of a vehicle is recognized at a point in time, as all performance obligations are satisfied when a contract is signed by the customer, financing has been arranged or collectability is probable, and the control of the vehicle is transferred to the customer. The transaction price for a retail vehicle sale is specified in the contract with the customer and includes all cash and non-cash consideration. In a retail vehicle sale, customers often trade in their current vehicle. The trade-in is measured at its stand-alone selling price in the contract, utilizing various third-party pricing sources. There are no other non-cash forms of consideration related to retail sales. All vehicle rebates are applied to the vehicle purchase price at the time of the sale and are therefore incorporated into the price of the contract at the time of the exchange. We do not allow the return of new or used vehicles, except where mandated by state Law. The Company collects sales taxes and other taxes from customers on behalf of governmental authorities at the time of sale. These taxes are accounted for on a net basis and are not included in revenues or cost of sales. Service, Body and Parts Revenue Revenue from service, body and parts sales is recognized upon the transfer of control of the parts or service to the customer. We allow for customer returns on sales of our parts inventory up to 30 days after the sale. Most parts returns generally occur within one to two weeks from the time of sale and are not significant. Finance and Insurance, net Revenue from finance and insurance sales is recognized, net of estimated charge-backs, at the time of the sale of the related vehicle. Charge-back reserves totaled $43,039 and $0 as of March 31, 2021 and December 31, 2020, respectively, and is recorded in other current liabilities on the consolidated balance sheet. As a part of the vehicle sale, we seek to arrange financing for customers and sell a variety of add-ons, such as extended warranty service contracts. These products are inherently attached to the governing vehicle and performance of the obligation cannot be performed without the underlying sale of the vehicle. We act as an agent in the sale of these contracts as the pricing is set by the third-party provider, and our commission is preset. Revenues for these contracts are presented net of associated costs within the consolidated statements of operations. Fleet and Other Revenue Fleet and other revenue consists of revenue from sales-type and operating leases, dealer fees, subscription and interest. Subscription Revenue The Company offers a vehicle subscription plan where a customer will pay a monthly fee in exchange for access to a vehicle. The Company’s subscriptions include monthly swaps, scheduled maintenance and upkeep, license, and registration and in most cases roadside assistance. Customers have the flexibility to up-or-downgrade a vehicle monthly, with the vehicle payment adjusted accordingly. There is an activation payment at subscription inception that varies based upon the monthly payment of the selected vehicle. Monthly vehicle payments are dependent upon the vehicle selected by the customer. Due to the nature of the subscription contract, where the subscriber can swap out the vehicle in the contract, the performance obligation is completed and recognized each month. The revenues earned under these contracts are recognized in accordance with ASC 606. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a vehicle to a customer under a subscription contract. The prices of the vehicles are stated in its contracts at stand-alone subscription prices, which are agreed upon with the customer prior to delivery. The Company satisfies its performance obligation for monthly subscription payments upon delivery to the customer and in each subsequent month the customer retains possession of the vehicle. The Company recognizes revenue at the agreed-upon price stated in the contract in the month earned. The Company also receives a one-time, non-refundable payment as an activation fee to its vehicle subscription program. This fee is deferred and amortized to income monthly over the term of the subscription, as the performance obligation (providing a vehicle for the customer) is completed over the term of the subscription. Subscription revenues are recognized over time based on the duration of the contract term with the customer. The amount of revenue recognized is calculated using an input method, which most closely depicts performance of the contracts. Our subscription liability balance was approximately $99,000 and $115,000 as of March 31, 2021, and December 31, 2020, respectively. The Company recognized approximately $43,000 and $95,000 of subscription revenue for the three months ended March 31, 2021 and 2020, respectively, related to our subscription liability. Our subscription liability balance is included in other current liabilities on the consolidated balance sheet. Customer payment is received prior to initial vehicle delivery and on each monthly recurring anniversary date. The Company collects sales taxes and other taxes from customers on behalf of governmental authorities at the time of sale. These taxes are accounted for on a net basis and are not included in sales or cost of sales. Leasing Revenue The Company accounts for revenue earned from vehicle rentals and rental related activities wherein an identified asset is transferred to the customer and the customer has the ability to control that asset under FASB ASC 842. Revenue from operating leases is recognized ratably on a straight-line basis over the term of the agreement. Performance obligations associated with rental related activities, such as charges to the customer for the fueling of vehicles and value-added services such as loss damage waivers, navigation units, and other ancillary and optional products, are also satisfied over the rental period. Payments are due from customers at the time of reservation. Additional charges incurred by the customers are collected at the time of vehicle return. The Company collects sales taxes and other taxes from customers on behalf of governmental authorities at the time of sale. These taxes are accounted for on a net basis and are not included in sales or cost of sales. Dealer Fees Dealer fees are earned primarily in connection with retail sales of new or used vehicles and are recorded at the same time as the retail sale. These consist of the standard dealer fees charged with each transaction. Segment Reporting We have determined that each of our retail stores along with our fleet operations, which are considered individual operating segments, are one reportable segment because they have similar operating revenues, margins, customers, product distribution, and regulatory environment. Additionally, there is one management team that reviews and manages our retail stores and fleet operations. Therefore, we have determined that we have one reportable segment: Retail & Fleet. Our Retail & Fleet segment is comprised of our retail automotive locations that sell new vehicles manufactured by General Motors and KIA Motors and Fleet leasing and sales. The franchises in each segment also sell used vehicles, wholesale vehicles, parts and automotive services, and automotive finance and insurance products. We define our chief operating decision maker (“CODM”) to be a committee comprising of the Company’s Chief Executive Officer and Chief Operating Officer. Historical and forecasted operational performance is evaluated on a store-by-store basis and on a consolidated basis by the CODM. We derive the operating results of the segments directly from our internal management reporting system. The accounting policies used to derive segment results are substantially the same as those used to determine our consolidated results. Our CODM does not regularly review capital expenditures on a reporting unit level. Performance measurement of the reportable segment by the CODM is based on several metrics, including earnings from operations. The CODM uses these results, in part, to evaluate the performance mainly associated with expected inventory and working capital requirements, of the reportable segment. Income Taxes Income tax expense includes federal and state taxes currently payable and deferred taxes arising from temporary differences between income for financial reporting and income tax purposes. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the difference is expected to reverse. The effect of a change in the tax rate on the deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company establishes a valuation allowance when necessary to reduce its deferred tax assets to an amount that is expected to be realized. Advertising The Company expenses advertising and marketing costs in the period incurred. Advertising expense was approximately $144,000 and $11,000, respectively, for the three months ended March 31, 2021 and 2020. Leases The Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases Under Topic 842, the Company applied a dual approach to all leases whereby the Company is a lessee and classifies leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the Company. Lease classification is evaluated at the inception of the lease agreement. Regardless of classification, the Company records a right-of-use asset and a lease liability for all leases with a term greater than 12 months. Operating lease expense is recognized on a straight-line basis over the term of the lease. The components of the right-of-use asset and lease liabilities as of March 31, 2021 and December 31, 2020 are as follows: March 31, December 31, 2021 2020 Operating lease right-of-use asset $ 3,427,867 $ 422,501 Operating lease liability, current portion $ 459,291 $ 181,437 Operating lease liability, net of current portion $ 3,006,962 $ 283,716 Operating Leases During 2018, the Company entered into a lease with an entity related through common ownership for its facilities in Plantation, Florida. In September 2020, the Company entered into a lease with an unrelated entity for office space in Fort Lauderdale, Florida. The 34 month lease provides for monthly payments of $16,113 plus operating costs and sales taxes. In March 2021, two of the Company’s dealerships entered into 10 year leases with an unrelated entity for the dealership premises with monthly rents of $21,000 and $7,500. Total operating lease cost for the Company’s lease locations was approximately $88,000 and $97,000 for the three months ended March 31, 2021 and 2020, respectively. Discount Rate When available, the Company uses the rate implicit in the lease or a borrowing rate based on similar debt to discount lease payments to present value. However, the lease generally does not provide a readily determinable implicit rate, therefore for the leases beginning in 2021, the Company used the incremental borrowing rate. Lease Cost Operating lease cost related to right-of-use asset on the Plantation lease was approximately $0 and $97,000, respectively, for the three months ended March 31, 2021 and 2020. The weighted average discount rate was 2.63%. During July 2020, the Company purchased the facilities. Operating lease cost related to right-of-use asset on the Fort Lauderdale lease was approximately $44,073 and $0 for the three months ended March 31, 2021 and 2020, respectively. The weighted average remaining term on the lease is 2.25 years. The weighted average discount rate was 3%. Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) Effective Dates, In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes In October 2020, the FASB issued ASU 2020-10, “ Codification Improvements The Company early adopted ASU 2020-06 Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity The Company accounts for the 2021 Warrants as liability-classified instruments based on an assessment of the specific terms of the 2021 Warrants with the applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging 2021 Warrants that meet all of the criteria for equity classification are initially measured at fair value or relative fair value, depending on the circumstances, and are recorded as a component of additional paid-in capital at the time of issuance, and are not subsequently remeasured. 2021 Warrants that do not meet all the criteria for equity classification are recorded at their initial fair value as a liability on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of liability-classified 2021 Warrants are recognized as a gain or loss on the statements of operations. The Company accounts for the 2021 Warrants in accordance with ASC 815-40 under which the 2021 Warrants do not meet the criteria for equity classification and must be recorded as liabilities. |
Global Pandemic
Global Pandemic | 3 Months Ended |
Mar. 31, 2021 | |
Global Pandemic [Abstract] | |
Global Pandemic | Note 3 - Global Pandemic On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond the point of origin. On March 20, 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve as of the date of these condensed consolidated financial statements. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s consolidated financial condition, liquidity, and future results of operations. Management is actively monitoring the impact of the global situation on its consolidated financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for fiscal year 2020. To curb the financial impacts of the outbreak, the Company initially reduced the total compensation to a maximum of $120,000 per employee for all current employees, effective beginning in May 2020. The Company also reduced the headcount of all nonessential employees, implemented cost cuts, and canceled certain new vehicle orders to accommodate the then-current demand. Beginning in January 2021, the Company resumed normal salaries, hiring practices, and vehicle purchases. |
Asset Purchase Agreements
Asset Purchase Agreements | 3 Months Ended |
Mar. 31, 2021 | |
Asset Purchase Agreement [Abstract] | |
