EX-99.4 7 ex99-4.htm

 

Exhibit 99.4

 

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

Defined terms included below have the same meaning as terms defined and included elsewhere in this Current Report on Form 8-K (this “Form 8-K”) and, if not defined in this Form 8-K, the Original Report.

 

Introduction

 

The unaudited pro forma condensed combined balance sheet as of September 30, 2022, and year ended March 31, 2022, gives pro forma effect to the Business Combination as if it had been consummated as of that date. The unaudited pro forma condensed combined statements of operations for the nine months ended September 30, 2022, and year ended March 31, 2022, give pro forma effect to the Business Combination as if it had occurred as of April 1, 2021. This information should be read together with Earth Science Tech, Inc. (“ETST”) audited financial statements for the year ended March 31, 2022 and related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of ETST for the year ended March 31, 2022 included incorporated by reference into this Form 8-K, and PEAK S CURATIVE, LLC’S (“PEAKS”) audited financial statements for the year ended September 30, 2022 and related notes and RXCOMPOUNDSTORE.COM, LLC (“RXCOMPOUND”) , included in this Form 8-K.

 

The unaudited pro forma condensed combined balance sheet as of September 30, 2022, has been prepared using the following:

 

  ● ETST’s audited historical balance sheet as of March 31, 2022, incorporated by reference into this Form 8-K.
  ● PEAK’s audited historical balance sheet as of September 30, 2022, included in this Form 8-K.
  ● RXCOMPOUND’s audited historical balance sheet as of September 30, 2022, included in this Form 8-K.

 

The unaudited pro forma condensed combined statement of operations for the nine months ended September 30, 2022, and year ended March 31, 2022, has been prepared using the following:

 

  ● ETST’s audited historical consolidated statement of operations for the year ended March 31, 2022, incorporated by reference into this Form 8-K.; and
  ● PEAK’s audited historical statement of operations for the year ended September 30, 2022 (1st year of operations), included in this Form 8-K.
  ● RXCOMPOUND’s audited historical statement of operations for the period ended September 30, 2022, and March 31, 2022, included in this Form 8-K.

 

Description of the Transactions

 

On November 8, 2022, Earth Science Tech, Inc. (“the Company”) acquired Peaks Curative, LLC. (“LLC”) a Florida limited liability company (“PEAKS”), and RxCompoundStore.com, LLC. (“RXCOMPOUND”). for 53,700,000 restricted shares of the Company’s common stock, and the assumption of certain indebtedness of PEAKS and RXCOMPOUND. PEAKS had one managing member, Mario G. Tabraue, who formed the LLC and established the company’s brand and website, and who was appointed to the Company as its President and a member of the board of directors on November 3, 2021, as part of a definitive agreement to be acquired by the Company. Pursuant to the definitive agreement the Company set terms for the transaction that was subsequently consumated on November 8, 2022, for 53,700,000 of the Company’s restricted common stock along with the PEAKS sister company, RxCompoundStore.com, LLC. (“RXCOMPOUND”). The shares issued consummated a merger, presently having the Company’s owned 100% by ETST

 

Accounting for the Merger

 

The Merger will be accounted for as a reverse recapitalization in accordance with U.S. GAAP. Under this method of accounting, PEAKS AND RXCOMPOUND, who are the legal acquirers, will be treated as the “acquired” companies for financial reporting purposes and ETST will be treated as the accounting acquirer. This determination was primarily based on PEAKS and RXCOMPOUND having a majority of the voting power of the post-combination company, PEAKS and RXCOMPOUND’s senior management comprising substantially all of the senior management of the post-combination company, the relative size of PEAKS and RXCOMPOUND combined compared to ETST, and PEAKS and RXCOMPOUND operations comprising the ongoing operations of the post-combination company. Accordingly, for accounting purposes, the Merger will be treated as the equivalent of a capital transaction in which ETST is issuing stock for the net assets of PEAKS and RXCOMPOUND. The net assets of PEAKS and RXCOMPOUND will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Merger will be those of ETST.

 

Basis of Pro Forma Presentation

 

The historical financial information has been adjusted to give pro forma effect to events that are related and/or directly attributable to the Business Combination. The adjustments presented on the unaudited pro forma combined financial statements have been identified and presented to provide relevant information necessary for an accurate understanding of the post-combination company upon consummation of the Business Combination. The unaudited pro forma condensed combined financial information is for illustrative purposes only. The financial results may have been different had the companies always been combined. You should not rely on the unaudited pro forma combined financial information as being indicative of the historical financial position and results that would have been achieved had the companies always been combined or the future financial position and results that the post-combination company will experience. ETST, PEAKS and RXCOMPOUND did not have any historical relationship prior to the Purchase Agreement dated November 3, 2021 later amended and consummated on November 8, 2022.

