Attached files
| file | filename |
|---|---|
| EX-99.2 - Fortium Holdings Corp. | ex99-2.htm |
| EX-99.1 - Fortium Holdings Corp. | ex99-1.htm |
| 8-K/A - Fortium Holdings Corp. | form8-ka.htm |
Exhibit 99.3
BANNER ENERGY SERVICES, INC. (FORMERLY MOUNT TAM BIOTECHNOLOGIES, INC.)
PRO FORMA UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma consolidated financial statements give effect to the merger of Banner Midstream Corp. (“Banner Midstream”) as of September 30, 2019 by Banner Energy Services, Inc. (“Banner Energy” and the “Company”) and are based on estimates and assumptions set forth herein and in the notes to such pro forma statements. The transaction was accounted for as a reverse merger by Banner Energy.
On November 13, 2019, Mount Tam Therapeutics, Inc. (“Mount Tam Therapeutics”), a wholly owned subsidiary of Banner Energy, completed the sale of substantially all of its assets and the transfer and satisfaction of certain liabilities, which also constitute substantially all of the assets and the liabilities of the Company, to Torcept Therapeutics, Inc. (“Torcept Therapeutics”).
On November 18, 2019, Banner Energy issued 5,929,424 shares of common stock to the shareholders of Banner Midstream. Banner Midstream became a wholly-owned subsidiary of Banner Energy as a result of this transaction.
The following unaudited pro forma consolidated statements of operations for the nine months ended September 30, 2019 and for the year ended December 31, 2018 of the Company, Banner Midstream and Mount Tam Therapeutics 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 September 30, 2019 assumes the effects of the above as if this transaction had occurred as of January 1, 2019.
BANNER ENERGY SERVICES, INC. (FORMERLY MOUNT TAM BIOTECHNOLOGIES, INC.)
PRO FORMA UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
The unaudited pro forma consolidated financial statements are based upon, and should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2018 and audited consolidated financial statements of Banner Midstream as of and for the year ended December 31, 2018, and interim unaudited consolidated financial statements of Banner Midstream as of September 30, 2019 and for the nine months ended September 30, 2019.
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 as well as to the Company’s annual report on Form 10-K for the year ended December 31, 2018 and the Company’s quarterly report on Form 10-Q for the period ended September 30, 2019 for additional disclosure regarding these transactions.
BANNER ENERGY SERVICES, INC. (FORMERLY MOUNT TAM BIOTECHNOLOGIES, INC.)
NOTES TO UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019
AND FOR THE YEAR DECEMBER 31, 2018
NOTE A – ACCOUNTING TREATMENT APPLIED AS A RESULT OF THIS TRANSACTION
The merger of Banner Midstream is being accounted for as a reverse merger, whereby Banner Midstream is the accounting acquirer.
NOTE B – ADJUSTMENT
| (1) | Represents the sales of Mount Tam Therapeutics assets and liabilities to Torcept Therapeutics on November 13, 2019. Such sales resulted a net gain of $2,857,783. | |
| (2) | To record the proceeds received of a secured loan on November 26, 2019 in the amount of $1,666,667, net of the discount of $166,667. | |
| (3) | Represents the 1 for 95 reverse stock split on November 14, 2019. | |
| (4) | Represents the acquisition of Banner Midstream which was accounted for as a reverse merger on November 18, 2019. There were $160,000 for the year ended December 31, 2018 and $125,000 for the nine months ended September 30, 2019 related to public company expenditures that would remain in the public entity. |
NOTE C – PRO FORMA WEIGHTED AVERAGES SHARES OUTSTANDING (in thousands)
Pro forma shares outstanding assuming the transaction occurred as of September 30, 2019:
| BANM Weighted Average Shares Outstanding | 586,157 | |||
| Pro forma adjustments | 5,929,424 | |||
| Pro forma shares outstanding | 6,515,581 |
BANNER ENERGY SERVICES, INC. (FORMERLY MOUNT TAM BIOTECHNOLOGIES, INC.)
