EX-99.4 16 hsmg_ex994.htm PRO FORMA CONDENSED COMBINED FINANCIAL hsmg_ex994.htm

EXHIBIT 99.4

 

On June 14, 2019, Healthcare Solutions Management Group, Inc., a Delaware corporation, and successor in interest to Verity Delaware Inc., a Delaware corporation which was previously a Nevada corporation named Verity Corp. (“we,” “us, “our” or the “Company”) entered into a Merger Agreement (the “Merger Agreement”) by and between the Company, Verity Merger Corp., a wholly-owned subsidiary of the Company and a Delaware corporation (the “Merger Sub”), and Healthcare Solutions Holdings, Inc., a Delaware corporation (“HSH”). Pursuant to the terms of the Merger Agreement, the parties agreed that Merger Sub would merge with and into HSH, with HSH being the surviving entity and becoming a wholly-owned subsidiary of the Company (the “Merger”).

 

The Merger closed on April 15, 2021 and upon the effective time of the Merger, the Company filed a certificate of merger and among Merger Sub and HSH, pursuant to which (i) HSH’s certificate of incorporation became the certificate of incorporation of the surviving company, (ii) HSH’s bylaws became the bylaws of the surviving company, (iii) HSH’s directors immediately prior to the effectiveness of the Merger became the directors of the surviving company and (iv) HSH’s officers immediately prior to the effectiveness of the Merger became the officers of the surviving company and pursuant to which Merger Sub merged with and into HSH with HSH being the surviving entity, and HSH became our wholly owned subsidiary. As a result of the consummation of the Merger, HSH became our wholly owned subsidiary and the business of HSH became the business of the Company going forward.

 

The unaudited pro forma combined financial statements presented below are prepared using recapitalization accounting for the Reverse Merger. Pro forma adjustments which give effect to certain transactions occurring as a direct result of the Reverse Merger are described in the accompanying unaudited notes presented on the following pages.

 

The unaudited pro forma combined balance sheets are prepared as though the Reverse Merger occurred at the close of business on September 30, 2020 and December 31, 2020, respectively. The unaudited pro forma combined statements of operations give effect to the Reverse Merger as though it had occurred on October 1, 2019, and October 1, 2020, respectively.

 

The unaudited pro forma combined financial statements have been prepared for illustrative purposes only and are not necessarily indicative of the consolidated financial position or results of operations in future periods or the results that actually would have been realized had the Company and HSH been a combined company during the specified periods. The unaudited pro forma combined financial statements, including the notes thereto, are qualified in their entirety by reference to, and should be read in conjunction with, the historical financial statements of HSH included herein and the historical financial statements of the Company included in its Annual Report on Form 10-KT for the fiscal year ended September 30, 2020 as filed with the United States Securities and Exchange Commission (“SEC”) on January 20, 2021 and in its Quarterly Report on Form 10-Q for the three months ended December 31, 2020 as filed with the SEC on February 22, 2021.

 

 
1

 

 

Healthcare Solutions Management Group Inc. and Healthcare Solutions Holdings, Inc.

        Unaudited Proforma Consolidated Balance Sheets

             For the Year Ended  September 30, 2020

 

 

 

Healthcare

 

 

Healthcare

 

 

 

 

 

 

 

Solutions

 

 

Solutions

 

 

 

 

 

 

 

Management

 

 

Holdings,

 

 

 

 

 

 

 

Group, Inc

 

 

Inc.

 

 

 

 

 

 

 

September 30,

 

 

September 30,

 

 

 

 

 

 

 

2020

 

 

2020

 

 

Adjustments

 

 

  Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

 $ 165

 

 

 $ 841,183

 

 

 

 

 

 $ 841,348

 

Accounts receivable/Other receivable

 

 

 -

 

 

 

 74,622

 

 

 

 

 

 

 74,622

 

Prepaid expenses

 

 

 -

 

 

 

 60,666

 

 

 

 

 

 

 60,666

 

Investments

 

 

 -

 

 

 

 83,087,469

 

 

 

 

 

 

 83,087,469

 

