Attis Industries Inc. - FORM 8-K/A - EX-99.4 - UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF EAGLE RIDGE LANDFILL, LLC - 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-99.2 - UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF CHRISTIAN DISPOSAL - Attis Industries Inc.mrdn_ex992.htm
EX-99.3 - AUDITED CONSOLIDATED BALANCE SHEET OF EAGLE RIDGE LANDFILL, LLC - Attis Industries Inc.mrdn_ex993.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 99.4
 

EAGLE RIDGE LANDFILL, LLC
(A BUSINESS OF WCA WASTE CORPORATION)

UNAUDITED
CARVE-OUT

FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED
 SEPTEMBER 30, 2015 AND 2014
 
 
 
 
 
EAGLE RIDGE LANDFILL, LLC
(A BUSINESS OF WCA WASTE CORPORATION)

UNAUDITED
CARVE-OUT
FINANCIAL STATEMENTS

TABLE OF CONTENTS
 
 
  Page
FINANCIAL STATEMENTS  
   
Unaudited Carve-Out Balance Sheets 1
   
Unaudited Carve-Out Statements of Operations 2
   
Unaudited Carve-Out Statements of Cash Flows 3
   
Notes to the Unaudited Carve-Out Financial Statements 4
 
 
 
 
 
EAGLE RIDGE LANDFILL, LLC
  
(A BUSINESS OF WCA WASTE CORPORATION)
  
UNAUDITED CARVE-OUT BALANCE SHEETS
  
SEPTEMBER 30, 2015 AND DECEMBER 31, 2014
  
             
             
   
September 30,
    
December 31,
  
   
2015
    
2014
  
Assets
  
(UNAUDITED)
        
             
Current assets:
            
Cash
   $ 200     $ 200  
Accounts receivable, net of allowance of $0 and $239, respectively
     177,990       351,377  
Prepaid expenses
     12,938       6,283  
                 
Total current assets
     191,128       357,860  
                 
Property, plant and equipment:
                
At cost, net of accumulated depreciation of $2,676,328 and $2,584,386, respectively
     1,769,412       1,229,636  
                 
Total assets
   $ 1,960,540     $ 1,587,496  
                 
                 
Liabilities and Member's Equity
                
                 
Current liabilities:
                
Accounts payable and accrued expenses
   $ 55,267     $ 4,256  
                 
Long term liabilities:
                
Asset recovery obligation
 
     346       328  
                 
Total liabilities
     55,613       4,584  
                 
Member's equity:
                
Member's equity
     1,904,927       1,582,912  
                 
Total liabilities and member's equity
   $ 1,960,540     $ 1,587,496  
 
See accompanying notes to the financial statements.
 
 
- 1 -
 
 
EAGLE RIDGE LANDFILL, LLC
(A BUSINESS OF WCA WASTE CORPORATION)
UNAUDITED CARVE-OUT STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014
             
             
   
2015
    
2014
  
   
(UNAUDITED)
    
(UNAUDITED)
  
             
Revenue
   $ 1,292,973     $ 1,363,364  
                 
Cost of sales and services
                
Cost of sales and services
     662,510       665,591  
Depreciation
     286,177       225,907  
                 
Total Cost of sales and services
     948,687       891,498  
                 
Gross profit
     344,286       471,866  
                 
Expenses
                
Compensation and related expense
     149,611       92,917  
Depreciation and amortization
     2,100       2,332  
Selling, general and administrative
     41,007       42,090  
                 
Total operating expenses
     192,718       137,339  
                 
Other income:
                
Gain on disposal of assets
     -       46,000  
                 
Total other income
     -       46,000  
                 
Net income
   $ 151,568     $ 380,527  
 
See accompanying notes to the financial statements.
 
