Attached files
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| 8-K/A - AMENDMENT TO CURRENT REPORT - Attis Industries Inc. | f8k042018a1_attisindustries.htm |
Exhibit 99.1
ATTIS INDUSTRIES INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
On April 24, 2018, on April 20, 2018, pursuant to the Equity Securities Purchase Agreement dated February 20, 2018 by and among Attis Industries Inc. (formerly known as Meridian Waste Solutions, Inc.) (the “Company”), Attis Operations Inc. (formerly known as Meridian Waste Operations, Inc.) (“Seller”), Meridian Waste Acquisitions, LLC (“Buyer”), a Delaware limited liability company formed by Warren Equity Partners Fund II, and Jeffrey S. Cosman, an officer, director and majority shareholder of the Company, Buyer purchased from Seller all of the membership interests in each of the direct wholly-owned subsidiaries of Seller (the “Acquired Parent Entities”), which constitute the solid waste business (the “Solid Waste Business”), and each such Acquired Parent Entity continues as a wholly-owned subsidiary of Buyer.
The following unaudited pro forma condensed consolidated financial statements have been derived by the application of pro forma adjustments to the Company’s historical consolidated financial statements, which have been presented to give effect to the disposition of the Solid Waste Business. The unaudited pro forma condensed consolidated balance sheet as of December 31, 2017 is presented as if the disposition had occurred as of December 31, 2017. The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2017 is presented as if the disposition had occurred on January 1, 2017. The unaudited pro forma condensed consolidated balance sheet and statement of operations for these respective periods are being provided for illustrative purposes only and do not purport to represent what our results of operations or financial position would have been if the transaction had occurred on the dates indicated and are not intended to project our results of operations or financial position for any future period. Any of the factors underlying these estimates and assumptions may change or prove to be materially different and the estimates and assumptions may not be representative of facts that existed upon completion of the disposition.
The unaudited pro forma adjustments are based on estimates, available information and certain assumptions that the Company believes are reasonable. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the historical consolidated financial statements and accompanying notes of the Company included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.
MERIDIAN WASTE SOLUTIONS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
| December 31, 2017 | ADJUSTMENTS | NOTES | PRO FORMA | |||||||||||
| Assets | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | 400,223 | 1,300,000 | (a) | $ | 1,700,223 | ||||||||
| Accounts receivable, net of allowance | 861,031 | 861,031 | ||||||||||||
| Prepaid expenses | 334,603 | 334,603 | ||||||||||||
| Other current assets | 6,450 | 6,450 | ||||||||||||
| Current assets held for sale | 8,714,497 | (8,714,497 | ) | (b) | - | |||||||||
| Total current assets | 10,316,804 | (7,414,497 | ) | 2,902,307 | ||||||||||
| Property, plant and equipment, at cost net of accumulated depreciation | 333,499 | 333,499 | ||||||||||||
| Other assets: | ||||||||||||||
| Contract deposits | 536,076 | 536,076 | ||||||||||||
| Other deposits | 162,206 | 162,206 | ||||||||||||
| Goodwill | 5,279,207 | 5,279,207 | ||||||||||||
| Capitalized software | 108,767 | 108,767 | ||||||||||||
| Patents | 3,141,796 | 3,141,796 | ||||||||||||
| Customer list, net of accumulated amortization | 2,718,300 | 2,718,300 | ||||||||||||
| Website, net of accumulated amortization | 27,117 | 27,117 | ||||||||||||
| Total other assets | 11,973,469 | - | 11,973,469 | |||||||||||
