Acquisitions

6 Months Ended

Jun. 30, 2018

Business Combinations [Abstract]

ACQUISITIONS

NOTE 3 – ACQUISITIONS

FLUX CARBON LLC JVCO ACQUISITION TRANSACTION

Effective May 25, 2018 (the “Closing Date”), the Company, Innovations, the Company’s wholly-owned subsidiary, GreenShift, and GreenShift’s wholly-owned subsidiary, GS CleanTech, and Candent Corporation (“Candent”) among others, entered into a SPA and related transaction documents pursuant to which Attis acquired 80% of the membership interest units (“80% Units”) of JVCo, and $10,000,000 of GreenShift’s subordinate secured debt, in exchange for an earn-out based purchase price equal to the greater of (i) $18,000,000 (“Floor Price”); (ii) five (5) times Company’s Consolidated EBITDA during 2018, 2019, and 2020; (iii) four (4) times Company’s Consolidated EBITDA during 2021, 2022, and 2023; (iv) three (3) times Company’s Consolidated EBITDA during 2024 and 2025; (v) two (2) times Company’s Consolidated EBITDA during 2026; or (vi), one (1) times Company’s Consolidated EBITDA during 2027. The agreements additionally call for Attis to pay $200,000 over sixty days, and for GreenShift to pay certain working capital surplus equal to about $200,000 to the Company. An initial payment against the SPA purchase price was paid at Closing in the form of 2,000,000 restricted shares of Attis’s common stock and 180,000 shares of Attis’s Series G Stock. GreenShift is required to use the first proceeds received upon sale of the shares to pay or refinance its senior secured debt. In connection with closing under the SPA, 100% of the issued and outstanding equity of Advanced Lignin Biocomposites LLC (“ALB”) and 49% of the issued and outstanding equity of Genarex FD LLC (“GFD”) was transferred to JVCo.

The SPA transaction documents also include an Amended and Restated Limited Liability Attis Operating Agreement and a Management Agreement (“Company Agreements”) under which GreenShift and CleanTech have in essence ‘outsourced’ its operations to the Company, which the parties have agreed to fully capitalize to meet a number of specific objectives, including servicing the continuing and future needs of licensees, investing in growth with the parties’ combined intellectual properties, protecting GreenShift’s intellectual properties, and supporting all pending and future litigation for infringement and related matters. The Company agreements further require that no distributions shall be paid by the Company prior to the date on which GreenShift’s senior secured lender is fully paid.

On and subject to the terms and conditions of the SPA and related transaction documents, at the Closing, GreenShift issued to Attis a subordinate secured convertible debenture in the original principal amount of $10,000,000 (“Debenture”). Commencing November 22, 2018, the Debenture shall be convertible into GreenShift’s common stock at the sole and exclusive option of the holder in one or more installments up to 9.9% of the GreenShift’s issued and outstanding common stock at the time of conversion (when taken with any other shares of GreenShift common stock held by the holder at the time of conversion). The Debenture converts into GreenShift common stock at the greater of (i) $0.10 per share or (ii) 100% of the lowest closing market price per share for the GreenShift common stock for the thirty (30) Trading Days preceding conversion. The Debenture shall accrue interest at the lesser of 2% or the minimum allowable rate under applicable law and shall be waived if the GreenShift Debenture is converted or otherwise fully paid on or before June 30, 2028. The Debenture shall be exclusively paid in the form of GreenShift common stock, provided, however, that the principal balance due under the Debenture shall be reduced on a dollar for dollar basis in an amount equal to any distributions paid as provided for in the SPA and Company Agreements.

Effective May 25, 2018, Attis Industries, Inc. acquired 4,900 membership interest units of GFD corresponding to 49% of the issued and outstanding equity of GFD. The remaining 51% of GFD is owned by Sutra, which entity holds the super-majority voting and management control of GFD.

GFD was formed as a research and development platform for developing sustainable bio-based products for the plastics industry. GFD takes low cost by-products from the corn ethanol industry and has developed cost effective additives for the plastics industry. This drives the cost of plastics down using renewable non-fossil fuel-based feedstock.

The following table summarizes the estimated fair value of the JVCo assets acquired at the date of acquisition:

Long-term Note receivable		10,000,000
Intangible Intellectual Property		18,000,000
Purchase price	$	28,000,000

The acquisition was accounted for in accordance with ASC 805, Business Combinations. The standard allows for provisional amounts to be recorded related to a business combination in the event the accounting is yet to be compete at the end of a reporting period. Entities have up to one year from the effective date of a business combination, referred to a s a measurement period, to adjust any provisional amounts recorded. The Company is finalizing the estimate of fair value amounts in connection with this acquisition. The completion of the fair value assessment of assets acquired is anticipated to be finalized before the measurement period. The measurement period for this acquisition ends on May 25, 2019. The Company will disclose any changes to the accounting of the acquisition, if any, in future reporting periods.

The following tables set forth certain unaudited pro forma consolidated financial data for the three months ended 6/30/18 and 6/30/17 and for the six months ended 6/30/18 and 6/30/17. We have derived the data from unaudited Condensed Consolidated Financial Statements that, in the opinion of management, reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of such quarterly information. The operating results for any period are not necessarily indicative of the results to be expected for any future period. These results are updated for continuing operations.

	Three Months Ended June 30, 2018		Six Months Ended June 30, 2018			3 Months Ended June 30, 2017			Six Months Ended June 30, 2017
Revenue
Services	$	281,782	$	1,070,000		$	-		$	-
Total revenue		281,782		1,070,000			-			-
Income (loss) from continuing operations	$	841,355	$	(1,941,955	)	$	(2,362,877	)	$	(2,415,074	)