Attached files
| file | filename |
|---|---|
| EX-99.4 - UNAUDITED COMBINED FINANCIAL STATEMENTS OF WHITE RIVER HOLDINGS CORP, WHITE RIVE - Ecoark Holdings, Inc. | ea124008ex99-4_ecoarkhold.htm |
| EX-99.3 - AUDITED COMBINED FINANCIAL STATEMENTS OF WHITE RIVER ENERGY LLC, AND WHITE RIVER - Ecoark Holdings, Inc. | ea124008ex99-3_ecoarkhold.htm |
| EX-99.2 - AUDITED FINANCIAL STATEMENTS OF SHAMROCK UPSTREAM ENERGY LLC, AS OF AND FOR THE - Ecoark Holdings, Inc. | ea124008ex99-2_ecoarkhold.htm |
| EX-99.1 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF BANNER MIDSTREAM CORP. AS OF AND FO - Ecoark Holdings, Inc. | ea124008ex99-1_ecoarkhold.htm |
| 8-K/A - AMENDMENT NO. 1 TO FORM 8-K - Ecoark Holdings, Inc. | ea124008-8ka1_ecoarkholdings.htm |
Exhibit 99.5
ECOARK HOLDINGS, INC.
PRO FORMA UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS AND SHARES IN THOUSANDS)
The following unaudited pro forma consolidated financial statements give effect to the acquisition of Banner Midstream Corp., White River Holdings Corp., and Shamrock Upstream Energy LLC. The White River Holdings Corp. figures include White River Energy LLC and White River Operating LLC., collectively referred to as Banner (“Banner”) as of December 31, 2019 by Ecoark Holdings, Inc. (“Ecoark” and the “Company”) and are based on estimates and assumptions set forth herein and in the notes to such pro forma statements.
On March 27, 2020, Banner Midstream Corp. acquired both White River Holdings Corp., and Shamrock Upstream Energy LLC, and then was acquired by Ecoark. Ecoark issued 8,945 shares of common stock valued at $4,866 to acquire Banner Midstream Corp. This transaction was completed and Ecoark was the surviving entity and Banner Midstream Corp., along with White River Holdings Corp. and Shamrock Upstream Energy LLC became wholly-owned subsidiaries.
In addition, on May 31, 2019, the Trend Discovery Holdings LLC (“Trend Discovery”) through a newly formed company, Trend Discovery Holdings, Inc. entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Ecoark to acquire 100% of Trend Discovery pursuant to a merger of Trend Discovery with and into Ecoark (the “Merger”). The Merger was completed on May 31, 2019 and as agreed in the Merger Agreement, Ecoark is the surviving entity in the Merger and the separate corporate existence of Trend Discovery has ceased to exist. Pursuant to the terms of the Merger, Trend Discovery Holdings, Inc. exchanged their shares into 5,500 shares of Ecoark valued at $3,236.
These transactions are being accounted for as an acquisition. No cash was paid relating to the acquisitions.
The following unaudited pro forma consolidated statements of operations for the year ended December 31, 2019 (Banner Midstream Corp. and Shamrock Upstream Energy LLC), from April 1, 2019 (Inception) through December 31, 2019 (White River Holdings Corp.) and for the nine months ended December 31, 2019 (Ecoark) of the Company and Banner gives effect to the above as if the transactions had occurred at the beginning of the period. The unaudited pro forma consolidated statements of operations for the year ended December 31, 2018 (Banner Midstream Corp., Shamrock Upstream Energy LLC and Trend Discovery) and March 31, 2019 (Ecoark) of the Company, Banner and Trend Discovery 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 December 31, 2019 assumes the effects of the above as if this transaction had occurred as of January 1, 2018 (Banner Midstream Corp., Shamrock Upstream Energy, Inc., and Trend Discovery), April 1, 2019 (White River Holdings Corp.) and April 1, 2018 (Ecoark).
ECOARK HOLDINGS, INC.
PRO FORMA UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS AND SHARES IN THOUSANDS)
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 March 31, 2019 and audited consolidated financial statements of Trend Discovery as of and for the year ended December 31, 2018, audited consolidated financial statements of Banner Midstream Corp. as of and for the years ended December 31, 2019 and 2018, audited financial statements of Shamrock Upstream Energy LLC as of and for the years ended December 31, 2019 and 2018, and the audited combined financial statements of White River Operating LLC and White River Energy LLC as of June 30, 2019 and for the period April 1, 2019 (Inception) through June 30, 2019 and the unaudited combined financial statements of White River Holdings Corp, White River Operating LLC and White River Energy LLC as of December 31, 2019 and for the six months ended December 31, 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 March 31, 2020 for additional disclosure regarding these acquisitions.