 

 

 

 

EARTH SCIENCES TECH , INC. & SUBSIDIARIES

 

PRO FORMA CONDENSED COMBINED BALANCE SHEETS (Unaudited)

 

   SEPTEMBER 30,2022   MARCH 31. 2022 
                  Merger   Pro Forma                  Merger   Pro Forma 
   EARTH SCIENCES TECH INC.   PEAKS CURATIVE LLC   RX COMPOUNDSTORE.COM LLC      Adjustments   Combined   EARTH SCIENCES TECH INC.   PEAKS CURATIVE LLC   RX COMPOUNDSTORE.COM LLC      Adjustments   Combined 
   (Public Co.)   (Private Co.)   (Private Co.)              (Public Co.)   (Private Co.)   (Private Co.)            
   Accounting   Accounting   Accounting              Accounting   Accounting   Accounting            
   Acquiror   Acquiree   Acquiree              Acquiror   Acquiree   Acquiree            
ASSETS                                                        
                                                         
CURRENT ASSETS:                                                        
Cash  $1,205   $              545    5,663            7,413   $26,942   $              545    4,829            32,316 
Inventory   -         10,259            10,259    -         10259            10,259 
Other current assets   -         224,873            224,873    -         116405            116,405 
TOTAL CURRENT ASSETS   1,205    545    240,795            242,545    26,942    545    131493            158,980 
                                                         
OTHER ASSETS                                                        
Due from RxCompound   303,057    -0    -0   bb   (303,057)   -    25,000    -    -   bb   (25,000)   25,000 
Prepaid acquisition costs   51,500    -0    -0            51,500    25,000    -    -            25,000 
TOTAL OTHER ASSETS   354,557    -0    -0            51,500    50,000    -0    -0            50,000 
                                                         
PROPERTY AND EQUIPMENT, net   -    -    -            -    -    -    -            - 
                                                         
INTANGIBLE ASSET, NET   -0    17,806                 17,806    -0    19,209                 19,209 
                                                         
Total assets  $355,762   $18,351    240,795   bb   (303,057)  $311,851   $76,942   $19,754    131493   bb    (25,000)   228,189 
                                                         
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)                                                        
                                                         
CURRENT LIABILITIES                                                        
Accounts payable and accrued expenses  $357,397    -    25532            382,929   $611,784    -    17,806            629,590 
Current portion of Notes payable   820,000    -    -0            820,000    406,838    -    -            406,838 
Government Loans   111,752    -    -0            111,752    138,550    -    -            138,550 
Loan payable   50,000    -    -0       -0    50,000    50,000    -    -            50,000 
Notes Payable - Related Parties   88,505    -    -0            88,505    87,402    -    -            87,402 
Due to ETST   -    -    286,000   bb   (286,000)   -    -    -    30,000   bb   (30,000)   - 
Due to RX   110,363    -        bb   (110,363)   -    1,895    -        bb   (1,895)   - 
Other current liabilities   845,318    -    -0            845,318    585,886    -0    -            585,886 
TOTAL CURRENT LIABILITIES   2,383,335    -0    311,532   bb    

(396,363

)    2,298,504    1,882,355    -0    47,806   bb    

(31,895

)    1,898,266 
                                                         
NON-CURRENT LIABILITIES                                                        
Notes payable   -    -    108,700            108,700    -    -    108,700            108,700 
TOTAL NON-CURRENT LIABILITIES   -    -    108,700            108,700    -0    -0    108,700            108,700 
                                                         
TOTAL LIABILITIES   2,383,335    -0    420,232            2,803,567    1,882,355    -    156,506            2,038,861 
                                                         
STOCKHOLDERS’/MEMBERS’ EQUITY (DEFICIT):                                                        
Preferred stock   1,000    -0    -0            1,000    -         -            - 
Common stock   59,053    -0    -0   aa   53,700    59053    53,853         -   aa   53,700    53,853 
Common Units        30,217        aa   (44,252)   (30,217)        21,867        aa   (36,401)   21,867 
Opening balance equity             73,190            73,190              73,190            73,190 
Shareholders distribution             (6,180)           (6,180)             (5,680)           (5,680)
Additional paid-in capital   28,264,452    0    -0   aa   (241,378)   28,264,452    28,264,452    -0        aa   (41,499)   28,264,452 
Accumulated earnings (deficit)   (30,352,078)   (11,866)   (24644)  aa   231,930    (30,610,391)   (30,123,718)   (2,113)   (92,523)  aa   74,201    (30,219,354)
                                                         
