Exhibit 99.3
ENVIRO TECHNOLOGIES US, INC.
PRO FORMA UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma consolidated financial statements give effect to the acquisition of Banner Midstream Corp. (“BM”) on September 7, 2022 by Enviro Technologies US, Inc. (“Enviro” and the “Company”) and are based on estimates and assumptions set forth herein and in the notes to such pro forma statements.
On August 23, 2022 Ecoark Holdings, Inc., a Nevada corporation (“Ecoark”) and BM entered into a Share Exchange Agreement (the “Agreement”) with the Company. The Agreement provides that, upon the terms and subject to the conditions set forth therein, Ecoark shall acquire 12,996,958 shares of the Company’s common stock in exchange for all of the capital stock of BM owned by Ecoark, which represents 100% of the issued and outstanding shares of the Company (the “Exchange”). Upon closing of the Agreement, Banner will continue as a wholly-owned subsidiary of the Company. On September 7, 2022, the Exchange was completed, and the Banner was merged into the Company via a reverse merger. As a result, the historical financial information is that of Banner.
This transaction is being accounted for as a reverse acquisition. No cash was paid relating to the acquisition. As the acquisition of BM resulted in the owners of BM gaining control over the combined entity after the transaction, and the shareholders of the Company continuing only as passive investors, the transaction was not considered a business combination under the ASC. Instead, this transaction was considered to be a capital transaction of the legal acquiree (BM) and was equivalent to the issuance of shares by BM for the net monetary assets of the Company accompanied by a recapitalization.
The Company effective September 22, 2022 changed their fiscal year to March 31 from December 31 as March 31 was the year end for BM. The following unaudited pro forma consolidated statements of operations for the year ended December 31, 2021 of the Company, and year ended March 31, 2022 for WR as well as the six months ended June 30, 2022 for the Company and three months ended June 30, 2022 for BM gives effect to the above as if the transactions had occurred at the beginning of the period. The unaudited pro forma consolidated balance sheet at June 30, 2022 assumes the effects of the above as if this transaction had occurred as of January 1, 2022 for the Company and April 1, 2022 for BM.
The unaudited pro forma consolidated financial statements are based upon, and should be read in conjunctions with, the Company’s audited consolidated financial statements as of and for the year ended December 31, 2021, and the audited financial statements of BM reflected herein.
The unaudited pro forma consolidated financial statements and notes thereto contained forward-looking statements that involve risks and uncertainties. Therefore, our actual results may vary materially from those discussed herein. The unaudited pro forma consolidated financial statements do not purport to be indicative of the results that would have been reported had such events actually occurred on the dates specified, nor is it indicative our future results. We refer you to the above referenced financial statements for additional disclosure regarding these acquisitions.
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ENVIRO TECHNOLOGIES US, INC.
NOTES TO UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS
NOTE A – ACCOUNTING TREATMENT APPLIED AS A RESULT OF THIS TRANSACTION
The acquisition of BM is being accounted for as a reverse merger.
NOTE B – ADJUSTMENTS
(1) | To record the acquisition of BM which includes the reclassification of the amount due to Ecoark Holdings and elimination of goodwill. |
(2) | To reclassify to discontinued operations the activity related to Florida Precision Aerospace, Inc. as Management determined to sell this entity were in September 2022. |
NOTE C – PRO FORMA WEIGHTED AVERAGES SHARES OUTSTANDING
