8-K
Earth Science Tech, Inc. (ETST)
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 29, 2022
EarthScience Tech Inc.
| Florida | 000-55000 | 80-0961484 |
|---|---|---|
| (State<br> or other jurisdiction <br><br>of incorporation) | (Commission<br><br><br> File Number) | (IRS<br> Employer <br><br>Identification No.) |
(Exact name of registrant as specified in its charter)
8950SW 74^th^ Court
Suite101
Miami,FL 33156
(Address of principal executive offices)
(786)375-7281
Registrant’s
telephone number, including area code
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communication<br>pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material<br>pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement<br>communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement<br>communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item2.01 Completion of Acquisitions
On December 29, 2022 Earth Science Tech, Inc., a Florida corporation (OTC: ETST) (the “Company”) received Peaks Curative, LLC., a Florida limited liability company (“Sellers”) audited financials pursuant to the previously announced Purchase and Sale Agreement (as amended, the “Purchase and Sale Agreement”) dated November 8, 2022 (the “closing Date), and, for the purposes set forth therein, the Seller entered into a Purchase and Sale Agreement, pursuant to which the Company agreed to acquire the Sellers.
The description of the Purchase and Sale Agreement contained herein does not purport to be complete and is qualified in its entirety by reference to the Purchase and Sale Agreement, a copy of which is filed as Exhibit 2.1 hereto, and the terms of which are incorporated by reference herein. This summary is not intended to modify or supplement any factual disclosures about the Company, and should not be relied upon as disclosure about the Company without consideration of the periodic and current reports and statements that the Company files with the SEC. The terms of the Purchase and Sale Agreement govern the contractual rights and relationships between, and allocate risks among, the parties thereto in relation to the transactions contemplated thereby. In particular, the representations and warranties made by the parties to each other in the Purchase and Sale Agreement reflect negotiations between, and are solely for the benefit of, the parties thereto and may be limited or modified by a variety of factors, including subsequent events, information included in public filings, disclosures made during negotiations among the parties, correspondence between the parties and disclosure schedules to the Purchase and Sales Agreement. Accordingly, such representations and warranties may not describe the actual state of affairs at the date they were made or at any other time and should not be relied upon as statements of fact.
Item9.01. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired
The financial statements of Peaks Curative, LLC. required by Item 9.01(a) to this Current Report on Form 8-K are incorporated herein by reference to (i) Peaks Curative, LLC.’s audited consolidated balance sheets as of and for the years ended September 30, 2020, and 2021.
(b) Pro Forma Financial Information
The pro forma financial information required by Item 9.01(b) to this Current Report on Form 8-K is incorporated herein by reference to the unaudited pro forma.
(d) Exhibits
| Exhibit No. | Description |
|---|---|
| 2.1 | Agreement and Plan of Merger |
| 23.1 | Bolko & Company, an independent registered public accounting firm of Peaks Curative, LLC. |
| 99.2 | Audited Consolidated Balance Sheets of Peaks Curative, LLC. as of September 30, 2022 and the Audited Consolidated Statements of Operations, Comprehensive Income/(Loss), and Cash Flows of Peaks Curative, LLC. for the period ended September 30, 2022. |
| 99.3 | Unaudited Pro Forma |
| 104 | Cover<br>Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| EARTH<br> SCIENCE TECH, INC. | ||
|---|---|---|
| Dated:<br> December 30, 2022 | By: | /s/ Nickolas S. Tabraue |
| Nickolas<br> S. Tabraue | ||
| Its: | CEO<br> and Director |
Exhibit 2.1
Exhibit 23.1
Peaks Curative, LLC. (The “Company” or “Peaks”), is a Florida entity in the telemedicine referral website facilitating asynchronous consultations for branded compound medication facilitated through its sister company, RxCompoundStore.com, LLC. (“RxCompound”). Customers can discreetly and conveniently order lifestyle medications offered through the secured Peaks developed website.
Currently positioned to prescribe to all 50 states utilizing Smart Doctors consultation services, but only able to fulfill prescriptions within the state of Florida and New York through RxCompound. The Company will be able to fulfill more states as RxCompound obtains dispensing licenses throughout the reaming non dispensing states. Members will be automatically enrolled into the Company’s Peaks Loyalty Program. As a member of the loyalty program, they will receive credit to cover the costs on their Peaks facilitated online doctor consultations. The Peaks membership enrollment will occur automatically once becoming a member and automatically renewed at the time of the prescription renewal order. At the time of the renewal order, credits will be applied to cover the Peaks facilitated online doctor consultation.