2
ECOARK HOLDINGS, INC.
NOTES TO UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE/TWELVE MONTHS ENDED DECEMBER 31, 2019
FOR THE YEAR ENDED MARCH 31, 2019/DECEMBER 31, 2018
(AMOUNTS AND SHARES IN THOUSANDS)
NOTE A – ACCOUNTING TREATMENT APPLIED AS A RESULT OF THIS TRANSACTION
The acquisition of Banner is being accounted for as a business combination, whereby Ecoark is the acquirer.
NOTE B – ADJUSTMENT
| (1) | To record the acquisition of Banner (March 27, 2020) which includes the adjustment of certain amounts to their respective fair values for changes in those amounts for the current fiscal year. Ecoark acquired Banner for $4,866 (8.945 shares of common stock) and assumed debt of approximately $11,774. | |
| (2) | Represents the conversion of a credit facility and accrued interest of $2,275 (3,855 shares of common stock). | |
| (3) | Represents the exercise of warrants that contained derivative liabilities into shares of common stock. | |
| (4) | Collection of accounts receivable through March 27, 2020. | |
| (5) | Payment of accounts payable through March 27, 2020. | |
| (6) | Represents subsequent events for issuance of common shares and conversion of debt, including the exercise of warrants and stock options through June 29, 2020. | |
| (7) | Represents repayment of debt through June 29, 2020. | |
| (8) | Represents activity of Ecoark from January 1, 2020 through March 27, 2020. | |
| (9) | Represents estimated change in depreciation, amortization, depletion and accretion as if Banner was operating in full capacity. | |
| (10) | Represents estimated change in interest expense as a result of the conversion/repayment of debt that has occurred through June 29, 2020. |
3
NOTE C – PRO FORMA WEIGHTED AVERAGES SHARES OUTSTANDING (in thousands)
Pro forma shares outstanding assuming the transaction occurred as of December 31, 2019:
| EARK Weighted Average Shares Outstanding | 61,342 | |
| Pro forma adjustments | 29,722 | |
| Pro forma shares outstanding | 91,064 |
4
ECOARK HOLDINGS, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2019
(IN THOUSANDS)
| Ecoark Holdings, | Banner Midstream | White River | Pro Forma Ecoark Holdings, | ||||||||||||||||||||||
| Inc. | Corp. | Holdings | Shamrock | Adjustments | Inc. | ||||||||||||||||||||
| ASSETS | |||||||||||||||||||||||||
| CURRENT ASSETS | |||||||||||||||||||||||||
| Cash and restricted cash | $ | 106 | $ | 227 | $ | 101 | $ | 55 | (4 | ) | $ | 96 | $ | 5,621 | |||||||||||
| (5 | ) | (179 | ) | ||||||||||||||||||||||
| (6 | ) | 7,013 | |||||||||||||||||||||||
| (7 | ) | (1,798 | ) | ||||||||||||||||||||||
| Accounts receivable, net of allowance | 96 | 44 | - | - | (1 | ) | 128 | 172 | |||||||||||||||||
| (4 | ) | (96 | ) | ||||||||||||||||||||||
| Prepaid expenses and other current assets | 420 | 523 | 11 | - | (1 | ) | 238 | 1,192 | |||||||||||||||||
| Total current assets | 622 | 794 | 112 | 55 | 5,402 | 6,985 | |||||||||||||||||||
| NON-CURRENT ASSETS | |||||||||||||||||||||||||
| Goodwill | 3,223 | - | - | - | (1 | ) | 7,002 | 10,225 | |||||||||||||||||
| Property and equipment, net | 608 | 3,489 | - | 42 | (1 | ) | (174 | ) | 3,965 | ||||||||||||||||
| Intangible assets | - | - | - | - | (1 | ) | 2,350 | 2,350 | |||||||||||||||||
| Oil and gas properties | - | - | 520 | 582 | (1 | ) | 5,033 | 6,135 | |||||||||||||||||