 
- 2 -
 
 
EAGLE RIDGE LANDFILL, LLC
(A BUSINESS OF WCA WASTE CORPORATION)
UNAUDITED CARVE-OUT STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014
             
             
   
2015
    
2014
  
   
(UNAUDITED)
    
(UNAUDITED)
  
             
Cash flows from operating activities:
            
Net income
   $ 151,568     $ 380,527  
Adjustments to reconcile net income to net cash provided from
               
in operating activities:
                
Depreciation and amortization
     288,277       228,239  
Gain on disposal of assets
     -       (46,000 )
Change in asset recovery obligation
     18       27  
Changes in working capital items:
                
Accounts receivable
     173,387       (33,736 )
Prepaid expense
     (6,655 )     40,546  
Accounts payable and accrued expenses
     51,011       50,231  
                 
Net cash provided from operating activities
     657,606       619,834  
                 
Cash flows from investing activities:
                
Proceeds from disposal of property, plant and equipment
     -       46,000  
Net investment in site development
     (765,529 )     (242,409 )
Acquisition of property, plant and equipment
     (62,523 )     (422,641 )
                 
Net cash used in investing activities
     (828,052 )     (619,050 )
                 
Cash flows from financing activities:
                
Member's deemed contribution and (deemed distribution)
     170,446       (784 )
                 
Net cash provided from and (used in) financing activities
     170,446       (784 )
                 
Net change in cash
     -       -  
                 
Beginning cash - January 1
     200       200  
                 
Ending cash - September 30
   $ 200     $ 200  
                 
Supplemental Disclosures of Cash Flow Information:
                
                 
Cash paid for income tax
   $ -     $ -  
                 
Cash paid for interest
   $ -     $ -  
 
See accompanying notes to the financial statements.
 
 
- 3 -
 
 
EAGLE RIDGE LANDFILL, LLC
(A BUSINESS OF WCA WASTE CORPORATION)

NOTES TO THE UNAUDITED CARVE-OUT FINANCIAL STATEMENTS
SEPTEMBER 30, 2015 AND DECEMBER 31, 2014

Note 1 -
Nature of Business and Summary of Significant Accounting Policies (Continued)

 
Nature of Business

 
WCA Waste Corporation (WCA) entered into an Asset Purchase Agreement (the Agreement) with Meridian Waste Solutions, Inc. (the Buyer), which provides for the sale of certain assets of WCA, pertaining to the Eagle Ridge Landfill, LLC (herein referred to as “ERL”, the “Company”). The sale closed on December 22, 2015.

 
The accompanying carve-out financial statements of  ERL were prepared for the purpose of assisting the Buyer in complying with the rules and regulations of the Securities and Exchange Commission and are not intended to be a complete presentation of ERL’s assets, liabilities, equity, revenues, expenses, and cash flows.

 
Eagle Ridge Landfill, LLC (ERL), a subsidiary of WCA Waste Corporation (“WCA”), is a landfill involved in the processing and disposal of non-hazardous solid waste.  The landfill is operated in Bowling Green, MO.

 
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. The financial statements have been prepared on a carve-out basis from the financial statements and accounting records of WCA using the historical results of operations and historical cost basis of the assets and liabilities that comprise the Company.

 
Carve-Out Financial Statements

 
The historical results of operations, financial position, member equity and cash flows of the Company may not be indicative of what they actually would have been had the Company been a separate stand-alone entity, nor are they indicative of what the Company’s results of operations, financial position, member equity and cash flows may be in the future. The carve-out financial statements have been prepared to demonstrate the historical results of operations, financial position, member equity and cash flows of the Company for the indicated years under WCA’s management. Accordingly, the carve-out financial statements do not reflect the presentation and classification of the Company’s operations in the same manner as WCA.

 
The Company receives services and support from various functions performed by WCA. All costs are generally allocated using specific identification and include corporate administrative expenses, finance, legal, tax, treasury and other corporate services. These allocated costs are recorded in selling, general and administrative expenses to related party in the accompanying carve-out financial statements. All related party transactions which resulted in intercompany balances at year end are noted in the carve-out Balance Statements as deemed contributions or deemed distributions from WCA.
 