Equipment

 

 

 -

 

 

 

 587,083

 

 

 

 

 

 

 587,083

 

Total Assets

 

 $ 165

 

 

 $ 84,651,023

 

 

 

 

 

 $ 84,651,188

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES & STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

 $ 88,064

 

 

 $ -

 

 

 

 

 

 $ 88,064

 

Accounts payable related party

 

 

 -

 

 

 

 20,250

 

 

 

 

 

 

 20,250

 

PPP loan

 

 

 -

 

 

 

 210,500

 

 

 

 

 

 

 210,500

 

Receiver certificate

 

 

 65,000

 

 

 

 -

 

 

 

 (65,000 )(a)

 

 

 -

 

Notes payable

 

 

 215,323

 

 

 

 250,000

 

 

 

 (215,323 )(b)

 

 

 250,000

 

Interest payable

 

 

 16,877

 

 

 

 16,215

 

 

 

 (16,877 )(a)

 

 

 16,215

 

Notes payable related party

 

 

 4,001,267

 

 

 

 9,446,348

 

 

 

 (4,001,267 )(b)

 

 

 9,446,348

 

Total current liabilities

 

 

 4,386,531

 

 

 

 9,943,313

 

 

 

 (4,298,467 )

 

 

 10,031,377

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

 4,386,531

 

 

 

 9,943,313

 

 

 

 (4,298,467 )

 

 

 10,031,377

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred Stock Class A

 

 

 -

 

 

 

 18

 

 

 

 (18 )

 

 

 

 

Preferred Stock Class B

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 

Preferred Stock Class C

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 

 

Preferred Stock Class D

 

 

 -

 

 

 

 10

 

 

 

 (10 )

 

 

 

 

Common stock

 

 

 127,333

 

 

 

 1,000

 

 

 

 1,144,998 (c)

 

 

 1,273,331

 

Additional paid in capital

 

 

 11,657,533

 

 

 

 86,055,989

 

 

 

 3,153,497 (a)(b)(c)

 

 

 100,867,019

 

Accumulated other comprehensive income

 

 

 -

 

 

 

 (1,137,548 )

 

 

 

 

 

 

 (1,137,548 )

Retained earnings (deficit)

 

 

 (16,171,231 )

 

 

 (10,211,758 )

 

 

 

 

 

 

 (26,382,989 )

Total Stockholders' (Deficit)

 

 

 (4,386,366 )

 

 

 74,707,710

 

 

 

 4,298,467

 

 

 

 74,619,812

 

Total Liabilities and Stockholders' (Equity)

 

 $ 165

 

 

 $ 84,651,023

 

 

 

 (0 )

 

 $ 84,651,188

 

 

(a) To write-off related party receiver loan and interest as a result of the merger

(b) To write-off related party debt due to the expiration of the statute of limitations and court actions

(c) To reflect the issuance of 1,145,997,555 shares of Healthcare Solutions Management's common stock pursuant to the Exchange Ratio in the merger agreement of 114.599574. As part of the transaction all preferred stock of Healthcare Solutions Holdings was cancelled.

 

 
2

 

   

Healthcare Solutions Management Group Inc. and Healthcare Solutions Holdings, Inc.

Unaudited Proforma Statements of Operations

For the Year Ended September 30, 2020

 

 

 

September 30,

 

 

September 30,

 

 

 

 

 

 

 

2020

 

 

2020

 

 

Adjustments

 

 

  Consolidated

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

 $ -

 

 

 $ 3,524,334

 

 

 

 

 

 

 3,524,334

 

COGS

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 -

 

Gross profit

 

 

 -

 

 

 

 3,524,334

 

 

 

 

 

 

 3,524,334

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Administrative expenses

 

 

 3,094,239

 

 

 

 1,654,591

 

 

 

 

 

 

 4,748,830

 

Contractors expenses

 

 

 

 

 

 

 4,900,139

 

 

 

 

 

 

 4,900,139

 

Total operating expenses

 

 

 3,094,239

 

 

 

 6,554,730

 

 

 

 

 