Asset Purchase Agreements | Note 4 - Asset Purchase Agreements On February 19, 2020, the Company consummated an Asset Purchase Agreement whereby the Company purchased $4.2 million of assets, including vehicles ($2.9 million) and a perpetual, non-exclusive license for leasing software ($1.4 million). The vehicles were financed by two different lenders, and the Company paid approximately $526,000 in cash and issued 33,183 shares of common stock at $14.69 per share (closing price of its common stock on February 19, 2020) for the remainder of the purchase consideration. The non-exclusive perpetual software license is for a vehicle subscription service app for upcoming launch in the Apple App and Google Play stores. The license value of $1.4 million is being amortized over its estimated economic useful life of three (3) years. The vehicle acquisition was financed in part by two credit lines. The first line from Sutton Leasing funded the purchase of 30 vehicles for $2.4 million at the floating LIBOR rate on the date of the advance, plus 2.80%, or 4.55% interest on the date of the advance, with terms ranging from 24 to 36 months. The second line from The Bancorp Bank was a credit line for funding advances up to $850,000 at the Prime Rate per the Wall Street Journal on the date of the advance plus 2%, but not less than 4% on advances on 48-month terms. The Company used approximately $818,400 at 6.5% interest for the purchase of 13 vehicles, with terms ranging from 32 to 41 months. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Acquisitions | Note 5 - Acquisitions Beckley Acquisitions 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 $41.6 million in cash and $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 purchase 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 $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 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 Franchise rights 9,500,000 Tradename 2,778,458 Other assets 43,243 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 consolidated statements of operations include the following revenue and net income attributable to the acquired dealerships since the date of the acquisition: 2021 Revenue $ 13,948,744 Net income $ 655,818 As a result of the Beckley Acquisitions, 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 $1.8 million as of March 3, 2021. There were no changes in the outstanding equity interests of 001 and 002 from the Beckley Acquisitions through March 31, 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 March 31, 2021, the redemption value of the 15% noncontrolling interests was $8.3 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 March 31, 2021 are as follows: Beginning balance $ - Noncontrolling interests issued in connection with Beckley Acquisitions 1,805,000 Net income attributable to noncontrolling interests 115,733 Adjustments to redemption value 6,361,033 Ending balance $ 8,281,766 A reconciliation of shareholders’ equity attributable to LMP Automotive Holdings, Inc., shareholders’ equity attributable to noncontrolling interests, and total shareholders’ equity as of March 31, 2021 is as follows: Shareholders’ equity attributable to LMP Automotive Holdings, Inc. $ 35,777,249 Shareholders’ equity attributable to noncontrolling interests 8,281,766 Total shareholders’ equity $ 44,059,015 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 $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 purchase 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 $ 13,876,368 Net income $ 700,058 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 $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 March 31, 2021 has recognized a liability which represents the computed purchase price less the outstanding principal and interest owed on the nonrecourse notes of $1.9 million and is included in deferred compensation liability in the accompanying consolidated balance sheets. The Company recorded compensation expense of $1.4 million for the three months ended March 31, 2021 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 $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 purchase 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 $ 1,085,580 Net income $ 63,451 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, $6.5 million for the effective settlement of preexisting receivables, and approximately $817,000 in rollover equity. 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 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 purchase 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 remains unchanged as of as of March 31, 2021 and is in other current liabilities in the consolidated balance sheets. The following table summarizes the total consideration: Cash $ 225,000 Common stock 625,000 Rollover equity 816,667 Effective settlement of receivables 6,533,052 Total consideration $ 8,199,719 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 Accounts receivable $ 4,392,830 Vehicles 4,542,738 Cash 46,415 Property & equipment 37,017 Other assets 10,904 Total assets acquired 9,029,904 Liabilities assumed Notes payable 639,360 Customer deposits 118,800 Accrued liabilities 72,025 Total liabilities assumed 830,185 Net assets acquired $ 8,199,719 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 $ 480,256 Net income $ 19,466 |
Concentration of Credit Risk
Concentration of Credit Risk | 3 Months Ended |
Mar. 31, 2021 | |
Risks and Uncertainties [Abstract] | |
Concentration of Credit Risk | Note 6 - Concentration of Credit Risk The Company maintains its cash balances in two financial institutions which are insured by the Federal Deposit Insurance Corporation (“FDIC”) for up to $250,000 per institution. From time to time, its balances may exceed these limits. |
Property, Equipment and Leaseho
Property, Equipment and Leasehold Improvements | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property, Equipment and Leasehold Improvements | Note 7 - Property, Equipment and Leasehold Improvements Property, equipment and leasehold improvements, net is summarized as follows: March 31, December 31, 2021 2020 Land $ 49,435,700 $ 435,700 Vehicles $ 277,311 $ 153,822 Building 3,292,008 3,164,300 Furniture, fixtures and equipment 2,399,213 392,262 Leasehold and building improvements 433,179 299,526 6,401,711 4,009,910 Less: accumulated depreciation and amortization (305,878 ) (228,791 ) $ 6,095,833 $ 3,781,119 Depreciation and amortization expense related to vehicles, equipment, and leasehold improvements totaled $77,087 and $22,687, respectively, for the three months ended March 31, 2021 and 2020, respectively. |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 8 - Intangible Assets Intangible assets, net, are summarized as follows: March 31, December 31, 2021 2020 Software license $ 1,350,000 $ 1,350,000 Website design and other intangibles 260,695 230,568 1,610,695 1,580,568 Less: Accumulated amortization (600,499 ) (469,745 ) 1,010,196 1,110,823 Franchise rights 19,500,000 - Tradenames 3,878,458 - $ 24,388,654 $ 1,110,823 Franchise rights and tradenames have indefinite lives. Amortization expense associated with software license and website and other intangibles amounted to $130,754 and $55,747, respectively, for the three months ended March 31, 2021 and 2020, respectively. Future amortization of intangible assets at March 31, 2021 are as follows: Year ending December 31, 2021 (9 months) $ 373,364 2022 478,412 2023 89,254 2024 69,166 $ 1,010,196 |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Note 9 - Goodwill Changes in the carrying value of goodwill as of March 31,2021 is as follows: March 31, Balance, December 31, 2020 $ - Goodwill acquired from acquisitions 27,400,000 Balance, March 31,2021 $ 27,400,000 |
Investment in Sales-type Leases
Investment in Sales-type Leases | 3 Months Ended |
Mar. 31, 2021 | |
Investment In Leasing Operations [Abstract] | |
Investment in Sales-type Leases | Note 10 - Investment in Sales-type leases Investment in sales-type leases consists of the following: March 31, December 31, 2021 2020 Sales-type leases: Minimum lease payments receivable $ 1,550,231 $ 1,576,325 Unearned income (277,872 ) (576,853 ) Guaranteed residual value of vehicles 5,538,773 10,744,104 Total investment in sales-type leases $ 6,811,132 $ 11,743,576 As of March 31, 2021 and December 31, 2020, the total investment in sales-type leases is classified as short-term as all leases are due within one year of the balance sheet date. Leasing revenue was $2.7 million and $4.1 million for the three months ended March 31, 2021 and 2020, respectively. The assets held under the investment are leased to three customers, one of which is LTO Holdings LLC (LTO), an entity that is 51% owned by the Company. All transactions with LTO, since their acquisition in March 2021, have been eliminated. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 11 - Related Party Transactions On July 8, 2020, the Company terminated the lease and purchased the land and building located in Plantation, Florida where its previous headquarters were located from its landlord, ST RXR Investments, LLC, a related party owned by the Company’s President and Chief Executive Officer, for $3.6 million in cash. The land and building were valued based upon a third party appraisal report. Beginning in September 2020 the Company became headquartered in Ft. Lauderdale, Florida. The Company leases vehicles under its subscription and sales-type programs to certain officers and directors under 6-month contracts. Total payments made by officers and directors for the vehicle leases amounted to $0 and $23,590, respectively, for the three months ended March 31, 2021 and 2020. To help facilitate the first quarter of 2021 acquisition of Kia of Port Charlotte and Kia of Cape Coral, the Company agreed to provide financing, in the form of promissory notes to the minority owners: Kevin West and Associates LLC and Rosciti & Associates LLC totaling $1,106,046 and $2,140,453, respectively. Both notes bear interest at 5% per annum and have a seven (7) year term. Repayment is funded by earnings with eighty-five percent (85%) of all after-tax cash distributions made to the minority interest being applied to the notes interest and principal balances. No distributions were made during the three months ended March 31, 2021. In March 2021, the Company signed an unsecured Revolving Line of Credit Agreement with a shareholder (the Line) and received funding of $500,000. The Line bears interest at 1.5% per month plus a $15,000 origination fee. The Line principal, interest and origination fee are all due on April 30, 2021. The Company repaid the loan during the second quarter of 2021. On March 23, 2021, in connection with the consummation of the Bachman Acquisition, LMP Greenville 001 Holdings, LLC, an indirect wholly owned subsidiary of LMP Automotive, transferred fifteen percent (15%) of the membership interests in LMP Greenville BBCBGC, LLC, a subsidiary of the Company, to an entity wholly owned by Richard Aldahan, the Company’s Chief Operating Officer, in lieu of an accrued bonus owed to Mr. Aldahan in the amount of $350,000. |
Accounts Payable and Other Curr
Accounts Payable and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Other Current Liabilities | Note 12 - Accounts Payable and Other Current Liabilities Accounts payable and other current liabilities are summarized as follows: Accounts Payable: March 31, December 31, 2021 2020 Accounts payable $ 3,816,676 $ 251,118 Credit card payable 33,206 22,717 Total accounts payable $ 3,849,882 $ 273,835 Other Current Liabilities: March 31, December 31, 2021 2020 Accrued payroll $ 1,220,702 $ 197,635 Customer deposits on hand 274,816 82,117 Deferred revenues 1,206,168 114,635 Insurance payable 99,081 - Sales & other taxes payable 871,717 37,905 Accrued legal expenses 845,287 133,032 Litigation accrual 280,000 550,000 Accrued advertising 261,644 - Accrued interest 332,915 - Accrued lot fees 290,076 - Contingent consideration 320,606 - Other accruals 792,300 217,911 Total other current liabilities $ 6,795,312 $ 1,333,235 |
Lease Commitments
Lease Commitments | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Lease Commitments | Note 13 - Lease Commitments The annual minimum lease payments, including fixed rate escalations, on the Company’s operating lease liability with an unrelated party in Fort Lauderdale, Florida and leases for our dealerships in West Virginia as of March 31, 2021 are as follows: Years Ending December 31: 2021 (nine months) $ 424,017 2022 565,356 2023 415,339 2024 342,000 2025 342,000 Thereafter 1,767,000 Total minimum lease payments 3,855,712 Less: amount representing interest (389,459 ) Present value of future payments 3,466,253 Less: current obligations (459,291 ) Long-term obligations $ 3,006,962 Operating Leases Rent expense charged to operations, inclusive of common area maintenance and taxes, was $144,550 and $124,075, respectively, for the three months ended March 31, 2021 and 2020. |
Vehicle Financing and Notes Pay
Vehicle Financing and Notes Payable | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Vehicle Financing and Notes Payable | Note 14 - Vehicle Financing and Notes Payable In 2019, Mercedes-Benz Financial approved a $3.5 million financing facility for the Company’s subscription and rental fleet inventory purchases. During 2019, the Company purchased vehicles totaling approximately $2.4 million under various Note and Security Agreements with 10% cash down payments and the remaining $2.2 million financed over 36 months at an interest rate of 4.89%. In 2020, Mercedes-Benz Financial increased the approval amount from $3.5 million to $10.0 million. During the first quarter of 2020, the Company financed vehicles previously purchased totaling approximately $802,000 under a Note and Security Agreement with no cash down payment and financed over 36 months at an interest rate of 4.09%. During the second quarter of 2020, the Company financed vehicles previously purchased totaling approximately $2.3 million under two new Note and Security Agreements with 10% cash down payment and financed over 36 months at interest rates ranging from 3.99% to 4.15%. During the third quarter of 2020, the Company financed vehicles totaling approximately $415,500 under a new Note and Security Agreement with 10% cash down payment and financed over 36 months at an interest rate of 4.15%. In February 2020, the Company entered into an Asset Purchase Agreement (see Note 4), which was financed in part by two credit lines. ● The first line from Sutton Leasing was for $2.4 million at the floating LIBOR rate on the date of the advance, plus 2.80%, or 4.55% interest on the date of the advance, with terms ranging from 24 to 36 months. As of March 31, 2021 and December 31, 2020, the outstanding balance on the Sutton line was approximately $393,742 and $426,155, respectively. ● The second line from The Bancorp Bank is a credit line for funding advances up to $850,000 at the Prime Rate per the Wall Street Journal on the date of the advance plus 2%, but not less than 4% on advances on 48-month terms. The Company used approximately $818,400 at 6.5% interest to purchase vehicles, with terms ranging from 32 to 41 months. As of March 31, 2021 and December 31, 2020, the outstanding balance on the Bancorp Bank line was approximately $843,626 and $248,934, respectively. In March 2021, in connection with the acquisition of ten new vehicle franchises, pursuant to a credit agreement, dated March 4, 2021 (the Credit Agreement) entered into by and among the Company and Truist Bank, as Administrative Agent, Lender and Swingline Lender (in such capacities, “Truist”), the Company received floorplan financing from Truist (the “Truist Floorplan”). The Truist Floorplan provided floorplan financing which replaced the floorplan financing in place at each of the dealerships acquired, plus provides some floorplan financing for vehicles