The Company’s strategy has been to launch the website within three phases to insure efficiency and compellability. The Company launched its first Phase, Phase I, in the month of June 2022, offering one product, Tadalafil in a gummy form within 3 different dosages and quantity offerings.
After months of feedback, successful orders and refills, the Company commenced Phase II website upgrade. Phase II will enhance customer experience as well as offering Tadalafil in the form of gummies and tablets (generic Cialis), and Sildenafil in the form of capsules and tablets (generic Viagra) all in three different dosages and quantity offerings. Achieving Phase II will position Peaks to compete head-to-head with Blue Chew.
Once Phase II has been completed, the Company plans to execute a marketing campaign within the RxCompound dispensing states to increase brand exposure and sales leading to Phase III. Phase III includes over the counter (“OTC”) (non-prescription) products such as supplements and topicals. The OTC products will be custom manufactured or through partnered companies under Peaks brand, offered worldwide. Achieving Phase III will position the Company to compete head-to-head with current industry leaders such as Hims Health and Get Roman.
Exhibit99.2
PeaksCurative, LLC.
FinancialStatements for the Period from
October1, 2021 to September 30, 2022
PeaksCurative, LLC.
FINANCIALSTATEMENTS
TABLE OF CONTENTS
| Page | |
|---|---|
| Auditor’s Report | F-2 |
| Balance Sheet | F-3 |
| Statement of Operations | F-4 |
| Statement of Changes in Member’s Equity | F-5 |
| Statement of Cash Flow | F-6 |
| Notes to Financial Statements | F-7 |
| F-1 |
| --- |
REPORTOF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Managing Members of Peaks Curative, LLC.
Opinionon the Financial Statements
We have audited the accompanying balance sheet of Peaks Curative, LLC, (the Company) as of September 30, 2022, and the related statements of income, changes in members’ equity, and cash flows for the period from inception (October 1, 2021) to September 30, 2022, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2022, and the results of its operations and its cash flows for the period from inception (October 1, 2021) to September 30, 2022, in conformity with accounting principles generally accepted in the United States of America.
TheCompany’s Ability to Continue as a Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the consolidated financial statements, the Company has incurred recurring operating losses, has negative cash flows from operating activities, and has stated that substantial doubt exists about the Company’s ability to continue as a going concern. Management’s evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 4. The consolidated financial statements do not include any adjustments result from the outcome of this uncertainty. Our opinion has not changed as a result of this matter.
Basisfor Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/Bolko & Company
We have served as the Company’s auditor since 2022.
Boca Raton, Florida
12/29/2022
| F-2 |
| --- |
PeaksCurative, LLC.
BalanceSheet
September30, 2022
| ASSETS | ||
|---|---|---|
| Current<br> assets | ||
| Cash<br> and cash equivalents | $ | <br> 545 |
| Total<br> current assets | $ | 545 |
| Intangible<br> asset | ||
| Telemedicine<br> Platform | $ | 17,806 |
| TOTAL<br> ASSETS | $ | 18,351 |
| LIABILITIES | ||
| Current<br> liabilities | $ | - |
| TOTAL LIABILITIES | $ | - |
| MEMBERS’ EQUITY | ||
| Common<br> units | $ | 30,217 |
| Retained<br> deficit | $ | <br> (11,866) |
| TOTAL<br> LIABILITIES AND MEMBERS’ EQUITY | $ | 18,351 |
See accompanying notes to these financial statements.
| F-3 |
| --- |
PeaksCurative, LLC.
Statementof Operations
Forthe Period from October 1, 2021 to September 30, 2022
| Revenues | $ | <br> 1,134 |
|---|---|---|
| Cost of goods | $ | <br> 398 |
| Gross<br> profit | $ | 736 |
| Operating expenses | ||
| Amortization | 8,902 | |
| Professional<br> fees | 360 | |
| General<br> and Administration | 2,796 | |
| Marketing | 544 | |
| Total<br> operating expenses | $ | <br> 12,602 |
| Net<br> income (loss) | $ | <br> (11,866) |
See accompanying notes to these financial statements.
| F-4 |
| --- |
PeaksCurative, LLC.
