Attis Industries Inc. - FORM 8-K/A - EX-99.2 - UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF CHRISTIAN DISPOSAL - March 30, 2016

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8-K/A - AMENDMENT TO CURRENT REPORT - Attis Industries Inc.mrdn_8ka.htm
EX-99.6 - UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE EAGLE RIDGE HAULING BUSINESS - Attis Industries Inc.mrdn_ex996.htm
EX-99.3 - AUDITED CONSOLIDATED BALANCE SHEET OF EAGLE RIDGE LANDFILL, LLC - Attis Industries Inc.mrdn_ex993.htm
EX-99.4 - UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF EAGLE RIDGE LANDFILL, LLC - Attis Industries Inc.mrdn_ex994.htm
EX-99.7 - UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET OF MERIDIAN WASTE SOLUTIONS, INC. AND ITS SUBSIDIARIES - Attis Industries Inc.mrdn_ex997.htm
EX-99.1 - AUDITED CONSOLIDATED BALANCE SHEET OF CHRISTIAN DISPOSAL LLC - Attis Industries Inc.mrdn_ex991.htm
EX-99.5 - AUDITED CONSOLIDATED BALANCE SHEET OF HAULING BUSINESS OF THE EAGLE RIDGE HAULING BUSINESS - Attis Industries Inc.mrdn_ex995.htm
Exhibit 99.2
 

 
 
CHRISTIAN DISPOSAL, LLC
AND SUBSIDIARY

UNAUDITED
CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 2015 and 2014
 
 
 
 
 
CHRISTIAN DISPOSAL, LLC AND SUBSIDIARY

UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
TABLE OF CONTENTS
 
  Page
CONSOLIDATED FINANCIAL STATEMENTS  
   
Unaudited Consolidated Balance Sheets 1
   
Unaudited Consolidated Statements of Operations 2
   
Unaudited Consolidated Statements of Cash Flows 3
   
Notes to the Unaudited Consolidated Financial Statements 4
 
 
 
 
 
CHRISTIAN DISPOSAL, LLC AND SUBSIDIARY
             
UNAUDITED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2015 AND DECEMBER 31, 2014
             
             
   
September 30,
    
December 31,
  
   
2015
    
2014
  
Assets  
(UNAUDITED)
      
             
Current assets:
            
Cash
   $ 714,858     $ 182,784  
Accounts receivable, net of allowance of $456,633 and $456,633, respectively
     1,013,355       1,153,269  
Prepaid expenses
     90,020       214,302  
                 
Total current assets
     1,818,233       1,550,355  
                 
Property, plant and equipment
                
At cost, net of accumulated depreciation of $8,521,348 and $7,666,308, respectively
     4,045,139       4,148,282  
                 
Other assets:
                
Deposits
     -       20,000  
                 
Total other assets
     -       20,000  
                 
Total assets
   $ 5,863,372     $ 5,718,637  
                 
                 
Liabilities and Member's Equity
                
                 
Current liabilities:
                
Accounts payable and accrued expenses
   $ 1,002,622     $ 246,058  
Deferred revenue
     920,942       948,826  
Current portion of long-term debt
     300,697       308,814  
                 
Total current liabilities
     2,224,261       1,503,698  
                 
Long-term debt, net of current portion
     395,342       622,126  
                 
Total liabilities
     2,619,603       2,125,824  
                 
Member's equity:
                
Member's equity
     3,243,769       3,592,813  
                 
Total liabilities and member's equity
   $ 5,863,372     $ 5,718,637  
 
See accompanying notes to the financial statements.
 
 
- 1 -
 
 
CHRISTIAN DISPOSAL, LLC AND SUBSIDIARY
             
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014
             
             
   
2015
    
2014
  
   
(UNAUDITED)
    
(UNAUDITED)
  
             
Revenue
   $ 9,526,773     $ 9,412,564  
                 
Cost of sales and services:
                
Cost of sales and services
     5,975,787       6,220,728  
Depreciation
     784,486       756,039  
                 
Total cost of sales and services
     6,760,273       6,976,767  
                 
Gross profit
     2,766,500       2,435,797  
                 
Expenses:
                
Compensation and related expense
     403,071       398,895  
Depreciation and amortization
     60,164       59,758  
Selling, general and administrative
     1,366,780       1,258,189  
                 
Total expenses
     1,830,015       1,716,842  
                 
Other income (expenses):
                
Gain on disposal of assets
     -       4,918  
Miscellaneous income
     45,000       2,339  
Interest (expense)
     (27,225 )     (21,337 )
                 
Total other income (expenses)
     17,775       (14,080 )
                 
Net income
   $ 954,260     $ 704,875  
 
See accompanying notes to the financial statements.
 