owned by LMP Finance. The Truist Floorplan matures on March 4, 2023. All amounts borrowed pursuant to the Truist Floorplan accrue interest at the LIBOR Rate (as defined in the Credit Agreement) plus 1.25% per annum. As of March 31, 2021 the balance of the Truist Floorplan was $53.7 million. In connection with the acquisition of ten new vehicle franchises and the related real estate in March 2021, the Company entered into a term loan with Truist Bank for $101.3 million (the “Truist Loan”), and received $95.0 million, net of loan origination fees of $1.9 million. The term loan accrues interest at a rate per annum equal to the LIBOR Rate (as defined in the Credit Agreement) plus the Applicable Margin (as defined in the Credit Agreement) in effect from time to time. The principal amount of the term loans shall be repaid in monthly installment of $422,083 in each of the first 12 such monthly installments, increasing to $844,167 for each monthly installment thereafter. Each quarter, beginning with the fiscal quarter ending June 30, 2021, the Company is obligated to repay the Term Loans in an amount equal to 75% of the Company’s Consolidated Excess Cash Flow (as defined in the Credit Agreement) minus the amount of all voluntary prepayments in such fiscal quarter, which shall be reduced to 50% of the Company’s Consolidated Excess Cash Flow if the Company’s Consolidated Leverage Ratio (as defined in the Credit Agreement) is less than 4.00:1.00. Further, the Company is obligated to pay not less than $10.9 million in respect of the term loan on or prior to September 4, 2021. The Term Loan matures on March 4, 2023. Subject to certain exceptions, Automotive and its subsidiaries that are Floor Plan Borrowers pursuant to the Credit Agreement are jointly and severally liable for the obligations under the Credit Agreement, which are also guaranteed by certain of Automotive’s subsidiaries identified as Guarantors pursuant to the Credit Agreement and are secured by a first priority security interest in substantially all of Automotive’s, the Floor Plan Borrowers’ and the Guarantors’ assets. The Credit Agreement contains financial covenants which require Automotive and its subsidiaries to maintain (i) a Consolidated Leverage Ratio of no greater than 6.00:1.00 until December 31, 2021, and thereafter, 5.00:1.00, (ii) a Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of at least 1.20:1.00 and (iii) a Consolidated Trust Equity Percentage (as defined in the Credit Agreement) of at least 20%, in each case, tested quarterly. The Credit Agreement also includes a number of customary negative covenants. Such covenants, among other things, limit or restrict the ability of the Company, the Floor Plan Borrowers and the Guarantors to: ● incur additional indebtedness; ● incur liens on assets; ● engage in mergers or consolidations or fundamental changes; ● make investments, loans and advances, including acquisitions; ● pay dividends and distributions or repurchase capital stock; ● dispose of assets; ● enter into certain transactions with affiliates; ● enter into certain agreements that would restrict the ability to incur liens on assets; ● enter into sale leaseback transactions; ● enter into certain hedging transactions; ● amend organizational documents and other material contracts; ● change fiscal periods; and ● amend the documents governing the Beckley, Fuccillo and Bachman acquisitions described herein. The aforementioned restrictions are subject to certain exceptions including (i) the ability to incur additional indebtedness, liens, investments and dividends and distributions, subject, in each case, to compliance with certain financial metrics and/or certain other conditions and (ii) a number of other traditional exceptions that grant the Company continued flexibility to operate and develop its business. The Credit Agreements also include customary affirmative covenants, representations and warranties and events of default. In addition, the Company is required to maintain $10.9 million in restricted certificate of deposit accounts until September 4, 2021, when these funds will be applied against the then outstanding principal balance. Total unpaid principal and accrued interest due under the Truist Loan was $96.9 million and $234,000, respectively, as of March 31, 2021. In total, the Company had an outstanding principal and accrued interest balance in the floorplan, vehicle financing and notes payable of approximately $152.3 million and $2.7 million as of March 31, 2021 and December 31, 2020, respectively. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Note 15 - Contingencies The Company is subject to asserted claims and liabilities that arise in the ordinary course of business. The Company maintains third-party insurance to mitigate potential losses from these actions. In the opinion of management, the amount of the ultimate liability with respect to these actions will not materially affect the Company’s financial position or results of operations. The Company is party to a claim for alleged breach of its license agreement to use garage parking spaces in Miami Beach, Florida, which the Company terminated in April 2019. On February 10, 2020, a partial summary judgment was granted for the plaintiff. The asserted losses by the plaintiff total approximately $224,250, with a potential maximum exposure under the terminated agreement of approximately $580,450. The judge ordered the parties to further mediate the dispute, and the Company appealed the partial summary judgment. During the second quarter of 2020, the Company posted a bond with the court to continue mediation of this matter. In February 2021, the Company reached a final settlement and agreed to pay a total of $550,000, $270,000 within 3 days of the final settlement and two payments of $140,000 each on or before June 30, 2021 and September 30, 2021, respectively. The Company made the initial payment required under the agreement on February 8, 2021. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Equity Note [Abstract] | |
Equity | Note 16 - Equity In February 2020, the Company completed a secondary public offering, selling 1,200,000 shares of common stock at an offering price of $16.00 per share, and warrants to purchase shares of common stock (“2020 Warrants”). Aggregate gross proceeds from the offering were approximately $19.2 million, and net proceeds received, after underwriting fees and offering expenses, were approximately $17.3 million and are accounted for as compensation to underwriters and considered equity classified. In February 2020, as part of its asset purchase agreement, the Company issued 33,183 shares of common stock valued at a price of $14.69 per share, or $487,454. During the three months ended March 31, 2021, the Company issued 942 shares of common stock in connection with the cashless exercise of 1,305 underwriter 2020 Warrants with exercise prices of $6.25 per share. The underwriter 2020 Warrants were granted in connection with the Company’s IPO. During the three months ended March 31, 2021, the Company issued 5,000 shares of common stock in exchange for $19,490 in connection with the exercise of options to purchase 3,000 and 2,000 shares of common stock at exercise prices of $3.33 and $4.75, respectively. During the three months ended March 31, 2021, the Company issued 23,462 shares of common stock to its Chief Operating and Chief Financial Officer in connection with the cashless exercise of 20,000 options each, respectively, at exercise prices of $8.21 and $7.50, respectively. In February 2021, the Company issued 20,100 shares of Series A Convertible Preferred Stock in exchange for proceeds of approximately $20.1 million ($18.7 million, net) and warrants (“2021 Warrants”) to purchase up to 861,429 shares of common stock at a strike price of $21.00 pursuant to a Securities Purchase Agreement. Currently the shares of common stock issuable upon conversion of the Series A Preferred Stock or the exercise of the related 2021 Warrants would be restricted under Rule 144 of the Securities Act of 1933, as amended. Conversion rights Each share of Series A Preferred Stock is convertible at the option of the holder into shares of common stock at any time after the date of issuance. The number of shares of common stock to be issued in the event of a conversion is determined by dividing the stated value of $1,000 by the conversion price of $17.50, subject to adjustments. As of March 31, 2021 Series A Preferred Stock is convertible to 1,148,571 share of common stock. Dividends Holders of the Series A Preferred Stock (the “Holders”) are entitled to receive dividends equal to common stock on an as-converted basis as if such dividends are paid on shares of the common stock. Liquidation Preference Upon liquidation, whether voluntary or involuntary, the Holders shall be entitled to receive out of the assets, the same amount that a holder of common stock would receive if the Series A Preferred Stock were fully converted to common stock without preference. Voting Rights Holders of Series A Preferred Stock have no voting rights. The Company cannot alter the preferences or rights of the Holders or increase the number of authorized shares of Preferred Stock without a majority approval from the Holders of Series A Preferred Stock. |
Stock Options
Stock Options | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock Options | Note 17 - Stock Options As of March 31, 2021 and 2020, the Company had $1,161,781 and $138,589, respectively, of unrecognized compensation costs related to stock options outstanding, which will be recognized through 2026. The Company recognizes forfeitures as they occur. Share-based compensation expense was $169,042 and $79,022, respectively, for the three months ended March 31, 2021 and 2020. The weighted average remaining contractual term for the outstanding options as of March 31, 2021 and December 31, 2020 was 2.69 and 2.84 years, respectively. Stock option activity for the three months ended March 31, 2021 is as follows: Weighted Number of Avg. Exercise Shares Price Outstanding as of December 31, 2020 371,500 $ 7.97 Options granted 40,000 17.35 Options exercised (45,000 ) 7.42 Options forfeited or expired (39,500 ) - Outstanding as of March 31, 2021 327,000 $ 7.12 Vested as of March 31, 2021 200,169 $ 4.62 Expected to vest as of March 31, 2021 126,831 $ 10.62 |
Purchase Warrants
Purchase Warrants | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Purchase Warrants | Note 18 - Purchase Warrants Common stock purchase warrant activity for the three months ended March 31, 2021 is as follows: Number of Warrants Weighted Avg. Exercise Price Outstanding as of December 31, 2019 115,000 $ 6.25 Issued 36,000 20.00 Cancelled (3,268 ) 6.25 Exercised (70,664 ) 8.46 Outstanding as of December 31, 2020 77,068 $ 10.65 Issued 861,429 21.00 Cancelled - - Exercised (1,305 ) 6.25 Outstanding as of March 31, 2021 937,192 $ 20.17 In connection with the Company’s IPO in December 2019, the Company granted warrants (“2019 Warrants”) to purchase 115,000 shares of its common stock at $6.25 per share to its underwriters. In February 2020, in connection with its second public offering, the Company granted 2020 Warrants to purchase 36,000 shares of its common stock at $20.00 per share to its underwriters. In February 2021, the Company issued 2021 Warrants to purchase 861,429 shares of common stock with an exercise price of $21.00 to the purchasers of its Series A Preferred Stock. During the three months ended March 31, 2021, 1,305 2020 Warrants to purchase shares at $6.25 per share were exercised in a cashless conversion for 942 shares of common stock. |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Note 19 - Earnings per Share We compute net loss per share using the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for common stock and any participating securities according to dividends declared and participation rights in undistributed earnings. Shares of our Series A p s Additionally, in accordance with ASC 480, Distinguishing Liabilities from Equity Basic earnings per common share are computed by dividing net income or loss attributable to common shareholders by the weighted-average common shares outstanding. Diluted earnings per common share are computed by dividing the net income attributable to common shareholders by the diluted weighted average common shares outstanding. The dilutive effect of outstanding stock options is computed using the treasury stock method, which assumes any proceeds that could be obtained upon the exercise of stock options, would be used to purchase common stock at the average market price for the period. The assumed proceeds include the purchase price the optionee pays, the windfall tax benefit that we receive upon assumed exercise and the unrecognized compensation expense at the end of each period. The calculation of basic earnings per common share and diluted earnings per share is summarized below as follows: Three Months Ended March 31, 2021 2020 Calculation of income for Basic earnings per share: Net loss attributable to LMP Automotive Holdings $ (1,668,504 ) $ (1,720,188 ) Change in noncontrolling interest redemption value (6,361,033 ) - Net loss attributable to common shareholders (8,029,537 ) (1,720,188 ) Weighted average shares of common stock outstanding, basic 10,040,542 9,326,054 Basic net loss per share $ (0.80 ) $ (0.18 ) Calculation of income for diluted earnings per share: Net loss attributable to common shareholders $ (8,029,537 ) $ (1,720,188 ) Weighted average shares of common stock outstanding, basic 10,040,542 9,326,054 10,040,542 9,326,054 Diluted net loss per share $ (0.80 ) $ (0.18 ) The basic and diluted net loss per common share was the same for each period presented as the Company’s potentially dilutive shares would be antidilutive. The number of shares that could potentially become antidilutive in the future was 2,285,932 and 389,870 for March 31, 2021 and 2020, respectively. |
Segments