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)   (2,027,573)   18,351    (179,437)           (2,188,659)   (1,805,413)   19,754    (25,013)           (1,810,672)
                                                         
Total liabilities and Equity  $355,762   $18,351   $240795       (303,057)   311,851   $76,942   $19,754    131,493       25,000    228,189 

 

See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information

 

 

 

 

EARTH SCIENCES TECH, INC. & SUBSIDIARIES

 

PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS (Unaudited)

 

   SIX MONTHS ENDED SEPTEMBER 30,2022   YEAR ENDED MARCH 31, 2022 
                                               
   EARTH SCIENCES TECH INC.   PEAKS CURATIVE LLC   RX COMPOUNDSTORE.COM              EARTH SCIENCES TECH INC.   PEAKS CURATIVE LLC   RX COMPOUNDSTORE.COM            
   (Public Co.)   (Private Co.)   (Private Co.)              (Public Co.)   (Private Co.)   (Private Co.)            
   Accounting   Accounting   Accounting      Merger   Pro Forma   Accounting   Accounting   Accounting      Merger   Pro Forma 
   Acquiror   Acquiree   Acquiree      Adjustments   Combined   Acquiror   Acquiree   Acquiree      Adjustments   Combined 
                                               
REVENUES                                                        
                                                         
Net Sales   -   $              1,134    101,378            102,512   $14,123                       -    255,176            269,299 
TOTAL REVENUES                                                        
                                                         
COST OF REVENUES   -    398    50,128            50,526    22,639    -    38,720            61,359 
                                                         
GROSS PROFIT   -    736    51,250            51,986    (8,516)   -    216,456            207,940 
                                                         
OPERATING EXPENSES                                                        
Sales and Marketing        544    444-            988    3,655    381    -            4,036 
General and administrative   246,160    12,058    204,728            462,946    207,035    1,173    296,582            504,790 
Litigation expense   522,925    -    -            522,925    7,500    -    -            7,500 
Total expenses   769,085    12,602    205,172            986,859    218,190    1,554    (80,126)           516,326 
                                                         
INCOME (LOSS) FROM OPERATIONS   (769,085)   (11,866)   (153,922)           (934,873)   (226,706)   (1,554)   (80,126)           (308,386)
                                                         
OTHER INCOME (EXPENSE)                                                        
Interest expense   (17,300)   -    (1)           (17,301)   (50,043)   -                 (50,043)
Other income (expense)   558,025    -                 585,025    3,450,009    -                 3,450,009 
                                                         
TOTAL OTHER INCOME (EXPENSE)   540,725    -    (1)           540,724    3,399,966    -                 3,399,966 
                                                         
NET INCOME (LOSS)  $(228,360)  $(11,866)   (153,923)           (394,149)  $3,173,260   $(1,554)   (80,126)           3,091,580 
                                                         
Common stock/units outstanding   59,051,966    1,000    -   aa   (1,000)   59,051,966    53,851,966    1,000    -   aa   (1,000)   53,851,966 
Common stock issued in merger   -             aa   53,700,000    53,700,000    -             aa   53,700,000    53,700,000 
Total common stock /units outstanding   59,051,966    1,000    -            112,751,966    53,851,966    1,000    -            107,551,966 
NET LOSS PER SHARE  $(0.0039)                    $(0.0038)   0.0589                     $0.0287 

 

See accompanying notes to the Unaudited Pro Forma Condensed Combined Financial Information

 

 

 

 

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

 

1. Unaudited Pro Forma Condensed Combined Balance Sheet Adjustments

 

  aa Reflects the recapitalization of PEAKS and RXCOMPOUND through (i) the exchange of 100% of the common units of PEAKS and RXCOMPOUND for 53,700,000 shares of common stock of ETST public stock on a 1:1 exchange basis, (ii) the elimination of the historical retained earnings of PEAKS and RXCOMPOUND.
     
  bb Reflects the settlement of the outstanding loans receivable/loans payable between ETST, PEAKS and RXCOMPOUND upon the closing of the Merger.