 
- 2 -
 
 
CHRISTIAN DISPOSAL, LLC AND SUBSIDIARY
             
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014
             
             
   
2015
    
2014
  
   
(UNAUDITED)
    
(UNAUDITED)
  
             
Cash flows from operating activities:
            
Net income
   $ 954,260     $ 704,875  
Adjustments to reconcile net income to net cash provided
                
from operating activities:
                
Depreciation and amortization
     844,650       815,797  
Gain on disposal of assets
     -       (4,918 )
Other assets
     20,000       30,000  
Changes in working capital items:
                
Accounts receivable
     139,914       (139,436 )
Prepaid expenses
     124,282       (43,295 )
Accounts payable and accrued expenses
     756,564       124,752  
Deferred revenue
     (27,883 )     (109,133 )
                 
Net cash provided from operating activities
     2,811,787       1,378,642  
                 
Cash flows from investing activities:
                
Proceeds from sale of property, plant and equipment
     -       4,919  
Acquisition of property, plant and equipment
     (741,507 )     (721,832 )
                 
Net cash used in investing activities
     (741,507 )     (716,913 )
                 
Cash flows from financing activities:
                
Principal payments on notes payable
     (234,901 )     (6,360 )
Member's contributions
     118,792       47,856  
Member's distributions
     (1,422,097 )     (946,963 )
                 
Net cash used in financing activities
     (1,538,206 )     (905,467 )
                 
Net change in cash
     532,074       (243,738 )
                 
Beginning cash - January 1
     182,784       633,598  
                 
Ending cash - September 30
   $ 714,858     $ 389,860  
                 
                 
                 
Supplemental Disclosures of Cash Flow Information:
                
                 
Cash paid for income tax
   $ -     $ -  
                 
Cash paid for interest
   $ -     $ -  
 
See accompanying notes to the financial statements.
 
 
- 3 -
 
 
CHRISTIAN DISPOSAL, LLC AND SUBSIDIARY

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2015 AND DECEMBER 31, 2014
 
Note 1
-
Nature of Business and Summary of Significant Accounting Policies

 
Nature of Business

 
Christian Disposal LLC and its affiliates (the “Company”) provide waste management services, including collection, transfer, recycling and disposal services. The Company’s customers include residential, commercial and municipal customers in the St. Louis area and surrounding counties.

 
Principles of Consolidation

 
The unaudited consolidated financial statements consist of the accounts of Christian Disposal LLC., consolidated with the results of FWCD, LLC (“FWCD”). All significant intercompany accounts and transactions have been eliminated in combination.

 
On January 31, 2013 an Operating Agreement for Hwy 79 became effective between FWCD, as its sole Member and Manager.

 
Basis of Presentation

 
The Company follows accounting standards set by the Financial Accounting Standards Board (“FASB”) in ASC 115, Generally Accepted Accounting Principles, which establishes the FASB Accounting Standards Codification (“ASC”), as the sole source of authoritative U.S. generally, accepted accounting principles.

 
Concentration of credit risk

 
The Company generates accounts receivable in the normal course of business and grants credit to customers and does not require collateral to secure accounts receivable.

 
Cash

 
The Company maintains cash accounts, which are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At times, cash balances may be in excess of the FDIC insurance limits.

 
Accounts receivable

 
Accounts receivable are recorded at management’s estimate of net realizable value. Management evaluates the adequacy of the allowance for doubtful accounts based on historical customer trends, type of customer, such as municipal or commercial, the age of the outstanding receivables and existing economic conditions. Accounts are written off when all collection efforts have been exhausted.
 
 
- 4 -
 
 
CHRISTIAN DISPOSAL, LLC AND SUBSIDIARY

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2015 AND DECEMBER 31, 2014
 
Note 1
-
Nature of Business and Summary of Significant Accounting Policies (Continued)

 
Property, plant and equipment

 
Property and equipment is stated at cost. Repairs and maintenance costs are expensed as incurred and additions and improvements that significantly extend the lives of assets are capitalized. Upon disposition, cost and accumulated depreciation are eliminated from the related accounts and any gain or loss is reflected in the statement of operations. Depreciation is computed on a straight-line basis over the estimated useful lives of the assets of three to thirty-nine years.

Deferred revenue

 
Deferred revenue represents amounts billed to customers in advance of services performed.

Fair value of financial instruments

 
In accordance with ASC 820, financial instruments, including cash, accounts receivable, prepaid expenses, accounts payable and accrued expenses and deferred revenue are carried at cost, which approximates fair value, due to the short-term nature of these instruments.
 
 
 
The Company has determined the fair value of notes payable through the use of significant other observable inputs. The carrying value of the Company’s notes payable approximates fair value based on current rates offered for debt with similar terms.
 
 
 
There were no triggering events that required fair value measurements of the Company’s nonfinancial assets and liabilities at September 30, 2015 and December 31, 2014.

 
Long-lived assets

 
If facts and circumstances suggest that a long-lived asset may be impaired, the carrying value is reviewed. If this review indicates that the carrying value of the asset will not be recovered, as determined based on projected undiscounted cash flows related to the asset over its remaining life, the carrying value of the asset is reduced to its estimated fair value. There were no impairment charges for the year ended September 30, 2015 or December 31, 2014.

 
Revenue recognition

 
The Company recognizes revenue from fees charged for waste collection, transfer, disposal, and recycling services. The fees charged are generally defined in service agreements and vary based on contract-specific terms such as frequency of service and general market factors influencing a municipality’s rates. The fees charged generally include fuel surcharges based on changes in market prices for fuel. Revenue is recognized as services are performed. Certain services are billed prior to performance, such as on a quarterly basis.