Statementof Changes in Members’ Equity
Forthe Period from October 1, 2021 to September 30, 2022
| Common<br> Units | Retained<br> Surplus | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Number | Value | (Deficit) | Total | |||||||
| Balance September 1, 2021 | $ | <br> - | $ | - | ||||||
| Capital contributions | 1,000 | 30,217 | $ | 30,217 | ||||||
| Net loss | (11,866 | ) | $ | (11,866 | ) | |||||
| Balance September 30,<br> 2022 | 1,000 | $ | 30,217 | (11,866 | ) | $ | <br> 18,351 |
See accompanying notes to these financial statements
| F-5 |
| --- |
PeaksCurative, LLC.Statement of Cash Flow
Forthe Period from October 1, 2021 to September 30, 2022
| CASH FLOWS FROM OPERATING<br> ACTIVITIES | |||
|---|---|---|---|
| Net loss | $ | <br> (11,866) | |
| Adjustments to reconcile net<br> loss to net cash provided by operating activities: | |||
| Depreciation and<br> amortization | 8,902 | ||
| Changes<br> in operating assets and liabilities: | - | ||
| NET<br> CASH USED BY OPERATING ACTIVITIES | $ | (2,964) | |
| CASH FLOWS FROM INVESTING<br> ACTIVITIES | |||
| Purchase)<br> of intangible assets | (26,708 | ) | |
| NET<br> CASH USED BY INVESTING ACTIVITIES | (26,708 | ) | |
| CASH FLOWS FROM FINANCING<br> ACTIVITIES | |||
| Proceeds<br> from contributed capital | $ | 30,217 | |
| NET<br> CASH PROVIDED BY FINANCING ACTIVITIES | $ | 30,217 | |
| NET<br> INCREASE IN CASH | $ | 545 | |
| Cash, beginning of period | -0- | ||
| Cash, end of period | $ | 545 |
See accompanying notes to these financial statements.
| F-6 |
| --- |
PeaksCurative, LLC.
Notesto Financial Statements
NOTE1. NATURE AND BACKGROUND OF BUSINESS
Peaks Curative, LLC. (the “Company”), was originally formed on March 1, 2021 and started operating on October 1, 2022 as a Florida limited liability company (“LLC”), formed with the implementation of its telemedicine referral website facilitating asynchronous consultations for branded compound medications prepared by its commonly owned sister company, RxCompoundStore, LLC. (“RxCompound”).
NOTE2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basisof Presentation
The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”).
Useof Estimates
The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that effect the amounts reported in the financial statements and the footnotes thereto. Actual results could differ from those estimates. It is reasonably possible that changes in estimates will occur in the near term.
FiscalYear
The Company operates on a 52- or 53-week fiscal year ending on September 30. The period presented in these financial statements is the fiscal year for the period October 1, 2021 and ended September 30, 2022 (fiscal 2022).
Cashand Cash Equivalents
The Company considers short-term, highly liquid investment with original maturities of three months or less at the time of purchase to be cash equivalents. Cash consists of funds held in the Company’s checking account. As of September 30, 2022, the Company had cash on hand totaling $545.
Receivablesand Credit Policy
Trade receivables from customers are uncollateralized customer obligations due under normal trade terms, primarily requiring payment before services are rendered. Trade receivables are stated at the amount billed to the customer. Payments of trade receivables are allocated to the specific invoices identified on the customer’s remittance advice or, if unspecified, are applied to the earliest unpaid invoice. The Company, by policy, routinely assesses the financial strength of its customer. As a result, the Company believes that its accounts receivable credit risk exposure is limited and it has not experienced significant write-downs in its accounts receivable balances.
IntangibleAsset
Intangible asset reflects the value of proprietary telemedicine website and portal recorded at cost. The Company determines the appropriate useful life of intangible and is being amortized on a straight-line basis over a three-year life.
| F-7 |
| --- |
PeaksCurative, LLC.
Notesto Financial Statements
FairValue Measurements
The Company has determined the fair value of certain assets and liabilities in accordance with United States generally accepted accounting principles (“GAAP”), which provides a framework for measuring fair value.
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques should maximize the use of observable inputs and minimize the use of unobservable inputs.
A fair value hierarchy has been established, which prioritizes the valuation inputs into three broad levels. Level 1 inputs consist of quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the related asset or liability. Level 3 inputs are unobservable inputs related to the asset or liability.
IncomeTaxes
The Company is treated as a partnership for income tax purposes; accordingly, income taxes have not been provided for in the accompanying financial statements. All of the Company’s income or losses are passed through to its members.
RevenueRecognition
The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the fee for the arrangement is fixed or determinable and collectability is reasonably assured.
AdvertisingExpenses
The Company expenses advertising costs as they are incurred.
RecentAccounting Pronouncements
The Company has considered all other recently issued accounting pronouncements during 2022 and do not believe the adoption of such pronouncements will have a material impact on its financial statements.
Note3 — Intangible Asset, Net
Intangible asset, net consist of the following:
| September<br> 30, | |||
|---|---|---|---|
| 2020 | |||
| Telemedicine<br> Website and Portal | $ | 26,708 | |
| Less<br> accumulated amortization | (8,902 | ) | |
| $ | 17,806 |
Amortization expense for the year ended September 30, 2022 was $8,902.
| F-8 |
| --- |
PeaksCurative, LLC.