Segments | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Segments | Note 20 - Segments Certain financial information on segment revenues is as follows: Three months ended March 31, 2021 2020 New vehicle retail $ 15,925,296 $ - Used vehicle retail 7,749,213 95,560 Used vehicle wholesale 2,665,602 541,900 Finance and insurance, net 1,325,197 - Service, body and parts 1,928,827 - Fleet and other 3,421,788 4,712,253 $ 33,015,923 $ 5,349,713 Segment net loss – Retail & Fleet $ (1,668,504 ) $ (1,720,188 ) |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 21 - Subsequent Events On April 1, 2021, the Company entered into two dealership Asset Purchase Agreements, each effective as of March 31, 2021, for the acquisition of the assets of a Chrysler Jeep dealership in White Plains, New York and the acquisition of the assets of a Chrysler Jeep 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 $24,500,000. The acquisition is subject to certain customary conditions, as set forth in each agreement. Up to 25% of the purchase price for each acquisition may be paid, at the Company’s election, with restricted shares of the Company’s common stock. The Company anticipates consummating the acquisition during the third quarter of 2021. In April 2021, the Company issued 12,000 shares of common stock in exchange for $47,060 in connection with the exercise of options with exercise prices of $3.33 and $4.75 per share. On May 5, 2021, the Company closed on the acquisition of assets related to the ownership and operation of the Hometown Subaru Motor Vehicle West Virginia (“Subaru”), as contemplated by that certain Asset Purchase Agreement, dated as of August 28, 2020, by and among the Company, Beckley Buick-GMC Auto Mall, Inc., King Coal Chevrolet Co., Hometown Preowned Vehicles, Inc. and the other parties thereto. The consideration paid by the Company for Subaru was approximately $3.2 million in cash. This acquisition by the Company complements its growth and expansion into the West Virginia 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 Subaru 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 quarterly report on Form 10-Q for the quarter ended June 30, 2021. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Liquidity | Liquidity The Company has sustained net losses and has an accumulated deficit of approximately $17.7 million as of March 31, 2021. Management plans to make strategic acquisitions of new and pre-owned automobile dealerships to expedite the Company’s growth and to produce positive margins. The Company completed an initial public offering (“IPO”) in December 2019 and a secondary public offering in February 2020 to help facilitate business growth and execute management’s plans to become profitable through acquisitions. Through these two public offerings, the Company received net proceeds of approximately $27.8 million. The Company completed a Securities Purchase Agreement (“SPA”) in connection with a February 2021 private placement to help facilitate business growth and dealership acquisitions. The Company received net proceeds of approximately $18.7 million from the issuance of Series A convertible preferred stock and warrants (“Series A Preferred Stock” and “2021 Warrants”, respectively). Management plans to continue to obtain funding through 2021 for strategic dealership acquisitions. |
Basis of Presentation | Basis of Presentation These accompanying condensed consolidated financial statements contain unaudited information as of March 31, 2021, and for the three months ended March 31, 2021 and 2020. The unaudited interim financial statements have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain disclosures required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for annual financial statements are not included herein. In management’s opinion, these unaudited financial statements reflect all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the information when read in conjunction with our 2020 audited Consolidated Financial Statements and the related notes thereto. The financial information as of December 31, 2020, is derived from our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 25, 2021. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for the full year. |
Reclassifications | Reclassifications Certain immaterial reclassifications of amounts previously reported have been made to the accompanying condensed consolidated financial statements to maintain consistency and comparability between periods presented. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Fair Value of Assets Acquired and Liabilities Assumed | Fair Value of Assets Acquired and Liabilities Assumed We estimate the fair value of the assets acquired and liabilities assumed in a business combination using various assumptions. The most significant assumptions used relate to determining the fair value of property and equipment, and intangible franchise rights. We estimate the fair value of property and equipment based on a market valuation approach. We use prices and other relevant information generated primarily by recent market transactions involving similar or comparable assets, as well as our historical experience in divestitures, acquisitions and real estate transactions. Additionally, we may use a cost valuation approach to value long-lived assets when a market valuation approach is unavailable. Under this approach, we determine the cost to replace the service capacity of an asset, adjusted for physical and economic obsolescence. When available, we use valuation inputs from independent valuation experts, such as real estate appraisers and brokers, to corroborate our estimates of fair value. We estimate the fair value of our franchise rights primarily using the Multi-Period Excess Earnings (MPEE) model. The forecasted cash flows used in the MPEE model contain inherent uncertainties, including significant estimates and assumptions related to growth rates, margins, general operating expenses, and cost of capital. We use primarily internally-developed forecasts and business plans to estimate the future cash flows that each franchise will generate. We have determined that only certain cash flows of the store are directly attributable to the franchise rights. We estimate the appropriate interest rate to discount future cash flows to their present value equivalent taking into consideration factors such as a risk-free rate, a peer group average beta, an equity risk premium and a small stock risk premium. Additionally, we also may use a market approach to determine the fair value of our franchise rights. These market data points include our acquisition and divestiture experience and third-party broker estimates. We use a relief-from-royalty method to determine the fair value of a trade name. Future cost savings associated with owning, rather than licensing, a trade name is estimated based on a royalty rate and management’s forecasted sales projections. The discount rate applied to the future cost savings factors an equity market risk premium, small stock risk premium, an average peer group beta, a risk-free interest rate and a premium for forecast risk. |
Accounts Receivable | Accounts Receivable The Company carries its accounts receivable at cost. Accounts receivable consist of amounts due from customers, financial institutions, manufacturers and insurance providers. Management has determined that no allowance for uncollectible accounts for accounts receivable is necessary as of March 31, 2021 and December 31, 2020. Such estimates are based on management’s assessments of the creditworthiness of its customers, the aged basis of its receivables, as well as current economic conditions and historical information. |
Inventories | Inventories Inventories are valued at the lower of net realizable value or cost, using the specific identification method for new vehicles, pooled approach for used vehicles, and the first-in, first out method for parts. The cost of new and used vehicle inventories includes the cost of any equipment added, reconditioning and transportation. Inventories as of March 31, 2021 and December 31, 2020 are recorded based on perpetual inventory records. The Company launched its subscription business in 2018, at which time it started to depreciate the corresponding fleet inventory using a monthly rate of 1% of initial cost. Fleet vehicle depreciation was $124,089 and $229,000 for the three months ended March 31, 2021 and 2020, respectively. Company management periodically reviews its inventories to determine whether any inventories have declined in value. The Company has a reserve recorded for impairment to reflect inventory at net realizable value of $48,043 and $141,762 at March 31, 2021 and December 31, 2020, respectively. Inventories consisted of the following as of March 31, 2021 and December 31, 2020: March 31, December 31, 2021 2020 New vehicles $ 30,901,264 $ - Used vehicles 21,043,967 4,320,444 Parts & accessories 1,901,920 - Fleet vehicles 8,353,524 4,707,709 62,200,675 9,028,153 Accumulated depreciation (346,930 ) (530,064 ) Total inventories $ 61,853,745 $ 8,498,089 |
Property, Equipment and Leasehold Improvements | Property, Equipment and Leasehold Improvements Property, equipment, and leasehold improvements are stated at cost. The costs of additions and betterments are capitalized and expenditures for repairs and maintenance are expensed in the period incurred. When items included in property and equipment are sold or retired, the related costs and accumulated depreciation are removed from the accounts and any gain or loss is included in selling, general and administrative expenses. Vehicles and equipment are depreciated utilizing the straight-line method over the estimated useful lives of the respective assets as follows: Vehicles 5 years Furniture and fixtures 10 years Buildings 39 years Equipment 7 years Leasehold improvements are amortized over the shorter of the remaining term of the lease or the useful life of the improvement utilizing the straight-line method. |
Intangible Assets | Intangible Assets Intangible assets are stated at their historical cost and amortized on a straight-line basis over their expected useful lives. Through acquisition, we have agreements (Franchise Rights) with our manufacturers. Franchise Rights represents a right received under Franchise Agreements with manufacturers and is identified on an individual dealership basis. The Company evaluates the useful lives of our Franchise Rights based on the following factors: As evidenced by our acquisitions, there is an active market for most automotive dealership franchises within the United States. We attribute value to the Franchise Rights acquired with the dealerships we purchase based on the understanding and industry practice that the Franchise Rights will be renewed indefinitely by the manufacturer. Accordingly, we have determined that our Franchise Agreements will continue to contribute to our cash flows indefinitely and, therefore, have indefinite lives. As an indefinite-lived intangible asset, franchise value is tested for impairment at least annually, and more frequently if events or circumstances indicate the carrying value may exceed fair value. The impairment test for indefinite-lived intangible assets requires the comparison of estimated fair value to carrying value. An impairment charge is recorded to the extent the fair value is less than the carrying value. We have the option to qualitatively or quantitatively assess indefinite-lived intangible assets for impairment. We will evaluate our indefinite-lived intangible assets using a qualitative assessment process. We have determined the appropriate unit of accounting for testing Franchise Rights for impairment is each individual store. The testing of our indefinite-lived intangible assets for impairment will be performed on or before December 31 of each year and more frequently if events or circumstances indicate the carrying amount of the reporting unit more likely than not exceeds fair value. |
Long-lived Assets | Long-lived Assets The Company reviews long-lived assets and certain identifiable intangibles held and used for possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In evaluating the fair value and future benefits of its long lived and intangible assets, management performs an analysis of the anticipated undiscounted future net cash flow of the individual assets over the remaining amortization period. The Company recognizes an impairment loss if the carrying value of the asset exceeds the expected future cash flows. There were no deemed impairments of long-lived assets as of March 31, 2021 and December 31, 2020. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. To increase the comparability of fair value measurements, a three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies, is as follows: Level 1 - Valuations based on quoted prices for identical assets and liabilities in active markets. Level 2 - Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3 - Valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment. As of March 31, 2021, and December 31, 2020, the fair value of these financial instruments, including cash and restricted cash, accounts receivable, notes receivable, net investment in sales-type leases, and accounts payable, approximated book value due to the short maturity of these instruments. Vehicle financing and notes payable and related party notes payable approximate fair value due to market interest rates. Our fair value measurements related to goodwill, intangible assets and contingent consideration are recognized in connection with acquisitions. Goodwill and intangible assets are valued using Level 3 inputs, and contingent consideration is valued using level 2 inputs. The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis as of March 31, 2021 and indicates the fair value hierarchy of the valuation techniques that the Company utilized to determine such fair value. As of March 31, 2021 the fair value of warrant liabilities is as follows: Description Quoted Priced in Significant Other Significant Other Warrant liabilities $ - $ - $ 4,867,074 Warrant Liability – The 2021 Warrants are accounted for as derivative liabilities in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 815-40 Derivatives and Hedging Initial Measurement – The Company established the initial fair value for the 2021 Warrants on February 25, 2021, the date of the closing. The 2021 Warrants are measured at fair value on a recurring basis, using a Monte Carlo simulation, Option Pricing Model (“OPM”). The Company allocated the proceeds received from (i) the sale of the preferred units, first to the 2021 Warrants based on their fair values as determined at initial measurement, with the remaining proceeds allocated to Series A convertible preferred stock. The 2021 Warrants were classified as Level 3 at the initial measurement date due to the use of unobservable inputs. The Company utilizes the OPM to value the 2021 Warrants at each reporting period, with any subsequent changes in fair value recognized in the consolidated statement of operations. The estimated fair value of the warrant liability is determined using Level 3 inputs. Inherent in the OPM are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its shares of common stock based on historical volatility that matches the expected remaining life of the 2021 Warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the issuance date for a maturity similar to the expected remaining life of the 2021 Warrants. The expected life of the 2021 Warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero. The aforementioned warrant derivative liability is not subject to qualified hedge accounting. The following table provides quantitative information regarding Level 3 fair value measurements: February 25, March 31, Risk-free interest rate .46 % .46 % Expected term (years) 3.5 3.4 Expected volatility 61 % 58 % Exercise Price $ 21.00 $ 21.00 Stock Price $ 17.71 $ 16.63 Dividend yield 0 % 0 % The following table presents the changes in the fair value of the warrant liability: Warrant Fair value as of February 25, 2021 $ 5,814,646 Change in valuation inputs or other assumptions (1) (947,572 ) Fair value as of March 31, 2021 $ 4,867,074 (1) Changes in valuation inputs or other assumptions are recognized in other income, net in the statement of operations for the three months ended March 31, 2021. |