PRO FORMA CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2019
| Banner Energy | Banner Midstream | Pro Forma Banner Energy | ||||||||||||||||
| Services, Inc. | Corp. | Adjustments | Services, Inc. | |||||||||||||||
| ASSETS | ||||||||||||||||||
| CURRENT ASSETS | ||||||||||||||||||
| Cash and restricted cash | $ | 9,094 | $ | 154,395 | (1) | $ | (9,094 | ) | $ | 1,654,395 | ||||||||
| (2) | 1,500,000 | |||||||||||||||||
| Accounts receivable, net of allowance | - | 141,200 | - | 141,200 | ||||||||||||||
| Prepaid expenses and other current assets | 10,522 | 366,397 | (1) | (10,522 | ) | 366,397 | ||||||||||||
| Total current assets | 19,616 | 661,992 | 1,480,384 | 2,161,992 | ||||||||||||||
| NON-CURRENT ASSETS | ||||||||||||||||||
| Property and equipment, net | - | 4,920,317 | - | 4,920,317 | ||||||||||||||
| Right of use assets | - | 502,326 | - | 502,326 | ||||||||||||||
| Assets of discontinued operations | - | 229,890 | - | 229,890 | ||||||||||||||
| Total non-current assets | - | 5,652,533 | - | 5,652,533 | ||||||||||||||
| TOTAL ASSETS | $ | 19,616 | $ | 6,314,525 | $ | 1,480,384 | $ | 7,814,525 | ||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||
| CURRENT LIABILITIES | ||||||||||||||||||
| Accounts payable and accrued liabilities | $ | 928,231 | $ | 1,079,899 | (1) | $ | (928,231 | ) | $ | 1,079,899 | ||||||||
| Accounts payable and accrued liabilities - related parties | 609 | 169,748 | (1) | (609 | ) | 169,748 | ||||||||||||
| Current liabilities of discontinued operations | - | 353,523 | - | 353,523 | ||||||||||||||
| Current portion of lease liability | - | 219,906 | - | 219,906 | ||||||||||||||
| Current portion of long-term debt | 1,948,559 | 5,235,817 | (1) | (1,948,559 | ) | 6,735,817 | ||||||||||||
| (2) | 1,500,000 | |||||||||||||||||
| Note payable - related parties | - | 1,872,492 | - | 1,872,492 | ||||||||||||||
| Due to related parties | - | 58,067 | - | 58,067 | ||||||||||||||
| Total current liabilities | 2,877,399 | 8,989,452 | (1,377,399 | ) | 10,489,452 | |||||||||||||
| NON-CURRENT LIABILITIES | ||||||||||||||||||
| Long-term debt, net of current portion | - | 776,027 | - | 776,027 | ||||||||||||||
| Lease liability, net of current portion | - | 358,842 | - | 358,842 | ||||||||||||||
| Total current liabilities | - | 1,134,869 | - | 1,134,869 | ||||||||||||||
| COMMITMENTS AND CONTINGENCIES | - | - | - | - | ||||||||||||||
| Total liabilities | 2,877,399 | 10,124,321 | (1,377,399 | ) | 11,624,321 | |||||||||||||
| STOCKHOLDERS’ EQUITY (DEFICIT) (Numbers of shares rounded to thousands) | ||||||||||||||||||
| Preferred stock, $0.0001 par value | - | 10 | (3) | (10 | ) | - | ||||||||||||
| Common stock, $0.0001 par value | 5,571 | 547 | (4) | (5,512 | ) | 652 | ||||||||||||
| (3) | 46 | |||||||||||||||||
| Stock subscription payable | (45 | ) | - | (3) | 45 | - | ||||||||||||
| Stock to be issued | 76 | - | (3) | (76 | ) | - | ||||||||||||
| Additional paid-in capital | 7,446,859 | 2,539,239 | (4) | 5,512 | 2,539,144 | |||||||||||||
| (3) | (7,452,497 | ) | ||||||||||||||||
| (3) | 31 | |||||||||||||||||
| Accumulated deficit | (10,310,244 | ) | (6,349,592 | ) | (1) | 2,857,783 | (6,349,592 | ) | ||||||||||
| (3) | 7,452,461 | |||||||||||||||||
| Total stockholders’ equity (deficit) | (2,857,783 | ) | (3,809,796 | ) | 2,857,783 | (3,809,796 | ) | |||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 19,616 | $ | 6,314,525 | $ | 1,480,384 | $ | 7,814,525 | ||||||||||
BANNER ENERGY SERVICES, INC. (FORMERLY MOUNT TAM BIOTECHNOLOGIES, INC.)