 

 9,648,969

 

(Loss) from operations

 

 

 (3,094,239 )

 

 

 (3,030,397 )

 

 

 

 

 

 (6,124,636 )

Other expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 -

 

Other (expense) net

 

 

 (1,616 )

 

 

 -

 

 

 

 

 

 

 (1,616 )

Income (loss) before provision for income taxes

 

 

 (3,095,855 )

 

 

 (3,030,397 )

 

 

 

 

 

 (6,126,252 )

Provision for income taxes

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 -

 

Net (Loss)

 

 $ (3,095,855 )

 

 $ (3,030,397 )

 

 

 

 

 $ (6,126,252 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings(loss) per common share

 

 $ (0.05 )

 

 $ (0.30 )

 

 

 

 

 $ (0.00 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding

 

 

 56,331,039

 

 

 

 10,000,000

 

 

 

 1,206,999,561 (a)

 

 

 1,273,330,600

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income: loss

 

 

 

 

 

 $ (3,030,397 )

 

 

 (3,095,855 )

 

 

 (6,126,252 )

Unrealized investment gain or loss

 

 

 

 

 

 

 (8,954,575 )

 

 

 

 

 

 

 (8,954,575 )

Comprehensive income (loss):

 

 

 

 

 

 $ (11,984,972 )

 

 

 

 

 

 

 (11,984,972 )

 

(a) To adjust share count to final merger consideration

 

 
3

 

   

Healthcare Solutions Management Group Inc. and Healthcare Solutions Holdings, Inc.

Unaudited Proforma Consolidated Balance Sheets

For the Three Months Ended December 31, 2020

   

 

 

Healthcare

 

 

Healthcare

 

 

 

 

 

 

 

 

 

Solutions

 

 

Solutions

 

 

 

 

 

 

 

 

 

Management

 

 

Holdings,

 

 

 

 

 

 

 

 

 

Group, Inc

 

 

Inc.

 

 

 

 

 

 

 

 

 

December 31,

 

 

December 31,

 

 

 

 

 

 

 

 

 

2020

 

 

2020

 

 

    Adjustments

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

 $ 3,643

 

 

 $ 429,561

 

 

 

 

 

 $ 433,204

 

Accounts receivable/Other receivable

 

 

 -

 

 

 

 160,906

 

 

 

 

 

 

 160,906

 

Prepaid expenses

 

 

 -

 

 

 

 60,666

 

 

 

 

 

 

 60,666

 

Investments

 

 

 -

 

 

 

 89,244,250

 

 

 

 

 

 

 89,244,250

 

Equipment

 

 

 -

 

 

 

 1,462,083

 

 

 

 

 

 

 1,462,083

 

Total Assets

 

 $ 3,643

 

 

 $ 91,357,467

 

 

 

 

 

 $ 91,361,110

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES & STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

 $ 88,064

 

 

 $ -

 

 

 

 

 

 $ 88,064

 

Accounts payable related party

 

 

 3,500

 

 

 

 796

 

 

 

 

 

 

 4,296

 

PPP loan

 

 

 -

 

 

 

 210,500

 

 

 

 

 

 

 210,500

 

Receiver certificate

 

 

 65,000

 

 

 

 -

 

 

 

 (65,000 )(a)

 

 

 -

 

Notes payable

 

 

 215,323

 

 

 

 250,000

 

 

 

 (215,323 )(b)

 

 

 250,000

 

Interest payable

 

 

 18,511

 

 

 

 16,215

 

 

 

 (18,511 )(a)

 

 

 16,215

 

Notes payable related party

 

 

 4,001,267

 

 

 

 10,489,614

 

 

 

 (4,001,267 )(b)

 

 

 10,489,614

 

Total current liabilities

 

 

 4,391,665

 

 

 

 10,967,125

 

 

 

 (4,300,101 )

 

 

 11,058,689

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

 4,391,665

 

 

 

 10,967,126

 

 

 

 (4,300,101 )

 

 

 11,058,690

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 -

 

Commitments and contingencies

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 -

 