 
 
 
- 4 -
 

EAGLE RIDGE LANDFILL, LLC
(A BUSINESS OF WCA WASTE CORPORATION)

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

 
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.
 
 
 
The Company provides an allowance for doubtful accounts equal to the estimated collection losses that will be incurred in collection of receivables related to residential customers and commercial project invoices.  The estimated losses are based on managements’ evaluation of outstanding accounts receivable at the end of the accounting period.

 
At September 30, 2015 and December 31, 2014, ERL had balances of approximately $178,000 and $351,000 of net receivables, respectively.

 
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.

Fair value of financial instruments

 
In accordance with ASC 820, financial instruments, including cash, accounts receivable, prepaid expenses, accounts payable and accrued expenses are carried at cost, which approximates fair value, due to the short-term nature of these instruments.
 
 
 
There were no triggering events that required fair value measurements of the Company’s nonfinancial assets and liabilities for the nine months ended September 30, 2015 or for the fiscal year ended December 31, 2014.
 
 
- 5 -
 
 
EAGLE RIDGE LANDFILL, LLC
(A BUSINESS OF WCA WASTE CORPORATION)

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

 
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 nine months ended September 30, 2015 or for the fiscal year ended December 31, 2014.

 
Revenue recognition

 
The Company recognizes revenue upon the receipt and acceptance of non-hazardous industrial and municipal waste at its landfill.

Cost of sales/services

 
The Company includes all direct costs associated with the processing and disposal of non-hazardous solid waste.  This includes but is not limited to employment costs, maintenance, supplies, and property taxes.

 
Advertising costs

 
Advertising costs are expensed as incurred and totaled approximately $1,000 for the nine months ended September 30, 2015 and 2014, respectively.
 
 
 
 
- 6 -
 
 
EAGLE RIDGE LANDFILL, LLC
(A BUSINESS OF WCA WASTE CORPORATION)

NOTES TO THE UNAUDITED CARVE-OUT FINANCIAL STATEMENTS
SEPTEMBER 30, 2015 AND DECEMBER 31, 2014
 
Note 1 -
Nature of Business and Summary of Significant Accounting Policies (Continued)
 
 
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
  
Vehicles and equipment
   $
525,150
     $ 661,504  
Building and improvements
   
3,290
     
3,290
  
Land and Landfill development costs
   
3,904,983
      
3,137,430
  
Furniture and Fixtures     12,317       11,798  
                 
Total cost
    
4,445,740
     
3,814,022
  
                 
Less accumulated depreciation
    
(2,676,328
 )    
(2,584,386
 )
                 
Undepreciated cost
   $
1,769,412
     $
1,229,636
  
 
Depreciation expense was approximately $288,000 and $229,000 for the nine months ended September 30, 2015 and 2014, respectively.
 
 
- 7 -
 
 
EAGLE RIDGE LANDFILL, LLC
(A BUSINESS OF WCA WASTE CORPORATION)

NOTES TO THE UNAUDITED CARVE-OUT FINANCIAL STATEMENTS
SEPTEMBER 30, 2015 AND DECEMBER 31, 2014
 
Note 3 -
Landfill Accounting

Capitalized landfill costs

 
Cost Basis of Landfill Assets — We capitalize various costs that we incur to make a landfill ready to accept waste. These costs generally include expenditures for land (including the landfill footprint and required landfill buffer property); permitting; excavation; liner material and installation; landfill leachate collection systems; landfill gas collection systems; environmental monitoring equipment for groundwater and landfill gas; and directly related engineering, capitalized interest, on-site road construction and other capital infrastructure costs. The cost basis of our landfill assets also includes asset retirement costs, which represent estimates of future costs associated with landfill final capping, closure and post-closure activities. These costs are discussed below.