Notesto Financial Statements
Note 4 — Liquidity and Going Concern
The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. On September 30, 2022, the Company had negative working capital, a retained deficit of $11,866. These factors raise substantial doubt about the Company’s ability to continue as a going concern. During 2022 the Company plans to raise additional capital and/or seek additional financing for its operations.
The ability of the Company to continue as a going concern is dependent upon its ability to successfully raise additional capital and achieve profitable operations. However, management cannot provide any assurances that the Company will be successful in completing this financing or capital raise and accomplishing any of its plans. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
Note 5-Subsequent Events
The Company only has one managing member, Mario G. Tabraue, who created the LLC and established the company’s brand and website, who is appointed to Earth Science Tech, Inc. (“ETST”) an OTC-Pink Sheet listed company, as its President and a board of directors’ member on November 3, 2021, as part of a definitive agreement to be acquired by ETST (the “Agreement”). Pursuant to the Agreement the Company set terms for the transaction that was subsequently settled on November 8, 2022, for 53,700,000 of ETST’s restricted common stock along with the Company’s sister company, RxCompound. The shares issued consummated a merger, presently having the Company owned 100% by ETST.
| F-9 |
| --- |
Exhibit99.3
UNAUDITEDPRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
Definedterms included below have the same meaning as terms defined and included elsewhere in this Current Report on Form 8-K (this “Form8-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<br> audited historical balance sheet as of March 31, 2022, incorporated by reference into this Form 8-K. |
|---|---|
| ● | PEAK’s<br> audited historical balance sheet as of September 30, 2022, included in this Form 8-K. |
| ● | RXCOMPOUND’s<br> 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<br> audited historical consolidated statement of operations for the year ended March 31, 2022, incorporated by reference into this Form<br> 8-K.; and |
|---|---|
| ● | PEAK’s<br> audited historical statement of operations for the year ended September 30, 2022 (1^st^ year of operations), included in<br> this Form 8-K. |
| ● | RXCOMPOUND’s<br> unaudited historical statement of operations for the year ended September 30, 2022, and March 31, 2022, included in this Form 8-K. |
Descriptionof 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
Accountingfor 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.
Basisof 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.<br> <br>(Public Co.) <br>Accounting <br>Acquiror | PEAKS CURATIVE LLC <br>(Private<br> Co.) <br>Accounting <br>Acquiree | RX COMPOUND<br><br> <br>STORE.COM LLC <br>(Private Co.) <br>Accounting <br>Acquiree | Merger <br>Adjustments | Pro Forma <br>Combined | EARTH SCIENCES TECH INC.<br> <br>(Public Co.) <br>Accounting <br>Acquiror | PEAKS CURATIVE LLC <br>(Private<br> Co.) <br>Accounting <br>Acquiree | RX COMPOUND<br><br> <br>STORE.COM LLC <br>(Private Co.) <br>Accounting <br>Acquiree | Merger <br>Adjustments | Pro Forma <br>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<br> (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<br> 30,2022 | YEAR ENDED MARCH 31, 2022 | |||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| EARTH SCIENCES TECH INC.<br> <br>(Public Co.) <br>Accounting <br>Acquiror | PEAKS CURATIVE LLC <br>(Private<br> Co.) <br>Accounting <br>Acquiree | RX COMPOUND<br><br> <br>STORE.COM <br>(Private Co.) <br>Accounting <br>Acquiree | Merger <br>Adjustments | Pro Forma <br>Combined | EARTH SCIENCES TECH INC.<br> <br>(Public Co.) <br>Accounting <br>Acquiror | PEAKS CURATIVE LLC <br>(Private<br> Co.) <br>Accounting <br>Acquiree | RX COMPOUND<br><br> <br>STORE.COM <br>(Private Co.) <br>Accounting <br>Acquiree | Merger <br>Adjustments | Pro Forma <br>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
NOTESTO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
1.Unaudited Pro Forma Condensed Combined Balance Sheet Adjustments
| aa | Reflects<br> the recapitalization of PEAKS and RXCOMPOUND through (i) the exchange of 100% of the common units of PEAKS and RXCOMPOUND for 53,700,000<br> shares of common stock of ETST public stock on a 1:1 exchange basis, (ii) the elimination of the historical retained earnings of<br> PEAKS and RXCOMPOUND. |
|---|---|
| bb | Reflects<br> the settlement of the outstanding loans receivable/loans payable between ETST, PEAKS and RXCOMPOUND upon the closing of the Merger. |