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Acquisition | 12 Months Ended
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Dec. 31, 2019
Business Combinations [Abstract] |
Acquisition | NOTE 5 — ACQUISITION On May 20, 2019, ECHG, LLC (“ECHG”) (f/k/a Corrent Resources, LLC), a wholly owned subsidiary of the Company, entered into an asset purchase agreement with each of Echo Environmental, LLC and its wholly owned subsidiary ITAD USA, LLC (collectively, the “Echo Entities”), pursuant to which the Echo Entities agreed to sell all of the assets, rights and interests of the Echo Entities (the “Acquired Assets”) for $6,925,979 (the “Echo Transaction”). The Echo Entities were wholly owned subsidiaries of Elemetal. John R. Loftus is the Company’s CEO, President and Chairman and owned approximately one-third of the equity interests of Elemetal prior to the Echo Transaction. The Company also paid a closing fee of $85,756 that was not part of the purchase price allocation. The fee is included in selling, general and administrative expenses. On the same day, Mr. Loftus became the largest beneficial owner of the Company’s stock by purchasing all of the Company’s stock beneficially owned by Elemetal. As part of the transaction of acquiring the stock from Elemetal, Mr. Loftus no longer owns an equity interest in Elemetal. As an interested party, Mr. Loftus was familiar with the operations of the Echo Entities. In connection with the Echo Transaction, on May 20, 2019, ECHG executed and delivered to Mr. Loftus, a promissory note to which ECHG borrowed from Mr. Loftus $6,925,979, the proceeds of which were used to purchase the Acquired Assets. As part of the Echo Transaction, goodwill was realized of $1,367,109, which is the purchase price less the fair value of the net assets purchased, as shown in the purchase price allocation in the following table. Goodwill is not amortized but evaluated for impairment on an annual basis during the fourth quarter of our fiscal year or earlier if events or circumstances indicate the carrying value may be impaired. The Company’s goodwill is related to the Echo Entities only and not the whole Company. The Company has evaluated goodwill based on cash flows for the Echo Entities’ segment. For federal income tax purposes, goodwill is amortized and deductible over fifteen years. The purchase price was allocated to the fair value of assets and liabilities acquired as follows:
Description |  | Amount |
Assets |  |  |  |
Cash |  | $ | 1,049,462 |
Account receivables |  |  | 1,025,615 |
Inventories |  |  | 1,209,203 |
Prepaids |  |  | 88,367 |
Fixed assets |  |  | 191,208 |
Right-of-use assets |  |  | 2,350,781 |
Intangible Assets |  |  | 3,356,000 |
Other assets |  |  | 88,998 |
Liabilities |  |  |  |
Account payables |  |  | (723,043 | )
Accrued liabilities |  |  | (721,483 | )
Operating lease liabilities |  |  | (2,350,781 | )
Other long-term liabilities |  |  | (5,457 | )
Net assets |  |  | 5,558,870 |
Goodwill |  |  | 1,367,109 |
Total Purchase Price |  | $ | 6,925,979 |
The following pro forma combines the results of the Echo Entities and the Company’s results of operations for the twelve months ended December 31, 2019 and 2018 as if they were combined the entire twelve months:
|  | Pro forma Combined |  |  | Pro forma Combined |
|  | For the Twelve Months Ended |  |  | For the Twelve Months Ended |
|  | December 31, 2019 |  |  | December 31, 2018 |
|  |  | (unaudited) |  |  |  | (unaudited) |
Revenue |  | $ | 87,921,642 |  |  | $ | 86,818,776 |
Income (loss) from continuing operations |  | $ | 1,931,558 |  |  | $ | (2,518 | )
Net income |  | $ | 1,931,558 |  |  | $ | 252,311 |
Basic net income per common share |  | $ | 0.07 |  |  | $ | 0.01 |
Diluted net income per common share |  | $ | 0.07 |  |  | $ | 0.01 |

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
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- References No definition available. + Details
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