 
Final capping, closure and post-closure costs — Following is a description of our asset retirement activities and our related accounting:

●   
Final capping — Involves the installation of flexible membrane liners and geosynthetic clay liners, drainage and compacted soil layers and topsoil over areas of a landfill where total airspace capacity has been consumed. Final capping asset retirement obligations are recorded on a units-of-consumption basis as airspace is consumed related to the specific final capping event with a corresponding increase in the landfill asset. Each final capping event is accounted for as a discrete obligation and recorded as an asset and a liability based on estimates of the discounted cash flows and capacity associated with each final capping event.

●   
Closure — Includes the construction of the final portion of methane gas collection systems (when required), demobilization and routine maintenance costs. These are costs incurred after the site ceases to accept waste, but before the landfill is certified as closed by the applicable state regulatory agency. These costs are recorded as an asset retirement obligation as airspace is consumed over the life of the landfill with a corresponding increase in the landfill asset. Closure obligations are recorded over the life of the landfill based on estimates of the discounted cash flows associated with performing closure activities.

●   
Post-closure — Involves the maintenance and monitoring of a landfill site that has been certified closed by the applicable regulatory agency. Generally, we are required to maintain and monitor landfill sites for a 30-year period. These maintenance and monitoring costs are recorded as an asset retirement obligation as airspace is consumed over the life of the landfill with a corresponding increase in the landfill asset. Post-closure obligations are recorded over the life of the landfill based on estimates of the discounted cash flows associated with performing post-closure activities.

 
We develop our estimates of these obligations using input from our operations personnel, engineers and accountants. Our estimates are based on our interpretation of current requirements and proposed regulatory changes and are intended to approximate fair value. Absent quoted market prices, the estimate of fair value is based on the best available information, including the results of present value techniques. In many cases, we contract with third parties to fulfill our obligations for final capping, closure and post
 
 
- 8 -
 
 
EAGLE RIDGE LANDFILL, LLC
(A BUSINESS OF WCA WASTE CORPORATION)

NOTES TO THE UNAUDITED CARVE-OUT FINANCIAL STATEMENTS
SEPTEMBER 30, 2015 AND DECEMBER 31, 2014
 
Note 3
-
Landfill Accounting (Continued)

 
closure. We use historical experience, professional engineering judgment and quoted and actual prices paid for similar work to determine the fair value of these obligations. We are required to recognize these obligations at market prices whether we plan to contract with third parties or perform the work ourselves. In those instances where we perform the work with internal resources, the incremental profit margin realized is recognized as a component of operating income when the work is performed.

 
Once we have determined the final capping, closure and post-closure costs, we inflate those costs to the expected time of payment and discount those expected future costs back to present value. During the nine months ended September 30, 2015 and the fiscal year ended December 31, 2014; we inflated these costs in current dollars until the expected time of payment using an inflation rate of 2.5%. We discounted these costs to present value using the credit-adjusted, risk-free rate effective at the time an obligation is incurred, consistent with the expected cash flow approach. Any changes in expectations that result in an upward revision to the estimated cash flows are treated as a new liability and discounted at the current rate while downward revisions are discounted at the historical weighted average rate of the recorded obligation. As a result, the credit-adjusted, risk-free discount rate used to calculate the present value of an obligation is specific to each individual asset retirement obligation. The weighted average rate applicable to our long-term asset retirement obligations at September 30, 2015 and December 31, 2014 is approximately 8.50%.

 
We record the estimated fair value of final capping, closure and post-closure liabilities for our landfills based on the capacity consumed through the current period. The fair value of final capping obligations is developed based on our estimates of the airspace consumed to date for each final capping event and the expected timing of each final capping event. The fair value of closure and post-closure obligations is developed based on our estimates of the airspace consumed to date for the entire landfill and the expected timing of each closure and post-closure activity. Because these obligations are measured at estimated fair value using present value techniques, changes in the estimated cost or timing of future final capping, closure and post-closure activities could result in a material change in these liabilities, related assets and results of operations. We assess the appropriateness of the estimates used to develop our recorded balances annually, or more often if significant facts change.
 