Share-Based Compensation | Share-Based Compensation The Company recognizes the cost of employee services received in exchange for awards of stock options, based on the fair value of those awards at the date of grant over the requisite service period, which generally is the vesting period of the award. The Company uses the Black-Scholes option pricing model to determine the fair value of stock option awards. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with the FASB ASC 606, Revenue from Contracts with Customers The Company leases vehicles to third parties that are accounted for in accordance with FASB ASC 842, Leases . Revenue on sales-type leases is recognized at the inception of the lease and the related interest income is recognized over the term of the lease using the effective interest method. Revenues on the sales of vehicles at the end of a lease are recognized at the inception of the lease, and any net gain or loss on sales of such vehicles is presented within vehicle sales revenues and vehicle sales cost of revenues in the condensed consolidated statements of operations. Interest income is derived from the discounted cash flows of the lease payments. Investments in sales-type leases are comprised of the minimum lease payments receivable and guaranteed residual at their present value. New Retail Vehicle and Used Retail Vehicle Revenues Revenue from the retail sale of a vehicle is recognized at a point in time, as all performance obligations are satisfied when a contract is signed by the customer, financing has been arranged or collectability is probable, and the control of the vehicle is transferred to the customer. The transaction price for a retail vehicle sale is specified in the contract with the customer and includes all cash and non-cash consideration. In a retail vehicle sale, customers often trade in their current vehicle. The trade-in is measured at its stand-alone selling price in the contract, utilizing various third-party pricing sources. There are no other non-cash forms of consideration related to retail sales. All vehicle rebates are applied to the vehicle purchase price at the time of the sale and are therefore incorporated into the price of the contract at the time of the exchange. We do not allow the return of new or used vehicles, except where mandated by state Law. The Company collects sales taxes and other taxes from customers on behalf of governmental authorities at the time of sale. These taxes are accounted for on a net basis and are not included in revenues or cost of sales. Service, Body and Parts Revenue Revenue from service, body and parts sales is recognized upon the transfer of control of the parts or service to the customer. We allow for customer returns on sales of our parts inventory up to 30 days after the sale. Most parts returns generally occur within one to two weeks from the time of sale and are not significant. Finance and Insurance, net Revenue from finance and insurance sales is recognized, net of estimated charge-backs, at the time of the sale of the related vehicle. Charge-back reserves totaled $43,039 and $0 as of March 31, 2021 and December 31, 2020, respectively, and is recorded in other current liabilities on the consolidated balance sheet. As a part of the vehicle sale, we seek to arrange financing for customers and sell a variety of add-ons, such as extended warranty service contracts. These products are inherently attached to the governing vehicle and performance of the obligation cannot be performed without the underlying sale of the vehicle. We act as an agent in the sale of these contracts as the pricing is set by the third-party provider, and our commission is preset. Revenues for these contracts are presented net of associated costs within the consolidated statements of operations. Fleet and Other Revenue Fleet and other revenue consists of revenue from sales-type and operating leases, dealer fees, subscription and interest. Subscription Revenue The Company offers a vehicle subscription plan where a customer will pay a monthly fee in exchange for access to a vehicle. The Company’s subscriptions include monthly swaps, scheduled maintenance and upkeep, license, and registration and in most cases roadside assistance. Customers have the flexibility to up-or-downgrade a vehicle monthly, with the vehicle payment adjusted accordingly. There is an activation payment at subscription inception that varies based upon the monthly payment of the selected vehicle. Monthly vehicle payments are dependent upon the vehicle selected by the customer. Due to the nature of the subscription contract, where the subscriber can swap out the vehicle in the contract, the performance obligation is completed and recognized each month. The revenues earned under these contracts are recognized in accordance with ASC 606. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a vehicle to a customer under a subscription contract. The prices of the vehicles are stated in its contracts at stand-alone subscription prices, which are agreed upon with the customer prior to delivery. The Company satisfies its performance obligation for monthly subscription payments upon delivery to the customer and in each subsequent month the customer retains possession of the vehicle. The Company recognizes revenue at the agreed-upon price stated in the contract in the month earned. The Company also receives a one-time, non-refundable payment as an activation fee to its vehicle subscription program. This fee is deferred and amortized to income monthly over the term of the subscription, as the performance obligation (providing a vehicle for the customer) is completed over the term of the subscription. Subscription revenues are recognized over time based on the duration of the contract term with the customer. The amount of revenue recognized is calculated using an input method, which most closely depicts performance of the contracts. Our subscription liability balance was approximately $99,000 and $115,000 as of March 31, 2021, and December 31, 2020, respectively. The Company recognized approximately $43,000 and $95,000 of subscription revenue for the three months ended March 31, 2021 and 2020, respectively, related to our subscription liability. Our subscription liability balance is included in other current liabilities on the consolidated balance sheet. Customer payment is received prior to initial vehicle delivery and on each monthly recurring anniversary date. The Company collects sales taxes and other taxes from customers on behalf of governmental authorities at the time of sale. These taxes are accounted for on a net basis and are not included in sales or cost of sales. Leasing Revenue The Company accounts for revenue earned from vehicle rentals and rental related activities wherein an identified asset is transferred to the customer and the customer has the ability to control that asset under FASB ASC 842. Revenue from operating leases is recognized ratably on a straight-line basis over the term of the agreement. Performance obligations associated with rental related activities, such as charges to the customer for the fueling of vehicles and value-added services such as loss damage waivers, navigation units, and other ancillary and optional products, are also satisfied over the rental period. Payments are due from customers at the time of reservation. Additional charges incurred by the customers are collected at the time of vehicle return. The Company collects sales taxes and other taxes from customers on behalf of governmental authorities at the time of sale. These taxes are accounted for on a net basis and are not included in sales or cost of sales. Dealer Fees Dealer fees are earned primarily in connection with retail sales of new or used vehicles and are recorded at the same time as the retail sale. These consist of the standard dealer fees charged with each transaction. |
Segment Reporting | Segment Reporting We have determined that each of our retail stores along with our fleet operations, which are considered individual operating segments, are one reportable segment because they have similar operating revenues, margins, customers, product distribution, and regulatory environment. Additionally, there is one management team that reviews and manages our retail stores and fleet operations. Therefore, we have determined that we have one reportable segment: Retail & Fleet. Our Retail & Fleet segment is comprised of our retail automotive locations that sell new vehicles manufactured by General Motors and KIA Motors and Fleet leasing and sales. The franchises in each segment also sell used vehicles, wholesale vehicles, parts and automotive services, and automotive finance and insurance products. We define our chief operating decision maker (“CODM”) to be a committee comprising of the Company’s Chief Executive Officer and Chief Operating Officer. Historical and forecasted operational performance is evaluated on a store-by-store basis and on a consolidated basis by the CODM. We derive the operating results of the segments directly from our internal management reporting system. The accounting policies used to derive segment results are substantially the same as those used to determine our consolidated results. Our CODM does not regularly review capital expenditures on a reporting unit level. Performance measurement of the reportable segment by the CODM is based on several metrics, including earnings from operations. The CODM uses these results, in part, to evaluate the performance mainly associated with expected inventory and working capital requirements, of the reportable segment. |
Income Taxes | Income Taxes Income tax expense includes federal and state taxes currently payable and deferred taxes arising from temporary differences between income for financial reporting and income tax purposes. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the difference is expected to reverse. The effect of a change in the tax rate on the deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company establishes a valuation allowance when necessary to reduce its deferred tax assets to an amount that is expected to be realized. |
Advertising | Advertising The Company expenses advertising and marketing costs in the period incurred. Advertising expense was approximately $144,000 and $11,000, respectively, for the three months ended March 31, 2021 and 2020. |
Leases | Leases The Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases Under Topic 842, the Company applied a dual approach to all leases whereby the Company is a lessee and classifies leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the Company. Lease classification is evaluated at the inception of the lease agreement. Regardless of classification, the Company records a right-of-use asset and a lease liability for all leases with a term greater than 12 months. Operating lease expense is recognized on a straight-line basis over the term of the lease. The components of the right-of-use asset and lease liabilities as of March 31, 2021 and December 31, 2020 are as follows: March 31, December 31, 2021 2020 Operating lease right-of-use asset $ 3,427,867 $ 422,501 Operating lease liability, current portion $ 459,291 $ 181,437 Operating lease liability, net of current portion $ 3,006,962 $ 283,716 Operating Leases During 2018, the Company entered into a lease with an entity related through common ownership for its facilities in Plantation, Florida. In September 2020, the Company entered into a lease with an unrelated entity for office space in Fort Lauderdale, Florida. The 34 month lease provides for monthly payments of $16,113 plus operating costs and sales taxes. In March 2021, two of the Company’s dealerships entered into 10 year leases with an unrelated entity for the dealership premises with monthly rents of $21,000 and $7,500. Total operating lease cost for the Company’s lease locations was approximately $88,000 and $97,000 for the three months ended March 31, 2021 and 2020, respectively. Discount Rate When available, the Company uses the rate implicit in the lease or a borrowing rate based on similar debt to discount lease payments to present value. However, the lease generally does not provide a readily determinable implicit rate, therefore for the leases beginning in 2021, the Company used the incremental borrowing rate. Lease Cost Operating lease cost related to right-of-use asset on the Plantation lease was approximately $0 and $97,000, respectively, for the three months ended March 31, 2021 and 2020. The weighted average discount rate was 2.63%. During July 2020, the Company purchased the facilities. Operating lease cost related to right-of-use asset on the Fort Lauderdale lease was approximately $44,073 and $0 for the three months ended March 31, 2021 and 2020, respectively. The weighted average remaining term on the lease is 2.25 years. The weighted average discount rate was 3%. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842) Effective Dates, In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes In October 2020, the FASB issued ASU 2020-10, “ Codification Improvements The Company early adopted ASU 2020-06 Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity The Company accounts for the 2021 Warrants as liability-classified instruments based on an assessment of the specific terms of the 2021 Warrants with the applicable authoritative guidance in FASB ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging 2021 Warrants that meet all of the criteria for equity classification are initially measured at fair value or relative fair value, depending on the circumstances, and are recorded as a component of additional paid-in capital at the time of issuance, and are not subsequently remeasured. 2021 Warrants that do not meet all the criteria for equity classification are recorded at their initial fair value as a liability on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of liability-classified 2021 Warrants are recognized as a gain or loss on the statements of operations. The Company accounts for the 2021 Warrants in accordance with ASC 815-40 under which the 2021 Warrants do not meet the criteria for equity classification and must be recorded as liabilities. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Schedule of inventories | March 31, December 31, 2021 2020 New vehicles $ 30,901,264 $ - Used vehicles 21,043,967 4,320,444 Parts & accessories 1,901,920 - Fleet vehicles 8,353,524 4,707,709 62,200,675 9,028,153 Accumulated depreciation (346,930 ) (530,064 ) Total inventories $ 61,853,745 $ 8,498,089 |
