Quarterly report pursuant to Section 13 or 15(d)

Acquisitions

v3.7.0.1
Acquisitions
3 Months Ended
Mar. 31, 2017
Acquisitions [Abstract]  
Acquisitions

Note 10 – Acquisitions

 

Acquisition of Business – Unrelated Entity – Three Months Ended March 31, 2017

 

On February 28, 2017, the Company purchased a garbage hauler and roll-off business, servicing both commercial and residential customers in Upstate New York, incorporating it into WRE’s operations. The business was purchased for $420,000.

 

Operations subsequent to February 28, 2017 are included in the accompanying consolidated financial statements. The purchase price of $420,000 included a $270,000, 5 year, 6% owner financed note, collateralized by a portion of the equipment acquired and a $150,000 cash payment. The acquisition has been accounted for using the purchase method of accounting; the $420,000 purchase was allocated as follows:

 

Assets      
Property and Equipment    
Transportation equipment   $ 95,000  
Containers     83,745  
Total property and equipment     178,745  
Amortizable intangible assets        
Customer list     212,953  
5 year non-compete agreement     8,518  
Total amortizable intangible assets     221,471  
Deferred tax assets     19,784  
Total purchase price   $ 420,000  

 

Acquisition of Business – Unrelated Entity - 2016

 

On May 11, 2016, the Company purchased a business in Upstate New York, incorporating it into WRE’s operations. The business was purchased for $230,000.

 

Assets      
Property and Equipment   $ 104,400  
Goodwill and intangible assets        
Customer list     79,547  
5 year, 100 miles non-compete agreement     10,000  
Goodwill     36,053  
Total goodwill and intangible assets     125,600  
Total purchase price   $ 230,000  

 

Related Party Acquisitions - Fiscal Year Ended December 31, 2016

 

Northeast Data Destruction and Recycling, LLC (Northeast Data)

 

On March 31, 2016, the Company acquired Northeast Data, an entity that was 50% owned by the majority shareholder of the Company. Northeast Data offers document shredding and destruction, hard-drive shredding, and cardboard recycling services. The Company’s primary operations are in Kingston, NY. The operations of this acquisition were tucked in to WRE operations and extend the service offerings of WRE to Kingston, NY. WRE will also begin to offer document and hard-drive destruction services in the Kingston area.

 

See the table below summarizing the purchase price paid to the related party owner and the second, non-related party entity:

 

Party

 

Cash

   

Restricted Common Shares

    Value Assigned to Shares ($0.077/share)    

Total
Purchase Price

 
Majority Shareholder – 50% owner   $ -       1,025,000     $ 78,925     $ 78,925  
Non-related entity - 50% owner     100,000       400,000       30,800       130,800  
Total   $ 100,000       1,425,000     $ 109,725     $ 209,725  

 

Operations on and after December 31, 2016 are included in the accompanying consolidated financial statements. The acquisition has been accounted for using the purchase method of accounting. The purchase price of $209,725 was allocated as follows:

 

Property and Equipment      
Transportation equipment   $ 42,000  
Machinery and Equipment     64,500  
Containers     32,000  
Total property and equipment     138,500  
Deferred tax Assets     14,360  
Goodwill and intangible assets        
Customer relationships     135,165  
Non-compete agreement     10,000  
Goodwill   $ 9,609  
Total goodwill and intangible assets     154,774  
         
Assumed Debt     (59,057 )
Deferred tax liability     (38,852 )
Total consideration for acquisition   $ 209,725  

 

The following pro-forma financial results reflect the historical operating results of acquired entities from the period from January 1, 2016 presenting the three months ended March 31, 2017. No adjustments have been made for synergies that may result from the acquisition. These combined results are not necessarily indicative of the results that may have been achieved had the companies been combined as of such dates or periods, or of the Company’s future operations.

 

 

March 31, 2017

    March 31, 2016  
Revenues   $ 1,766,453     $ 1,762,702  
Net income (loss) from continuing operations     (161,423 )     72,344  
Net income (loss)     (142,676 )     (12,876 )
Net income (loss) attributable to common shareholders     (192,676 )     (62,876 )
                 
Income (loss) per share – basic and diluted   $ (0.002 )   $ (0.001 )
Weighted average shares outstanding – basic and diluted     69,060,716       65,568,229