 
- 9 -
 
 
EAGLE RIDGE LANDFILL, LLC
(A BUSINESS OF WCA WASTE CORPORATION)

NOTES TO THE UNAUDITED CARVE-OUT FINANCIAL STATEMENTS
SEPTEMBER 30, 2015 AND DECEMBER 31, 2014
 
Note 3 -
Landfill Accounting (Continued)

 
Changes in inflation rates or the estimated costs, timing or extent of future final capping, closure and post-closure activities typically result in both (i) a current adjustment to the recorded liability and landfill asset and (ii) a change in liability and asset amounts to be recorded prospectively over either the remaining capacity of the related discrete final capping event or the remaining permitted and expansion airspace (as defined below) of the landfill. Any changes related to the capitalized and future cost of the landfill assets are then recognized in accordance with our amortization policy, which would generally result in amortization expense being recognized prospectively over the remaining capacity of the final capping event or the remaining permitted and expansion airspace of the landfill, as appropriate. Changes in such estimates associated with airspace that has been fully utilized result in an adjustment to the recorded liability and landfill assets with an immediate corresponding adjustment to landfill airspace amortization expense.
 
Interest accretion on final capping, closure and post-closure liabilities is recorded using the effective interest method and is recorded as final capping, closure and post-closure expense, which is included in “Operating” expenses within our Statements of Operations.

 
Amortization of landfill assets — The amortizable basis of a landfill includes (i) amounts previously expended and capitalized; (ii) capitalized landfill final capping, closure and post-closure costs; (iii) projections of future purchase and development costs required to develop the landfill site to its remaining permitted and expansion capacity and (iv) projected asset retirement costs related to landfill final capping, closure and post-closure activities.

 
Amortization is recorded on a units-of-consumption basis, applying expense as a rate per ton. The rate per ton is calculated by dividing each component of the amortizable basis of a landfill by the number of tons needed to fill the corresponding asset’s airspace.

 
We apply the following guidelines in determining a landfill’s remaining permitted and expansion airspace:

●   
Remaining permitted airspace — Our engineers, in consultation with third-party engineering consultants and surveyors, are responsible for determining remaining permitted airspace at our landfills. The remaining permitted airspace is determined by an annual survey, which is used to compare the existing landfill topography to the expected final landfill topography.

●   
Expansion airspace — We also include currently unpermitted expansion airspace in our estimate of remaining permitted and expansion airspace in certain circumstances. First, to include airspace associated with an expansion effort, we must generally expect the initial expansion permit application to be submitted within one year and the final expansion permit to be received within five years. Second, we must believe that obtaining the expansion permit is likely, considering the following criteria:

o  
Personnel are actively working on the expansion of an existing landfill, including efforts to obtain land use and local, state or provincial approvals;
o  
We have a legal right to use or obtain land to be included in the expansion plan;
 
 
- 10 -
 
 
EAGLE RIDGE LANDFILL, LLC
(A BUSINESS OF WCA WASTE CORPORATION)
 
NOTES TO THE UNAUDITED CARVE-OUT FINANCIAL STATEMENTS
SEPTEMBER 30, 2015 AND DECEMBER 31, 2014
 
Note 3 -
Landfill Accounting (Continued)

o  
There are no significant known technical, legal, community, business, or political restrictions or similar issues that could negatively affect the success of such expansion; and
o  
Financial analysis has been completed based on conceptual design, and the results demonstrate that the expansion meets Company criteria for investment.

 
For unpermitted airspace to be initially included in our estimate of remaining permitted and expansion airspace, the expansion effort must meet all of the criteria listed above. These criteria are evaluated by our field-based engineers, accountants, managers and others to identify potential obstacles to obtaining the permits. Once the unpermitted airspace is included, our policy provides that airspace may continue to be included in remaining permitted and expansion airspace even if certain of these criteria are no longer met as long as we continue to believe we will ultimately obtain the permit, based on the facts and circumstances of a specific landfill.