| Total noncurrent assets held for sale | 80,932,386 | (80,932,386 | ) | (b) | - | |||||||||
| Total assets | $ | 103,556,158 | $ | (88,346,883 | ) | $ | 15,209,275 | |||||||
| Liabilities and Shareholders’ Deficit | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable | $ | 1,777,355 | $ | 1,777,355 | ||||||||||
| Accrued expenses | 820,458 | 820,458 | ||||||||||||
| Notes payable, related parties | 6,891 | 6,891 | ||||||||||||
| Deferred compensation | - | - | ||||||||||||
| Derivative and other fair value liabilities | 2,307,363 | 2,307,363 | ||||||||||||
| Current portion - capital leases payable | 25,999 | 25,999 | ||||||||||||
| Current portion - long term debt | 8,502,387 | 8,502,387 | ||||||||||||
| Current liabilities held for sale | 84,227,518 | (84,227,518 | ) | (b) | - | |||||||||
| Total current liabilities | 97,667,971 | (84,227,518 | ) | 13,440,453 | ||||||||||
| Long term liabilities: | ||||||||||||||
| Contingent consideration liability | 1,957,226 | 1,957,226 | ||||||||||||
| Deferred tax liability | 14,337 | 14,337 | ||||||||||||
| Deferred rent | 53,418 | 53,418 | ||||||||||||
| Long term debt, net of current | 1,977,707 | 1,977,707 | ||||||||||||
| Noncurrent liabilities held for sale | 17,307,998 | (17,307,998 | ) | (b) | - | |||||||||
| Total long term liabilities | 21,310,686 | (17,307,998 | ) | 4,002,688 | ||||||||||
| Total liabilities | 118,978,657 | (101,535,516 | ) | 17,443,141 | ||||||||||
| Preferred Series C stock redeemable, cumulative, stated value $100 per share, par value $.001, 67,361 shares authorized, 35,750 and 0 shares issued and outstanding, respectively | - | - | ||||||||||||
| Preferred Series E stock, cumulative, stated value $100 per share, par value $.001, 300,000 shares authorized, 300,000 and 0 shares issued and outstanding, respectively | 1,253,476 | 1,253,476 | ||||||||||||
| Shareholders’ deficit: | ||||||||||||||
| Preferred Series A stock, par value $.001, 51 shares authorized, issued and outstanding | - | - | ||||||||||||
| Preferred Series B stock, par value $.001, 71,210 shares authorized, 0 and 71,210 issued and outstanding | - | - | ||||||||||||
| Preferred Series D stock, cumulative, stated value $100 per share, par value $.001, 141,000 shares authorized, 141,000 and 0 shares issued and outstanding, respectively | 531,691 | 531,691 | ||||||||||||
| Common stock, par value $.025, 75,000,000 shares authorized, 14,658,979 and 1,712,471 shares issued and 14,647,749 and 1,700,971 shares outstanding, respectively | 366,156 | 366,156 | ||||||||||||
| Common stock to be issued | 720,147 | 720,147 | ||||||||||||
| Treasury stock, at cost, 11,500 shares | (224,250 | ) | (224,250 | ) | ||||||||||
| Additional paid in capital | 65,532,467 | 65,532,467 | ||||||||||||
| Accumulated deficit | (85,061,593 | ) | 13,188,633 | (c) | (71,872,960 | ) | ||||||||
| Total Meridian Waste Solutions, Inc. shareholders’ deficit | (18,135,382 | ) | (4,946,749 | ) | ||||||||||
| Noncontrolling Interest | 1,459,407 | 1,459,407 | ||||||||||||
| Total shareholders ‘equity | (16,675,975 | ) | 13,188,633 | (3,487,341 | ) | |||||||||
| Total liabilities and shareholders’ deficit | $ | 103,556,158 | $ | 88,346,883 | $ | 15,209,275 | ||||||||
(a) This adjustment represents the receipt of cash consideration at the closing of the transaction, net of $1,700,000 of costs incurred
(b) This adjustment reflects the elimination of assets and liabilities attributable to the waste business
(c) This adjustment reflects the gain of $13,188,633 arising from the transaction as of April 20, 2018. This estimated gain has not been reflected in the pro forma statement of operations as it is considered to be nonrecurring in nature. No adjustment has been made to the sale proceeds to give effect to any potential post-closing adjustments under the terms of the purchase agreement.
