NOTE 11 - DISCONTINUED OPERATIONS

In order to increase access to cost-effective growth capital to help create shareholder value in our biomass innovation and healthcare businesses, in the fourth quarter of 2017, the Company committed to a plan to make available for immediate sale the waste management business. Management engaged in an active program to market the business which culminated with the reaching of a binding sales agreement in February 2018. Pursuant to the purchase Agreement, upon the closing of the Transaction, Buyer will pay Seller Parties $3.0 million in cash; satisfy $75.8 million of outstanding indebtedness under the Credit Agreement; and assume the Acquired Entities’ obligations under certain equipment leases and other operating indebtedness. At the Closing, Meridian will issue to Buyer a warrant to purchase shares of common stock, par value $0.025, of Meridian, equal to two percent of the issued and outstanding shares of capital stock of Meridian on a fully-diluted basis as of Closing (subject to adjustment as set forth in the Purchase Agreement) on such terms to be determined by Meridian and Buyer.

As all the required criteria for held for sale classification was met at December 31, 2017, the waste management business is classified as held for sale in the Consolidated Balance Sheets and reflected as discontinued operations in the Consolidated Statements of Operations for all periods presented. Included in these results are the operations of a consolidated variable interest entity. See note 15.

The assets held for sale represent that entirety of the Mid-Atlantic and Midwest waste management segments historically disclosed by the Company. The Company will have no continuing involvement with the discontinued operations after the disposal date.

The following table contains select amounts reported in our Consolidated Statements of Income as discontinued operations:

Major Class of line items constituting pretax (loss) of discontinued operations:

	Years ended December 31,
	2017			2016

Total revenues		54,249,493			31,727,673
Total costs and expenses
Operating		38,823,945			20,119,447
Depreciation, depletion and amortization		20,421,905			7,587,034
Selling, general and administrative		6,735,843			4,679,149
Impairment Expense		6,014,213			1,255,267
Interest Expense		8,475,979			4,246,520
Other		901,050			(915,759	)
Total costs and expenses		81,372,935			36,971,658
Pretax Loss from discontinued operations		(27,123,442	)		(5,243,985	)
(Provision) benefit for income taxes		(24,815	)		(193,482	)
Loss from discontinued operations		(27,148,257	)		(5,437,467	)

The following table presents the carrying value of the major categories of assets and liabilities of our waste business that are reflected as held for sale on our consolidated balance sheets at December 31, 2017 and 2016, respectively.

	December 31,
	2017		2016

Carrying amounts of the major classes of assets included in discontinued operations:
Current assets:
Cash		596,993		723,850
Short Term Investments - Restricted		-		1,953,969
Accounts Receivable		6,748,980		2,540,657
Other current assets		1,368,524		212,582
Total current assets held for sale		8,714,497		5,431,058

Noncurrent assets:
Property, plant and equipment		38,513,198		17,017,413
Landfill assets		19,781,123		3,278,817
Intangible assets		15,212,904		14,676,429
Goodwill		7,234,420		7,234,420
Other assets		190,741		190,521
Total noncurrent assets:		80,932,386		42,397,600

Carrying amounts of the major classes of liabilities included in discontinued operations:
Current liabilities:
Accounts payable and accrued expenses		6,950,590		2,827,048
Deferred revenue		5,501,273		3,431,869
Derivative Liability		-		1,133,373
Current portion of capital leases		1,490,431		-
Current portion of long term debt		1,450,506		1,635,380
Total current liabilities		15,392,800		9,027,670

Noncurrent liabilities:
Asset retirement obligation		2,623,899		5,299
Deferred tax liability		218,297		193,482
Capital leases payable, net of current		7,531,538		-
Long term debt, net of current		75,768,982		36,586,105
Total noncurrent liabilities		86,142,716		36,784,886

The following table presents the depreciation, amortization, accretion, capital expenditures and impairment expense for the discontinued operations for the years ended December 31, 2017 and 2016, respectively and also any significant operating or investing non-cash items for the years ended December 31, 2017 and 2016, respectively.

	December 31,
	2017		2016

Depreciation and amortization		20,421,905		7,587,034
Accretion expense		415,562		-
Impairment expense		6,014,213		1,255,267
Capital expenditures		3,250,000		6,200,000

Significant Noncash Operating and Investing Activities Related to Discontinued Operations

	December 31,
	2017		2016

Note payable incurred for acquisition		34,100,000		-
Common stock issued for acquisition		1,251,000		-
Property, plant and equipment additions financed by notes payable and capital leases		6,763,190		-