Pro forma shares outstanding assuming the transaction occurred as of March 31, 2022 / December 31, 2021:
Enviro Weighted Average Shares Outstanding | 4,951,824 | |||
Pro forma adjustments – Shares issued to BM | 12,996,958 | |||
Pro forma shares outstanding | 17,948,782 |
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PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, 2022
Banner Midstream | Other Transaction | Other Transaction | ||||||||||||||||||
Historical | Corp. | Adjustments | Adjustments | Pro Forma | ||||||||||||||||
ASSETS | (1) | (2) | ||||||||||||||||||
CURRENT ASSETS | ||||||||||||||||||||
Cash | $ | 4,236 | $ | 31,335 | $ | - | $ | - | $ | 35,571 | ||||||||||
Accounts receivable | 5,008 | 105,983 | - | - | 110,991 | |||||||||||||||
Prepaid expenses and other current assets | 670 | 1,873,895 | - | - | 1,874,565 | |||||||||||||||
Inventory | 116,200 | - | - | - | 116,200 | |||||||||||||||
Total current assets | 126,114 | 2,011,213 | - | - | 2,137,327 | |||||||||||||||
NON-CURRENT ASSETS | ||||||||||||||||||||
Property and equipment, net | 6,913 | 928,128 | - | - | 935,041 | |||||||||||||||
Intangible assets, net | - | 1,652,088 | - | - | 1,652,088 | |||||||||||||||
Other assets | 10,143 | - | - | - | 10,143 | |||||||||||||||
Right of use asset - operating leases | 128,755 | 48,860 | 177,615 | |||||||||||||||||
Right of use asset - financing leases | - | 264,535 | - | - | 264,535 | |||||||||||||||
Goodwill | - | 4,900,873 | (4,900,873 | ) | - | - | ||||||||||||||
Total non-current assets | 145,811 | 7,794,484 | (4,900,873 | ) | - | 3,039,422 | ||||||||||||||
TOTAL ASSETS | $ | 271,925 | $ | 9,805,697 | $ | (4,900,873 | ) | $ | - | $ | 5,176,749 | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
CURRENT LIABILITIES | ||||||||||||||||||||
Accounts payable and accrued expenses | $ | 396,338 | $ | 2,894,247 | $ | - | $ | - | 3,290,585 | |||||||||||
Current portion of lease liability - operating leases | 52,715 | 33,736 | - | - | 86,451 | |||||||||||||||
Current portion of lease liability - financing leases | - | 141,934 | - | - | 141,934 | |||||||||||||||
Current portion of long-term debt | - | 192,119 | - | - | 192,119 | |||||||||||||||
Accrued expenses - related party | 903,565 | - | - | - | 903,565 | |||||||||||||||
Loans payable, current portion | 114,855 | - | - | - | 114,855 | |||||||||||||||
Loans payable - related party | 104,500 | - | - | - | 104,500 | |||||||||||||||
Due to Ecoark Holdings, Inc. | - | 9,170,029 | (9,170,029 | ) | - | - | ||||||||||||||
Total current liabilities | 1,571,973 | 12,432,065 | (9,170,029 | ) | - | 4,834,009 | ||||||||||||||
NON-CURRENT LIABILITIES | ||||||||||||||||||||
Lease liability - financing leases, net of current portion | 117,236 | 117,236 | ||||||||||||||||||
Lease liability - operating leases, net of current portion | 76,040 | 16,839 | - | - | 92,879 | |||||||||||||||
Loans payable, net of current portion | 147,116 | - | - | - | 147,116 | |||||||||||||||
Long-term debt, net of current portion | - | 11,629 | - | - | 11,629 | |||||||||||||||
223,156 | 145,704 | - | - | 368,860 | ||||||||||||||||
Total liabilities | 1,795,129 | 12,577,769 | (9,170,029 | ) | - | 5,202,869 | ||||||||||||||
STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||||||||||||||
Preferred stock | - | - | - | - | - | |||||||||||||||
Common stock | 5,571 | 557 | 12,439 | - | 18,567 | |||||||||||||||
Additional paid-in capital | 15,390,553 | 1,622,915 | (12,662,611 | ) | - | 4,350,857 | ||||||||||||||
- | ||||||||||||||||||||
Accumulated deficit | (16,919,328 | ) | (4,395,544 | ) | 16,919,328 | - | (4,395,544 | ) | ||||||||||||
Total stockholders’ equity (deficit) | (1,523,204 | ) | (2,772,072 | ) | 4,269,156 | - | (26,120 | ) | ||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 271,925 | $ | 9,805,697 | $ | (4,900,873 | ) | $ | - | $ | 5,176,749 |
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PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2021 FOR ENVIRO TECHNOLOGIES US, INC. (AND MARCH 31, 2022 FOR BANNER MIDSTREAM CORP.)