 
- 5 -
 
 
CHRISTIAN DISPOSAL, LLC AND SUBSIDIARY

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2015 AND DECEMBER 31, 2014
 
Note 1
-
Nature of Business and Summary of Significant Accounting Policies (Continued)

 
These advance billings are included in deferred revenue and recognized as revenue in the period the service is provided.

 
Advertising costs

 
Advertising costs are expensed as incurred and totaled approximately $1,000 for the years ended September 30, 2015 and 2014 respectively.
 
 
 
Income taxes

 
As a limited liability company, the Company is not subject to U.S. federal, state, or local income taxes. Rather, income taxes related to the Company’s operations are the responsibility of its member. As a single member limited liability company, the Company does not file separate income tax returns, rather all income and expense is reported on the member’s personal income tax return.

 
Use of estimates

 
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets, liabilities, revenues, expenses, and the disclosure of contingent assets and liabilities. Accordingly, actual results could differ from those estimates.

Note 2             -    Property, Plant and Equipment

The principal categories of property, plant and equipment may be summarized as follows:

   
September 30,
2015
    
December 31,
2014
  
Land
   $
187,939
     $ 164,173  
Building and improvements
    
1,312,902
      
1,212,375
  
Office equipment
    
294,836
      
276,491
  
Vehicles and equipment
    
10,770,810
      
10,161,551
  
                 
Total cost
    
12,566,487
      
11,814,590
  
                 
Less accumulated depreciation
    
(8,521,348
 )    
(7,666,308
 )
                 
Undepreciated cost
   $
4,045,139
     $
4,148,282
  
 
Depreciation expense was approximately $845,000 and $815,000 for the years ended September 30, 2015 and 2014, respectively.

 
- 6 -
 
 
CHRISTIAN DISPOSAL, LLC AND SUBSIDIARY

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2015 AND DECEMBER 31, 2014

Note 3             -    Notes Payable and Long-Term Debt

Notes payable consisted of the following:
 
   
September 30,
2015
    
December 31,
2014
  
             
Note payable - financing company, secured by equipment, payable in monthly installments of $10,044, including principal and interest at 4.65%, due November 2016
   $ 136,612     $ 220,607  
                 
Note payable - financing company, secured by equipment, payable in monthly installments of $5,836, including principal and interest at 4.29%, due September 2017
     133,989       181,346  
                 
Note payable - financing company, secured by equipment, payable in monthly installments of $2,899, including principal and interest at 5.75%, due December 2015
     -       -  
                 
Note payable - individual, secured by equipment, payable in monthly installments of $1,500, non-interest bearing, paid in full in 2014
     -       -  
                 
Note payable - financing company, secured by equipment, payable in monthly installments of $3,268, including principal and interest at 4.57%, due July 2020
     137,661       161,892  
                 
Note payable - financing company, secured by equipment, payable in monthly installments of $6,821, including principal and interest at 4.35%, due December 2019
     247,646       300,000  
                 
Capitalized lease - financing company, secured by equipment, payable in monthly installments of $1,170, including principal and interest at 4.75%, through August 2018
     40,131       67,095  
                 
Total     696,039       665,893  
                 
Less current portion of long-term debt     300,697       308,814  
                 
Total debt reflected as long-term   $ 395,342     $ 622,126  

 
- 7 -
 
 
CHRISTIAN DISPOSAL, LLC AND SUBSIDIARY

NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 2015 AND DECEMBER 31, 2014
 
Note 3
-
Notes Payable and Long-Term Debt (Continued)

 
Interest expense was approximately $27,000 and $21,000 for the years ended September 30, 2015 and 2014, respectively.

Note 4
-
Concentrations

 
During the year ended September 30, 2015, one customer accounted for approximately 10% of the Company’s revenues. One customer accounted for approximately 16% of the Company’s accounts receivable balance at September 30, 2015.

 
During the year ended September 30, 2014, one customer accounted for approximately 10% of the Company’s revenues. One customer accounted for approximately 13% of the Company’s accounts receivable balance at December 31, 2014.

Note 5
-
Risks and Uncertainties

 
While there are no material pending legal proceedings to which the Company is a party, the Company is involved in various claims, legal actions and regulatory proceedings arising in the ordinary course of business. In the opinion of the Company’s management, the resolution of these matters will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.

Note 6
-
Subsequent Events

 
In accordance with ASC 855, the Company has evaluated subsequent events through March 29, 2016, which is the date the financial statements were available to be issued and has determined that the following would be include as subsequent events.

 
Effective December 22, 2015, the Company was purchased by Meridian Waste Solutions, Inc., for thirteen million dollars (Christian Purchase Agreement).

 
Pursuant to the Christian Purchase Agreement, and simultaneous with the closing thereof, Christian Disposal, and the Company entered into that certain Employment Agreement with Patrick McLaughlin, pursuant to which Mr. McLaughlin will serve as Area Vice President of Business Development and Marketing for Christian Disposal, for a term of five years (the “Employment Agreement”).
 
 
 - 8 -

Attis Industries Inc. Reports