MERIDIAN WASTE SOLUTIONS, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
| Year Ended December 31, 2017 | ADJUSTMENTS | NOTES | PRO FORMA | |||||||||||
| Revenue | ||||||||||||||
| Services | $ | 890,258 | $ | 890,258 | ||||||||||
| Total revenue | 890,258 | 890,258 | ||||||||||||
| Cost and expenses: | ||||||||||||||
| Operating | 691,415 | 691,415 | ||||||||||||
| Depreciation and amortization | 223,977 | 223,977 | ||||||||||||
| Impairment expense | 221,146 | 221,146 | ||||||||||||
| Selling, general and administrative | 13,198,096 | 13,198,096 | ||||||||||||
| Total cost and expenses | 14,334,634 | 14,334,634 | ||||||||||||
| Other income (expenses): | ||||||||||||||
| Unrealized gain (loss) on change in fair value of derivative and other fair value liabilities | (992,115 | ) | (992,115 | ) | ||||||||||
| Unrealized gain from change in fair value of contingent consideration | 263,458 | 263,458 | ||||||||||||
| Gain on extinguishment of debt | 2,911,417 | 2,911,417 | ||||||||||||
| Interest income | 7,644 | 7,644 | ||||||||||||
| Interest expense | (620,923 | ) | (620,923 | ) | ||||||||||
| Total other income (expenses) | 1,569,481 | 1,569,481 | ||||||||||||
| Loss before income taxes | (11,874,895 | ) | (11,874,895 | ) | ||||||||||
| Provision for income taxes | (14,337 | ) | (14,337 | ) | ||||||||||
| Loss from continuing | $ | (11,889,232 | ) | $ | (11,889,232 | ) | ||||||||
| Discontinued Operations | ||||||||||||||
| Loss from operations of discontinued operations | $ | (27,148,257 | ) | 27,148,257 | (d) | - | ||||||||
| Consolidated Net Loss | $ | (39,037,489 | ) | $ | (11,889,232 | ) | ||||||||
| Net loss attributable to noncontrolling interest | $ | 123,523 | $ | 123,523 | ||||||||||
| Net loss available to common shareholders | $ | (39,161,012 | ) | $ | (12,012,755 | ) | ||||||||
| Deemed dividend related to beneficial conversion feature and accretion of a discount on Series C Preferred Stock | $ | (2,115,317 | ) | $ | (2,115,317 | ) | ||||||||
| Stock dividend related to Series C Preferred Stock | $ | (135,072 | ) | $ | (135,072 | ) | ||||||||
| Deemed dividend related to issuance of Series D Preferred Stock | $ | (531,692 | ) | $ | (531,692 | ) | ||||||||
| Stock dividend related to issuance of Series D Preferred Stock | $ | (106,874 | ) | $ | (106,874 | ) | ||||||||
| Deemed dividend related to issuance of Series E Preferred Stock | $ | (1,253,476 | ) | $ | (1,253,476 | ) | ||||||||
| Stock dividend related to issuance of Series E Preferred Stock | $ | (703,168 | ) | $ | (703,168 | ) | ||||||||
| Net loss attributable to common stockholders | $ | (44,006,611 | ) | $ | (16,858,354 | ) | ||||||||
| Earnings per common share (basic and diluted): | ||||||||||||||
| Loss from continuing operations | (1.77 | ) | (1.77 | ) | ||||||||||
| Loss from discontinued operations | (2.86 | ) | - | |||||||||||
| Net loss per common share | $ | (4.63 | ) | $ | (1.77 | ) | ||||||||
| Weighted average number of shares outstanding | ||||||||||||||
| (Basic and Diluted) | 9,547,042 | 9,547,042 | ||||||||||||
(d) This adjustment reflects the elimination of our waste business, which was classified as discontinued operations