| Right of use assets | - | 779 | - | - | (1 | ) | (48 | ) | 731 | ||||||||||||||||
| Assets of discontinued operations | - | 249 | - | - | - | 249 | |||||||||||||||||||
| Other assets | 25 | - | - | - | - | 25 | |||||||||||||||||||
| Total non-current assets | 3,856 | 4,517 | 520 | 624 | 14,163 | 23,680 | |||||||||||||||||||
| TOTAL ASSETS | $ | 4,478 | $ | 5,311 | $ | 632 | $ | 679 | $ | 19,565 | $ | 30,665 | |||||||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||||||||
| CURRENT LIABILITIES | |||||||||||||||||||||||||
| Accounts payable | $ | 368 | $ | 2,201 | $ | 270 | $ | 4 | (1 | ) | $ | (2,092 | ) | $ | 61 | ||||||||||
| (5 | ) | (179 | ) | ||||||||||||||||||||||
| (6 | ) | (511 | ) | ||||||||||||||||||||||
| Accrued liabilities | 774 | - | - | - | (1 | ) | 2,762 | 3,286 | |||||||||||||||||
| (2 | ) | (250 | ) | ||||||||||||||||||||||
| Current liabilities of discontinued operations | - | 228 | - | - | - | 228 | |||||||||||||||||||
| Current portion of lease liability | - | 220 | - | - | (1 | ) | 2 | 222 | |||||||||||||||||
| Current portion of long-term debt | 2,435 | 5,412 | - | 50 | (1 | ) | 1,029 | 1,759 | |||||||||||||||||
| (2 | ) | (2,525 | ) | ||||||||||||||||||||||
| (6 | ) | (3,942 | ) | ||||||||||||||||||||||
| (7 | ) | (700 | ) | ||||||||||||||||||||||
| Note payable - related parties | 403 | 2,029 | 275 | - | (7 | ) | (1,023 | ) | 1,684 | ||||||||||||||||
| Due to prior owners | - | - | - | - | (1 | ) | 2,358 | 2,283 | |||||||||||||||||
| (7 | ) | (75 | ) | ||||||||||||||||||||||
| Derivative liabilities | 3,759 | - | - | - | (3 | ) | (984 | ) | 2,775 | ||||||||||||||||
| Total current liabilities | 7,739 | 10,090 | 545 | 54 | (6,130 | ) | 12,298 | ||||||||||||||||||
| NON-CURRENT LIABILITIES | |||||||||||||||||||||||||
| Asset retirement obligations | 223 | 223 | |||||||||||||||||||||||
| Long-term debt, net of current portion | - | 463 | - | - | (1 | ) | (42 | ) | 421 | ||||||||||||||||
| Lease liability, net of current portion | - | 566 | - | - | (1 | ) | (56 | ) | 510 | ||||||||||||||||
| Total current liabilities | - | 1,029 | - | 223 | (98 | ) | 1,154 | ||||||||||||||||||
| COMMITMENTS AND CONTINGENCIES | - | - | - | - | - | - | |||||||||||||||||||
| Total liabilities | 7,739 | 11,119 | 545 | 277 | (6,228 | ) | 13,452 | ||||||||||||||||||
| STOCKHOLDERS’ EQUITY (DEFICIT) (Numbers of shares rounded to thousands) | |||||||||||||||||||||||||
| Preferred stock, $0.001 par value | - | - | - | - | - | - | |||||||||||||||||||
| Common stock, $0.001 par value | 69 | 1 | - | - | (1 | ) | 9 | 99 | |||||||||||||||||
| (1 | ) | (1 | ) | ||||||||||||||||||||||
| (2 | ) | 4 | |||||||||||||||||||||||
| (3 | ) | 4 | |||||||||||||||||||||||
| (6 | ) | 13 | |||||||||||||||||||||||
| Additional paid-in capital | 125,681 | 2,539 | - | - | (1 | ) | 4,857 | 146,973 | |||||||||||||||||
| (1 | ) | (2,539 | ) | ||||||||||||||||||||||
| (2 | ) | 2,771 | |||||||||||||||||||||||
| (3 | ) | 2,046 | |||||||||||||||||||||||
| (6 | ) | 11,618 | |||||||||||||||||||||||
| Accumulated deficit | (127,340 | ) | (8,348 | ) | 87 | 402 | (1 | ) | 8,242 | (128,188 | ) | ||||||||||||||
| (3 | ) | (1,066 | ) | ||||||||||||||||||||||
| (6 | ) | (165 | ) | ||||||||||||||||||||||
| Treasury stock, at cost | (1,671 | ) | - | - | - | - | (1,671 | ) | |||||||||||||||||