When we include the expansion airspace in our calculations of remaining permitted and expansion airspace, we also include the projected costs for development, as well as the projected asset retirement costs related to final capping, closure and post-closure of the expansion in the amortization basis of the landfill.

 
Once the remaining permitted and expansion airspace is determined in cubic yards, an airspace utilization factor (“AUF”) is established to calculate the remaining permitted and expansion capacity in tons. The AUF is established using the measured density obtained from previous annual surveys and is then adjusted to account for future settlement. The amount of settlement that is forecasted will take into account several site-specific factors including current and projected mix of waste type, initial and projected waste density, estimated number of years of life remaining, depth of underlying waste, anticipated access to moisture through precipitation or recirculation of landfill leachate, and operating practices. In addition, the initial selection of the AUF is subject to a subsequent multi-level review by our engineering group, and the AUF used is reviewed on a periodic basis and revised as necessary. Our historical experience generally indicates that the impact of settlement at a landfill is greater later in the life of the landfill when the waste placed at the landfill approaches its highest point under the permit requirements.

 
After determining the costs and remaining permitted and expansion capacity at each of our landfill, we determine the per ton rates that will be expensed as waste is received and deposited at the landfill by dividing the costs by the corresponding number of tons. We calculate per ton amortization rates for the landfill for assets associated with each final capping event, for assets related to closure and post-closure activities and for all other costs capitalized or to be capitalized in the future. These rates per ton are updated annually, or more often, as significant facts change.

It is possible that actual results, including the amount of costs incurred, the timing of final capping, closure and post-closure activities, our airspace utilization or the success of our expansion efforts could ultimately turn out to be significantly different from our estimates and assumptions. To the extent that such estimates, or related assumptions, prove to be significantly different than actual results, lower profitability may be experienced due to higher amortization rates or higher expenses; or higher profitability may result if the opposite occurs. Most significantly, if it is determined that expansion capacity should no longer be considered in calculating the recoverability of a landfill asset, we may be
 
 
- 11 -
 
 
EAGLE RIDGE LANDFILL, LLC
(A BUSINESS OF WCA WASTE CORPORATION)

NOTES TO THE UNAUDITED CARVE-OUT FINANCIAL STATEMENTS
SEPTEMBER 30, 2015 AND DECEMBER 31, 2014
 
Note 3 -
Landfill Accounting (Continued)
 
required to recognize an asset impairment or incur significantly higher amortization expense. If at any time management makes the decision to abandon the expansion effort, the capitalized costs related to the expansion effort are expensed immediately.
 
Note 4 -
Concentrations
 
During the nine month period ended September 30, 2015, one customer accounted for approximately 30% of the Company’s revenues. Two customers accounted for approximately 65% of the Company’s accounts receivable balance at September 30, 2015.

 
During the nine months ended September 30, 2014, one customer accounted for approximately 30% of the Company’s revenues. Two customers accounted for approximately 65% 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 -
Related Party Transactions
 
 
 
The Company had sales to an affiliate, Eagle Ridge Hauling Business, which involved the processing and disposal of non-hazardous solid waste. The amounts of sales to related parties were approximately $169,000 and $268,000 at September 30, 2015 and 2014, respectively.
 
Note 7 -
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, Meridian Land Company, LLC a wholly-owned subsidiary of Meridian Waste Solutions, Inc., purchased certain assets as of November 13, 2015. Pursuant to which Meridian Land purchased from Eagle Ridge Landfill, LLC (Eagle) a landfill located in Pike County, Missouri and certain of the assets, rights and properties related to such business of Eagle, including certain debts, in exchange for $9,506,500, subject to a working capital adjustment. The Purchase Agreement contains typical representations, warranties and covenants.


 - 12 -
 

Attis Industries Inc. Reports