Banner Midstream | Other Transaction | |||||||||||||||
Historical | Corp. | Adjustments | Pro Forma | |||||||||||||
(2) | ||||||||||||||||
Revenues | $ | 107,315 | $ | 18,750,053 | $ | - | $ | 18,857,368 | ||||||||
Cost of revenues | 38,527 | 13,447,203 | 13,485,730 | |||||||||||||
Gross profit (loss) | 68,788 | 5,302,850 | - | 5,371,638 | ||||||||||||
Salaries and salaries related costs | 451,183 | 2,494,942 | 2,946,125 | |||||||||||||
Professional and consulting fees | 144,022 | 309,825 | - | 453,847 | ||||||||||||
Selling, general and administrative costs | 240,523 | 7,471,525 | - | 7,712,048 | ||||||||||||
Depreciation and amortization | - | 783,324 | - | 783,324 | ||||||||||||
Total operating expenses | 835,728 | 11,059,616 | - | 11,895,344 | ||||||||||||
Loss from operations before other income (expenses) | (766,940 | ) | (5,756,766 | ) | - | (6,523,706 | ) | |||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||
Change in fair value of derivative liability on Ecoark | - | 10,975,737 | - | 10,975,737 | ||||||||||||
Loss on disposal of fixed assets | (15,011 | ) | (6,770 | ) | - | (21,781 | ) | |||||||||
Other income | 82,572 | - | - | 82,572 | ||||||||||||
Interest expense, net of interest income | (14,913 | ) | (321,159 | ) | - | (336,072 | ) | |||||||||
Total other income (expense) | 52,648 | 10,647,808 | 10,700,456 | |||||||||||||
INCOME (LOSS) FROM OPERATIONS BEFORE PROVISION FOR INCOME TAXES | (714,292 | ) | 4,891,042 | - | 4,176,750 | |||||||||||
Provision for income taxes | - | 85,000 | - | 85,000 | ||||||||||||
NET INCOME (LOSS) | (714,292 | ) | 4,806,042 | - | 4,091,7500 | |||||||||||
Net loss attributable to non-controlling interest | - | - | - | - | ||||||||||||
NET INCOME (LOSS) TO CONTROLLING INTEREST | $ | (714,292 | ) | $ | 4,806,042 | $ | - | $ | 4,091,750 | |||||||
NET EARNINGS (LOSS) PER SHARE | ||||||||||||||||
Basic and Diluted earnings (loss) per share: | $ | (0.14 | ) | $ | 0.86 | $ | 0.23 | |||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING | 4,951,824 | 5,565,976 | 17,948,782 |
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PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2022 FOR ENVIRO TECHNOLOGIES US, INC. (AND THREE MONTHS ENDED JUNE 30, 2022 FOR BANNER MIDSTREAM CORP.)
Banner Midstream | Other Transaction | |||||||||||||||
Historical | Corp. | Adjustments | Pro Forma | |||||||||||||
(2) | ||||||||||||||||
Revenues | $ | 59,330 | $ | 5,418,655 | $ | - | $ | 5,477,985 | ||||||||
Cost of revenues | 39,691 | 4,512,249 | - | 4,551,940 | ||||||||||||
Gross profit (loss) | 19,639 | 906,406 | - | 926,045 | ||||||||||||
Salaries and salaries related costs | 163,915 | 263,321 | 427,236 | |||||||||||||
Professional and consulting fees | 59,223 | - | - | 59,223 | ||||||||||||
Selling, general and administrative costs | 74,915 | 1,209,725 | - | 1,284,640 | ||||||||||||
Depreciation and amortization | - | 112,829 | - | 112,829 | ||||||||||||
Total operating expenses | 298,053 | 1,585,875 | - | 1,883,928 | ||||||||||||
Loss from operations before other income (expenses) | (278,414 | ) | (679,469 | ) | - | (957,883 | ) | |||||||||
OTHER INCOME (EXPENSE) | ||||||||||||||||
Other income | 2,948 | - | - | 2,948 | ||||||||||||
Loss on disposal of fixed assets | - | (950,024 | ) | - | (950,024 | ) | ||||||||||
Interest expense, net of interest income | (7,341 | ) | (7,278 | ) | - | (14,619 | ) | |||||||||
Total other income (expense) | (4,393 | ) | (957,302 | ) | (961,695 | ) | ||||||||||
LOSS FROM OPERATIONS BEFORE PROVISION FOR INCOME TAXES | (282,807 | ) | (1,636,771 | ) | - | (1,919,578 | ) | |||||||||
Provision for income taxes | - | - | - | - | ||||||||||||
NET LOSS | (282,807 | ) | (1,636,771 | ) | - | (1,919,578 | ) | |||||||||
Net loss attributable to non-controlling interest | - | - | - | - | ||||||||||||
NET LOSS TO CONTROLLING INTEREST | $ | (282,807 | ) | $ | (1,636,771 | ) | $ | - | $ | (1,919,578 | ) | |||||
NET EARNINGS (LOSS) PER SHARE | ||||||||||||||||
Basic and Diluted earnings (loss) per share: | $ | (0.05 | ) | $ | (0.29 | ) | $ | (0.10 | ) | |||||||
WEIGHTED AVERAGE SHARES OUTSTANDING | 5,570,125 | 5,565,976 | 18,567,083 |
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