Schedule of straight-line method over the estimated useful lives | Vehicles 5 years Furniture and fixtures 10 years Buildings 39 years Equipment 7 years |
Schedule of fair value hierarchy of valuation techniques | Description Quoted Priced in Significant Other Significant Other Warrant liabilities $ - $ - $ 4,867,074 |
Schedule of quantitative information regarding level 3 fair value measurements | February 25, March 31, Risk-free interest rate .46 % .46 % Expected term (years) 3.5 3.4 Expected volatility 61 % 58 % Exercise Price $ 21.00 $ 21.00 Stock Price $ 17.71 $ 16.63 Dividend yield 0 % 0 % |
Schedule of changes in the fair value of the warrant liability | Warrant Fair value as of February 25, 2021 $ 5,814,646 Change in valuation inputs or other assumptions (1) (947,572 ) Fair value as of March 31, 2021 $ 4,867,074 |
Schedule of right-of-use asset and lease liabilities | March 31, December 31, 2021 2020 Operating lease right-of-use asset $ 3,427,867 $ 422,501 Operating lease liability, current portion $ 459,291 $ 181,437 Operating lease liability, net of current portion $ 3,006,962 $ 283,716 |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Business Combinations [Abstract] | |
Schedule of total consideration | Cash $ 41,595,574 Rollover equity 1,805,000 Total consideration $ 43,400,574 Cash $ 225,000 Common stock 625,000 Rollover equity 816,667 Effective settlement of receivables 6,533,052 Total consideration $ 8,199,719 |
Schedule of fair values of assets acquired and liabilities assumed at acquisition date | 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 Franchise rights 9,500,000 Tradename 2,778,458 Other assets 43,243 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 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 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 Assets acquired Accounts receivable $ 4,392,830 Vehicles 4,542,738 Cash 46,415 Property & equipment 37,017 Other assets 10,904 Total assets acquired 9,029,904 Liabilities assumed Notes payable 639,360 Customer deposits 118,800 Accrued liabilities 72,025 Total liabilities assumed 830,185 Net assets acquired $ 8,199,719 |
Schedule of consolidated of operations revenue and operating income attributable to acquired dealership date of acquisition | 2021 Revenue $ 13,948,744 Net income $ 655,818 2021 Revenue $ 13,876,368 Net income $ 700,058 2021 Revenue $ 1,085,580 Net income $ 63,451 2021 Revenue $ 480,256 Net income $ 19,466 |
Schedule of components of redeemable noncontrolling interests | Beginning balance $ - Noncontrolling interests issued in connection with Beckley Acquisitions 1,805,000 Net income attributable to noncontrolling interests 115,733 Adjustments to redemption value 6,361,033 Ending balance $ 8,281,766 |
Schedule of reconciliation of shareholders’ equity attributable to noncontrolling interests | Shareholders’ equity attributable to LMP Automotive Holdings, Inc. $ 35,777,249 Shareholders’ equity attributable to noncontrolling interests 8,281,766 Total shareholders’ equity $ 44,059,015 |
Property, Equipment and Lease_2
Property, Equipment and Leasehold Improvements (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, equipment and leasehold improvements | March 31, December 31, 2021 2020 Land $ 49,435,700 $ 435,700 Vehicles $ 277,311 $ 153,822 Building 3,292,008 3,164,300 Furniture, fixtures and equipment 2,399,213 392,262 Leasehold and building improvements 433,179 299,526 6,401,711 4,009,910 Less: accumulated depreciation and amortization (305,878 ) (228,791 ) $ 6,095,833 $ 3,781,119 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets net | March 31, December 31, 2021 2020 Software license $ 1,350,000 $ 1,350,000 Website design and other intangibles 260,695 230,568 1,610,695 1,580,568 Less: Accumulated amortization (600,499 ) (469,745 ) 1,010,196 1,110,823 Franchise rights 19,500,000 - Tradenames 3,878,458 - $ 24,388,654 $ 1,110,823 |
Schedule of future amortization of intangible assets | Year ending December 31, 2021 (9 months) $ 373,364 2022 478,412 2023 89,254 2024 69,166 $ 1,010,196 |
Goodwill (Tables)
Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of carrying value of goodwill | March 31, Balance, December 31, 2020 $ - Goodwill acquired from acquisitions 27,400,000 Balance, March 31,2021 $ 27,400,000 |
Investment in Sales-type Leas_2
Investment in Sales-type Leases (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Investment In Leasing Operations [Abstract] | |
Schedule of investment in Sales-type Leases | March 31, December 31, 2021 2020 Sales-type leases: Minimum lease payments receivable $ 1,550,231 $ 1,576,325 Unearned income (277,872 ) (576,853 ) Guaranteed residual value of vehicles 5,538,773 10,744,104 Total investment in sales-type leases $ 6,811,132 $ 11,743,576 |
Accounts Payable and Other Cu_2
Accounts Payable and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of accounts payable | March 31, December 31, 2021 2020 Accounts payable $ 3,816,676 $ 251,118 Credit card payable 33,206 22,717 Total accounts payable $ 3,849,882 $ 273,835 |
Schedule of other current liabilities | March 31, December 31, 2021 2020 Accrued payroll $ 1,220,702 $ 197,635 Customer deposits on hand 274,816 82,117 Deferred revenues 1,206,168 114,635 Insurance payable 99,081 - Sales & other taxes payable 871,717 37,905 Accrued legal expenses 845,287 133,032 Litigation accrual 280,000 550,000 Accrued advertising 261,644 - Accrued interest 332,915 - Accrued lot fees 290,076 - Contingent consideration 320,606 - Other accruals 792,300 217,911 Total other current liabilities $ 6,795,312 $ 1,333,235 |
Lease Commitments (Tables)
Lease Commitments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Schedule of operating lease liability | Years Ending December 31: 2021 (nine months) $ 424,017 2022 565,356 2023 415,339 2024 342,000 2025 342,000 Thereafter 1,767,000 Total minimum lease payments 3,855,712 Less: amount representing interest (389,459 ) Present value of future payments 3,466,253 Less: current obligations (459,291 ) Long-term obligations $ 3,006,962 |
Stock Options (Tables)
Stock Options (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock option activity | Weighted Number of Avg. Exercise Shares Price Outstanding as of December 31, 2020 371,500 $ 7.97 Options granted 40,000 17.35 Options exercised (45,000 ) 7.42 Options forfeited or expired (39,500 ) - Outstanding as of March 31, 2021 327,000 $ 7.12 Vested as of March 31, 2021 200,169 $ 4.62 Expected to vest as of March 31, 2021 126,831 $ 10.62 |
Purchase Warrants (Tables)
Purchase Warrants (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Schedule of share purchase warrants | Number of Warrants Weighted Avg. Exercise Price Outstanding as of December 31, 2019 115,000 $ 6.25 Issued 36,000 20.00 Cancelled (3,268 ) 6.25 Exercised (70,664 ) 8.46 Outstanding as of December 31, 2020 77,068 $ 10.65 Issued 861,429 21.00 Cancelled - - Exercised (1,305 ) 6.25 Outstanding as of March 31, 2021 937,192 $ 20.17 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of basic earnings per common share and diluted earnings per share | Three Months Ended March 31, 2021 2020 Calculation of income for Basic earnings per share: Net loss attributable to LMP Automotive Holdings $ (1,668,504 ) $ (1,720,188 ) Change in noncontrolling interest redemption value (6,361,033 ) - Net loss attributable to common shareholders (8,029,537 ) (1,720,188 ) Weighted average shares of common stock outstanding, basic 10,040,542 9,326,054 Basic net loss per share $ (0.80 ) $ (0.18 ) Calculation of income for diluted earnings per share: Net loss attributable to common shareholders $ (8,029,537 ) $ (1,720,188 ) Weighted average shares of common stock outstanding, basic 10,040,542 9,326,054 10,040,542 9,326,054 Diluted net loss per share $ (0.80 ) $ (0.18 ) |
Segments (Tables)
Segments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of financial information on segment | Three months ended March 31, 2021 2020 New vehicle retail $ 15,925,296 $ - Used vehicle retail 7,749,213 95,560 Used vehicle wholesale 2,665,602 541,900 Finance and insurance, net 1,325,197 - Service, body and parts 1,928,827 - Fleet and other 3,421,788 4,712,253 $ 33,015,923 $ 5,349,713 Segment net loss – Retail & Fleet $ (1,668,504 ) $ (1,720,188 ) |
Nature of Operations and Prin_2
Nature of Operations and Principles of Consolidation (Details) - USD ($) | Mar. 23, 2021 | Mar. 09, 2021 | Mar. 31, 2021 | Dec. 15, 2017 |
Nature of Operations and Principles of Consolidation (Details) [Line Items] | ||||
Future committed value | $ 625,000 | |||
Purchase price | $ 143,600,000 | |||
Borrowed value | 192,000,000 | |||
Transaction and integration costs | $ 1,300,000 | |||
LMP Automotive Holdings, Inc. [Member] | ||||
Nature of Operations and Principles of Consolidation (Details) [Line Items] | ||||
Common ownership contributed Interest | 100.00% | |||
LMP Automotive Holdings, Inc. [Member] | ||||
Nature of Operations and Principles of Consolidation (Details) [Line Items] | ||||
Acquired interest, percentage | 51.00% | |||
Shares of common stock (in Shares) | 16,892 | |||
Future committed value, total | $ 320,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | Sep. 30, 2020 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Accumulated deficit | $ (17,740,479) | $ (15,416,151) | ||
Net proceeds received | $ 27,800,000 | |||
Percentage of inventory | 1.00% | |||
Cost, Depreciation and Amortization | $ 124,089 | $ 229,000 | ||
Realizable inventory, net | 48,043 | 141,762 | ||
Reserves total | 43,039 | 0 | ||
Subscription liability | 99,000 | 115,000 | ||
Subscriptions revenue | 43,000 | $ 95,000 | ||
Advertising expense | $ 144,000 | 11,000 | ||
Monthly lease payment | $ 16,113 | |||
Lease term | 10 years | |||
Operating Lease, Cost | $ 88,000 | 97,000 | ||
Operating lease cost right of use asset | $ 0 | 97,000 | ||
Weighted average discount rate | 2.63% | |||
Operating lease related costs | $ 44,073 | $ 0 | ||
Weighted average remaining term | 2 years 3 months | |||
Average discount rate | 3.00% | |||
Dealer One [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Monthly lease payment | $ 21,000 | |||
Dealer Two [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Monthly lease payment | 7,500 | |||
Series A Convertible Preferred Stock and Warrants [Member] | ||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||
Net proceeds | $ 18,700,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of inventories - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Inventory [Line Items] | ||
Inventories, gross | $ 62,200,675 | $ 9,028,153 |
Accumulated depreciation | (346,930) | (530,064) |
Total inventories | 61,853,745 | 8,498,089 |
New vehicle retail [Member] | ||
Inventory [Line Items] | ||
Inventories, gross | 30,901,264 | |
Used vehicles [Member] | ||
Inventory [Line Items] | ||
Inventories, gross | 21,043,967 | 4,320,444 |
Parts & accessories [Member] | ||
Inventory [Line Items] | ||
Inventories, gross | 1,901,920 | |
Fleet vehicles [Member] | ||
Inventory [Line Items] | ||
Inventories, gross | $ 8,353,524 | $ 4,707,709 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details) - Schedule of straight-line method over the estimated useful lives | 3 Months Ended |
Mar. 31, 2021 | |
Schedule of straight-line method over the estimated useful lives [Abstract] | |
Vehicles | 5 years |
Furniture and fixtures | 10 years |
Buildings | 39 years |
Equipment | 7 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Details) - Schedule of fair value hierarchy of valuation techniques | Mar. 31, 2021USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrant liabilities | $ 4,867,074 |
Quoted Priced in Active Markets (Level 1) [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrant liabilities | |
Significant Other Unobservable Inputs (Level 3) [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Warrant liabilities |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Details) - Schedule of quantitative information regarding level 3 fair value measurements - $ / shares | 2 Months Ended | 3 Months Ended |
Feb. 25, 2021 | Mar. 31, 2021 | |
Schedule of quantitative information regarding level 3 fair value measurements [Abstract] | ||
Risk-free interest rate | 0.46% | 0.46% |
Expected term (years) | 3 years 6 months | 3 years 146 days |
Expected volatility | 61.00% | 58.00% |
Exercise Price (in Dollars per share) | $ 21 | $ 21 |
Stock Price (in Dollars per share) | $ 17.71 | $ 16.63 |
Dividend yield | 0.00% | 0.00% |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies (Details) - Schedule of changes in the fair value of the warrant liability | 3 Months Ended | |
Mar. 31, 2021USD ($) | ||
Schedule of changes in the fair value of the warrant liability [Abstract] | ||
Fair value as of February 25, 2021 | $ 5,814,646 | |
Change in valuation inputs or other assumptions | (947,572) | [1] |
Fair value as of March 31, 2021 | $ 4,867,074 | |
[1] | Changes in valuation inputs or other assumptions are recognized in other income, net in the statement of operations for the three months ended March 31, 2021. |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies (Details) - Schedule of right-of-use asset and lease liabilities - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Schedule of right-of-use asset and lease liabilities [Abstract] | ||
Operating lease right-of-use asset | $ 3,427,867 | $ 422,501 |
Operating lease liability, current portion | 459,291 | 181,437 |
Operating lease liability, net of current portion | $ 3,006,962 | $ 283,716 |
Global Pandemic (Details)
Global Pandemic (Details) | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Global Pandemic [Abstract] | |
Compensation amount | $ 120,000 |
Asset Purchase Agreements (Deta
Asset Purchase Agreements (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Feb. 19, 2020 | Mar. 31, 2021 | Feb. 25, 2021 | |
Asset Purchase Agreements (Details) [Line Items] | |||
Price per share (in Dollars per share) | $ 16.63 | $ 17.71 | |
License value | $ 1,400,000 | ||
License estimated useful life | 3 years | ||
Asset Purchase Agreement [Member] | |||
Asset Purchase Agreements (Details) [Line Items] | |||
Purchase price of asset | $ 4,200,000 | ||
Purchase price of vehicles | 2,900,000 | ||
Leasing software | 1,400,000 | ||
Paid to lenders in cash | $ 526,000 | ||
Issued shares of common stock (in Shares) | 33,183 | ||
Price per share (in Dollars per share) | $ 14.69 | ||
Asset Purchase Agreement [Member] | First Credit line [Member] | |||
Asset Purchase Agreements (Details) [Line Items] | |||
Line of credit facility, description | The first line from Sutton Leasing funded the purchase of 30 vehicles for $2.4 million at the floating LIBOR rate on the date of the advance, plus 2.80%, or 4.55% interest on the date of the advance, with terms ranging from 24 to 36 months. | ||
Asset Purchase Agreement [Member] | Second Credit line [Member] | |||
