EX-99.3 5 ex99-3.htm

 

Exhibit 99.3

 

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:

 

  ● ESTE’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 unaudited 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 unaudited historical statement of operations for the year 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 created the LLC and established the company’s brand and website, who was appointed to the Company as its President and a board of directors’ member 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 settled 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 Business Combination. Accordingly, no pro forma adjustments were required to eliminate activities between the companies.

 

 

 

 

EARTH SCIENCES TECH , INC. & SUBSIDIARIES

 

PRO FORMA CONDENSED COMBINED BALANCE SHEETS (Unaudited)

 

   SEPTEMBER 30,2022   MARCH 31. 2022 
   EARTH SCIENCES TECH INC.
(Public Co.)
Accounting
Acquiror		   PEAKS CURATIVE LLC
(Private Co.)
Accounting
Acquiree		  

RX COMPOUND

STORE.COM LLC
(Private Co.)
Accounting
Acquiree

     Merger
Adjustments		   Pro Forma
Combined		   EARTH SCIENCES TECH INC.
(Public Co.)
Accounting
Acquiror		   PEAKS CURATIVE LLC
(Private Co.)
Accounting
Acquiree		  

RX COMPOUND

STORE.COM LLC
(Private Co.)
Accounting
Acquiree

      Merger
Adjustments		   Pro Forma
Combined		 
ASSETS                                                      
                                                       
CURRENT ASSETS:                                                      
Cash  $1,205   $545   $7,029          $8,779   $26,942   $545    6,195          $33,137 
Inventory   -         6,939           6,939    -         6,939           6,939 
Other current assets   -         37,824           37,824    -         9,750           9,750 
TOTAL CURRENT ASSETS   1,205    545    51,791           53,541    26,942    545    22,883           49,825 
                                                       
OTHER ASSETS                                                      
Due from RxCompound   303,057    -0    -0  bb   (303,057)   -    25,000    -    - bb    (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           25,000 
                                                       
PROPERTY AND EQUIPMENT, net   -    -    -           -    -    -    -           - 
                                                       
INTANGIBLE ASSET, NET   -0    17,806    134,867           152,673    -0    19,209    134,867             
                                                       
   $355,762   $18,351   $186,658      (303,057)  $257,714   $76,942   $19,754   $157,750      (25,000)  $74,825 
                                                       
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)                                                      
                                                       
CURRENT LIABILITIES                                                      
Accounts payable and accrued expenses  $357,397   $-   $21,393          $378,790   $611,784   $-   $13,598          $625,382 
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   -    -    192,694  bb   (192,694)   -    -    -    23,105 bb    (23,105)   - 
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    214,087           2,294,365    1,882,355    -0    36,703           1,894,058 
                                                       
NON-CURRENT LIABILITIES                                                      
Notes payable   -    -    178,600           178,600    -    -    178,600           178,600 
TOTAL NON-CURRENT LIABILITIES   -    -    178,600           178,600    -0    -0    178,600           178,600 
                                                       
TOTAL LIABILITIES   2,383,335    -0    392,687           2,472,965    1,882,355    -    215,303           2,072,658 
                                                       
STOCKHOLDERS’/MEMBERS’ EQUITY (DEFICIT):                                                      
Preferred stock   1,000    -0    -0           1,000    -         -           - 
Common stock   59,053    -0    -0  aa   53,700    112,753    53,853         - aa    53,700    107,553 
Common Units        30,217    14,035  aa   (44,252)   -         21,867    14,535 aa    (36,401)     
Additional paid-in capital   28,264,452    -0    -0  aa   (241,378)   28,023,074    28,264,452    -0    - aa    (41,499)   28,222,953 
Accumulated earnings (deficit)   (30,352,078)   (11,866)   (220,064) aa   231,930    (30,352,078)   (30,123,718)   (2,113)   (72,088)aa    74,201    (30,121,605)
                                                       
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)   (2,027,573)   18,351    (206,030)          (2,215,251)   (1,805,413)   19,754    (57,553)          (1,791,099)
                                                       
   $355,762   $18,351   $186,657      (303,057)  $257,715   $76,942   $19,754   $157,750      25,000   $281,559 

 

See accompanying notes to the Unaudited Pro Forma Comdensed 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.
(Public Co.)
Accounting
Acquiror		   PEAKS CURATIVE LLC
(Private Co.)
Accounting
Acquiree		  

RX COMPOUND

STORE.COM
(Private Co.)
Accounting
Acquiree

     Merger
Adjustments		   Pro Forma
Combined		   EARTH SCIENCES TECH INC.
(Public Co.)
Accounting
Acquiror		   PEAKS CURATIVE LLC
(Private Co.)
Accounting
Acquiree		  

RX COMPOUND

STORE.COM
(Private Co.)
Accounting
Acquiree

     Merger
Adjustments		   Pro Forma
Combined		 
                                             
REVENUES                                                      
                                                       
Net Sales  $-   $1,134   $216,498          $217,632   $14,123   $-   $256,176          $270,299 
TOTAL REVENUES                                                      
                                                       
COST OF REVENUES   -    398    99,412           99,810    22,639    -    47,738           70,377 
                                                       
GROSS PROFIT   -    736    117,087           117,823    (8,516)   -    208,439           199,923 
                                                       
OPERATING EXPENSES                                                      
Sales and Marketing        544    -           544    3,655    381    -           4,036 
General and administrative   246,160    12,058    305,325           563,543    207,035    1,173    195,256           403,464 
Litigation expense   522,925    -    -           522,925    7,500    -    -           7,500 
    769,085    12,602    305,325           1,087,012    218,190    1,554    195,256           415,000 
                                                       
INCOME (LOSS) FROM OPERATIONS   (769,085)   (11,866)   (188,238)          (969,189)   (226,706)   (1,554)   13,183           (215,077)
                                                       
OTHER INCOME (EXPENSE)                                                      
Interest expense   (17,300)   -    (998)          (18,298)   (50,043)   -    (579)          (50,622)
Other income (expense)   558,025    -    (149)          557,876    3,450,009    -    (96,223)          3,353,786 
                                                       
TOTAL OTHER INCOME (EXPENSE)   540,725    -    (1,147)          539,578    3,399,966    -    (96,803)          3,303,163 
                                                       
NET INCOME (LOSS)  $(228,360)  $(11,866)  $(189,385)         $(429,611)  $3,173,260   $(1,554)  $(83,620)         $3,088,086 
                                                       
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 Comdensed 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.