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019
| Banner Energy | Banner Midstream | Pro Forma Banner Energy | ||||||||||||||||
| Services, Inc. | Corp. | Adjustments | Services, Inc. | |||||||||||||||
| CONTINUING OPERATIONS | ||||||||||||||||||
| Revenues | $ | - | $ | 12,591,405 | $ | - | $ | 12,591,405 | ||||||||||
| Cost of revenues | - | (8,463,488 | ) | - | (8,463,488 | ) | ||||||||||||
| Gross profit | - | 4,127,917 | - | 4,127,917 | ||||||||||||||
| OPERATING EXPENSES | ||||||||||||||||||
| Salary and salary related costs | - | 1,547,505 | - | 1,547,505 | ||||||||||||||
| Other selling, general and administrative expenses | 1,069,278 | 2,711,984 | (4) | (944,278 | ) | 2,836,984 | ||||||||||||
| Research and development | 164,552 | - | (4) | (164,552 | ) | - | ||||||||||||
| Total operating expenses | 1,233,830 | 4,259,489 | (1,108,830 | ) | 4,384,489 | |||||||||||||
| Loss from continuing operations | (1,233,830 | ) | (131,572 | ) | 1,108,830 | (256,572 | ) | |||||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||||||||
| Other income (expense) | 174 | - | (4) | (174 | ) | - | ||||||||||||
| Interest expense, net | (98,995 | ) | (2,354,776 | ) | (4) | 98,995 | (2,354,776 | ) | ||||||||||
| Total other income (expense) | (98,821 | ) | (2,354,776 | ) | 98,821 | (2,354,776 | ) | |||||||||||
| LOSS FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES AND DISCONTINUED OPERATIONS | (1,332,651 | ) | (2,486,348 | ) | 1,207,651 | (2,611,348 | ) | |||||||||||
| Gain (loss) from discontinued operations | - | (154,884 | ) | (1) | 2,857,783 | (154,884 | ) | |||||||||||
| (4) | (2,857,783 | ) | ||||||||||||||||
| Total discontinued operations | - | (154,884 | ) | - | (154,884 | ) | ||||||||||||
| LOSS FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES | (1,332,651 | ) | (2,641,232 | ) | 1,207,651 | (2,766,232 | ) | |||||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||||
| NET LOSS | $ | (1,332,651 | ) | $ | (2,641,232 | ) | $ | 1,207,651 | $ | (2,766,232 | ) | |||||||
| NET LOSS PER SHARE | ||||||||||||||||||
| Basic and Diluted loss per share: | ||||||||||||||||||
| Continuing operations | $ | (2.27 | ) | $ | (0.51 | ) | $ | (0.40 | ) | |||||||||
| Discontinued operations | $ | - | $ | (0.03 | ) | $ | (0.02 | ) | ||||||||||
| Total | $ | (2.27 | ) | $ | (0.55 | ) | $ | (0.42 | ) | |||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING | 586,157 | 4,832,198 | 6,515,581 | |||||||||||||||
BANNER ENERGY SERVICES, INC. (FORMERLY MOUNT TAM BIOTECHNOLOGIES, INC.)
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2018
| Banner Energy | Banner Midstream | Pro Forma Banner Energy | ||||||||||||||||
| Services, Inc. | Corp. | Adjustments | Services, Inc. | |||||||||||||||
| CONTINUING OPERATIONS | ||||||||||||||||||
| Revenues | $ | - | $ | 8,614,989 | $ | - | $ | 8,614,989 | ||||||||||
| Cost of revenues | - | (7,052,762 | ) | - | (7,052,762 | ) | ||||||||||||
| Gross profit | - | 1,562,227 | - | 1,562,227 | ||||||||||||||
| OPERATING EXPENSES | ||||||||||||||||||
| Salary and salary related costs | - | 2,117,285 | - | 2,117,285 | ||||||||||||||
| Other selling, general and administrative expenses | 1,359,736 | 2,200,718 | (4) | (1,199,736 | ) | 2,360,718 | ||||||||||||
| Research and development | 456,955 | - | (4) | (456,955 | ) | - | ||||||||||||
| Total operating expenses | 1,816,691 | 4,318,003 | (1,656,691 | ) | 4,478,003 | |||||||||||||
| Loss from continuing operations | (1,816,691 | ) | (2,755,776 | ) | 1,656,691 | (2,915,776 | ) | |||||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||||||||
| Sale of subsidiary, net of expenses | 332,801 | - | (4) | (332,801 | ) | - | ||||||||||||
| Bargain purchase gain | - | 208,690 | - | 208,690 | ||||||||||||||
| Other income (expense) | 315,055 | - | 315,055 | |||||||||||||||
| Interest expense, net | (343,899 | ) | (1,168,357 | ) | (4) | 343,899 | (1,168,357 | ) | ||||||||||
| Total other income (expense) | (11,098 | ) | (644,612 | ) | 11,098 | (644,612 | ) | |||||||||||
| LOSS FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES AND DISCONTINUED OPERATIONS | (1,827,789 | ) | (3,400,388 | ) | 1,667,789 | (3,560,388 | ) | |||||||||||
| Gain (loss) from discontinued operations | - | (307,972 | ) | (1) | 2,857,783 | (307,972 | ) | |||||||||||
| (4) | (2,857,783 | ) | ||||||||||||||||
| Total discontinued operations | - | (307,972 | ) | - | (307,972 | ) | ||||||||||||
| LOSS FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES | (1,827,789 | ) | (3,708,360 | ) | 1,667,789 | (3,868,360 | ) | |||||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||||
| NET LOSS | $ | (1,827,789 | ) | $ | (3,708,360 | ) | $ | 1,667,789 | $ | (3,868,360 | ) | |||||||
| NET LOSS PER SHARE | ||||||||||||||||||
| Basic and Diluted loss per share: | ||||||||||||||||||
| Continuing operations | $ | (3.19 | ) | $ | (0.86 | ) | $ | (0.55 | ) | |||||||||
| Discontinued operations | $ | - | $ | (0.08 | ) | $ | (0.05 | ) | ||||||||||
| Total | $ | (3.19 | ) | $ | (0.94 | ) | $ | (0.59 | ) | |||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING | 573,634 | 3,940,094 | 6,503,058 | |||||||||||||||