Asset Purchase Agreements (Details) [Line Items] | |||
Line of credit facility, description | The second line from The Bancorp Bank was a credit line for funding advances up to $850,000 at the Prime Rate per the Wall Street Journal on the date of the advance plus 2%, but not less than 4% on advances on 48-month terms. The Company used approximately $818,400 at 6.5% interest for the purchase of 13 vehicles, with terms ranging from 32 to 41 months. |
Acquisitions (Details)
Acquisitions (Details) - USD ($) | Mar. 09, 2021 | Mar. 04, 2021 | Mar. 03, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Acquisitions (Details) [Line Items] | |||||
Consideration paid in cash | $ 8,522,892 | $ 3,935,726 | |||
Equity interest outstanding | 1,800,000 | ||||
Redeemable non-controlling interest | 8,300,000 | ||||
Acquisition costs | $ 486,000 | $ 1,400,000 | |||
Business acquisition, description | 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. | ||||
Settlement of preexisting receivables | $ 6,500,000 | ||||
Rollover equity | 817,000 | $ 816,667 | |||
Beckley Acquisition [Member] | |||||
Acquisitions (Details) [Line Items] | |||||
Purchase price | $ 43,400,000 | ||||
Consideration paid in cash | 41,600,000 | ||||
Consideration paid in equity | 1,800,000 | ||||
Net assets acquired | 43,400,000 | ||||
Acquisition costs | 478,000 | ||||
Acquisition costs | 284,000 | ||||
Southwest Florida Dealership [Member] | |||||
Acquisitions (Details) [Line Items] | |||||
Acquisition costs | 79,300,000 | ||||
Fuccillo Acquisitions [Member] | |||||
Acquisitions (Details) [Line Items] | |||||
Consideration paid in cash | $ 550,000 | ||||
Equity rights, percentage | 15.00% | ||||
Consideration paid in notes payable | $ 3,300,000 | ||||
Notes maturity term | 7 years | ||||
Interest rate | 5.00% | ||||
Equity interest, percentage | 15.00% | ||||
Deferred compensation liability | $ 1,900,000 | ||||
West Virginia Dealerships [Member] | |||||
Acquisitions (Details) [Line Items] | |||||
Acquisition costs | 12,700,000 | ||||
Bachman Acquisition [Member] | |||||
Acquisitions (Details) [Line Items] | |||||
Acquisition costs | $ 344,267 | ||||
Equity rights, percentage | 15.00% | ||||
LTO Acquisition [Member] | |||||
Acquisitions (Details) [Line Items] | |||||
Consideration paid in cash | 850,000 | ||||
Acquisition costs | $ 10,000 | ||||
Business combination, percentage | 51.00% | ||||
Business consideration, description | 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 $320,606. |
Acquisitions (Details) - Schedu
Acquisitions (Details) - Schedule of total consideration - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Mar. 09, 2021 | |
Business Acquisition, Contingent Consideration [Line Items] | |||
Cash | $ 17,328,577 | ||
Rollover equity | $ 816,667 | $ 817,000 | |
Beckley Acquisitions [Member] | |||
Business Acquisition, Contingent Consideration [Line Items] | |||
Cash | 41,595,574 | ||
Rollover equity | 1,805,000 | ||
Total consideration | 43,400,574 | ||
LTO Acquisition [Member] | |||
Business Acquisition, Contingent Consideration [Line Items] | |||
Cash | 225,000 | ||
Common stock | 625,000 | ||
Effective settlement of receivables | 6,533,052 | ||
Total consideration | $ 8,199,719 |
Acquisitions (Details) - Sche_2
Acquisitions (Details) - Schedule of fair values of assets acquired and liabilities assumed at acquisition date - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 23, 2021 | Dec. 31, 2020 | |
Business Acquisition [Line Items] | |||
Cash | $ 143,600,000 | ||
Liabilities assumed | |||
Intransit floorplan liability | $ 840,613 | ||
Net Assets Acquired | |||
Goodwill | 27,400,000 | ||
Beckley Acquisitions [Member] | |||
Business Acquisition [Line Items] | |||
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 | ||
Franchise Rights | 9,500,000 | ||
Tradenames | 2,778,458 | ||
Liabilities assumed | |||
Other assets | 43,243 | ||
Total assets acquired | 47,447,291 | ||
Liabilities assumed | |||
Accrued personal property tax | 23,143 | ||
Accrued vacation | 94,803 | ||
We-owes | 21,272 | ||
Operating lease liabilities | 3,066,886 | ||
Total liabilities assumed | 4,046,717 | ||
Net assets acquired | 43,400,574 | ||
Fuccillo Acquisition [Member] | |||
Business Acquisition [Line Items] | |||
New vehicles | 7,421,724 | ||
Used vehicles | 878,000 | ||
Parts & accessories | 927,012 | ||
Property & equipment | 1,063,914 | ||
Real property | 33,100,000 | ||
Liabilities assumed | |||
Other assets | 198,373 | ||
Total assets acquired | 79,589,023 | ||
Liabilities assumed | |||
We-owes | 25,477 | ||
Total liabilities assumed | 262,186 | ||
Net assets acquired | 79,326,837 | ||
Net Assets Acquired | |||
Franchise rights | 9,800,000 | ||
Goodwill | 26,200,000 | ||
Prepaid maintenance program credit | 226,709 | ||
Customer deposits | 10,000 | ||
Bachman Acquisition [Member] | |||
Business Acquisition [Line Items] | |||
New vehicles | 2,359,207 | ||
Used vehicles | 2,062,522 | ||
Parts & accessories | 210,625 | ||
Property & equipment | 131,416 | ||
Real property | 5,400,000 | ||
Franchise Rights | 200,000 | ||
Tradenames | 1,100,000 | ||
Liabilities assumed | |||
Other assets | 31,248 | ||
Total assets acquired | 12,695,018 | ||
Liabilities assumed | |||
Accrued personal property tax | 2,216 | ||
We-owes | 3,686 | ||
Total liabilities assumed | 19,376 | ||
Net assets acquired | 12,675,642 | ||
Net Assets Acquired | |||
Goodwill | 1,200,000 | ||
Customer deposits | 13,474 | ||
LTO Acquisition [Member] | |||
Business Acquisition [Line Items] | |||
Used vehicles | 4,542,738 | ||
Cash | 46,415 | ||
Property & equipment | 37,017 | ||
Liabilities assumed | |||
Accounts receivable | 4,392,830 | ||
Other assets | 10,904 | ||
Total assets acquired | 9,029,904 | ||
Liabilities assumed | |||
Notes payable | 639,360 | ||
Customer deposits | 118,800 | ||
Accrued liabilities | 72,025 | ||
Total liabilities assumed | 830,185 | ||
Net assets acquired | $ 8,199,719 |
Acquisitions (Details) - Sche_3
Acquisitions (Details) - Schedule of consolidated of operations revenue and operating income attributable to acquired dealership date of acquisition | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Beckley Acquisitions [Member] | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |
Revenue | $ 13,948,744 |
Net income | 655,818 |
Fuccillo Acquisition [Member] | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |
Revenue | 13,876,368 |
Net income | 700,058 |
Bachman Acquisition [Member] | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |
Revenue | 1,085,580 |
Net income | 63,451 |
LTO Acquisition [Member] | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |
Revenue | 480,256 |
Net income | $ 19,466 |
Acquisitions (Details) - Sche_4
Acquisitions (Details) - Schedule of components of redeemable noncontrolling interests | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Schedule of components of redeemable noncontrolling interests [Abstract] | |
Beginning balance | |
Noncontrolling interests issued in connection with Beckley Acquisitions | 1,805,000 |
Net income attributable to noncontrolling interests | 115,733 |
Adjustments to redemption value | 6,361,033 |
Ending balance | $ 8,281,766 |
Acquisitions (Details) - Sche_5
Acquisitions (Details) - Schedule of reconciliation of shareholders’ equity attributable to noncontrolling interests - Acquisition [Member] | Mar. 31, 2021USD ($) |
Class of Warrant or Right [Line Items] | |
Shareholders’ equity attributable to LMP Automotive Holdings, Inc., | $ 35,777,249 |
Shareholders’ equity attributable to noncontrolling interests | 8,281,766 |
Total shareholders’ equity | $ 44,059,015 |
Concentration of Credit Risk (D
Concentration of Credit Risk (Details) | Mar. 31, 2021USD ($) |
Risks and Uncertainties [Abstract] | |
Cash balances in FDIC | $ 250,000 |
Property, Equipment and Lease_3
Property, Equipment and Leasehold Improvements (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 77,087 | $ 22,687 |
Property, Equipment and Lease_4
Property, Equipment and Leasehold Improvements (Details) - Schedule of property, equipment and leasehold improvements - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property, equipment and leasehold improvements | $ 6,401,711 | $ 4,009,910 |
Less: accumulated depreciation and amortization | (305,878) | (228,791) |
Property, equipment and leasehold improvements, net | 6,095,833 | 3,781,119 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and leasehold improvements | 49,435,700 | 435,700 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and leasehold improvements | 277,311 | 153,822 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and leasehold improvements | 3,292,008 | 3,164,300 |
Furniture, fixtures, and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and leasehold improvements | 2,399,213 | 392,262 |
Leasehold and building improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and leasehold improvements | $ 433,179 | $ 299,526 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Software License and Webdesign [Member] | ||
Intangible Assets (Details) [Line Items] | ||
Amortization expense | $ 130,754 | $ 55,747 |
Intangible Assets (Details) - S
Intangible Assets (Details) - Schedule of intangible assets net - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Intangible Assets (Details) - Schedule of intangible assets net [Line Items] | ||
Intangible assets, gross | $ 1,610,695 | $ 1,580,568 |
Less: Accumulated amortization | (600,499) | (469,745) |
Intangible assets, net | 1,010,196 | 1,110,823 |
Intangible Assets | 24,388,654 | 1,110,823 |
Software license [Member] | ||
Intangible Assets (Details) - Schedule of intangible assets net [Line Items] | ||
Intangible assets, gross | 1,350,000 | 1,350,000 |
Website design and other intangibles [Member] | ||
Intangible Assets (Details) - Schedule of intangible assets net [Line Items] | ||
Intangible assets, gross | 260,695 | 230,568 |
Franchise rights [Member] | ||
Intangible Assets (Details) - Schedule of intangible assets net [Line Items] | ||
Intangible Assets | 19,500,000 | |
Tradenames [Member] | ||
Intangible Assets (Details) - Schedule of intangible assets net [Line Items] | ||
Intangible Assets | $ 3,878,458 |
Intangible Assets (Details) -_2
Intangible Assets (Details) - Schedule of future amortization of intangible assets - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Schedule of future amortization of intangible assets [Abstract] | ||
2021 (9 months) | $ 373,364 | |
2022 | 478,412 | |
2023 | 89,254 | |
2024 | 69,166 | |
Total | $ 1,010,196 | $ 1,110,823 |
Goodwill (Details) - Schedule o
Goodwill (Details) - Schedule of carrying value of goodwill | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Schedule of carrying value of goodwill [Abstract] | |
Beginning balance | |
Goodwill acquired from acquisitions | 27,400,000 |
Ending balance | $ 27,400,000 |
Investment in Sales-type Leas_3
Investment in Sales-type Leases (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Investment in Sales-type Leases (Details) [Line Items] | ||
Short-term leases due | 1 year | |
Leasing revenue | $ 2.7 | $ 4.1 |
LTO Holdings, LLC [Member] | ||
Investment in Sales-type Leases (Details) [Line Items] | ||
Equity Method Investment, Ownership Percentage | 51.00% |
Investment in Sales-type Leas_4
Investment in Sales-type Leases (Details) - Schedule of investment in Sales-type Leases - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Sales-type leases: | ||
Minimum lease payments receivable | $ 1,550,231 | $ 1,576,325 |
Unearned income | (277,872) | (576,853) |
Guaranteed residual value of vehicles | 5,538,773 | 10,744,104 |
Total investment in sales-type leases | $ 6,811,132 | $ 11,743,576 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Jul. 08, 2020 | Mar. 23, 2021 | Mar. 31, 2021 | Mar. 31, 2020 |
Related Party Transactions (Details) [Line Items] | ||||
Interest rate | 5.00% | |||
After-Tax of cash distributions | 85.00% | |||
Credit agreement received fund | $ 500,000 | |||
Bears interest | 1.50% | |||
Origination Fee | $ 15,000 | |||
Debt instrument maturity date | Apr. 30, 2021 | |||
Membership [Member] | ||||
Related Party Transactions (Details) [Line Items] | ||||
Interest rate | 15.00% | |||
President and Chief Executive Officer [Member] | ||||
Related Party Transactions (Details) [Line Items] | ||||
Related party transaction, cash | $ 3,600,000 | |||
Kevin West and Associates LLC [Member] | ||||
Related Party Transactions (Details) [Line Items] | ||||
Related party transaction, cash | $ 1,106,046 | |||
Rosciti & Associates LLC LLC [Member] | ||||
Related Party Transactions (Details) [Line Items] | ||||
Related party transaction, cash | 2,140,453 | |||
Mr. Aldahan [Member] | ||||
Related Party Transactions (Details) [Line Items] | ||||
accrued bonus amount | $ 350,000 | |||
Directors [Member] | ||||
Related Party Transactions (Details) [Line Items] | ||||
Vehicle leases | $ 0 | $ 23,590 |
Accounts Payable and Other Cu_3
Accounts Payable and Other Current Liabilities (Details) - Schedule of accounts payable - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Accounts Payable and Other Current Liabilities (Details) - Schedule of accounts payable [Line Items] | ||
Total accounts payable | $ 3,849,882 | $ 273,835 |
Accounts payable [Member] | ||
Accounts Payable and Other Current Liabilities (Details) - Schedule of accounts payable [Line Items] | ||
Total accounts payable | 3,816,676 | 251,118 |
Credit card payable [Member] | ||
Accounts Payable and Other Current Liabilities (Details) - Schedule of accounts payable [Line Items] | ||
Total accounts payable | $ 33,206 | $ 22,717 |
Accounts Payable and Other Cu_4
Accounts Payable and Other Current Liabilities (Details) - Schedule of other current liabilities - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Schedule of other current liabilities [Abstract] | ||
Accrued payroll | $ 1,220,702 | $ 197,635 |
Customer deposits on hand | 274,816 | 82,117 |
Deferred revenues | 1,206,168 | 114,635 |
Insurance payable | 99,081 | |
Sales & other taxes payable | 871,717 | 37,905 |
Accrued legal expenses | 845,287 | 133,032 |
Litigation accrual | 280,000 | 550,000 |
Accrued advertising | 261,644 | |
Accrued interest | 332,915 | |
Accrued lot fees | 290,076 | |
Contingent consideration | 320,606 | |
Other accruals | 792,300 | 217,911 |
Total other current liabilities | $ 6,795,312 | $ 1,333,235 |
Lease Commitments (Details)
Lease Commitments (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Abstract] | ||
Rent expense | $ 144,550 | $ 124,075 |
Lease Commitments (Details) - S
Lease Commitments (Details) - Schedule of operating lease liability | Mar. 31, 2021USD ($) |
Schedule of operating lease liability [Abstract] | |
2021 | $ 424,017 |
2022 | 565,356 |
2023 | 415,339 |
2024 | 342,000 |
2025 | 342,000 |
Thereafter | 1,767,000 |
Total minimum lease payments | 3,855,712 |
Less: amount representing interest | (389,459) |
Present value of future payments | 3,466,253 |
Less: current obligations | (459,291) |