Preferred Stock Class A

 

 

 -

 

 

 

 18

 

 

 

 (18 )

 

 

 -

 

Preferred Stock Class B

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 -

 

Preferred Stock Class C

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 

 -

 

Preferred Stock Class D

 

 

 -

 

 

 

 10

 

 

 

 (10 )

 

 

 -

 

Common stock

 

 

 127,333

 

 

 

 1,000

 

 

 

 1,144,998 (c)

 

 

 1,273,331

 

Additional paid in capital

 

 

 11,657,533

 

 

 

 86,055,989

 

 

 

 3,155,131 (a)(b)(c)

 

 

 100,868,653

 

Accumulated other comprehensive income

 

 

 -

 

 

 

 5,019,233

 

 

 

 

 

 

 

 5,019,233

 

Retained earnings (deficit)

 

 

 (16,172,887 )

 

 

 (10,685,909 )

 

 

 

 

 

 

 (26,858,796 )

Total Stockholders' (Deficit)

 

 

 (4,388,022 )

 

 

 80,390,341

 

 

 

 4,300,101

 

 

 

 80,302,421

 

Total Liabilities and Stockholders' (Equity)

 

 $ 3,643

 

 

 $ 91,357,467

 

 

 

 -

 

 

 $ 91,361,110

 

 

(a) To write-off related party receiver loan and interest as a result of the merger

(b) To write-off related party debt due to the expiration of the statute of limitations and court actions

(c) To reflect the issuance of 1,145,997,555 shares of Healthcare Solutions Management's common stock pursuant to the Exchange Ratio in the merger agreement of 114.599574. As part of the transaction all preferred stock of Healthcare Solutions Holdings was cancelled.

 

 
4

 

 

Healthcare Solutions Management Group Inc. and Healthcare Solutions Holdings, Inc.

Unaudited Proforma statements of Operations

For the Three Months Ended December 31, 2020

 

 

 

December 31,

 

 

December 31,

 

 

 

 

 

 

 

 

 

2020

 

 

2020

 

 

Adjustments

 

 

Consolidated

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

 $ -

 

 

 $ 1,697,297

 

 

 

 

 

 $ 1,697,297

 

COGS

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 -

 

Gross profit

 

 

 -

 

 

 

 1,697,297

 

 

 

 

 

 

 1,697,297

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Administrative expenses

 

 

 22

 

 

 

 531,119

 

 

 

 

 

 

 531,141

 

Contractors expenses

 

 

 

 

 

 

 1,640,329

 

 

 

 

 

 

 1,640,329

 

     Total operating expenses

 

 

 22

 

 

 

 2,171,448

 

 

 

 

 

 

 2,171,470

 

(Loss) from operations

 

 

 (22 )

 

 

 (474,150 )

 

 

 

 

 

 (474,172 )

Other expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

         Other (expense) net

 

 

 (1,634 )

 

 

 -

 

 

 

 

 

 

 (1,634 )

Income (loss) before provision for income taxes

 

 

 (1,656 )

 

 

 (474,150 )

 

 

 

 

 

 (475,806 )

         Provision for income taxes

 

 

 -

 

 

 

 -

 

 

 

 

 

 

 -

 

Net (Loss)

 

 $ (1,656 )

 

 $ (474,150 )

 

 

 

 

 

 (475,806 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings(loss) per common share

 

 $ (0.00 )

 

 $ (0.05 )

 

 

 

 

 $ (0.00 )

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding

 

 

 127,333,060

 

 

 

 10,000,000

 

 

 

 1,135,997,540 (a)

 

 

 1,273,330,600

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income: loss

 

 

 

 

 

 $ (474,150 )

 

 

 (1,656 )

 

 $ (475,806 )

Unrealized investment gain or loss

 

 

 

 

 

 

 6,156,781

 

 

 

 

 

 

 

 6,156,781

 

Comprehensive income (loss):

 

 

 

 

 

 $ 5,682,631

 

 

 

 

 

 

 $ 5,680,975

 

 

(a) To adjust share count to final merger consideration

   

 
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