UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
Exhibit 99.2
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
The Company entered into an Exchange Agreement, dated as of August 14, 2020, by and among the Company, Advanced Container Technologies, Inc., a California corporation (“ACT”), and all of the shareholders of ACT (the “Shareholders”), which was amended on September 9, 2020 (as amended, the “Exchange Agreement”). The closing under the Exchange Agreement occurred on October 9, 2020, such that the Shareholders exchanged, on a pro rata basis, all of their shares in ACT for 50,000,000 shares of the Company’s common stock (the “Exchange”). As a result of the Exchange, ACT became the wholly owned subsidiary of the Company. The Company changed its corporate name to Advanced Container Technologies, Inc. on October 3, 2020.
In the unaudited pro forma combined financial statements, the Exchange has been accounted for as an acquisition, using the acquisition method of accounting, in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 805 “Business Combinations”.
The unaudited pro forma combined balance sheet as of September 30, 2020, gives effect to the Exchange as if it took place on that date and combines the historical balance sheets of the Company and ACT as of September 30, 2020. The unaudited pro forma combined statements of operations for the three and nine months ended September 30, 2020, gives effect to the Exchange as if it occurred on January 1, 2020 and combines the historical results of the Company and ACT for the three and nine months ended September 30, 2020.
The unaudited pro forma combined financial statements, including the notes thereto, should be read in conjunction with separate historical consolidated financial statements of the Company and ACT. The Company’s historical audited consolidated financial statements for the years ended December 31, 2019, and 2018, are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission (the “SEC”) on May 28, 2020. In addition, the Company’s unaudited consolidated financial statements for the quarter ended September 30, 2020, are included in its Quarterly Report on Form 10-Q, as filed with the SEC on November 16, 2020. ACT’s historical audited consolidated financial statements for the period from its inception on June 2, 2020, to October 9, 2020, are included as Exhibit 99.1 in this Current Report on Form 8-K.
1
ADVANCED CONTAINER TECHNOLOGIES, INC.
(formerly named Medtainer, Inc.)
UNAUDITED PRO FORMA COMBINED BALANCE SHEETS
AT SEPTEMBER 30, 2020
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| Historical |
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| Advanced Container Technologies, Inc. (California corporation) |
| Advanced Container Technologies, Inc. (Florida corporation) |
| Pro Forma Combined | ||
ASSETS |
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CURRENT ASSETS: |
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Cash | $ | 86,431 | $ | 170,762 | $ | 257,193 | |
Accounts receivable |
| - |
| 100,803 |
| 100,803 | |
Inventories |
| - |
| 153,661 |
| 153,661 | |
Prepaid inventories |
| - |
| 12,000 |
| 12,000 | |
Prepaid expenses |
| - |
| 10,436 |
| 10,436 | |
TOTAL CURRENT ASSETS |
| 86,431 |
| 447,662 |
| 534,093 | |
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Property and equipment, net of accumulated depreciation of $134,364 |
| - |
| 59,378 |
| 59,378 | |
Intangible assets, net of accumulated amortization of $186,928 |
| - |
| 1,345,072 |
| 1,345,072 | |
Goodwill |
| - |
| 1,020,314 |
| 1,020,314 | |
Security deposits |
| - |
| 8,699 |
| 8,699 | |
TOTAL ASSETS | $ | 86,431 | $ | 2,881,125 | $ | 2,967,556 | |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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CURRENT LIABILITIES: |
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Accounts payable and accrued expenses | $ | 150 | $ | 355,807 | $ | 355,957 | |
Accrued interest payable |
| - |
| 120,427 |
| 120,427 | |
Payroll liabilities payable |
| - |
| 223,831 |
| 223,831 | |
Customer deposits payable |
| - |
| 74,495 |
| 74,495 | |
Convertible notes payable |
| - |
| 81,172 |
| 81,172 | |
Notes payable |
| - |
| 373,959 |
| 373,959 | |
Payroll Protection Program note payable |
| - |
| 79,715 |
| 79,715 | |
Loan payable - stockholders |
| - |
| 439,602 |
| 439,602 | |
TOTAL CURRENT LIABILITIES |
| 150 |
| 1,749,008 |
| 1,749,158 | |
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LONG - TERM LIABILITIES |
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Payroll Protection Program note payable |
| - |
| 57,975 |
| 57,975 | |
Loan payable - stockholder |
| - |
| 108,791 |
| 108,791 | |
TOTAL LONG - TERM LIABILITIES: |
| - |
| 166,766 |
| 166,766 | |
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TOTAL LIABILITIES |
| 150 |
| 1,915,774 |
| 1,915,924 | |
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STOCKHOLDERS' EQUITY (DEFICIT) |
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Preferred stock |
| - |
| 10 |
| 10 | |
Common stock |
| 86,292 |
| 10 |
| 86,302 | |
Additional paid in capital |
| - |
| 6,404,279 |
| 6,404,279 | |
Accumulated (deficit) equity |
| (11) |
| (5,438,948) |
| (5,438,959) | |
TOTAL STOCKHOLDERS' EQUITY |
| 86,281 |
| 965,351 |
| 1,051,632 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 86,431 | $ | 2,881,125 | $ | 2,967,556 | |
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The accompanying notes are an integral part of these financial statements. | |||||||
2
ADVANCED CONTAINER TECHNOLOGIES, INC.