Long-term obligations | $ 3,006,962 |
Vehicle Financing and Notes P_2
Vehicle Financing and Notes Payable (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Vehicle Financing and Notes Payable (Details) [Line Items] | |||||
Amount paid | $ 3,500,000 | ||||
Cash payments, description | the Company financed vehicles previously purchased totaling approximately $2.3 million under two new Note and Security Agreements with 10% cash down payment and financed over 36 months at interest rates ranging from 3.99% to 4.15%. During the third quarter of 2020, the Company financed vehicles totaling approximately $415,500 under a new Note and Security Agreement with 10% cash down payment and financed over 36 months at an interest rate of 4.15%. | During the first quarter of 2020, the Company financed vehicles previously purchased totaling approximately $802,000 under a Note and Security Agreement with no cash down payment and financed over 36 months at an interest rate of 4.09%. | During 2019, the Company purchased vehicles totaling approximately $2.4 million under various Note and Security Agreements with 10% cash down payments and the remaining $2.2 million financed over 36 months at an interest rate of 4.89%. | ||
Amount paid | $ 3,500,000 | ||||
Balance of truist floorplan | $ 53,700,000 | ||||
Net loan amount | 101,300,000 | ||||
Trust bank amount | 95,000,000 | ||||
origination fees | $ 1,900,000 | ||||
Term Loans, description | The principal amount of the term loans shall be repaid in monthly installment of $422,083 in each of the first 12 such monthly installments, increasing to $844,167 for each monthly installment thereafter. Each quarter, beginning with the fiscal quarter ending June 30, 2021, the Company is obligated to repay the Term Loans in an amount equal to 75% of the Company’s Consolidated Excess Cash Flow (as defined in the Credit Agreement) minus the amount of all voluntary prepayments in such fiscal quarter, which shall be reduced to 50% of the Company’s Consolidated Excess Cash Flow if the Company’s Consolidated Leverage Ratio (as defined in the Credit Agreement) is less than 4.00:1.00. Further, the Company is obligated to pay not less than $10.9 million in respect of the term loan on or prior to September 4, 2021. The Term Loan matures on March 4, 2023. | ||||
Credit agreement, description | The Credit Agreement contains financial covenants which require Automotive and its subsidiaries to maintain (i) a Consolidated Leverage Ratio of no greater than 6.00:1.00 until December 31, 2021, and thereafter, 5.00:1.00, (ii) a Consolidated Fixed Charge Coverage Ratio (as defined in the Credit Agreement) of at least 1.20:1.00 and (iii) a Consolidated Trust Equity Percentage (as defined in the Credit Agreement) of at least 20%, in each case, tested quarterly. | ||||
Deposit | $ 10,900,000 | ||||
Total unpaid principal | 96,900,000 | ||||
Accrued interest principal amount | 234,000 | ||||
Accrued interest balance | 152,300,000 | 2,700,000 | |||
Mercedes-Benz Financial [Member] | |||||
Vehicle Financing and Notes Payable (Details) [Line Items] | |||||
Outstanding principal | $ 1,700,000 | 2,000,000 | |||
Maximum [Member] | |||||
Vehicle Financing and Notes Payable (Details) [Line Items] | |||||
Amount paid | $ 10,000,000 | ||||
Asset Purchase Agreement [Member] | First Credit line [Member] | |||||
Vehicle Financing and Notes Payable (Details) [Line Items] | |||||
Line of credit, description | The first line from Sutton Leasing was for $2.4 million at the floating LIBOR rate on the date of the advance, plus 2.80%, or 4.55% interest on the date of the advance, with terms ranging from 24 to 36 months. As of March 31, 2021 and December 31, 2020, the outstanding balance on the Sutton line was approximately $393,742 and $426,155, respectively. | ||||
Asset Purchase Agreement [Member] | Second Credit line [Member] | |||||
Vehicle Financing and Notes Payable (Details) [Line Items] | |||||
Line of credit, description | The second line from The Bancorp Bank is a credit line for funding advances up to $850,000 at the Prime Rate per the Wall Street Journal on the date of the advance plus 2%, but not less than 4% on advances on 48-month terms. The Company used approximately $818,400 at 6.5% interest to purchase vehicles, with terms ranging from 32 to 41 months. As of March 31, 2021 and December 31, 2020, the outstanding balance on the Bancorp Bank line was approximately $843,626 and $248,934, respectively. |
Contingencies (Details)
Contingencies (Details) | Feb. 21, 2021 | Feb. 10, 2020 |
Commitments and Contingencies Disclosure [Abstract] | ||
Contingencies, description | The Company is party to a claim for alleged breach of its license agreement to use garage parking spaces in Miami Beach, Florida, which the Company terminated in April 2019. On February 10, 2020, a partial summary judgment was granted for the plaintiff. The asserted losses by the plaintiff total approximately $224,250, with a potential maximum exposure under the terminated agreement of approximately $580,450. | |
Loss contingency, settlement agreement, description | the Company reached a final settlement and agreed to pay a total of $550,000, $270,000 within 3 days of the final settlement and two payments of $140,000 each on or before June 30, 2021 and September 30, 2021, respectively. The Company made the initial payment required under the agreement on February 8, 2021. |
Equity (Details)
Equity (Details) | 1 Months Ended | 3 Months Ended | ||||
Feb. 28, 2021USD ($)$ / shares$ / itemshares | Feb. 28, 2020USD ($)$ / sharesshares | Mar. 31, 2021$ / sharesshares | Dec. 31, 2020shares | Feb. 29, 2020$ / shares | Dec. 31, 2019$ / shares | |
Equity (Details) [Line Items] | ||||||
Selling shares of common stock | shares | 1,200,000 | |||||
Offering price per share (in Dollars per share) | $ / shares | $ 16 | |||||
Aggregate gross proceeds from offering (in Dollars) | $ | $ 19,200,000 | |||||
Underwriting fees and offering expenses (in Dollars) | $ | $ 17,300,000 | |||||
Issued shares of common stock | shares | 33,183 | |||||
Price per share (in Dollars per share) | $ / shares | $ 14.69 | |||||
Common stock vakue amount (in Dollars) | $ | $ 487,454 | |||||
Cashless exercise share | shares | 942 | |||||
Warrants exercise price (in Dollars per share) | $ / shares | $ 6.25 | $ 20 | ||||
Option exercise price (in Dollars per share) | $ / shares | $ 7.42 | |||||
Issued shares of series A preferred stock | shares | 20,100 | |||||
Common stock issuable upon conversion, description | Currently the shares of common stock issuable upon conversion of the Series A Preferred Stock or the exercise of the related 2021 Warrants would be restricted under Rule 144 of the Securities Act of 1933, as amended. | |||||
Conversion rights description | The number of shares of common stock to be issued in the event of a conversion is determined by dividing the stated value of $1,000 by the conversion price of $17.50, subject to adjustments. | |||||
Maximum [Member] | ||||||
Equity (Details) [Line Items] | ||||||
Options to purchase shares of common stock | shares | 3,000 | |||||
Option exercise price (in Dollars per share) | $ / shares | $ 4.75 | |||||
Minimum [Member] | ||||||
Equity (Details) [Line Items] | ||||||
Options to purchase shares of common stock | shares | 2,000 | |||||
Option exercise price (in Dollars per share) | $ / shares | $ 3.33 | |||||
IPO [Member] | ||||||
Equity (Details) [Line Items] | ||||||
Price per share (in Dollars per share) | $ / shares | $ 6.25 | |||||
Cashless exercise share | shares | 5,000 | |||||
Warrants exercise price (in Dollars per share) | $ / shares | $ 19,490 | |||||
Underwriter [Member] | IPO [Member] | ||||||
Equity (Details) [Line Items] | ||||||
Cashless exercise share | shares | 1,305 | |||||
Warrants exercise price (in Dollars per share) | $ / shares | $ 6.25 | |||||
Chief Operating Officer [Member] | ||||||
Equity (Details) [Line Items] | ||||||
Warrants exercise price (in Dollars per share) | $ / shares | 20,000 | |||||
Option exercise price (in Dollars per share) | $ / shares | $ 8.21 | |||||
Issued shares of common stock | shares | 23,462 | |||||
Chief Financial Officer [Member] | ||||||
Equity (Details) [Line Items] | ||||||
Option exercise price (in Dollars per share) | $ / shares | $ 7.50 | |||||
Series A Preferred Stock [Member] | ||||||
Equity (Details) [Line Items] | ||||||
Cashless exercise share | shares | 861,429 | |||||
Warrants exercise price (in Dollars per share) | $ / shares | $ 21 | |||||
Issued shares of series A preferred stock | shares | 20,100 | |||||
Net proceeds (in Dollars) | $ | $ 20,100,000 | |||||
Net of expenses (in Dollars) | $ | $ 18,700,000 | |||||
Warrants purchased | shares | 861,429 | |||||
Strike price (in Dollars per Item) | $ / item | 21 | |||||
Conversion of preferred stock | shares | 1,148,571 |
Stock Options (Details)
Stock Options (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Stock Options (Details) [Line Items] | |||
Share-based compensation expense | $ 169,042 | $ 79,022 | |
Weighted average remaining contractual term | 2 years 251 days | 2 years 306 days | |
Stock Options [Member] | |||
Stock Options (Details) [Line Items] | |||
Compensation costs related to stock options | $ 1,161,781 | 138,589 | |
Share-based compensation expense | $ 169,042 | $ 79,022 |
Stock Options (Details) - Sched
Stock Options (Details) - Schedule of stock option activity | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Schedule of stock option activity [Abstract] | |
Number of shares outstanding, Beginning | shares | 371,500 |
Weighted average exercise price outstanding, Beginning | $ / shares | $ 7.97 |
Number of shares outstanding, Options granted | shares | 40,000 |
Weighted average exercise price outstanding, Options granted | $ / shares | $ 17.35 |
Number of shares outstanding, Options exercised | shares | (45,000) |
Weighted average exercise price outstanding, Options exercised | $ / shares | $ 7.42 |
Number of shares outstanding, Options forfeited or expired | shares | (39,500) |
Weighted average exercise price outstanding, Options forfeited or expired | $ / shares | |
Number of shares outstanding, Ending | shares | 327,000 |
Weighted average exercise price outstanding, Ending | $ / shares | $ 7.12 |
Number of shares outstanding, Vested | shares | 200,169 |
Weighted average exercise price outstanding, Vested | $ / shares | $ 4.62 |
Number of shares outstanding, Expected | shares | 126,831 |
Weighted average exercise price outstanding, Expected | $ / shares | $ 10.62 |
Purchase Warrants (Details)
Purchase Warrants (Details) - $ / shares | 1 Months Ended | 3 Months Ended | |||
Feb. 28, 2021 | Mar. 31, 2021 | Feb. 29, 2020 | Feb. 28, 2020 | Dec. 31, 2019 | |
Purchase Warrants (Details) [Line Items] | |||||
Warrant to purchase common stock | 36,000 | ||||
Common stock per share (in Dollars per share) | $ 14.69 | ||||
Common stock price per share (in Dollars per share) | $ 6.25 | $ 20 | |||
Warrant to purchase shares | 942 | ||||
Warrants to purchase shares of common stock | 1,305 | ||||
Conversion shares of common stock | 942 | ||||
IPO [Member] | |||||
Purchase Warrants (Details) [Line Items] | |||||
Warrant to purchase common stock | 115,000 | ||||
Common stock per share (in Dollars per share) | $ 6.25 | ||||
Common stock price per share (in Dollars per share) | $ 19,490 | ||||
Warrant to purchase shares | 5,000 | ||||
Series A Preferred Stock [Member] | |||||
Purchase Warrants (Details) [Line Items] | |||||
Common stock price per share (in Dollars per share) | $ 21 | ||||
Warrant to purchase shares | 861,429 |
Purchase Warrants (Details) - S
Purchase Warrants (Details) - Schedule of share purchase warrants - Warrant [Member] - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Purchase Warrants (Details) - Schedule of share purchase warrants [Line Items] | ||
Number of Warrants, outstanding beginning balance | 77,068 | 115,000 |
Weighted Avg. Exercise Price, outstanding beginning balance | $ 10.65 | $ 6.25 |
Number of Warrants, outstanding ending balance | 937,192 | 77,068 |
Weighted Avg. Exercise Price, outstanding ending balance | $ 20.17 | $ 10.65 |
Number of Warrants, Issued | 861,429 | 36,000 |
Weighted Avg. Exercise Price , Issued | $ 21 | $ 20 |
Number of Warrants, Cancelled | (3,268) | |
Weighted Avg. Exercise Price, Cancelled | $ 6.25 | |
Number of Warrants, Exercised | (1,305) | (70,664) |
Weighted Avg. Exercise Price, Exercised | $ 6.25 | $ 8.46 |
Earnings per Share (Details)
Earnings per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Earnings Per Share [Abstract] | ||
Potentially dilutive shares | 2,285,932 | 389,870 |
Earnings per Share (Details) -
Earnings per Share (Details) - Schedule of basic earnings per common share and diluted earnings per share - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Calculation of income for Basic earnings per share: | ||
Net loss attributable to LMP Automotive Holdings | $ (1,668,504) | $ (1,720,188) |
Change in noncontrolling interest redemption value | (6,361,033) | |
Net loss attributable to common shareholders | $ (8,029,537) | $ (1,720,188) |
Weighted average shares of common stock outstanding, basic (in Shares) | 10,040,542 | 9,326,054 |
Basic net loss per share (in Dollars per share) | $ (0.80) | $ (0.18) |
Calculation of income for diluted earnings per share: | ||
Net loss attributable to common shareholders | $ (8,029,537) | $ (1,720,188) |
Weighted average shares of common stock outstanding, basic (in Shares) | 10,040,542 | 9,326,054 |
Weighted average shares of common stock outstanding, diluted (in Shares) | 10,040,542 | 9,326,054 |
Diluted net loss per share (in Dollars per share) | $ (0.80) | $ (0.18) |
Segments (Details) - Schedule o
Segments (Details) - Schedule of financial information on segment - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 33,015,923 | $ 5,349,713 |
Segment net loss – Retail & Fleet | (1,668,504) | (1,720,188) |
New vehicle retail [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 15,925,296 | |
Used vehicle retail [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 7,749,213 | 95,560 |
Used vehicle wholesale [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 2,665,602 | 541,900 |
Finance and insurance, net [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 1,325,197 | |
Service body and parts [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | 1,928,827 | |
Fleet and other [Member] | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 3,421,788 | $ 4,712,253 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - USD ($) | Apr. 01, 2021 | Apr. 30, 2021 | May 05, 2021 |
Subsequent Events (Details) [Line Items] | |||
Aggregate amount paid | $ 24,500,000 | ||
Purchase price percentage | 25.00% | ||
Conversion of stock, description | the Company issued 12,000 shares of common stock in exchange for $47,060 in connection with the exercise of options with exercise prices of $3.33 and $4.75 per share. | ||
Cash | $ 3,200,000 |