| Total stockholders’ equity (deficit) | (3,261 | ) | (5,808 | ) | 87 | 402 | 25,793 | 17,213 | |||||||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 4,478 | $ | 5,311 | $ | 632 | $ | 679 | $ | 19,565 | $ | 30,665 | |||||||||||||
5
ECOARK HOLDINGS, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE/TWELVE MONTHS ENDED DECEMBER 31, 2019
(IN THOUSANDS)
| Ecoark
Holdings, Inc. | Banner
Midstream Corp. | White
River Holdings | Shamrock | Adjustments | Pro
Forma Ecoark Holdings, Inc. | ||||||||||||||||||||
| (Nine Months) | (April 1, 2019 (Inception) | ||||||||||||||||||||||||
| through December 31, 2019) | |||||||||||||||||||||||||
| CONTINUING OPERATIONS | |||||||||||||||||||||||||
| Revenues | $ | 219 | $ | 14,715 | $ | 593 | $ | 37 | (8) | $ | 129 | $ | 15,693 | ||||||||||||
| Cost of revenues | (128 | ) | (10,228 | ) | (549 | ) | (270 | ) | (8) | (37 | ) | (11,212 | ) | ||||||||||||
| Gross profit | 91 | 4,487 | 44 | (233 | ) | 92 | 4,481 | ||||||||||||||||||
| OPERATING EXPENSES | |||||||||||||||||||||||||
| Salary and salary related costs | - | 1,940 | - | - | - | 1,940 | |||||||||||||||||||
| Professional fees and consulting | - | - | - | - | - | ||||||||||||||||||||
| Other selling, general and administrative expenses | 5,680 | 3,516 | 893 | 115 | (8) | 1,625 | 12,579 | ||||||||||||||||||
| (9) | 750 | ||||||||||||||||||||||||
| Research and development | 2,109 | - | - | - | (8) | 363 | 2,472 | ||||||||||||||||||
| Total operating expenses | 7,789 | 5,456 | 893 | 115 | 2,738 | 16,991 | |||||||||||||||||||
| Loss from continuing operations | (7,698 | ) | (969 | ) | (849 | ) | (348 | ) | (2,646 | ) | (12,510 | ) | |||||||||||||
| OTHER INCOME (EXPENSE) | |||||||||||||||||||||||||
| Change in fair value of derivative liability | (2,392 | ) | - | - | - | (8) | 2,023 | (369 | ) | ||||||||||||||||
| Loss on exchange of warrants for common stock | (1,059 | ) | - | - | - | (8) | (1,040 | ) | (2,099 | ) | |||||||||||||||
| Gain on conversion of credit facility | - | - | - | - | (8) | 541 | 541 | ||||||||||||||||||
| Gain on sale of equipment/properties | 16 | - | 134 | - | - | 150 | |||||||||||||||||||
| Forgiveness of debt | - | 300 | - | - | - | 300 | |||||||||||||||||||
| Other income (expense) | - | (1,099 | ) | - | - | - | (1,099 | ) | |||||||||||||||||
| Interest expense, net | (323 | ) | (2,866 | ) | (8 | ) | (3 | ) | (8) | (100 | ) | (1,300 | ) | ||||||||||||
| (10) | 2,000 | ||||||||||||||||||||||||
| Total other income (expense) | (3,758 | ) | (3,665 | ) | 126 | (3 | ) | 3,424 | (3,876 | ) | |||||||||||||||
| LOSS FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES AND DISCONTINUED OPERATIONS | (11,456 | ) | (4,634 | ) | (723 | ) | (351 | ) | 778 | (16,386 | ) | ||||||||||||||
| Loss from discontinued operations | 2 | (5 | ) | - | - | - | (3 | ) | |||||||||||||||||
| Total discontinued operations | 2 | (5 | ) | - | - | - | (3 | ) | |||||||||||||||||
| LOSS FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES | (11,454 | ) | (4,639 | ) | (723 | ) | (351 | ) | 778 | (16,389 | ) | ||||||||||||||
| Provision for income taxes | - | - | - | - | - | - | |||||||||||||||||||
| NET LOSS | $ | (11,454 | ) | $ | (4,639 | ) | $ | (723 | ) | $ | (351 | ) | $ | 778 | $ | (16,389 | ) | ||||||||
| NET LOSS PER SHARE | |||||||||||||||||||||||||
| Basic and Diluted loss per share: | |||||||||||||||||||||||||
| Continuing operations | $ | (0.19 | ) | $ | (0.18 | ) | |||||||||||||||||||
| Discontinued operations | $ | 0.00 | $ | (0.00 | ) | ||||||||||||||||||||
| Total | $ | (0.19 | ) | $ | (0.18 | ) | |||||||||||||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING | 61,342 | 91,064 | |||||||||||||||||||||||
6
ECOARK HOLDINGS, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2019
(IN THOUSANDS)
| Ecoark Holdings, Inc. | Banner Midstream Corp. | Trend Discovery Holdings | Shamrock | Adjustments | Pro Forma Ecoark Holdings, Inc. | |||||||||||||||||||
| (a) | (a) | (a) | ||||||||||||||||||||||
| CONTINUING OPERATIONS | ||||||||||||||||||||||||
| Revenues | $ | 1,062 | $ | 8,615 | $ | 405 | $ | 19 | $ | - | $ | 10,101 | ||||||||||||
| Cost of revenues | (699 | ) | (7,053 | ) | - | (172 | ) | - | (7,924 | ) | ||||||||||||||
| Gross profit | 363 | 1,562 | 405 | (153 | ) | - | 2,177 | |||||||||||||||||
| OPERATING EXPENSES | ||||||||||||||||||||||||
| Salary and salary related costs | 4,848 | 2,117 | - | - | - | 6,965 | ||||||||||||||||||
| Professional fees and consulting | 1,315 | - | - | - | - | 1,315 | ||||||||||||||||||
| Other selling, general and administrative expenses | 5,028 | 2,201 | 22 | 92 | - | 7,343 | ||||||||||||||||||
| Research and development | 3,320 | - | - | - | - | 3,320 | ||||||||||||||||||
| Total operating expenses | 14,511 | 4,318 | 22 | 92 | - | 18,943 | ||||||||||||||||||
| Loss from continuing operations | (14,148 | ) | (2,756 | ) | 383 | (245 | ) | - | (16,766 | ) | ||||||||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||||||||||||||
| Change in fair value of derivative liability | 3,160 | - | - | - | - | 3,160 | ||||||||||||||||||
| Loss on exchange of warrants for common stock | - | - | - | - | - | - | ||||||||||||||||||
| Gain on conversion of credit facility | - | - | - | - | - | - | ||||||||||||||||||
| Gain on sale of equipment/properties | - | - | - | - | - | - | ||||||||||||||||||
| Forgiveness of debt | - | - | - | - | - | - | ||||||||||||||||||
| Other income (expense) | - | 524 | - | - | - | 524 | ||||||||||||||||||
| Interest expense, net | (417 | ) | (1,168 | ) | - | (2 | ) | - | (1,587 | ) | ||||||||||||||
| Total other income (expense) | 2,743 | (644 | ) | - | (2 | ) | - | 2,097 | ||||||||||||||||
| LOSS FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES AND DISCONTINUED OPERATIONS | (11,405 | ) | (3,400 | ) | 383 | (247 | ) | - | (14,669 | ) | ||||||||||||||
| Loss from discontinued operations | (2,243 | ) | (308 | ) | - | - | - | (2,551 | ) | |||||||||||||||
| Total discontinued operations | (2,243 | ) | (308 | ) | - | - | - | (2,551 | ) | |||||||||||||||
| LOSS FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES | (13,648 | ) | (3,708 | ) | 383 | (247 | ) | - | (17,220 | ) | ||||||||||||||
| Provision for income taxes | (2 | ) | - | - | - | - | (2 | ) | ||||||||||||||||
| NET LOSS | $ | (13,650 | ) | $ | (3,708 | ) | $ | 383 | $ | (247 | ) | $ | - | $ | (17,222 | ) | ||||||||
| NET LOSS PER SHARE | ||||||||||||||||||||||||
| Basic and Diluted loss per share: | ||||||||||||||||||||||||
| Continuing operations | $ | (0.22 | ) | $ | (0.16 | ) | ||||||||||||||||||
| Discontinued operations | $ | (0.04 | ) | $ | (0.03 | ) | ||||||||||||||||||
| Total | $ | (0.27 | ) | $ | (0.19 | ) | ||||||||||||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING | 51,010 | 91,064 |
| (a) | Represent the year ended December 31, 2018 |
7