(formerly named Medtainer, Inc.)
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020
| Advanced Container Technologies, Inc. (California corporation) |
| Advanced Container Technologies, Inc. (Florida corporation) |
| Pro Forma Combined | |
Revenues | $ | - | $ | 1,521,022 | $ | 1,521,022 |
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Cost of goods sold |
| - |
| 767,133 |
| 767,133 |
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Gross profit |
| - |
| 753,889 | $ | 753,889 |
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Operating expenses: |
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Operating expense |
| - |
| 1,238,964 |
| 1,238,964 |
Total operating expenses |
| - |
| 1,238,964 |
| 1,238,964 |
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Operating loss |
| - |
| (485,075) |
| (485,075) |
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Non-operating expenses |
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Other income (expense) |
| (11) |
| (18,510) |
| (18,521) |
Total non-operating expenses, net |
| (11) |
| (18,510) |
| (18,521) |
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Loss before income taxes |
| (11) |
| (503,585) |
| (503,596) |
Income tax provision |
| - |
| - |
| - |
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Net loss | $ | (11) | $ | (503,585) | $ | (503,596) |
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Basic profit (loss) per common share |
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| $ | (0.61) | $ | (0.61) |
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Diluted profit (loss) per common share |
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| $ | (0.44) | $ | (0.44) |
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Basic weighted average common shares outstanding |
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| 826,121 |
| 50,826,121 |
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Diluted weighted average common shares outstanding |
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| 1,136,047 |
| 51,136,047 |
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The accompanying notes are an integral part of these financial statements. | ||||||
3
ADVANCED CONTAINER TECHNOLOGIES, INC.
(formerly named Medtainer, Inc.)
UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020
(Unaudited)
| Advanced Container Technologies, Inc. (California corporation) |
| Advanced Container Technologies, Inc. (Florida corporation) |
| Pro Forma Combined | |
Revenues | $ | - | $ | 671,853 | $ | 671,853 |
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Cost of goods sold |
| - |
| 349,087 |
| 349,087 |
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Gross profit |
| - |
| 322,766 | $ | 322,766 |
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Operating expenses: |
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Operating expense |
| - |
| 226,526 |
| 226,526 |
Total operating expenses |
| - |
| 226,526 |
| 226,526 |
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Operating profit |
| - |
| 96,240 |
| 96,240 |
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Non-operating expenses |
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Other income (expense) |
| (11) |
| (9,503) |
| (9,514) |
Total non-operating expenses, net |
| (11) |
| (9,503) |
| (9,514) |
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Loss before income taxes |
| (11) |
| 86,737 |
| 86,726 |
Income tax provision |
| - |
| - |
| - |
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Net profit (loss) | $ | (11) | $ | 86,737 | $ | 86,726 |
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Basic profit (loss) per common share |
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| $ | (0.09) | $ | (0.61) |
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Diluted profit (loss) per common share |
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| $ | (0.07) | $ | (0.44) |
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Basic weighted average common shares outstanding |
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| 1,001,446 |
| 51,001,446 |
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Diluted weighted average common shares outstanding |
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| 1,308,013 |
| 51,308,013 |
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The accompanying notes are an integral part of these financial statements | ||||||
4
ADVANCED CONTAINER TECHNOLOGIES, INC.
(formerly named Medtainer, Inc.)
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(1) Description of the Transaction
Advanced Container Technologies, Inc., a Florida corporation (the “Company”) entered into an Exchange Agreement, dated as of August 14, 2020, by and among the Company, Advanced Container Technologies, Inc., a California corporation (“ACT”), and all of the shareholders of ACT (the “Shareholders”), which was amended on September 9, 2020 (as amended, the “Exchange Agreement”). The closing under the Exchange Agreement occurred on October 9, 2020, such that the Shareholders exchanged, on a pro rata basis, their shares in ACT for 50,000,000 shares of the Company’s common stock (the “Exchange”) and ACT became a wholly owned subsidiary of the company.
(2) Basis of Presentation
The Company has accounted for the Exchange using the acquisition method of accounting, in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 805 “Business Combinations”. Inasmuch as the assets acquired consisted solely of cash and ACT has no material liabilities, it was not necessary to use estimates or assumptions in order to assign fair value to the assets and liabilities of ACT acquired by virtue of the Exchange.
The accompanying unaudited pro forma combined financial information was prepared in accordance with Article 11 of SEC Regulation S-X. The unaudited pro forma combined balance sheets as of September 30, 2020, were prepared using the historical balance sheets of the Company and ACT as at September 30, 2020, and give effect to the Exchange as if it occurred on September 30, 2020. The unaudited pro forma combined statements of operations for the three and nine months ended September 30, 2020, give effect to the Exchange as if it occurred on January 1, 2020, and were prepared using:
·the historical audited financial statements of ACT for the period ended October 9, 2020; and
·the historical unaudited consolidated financial statements of ACTX for the three and nine months ended September 30, 2020.
(3) Accounting Policies
During the preparation of the accompanying unaudited pro forma combined financial information, the Company was not aware of any material differences between its accounting policies and the accounting policies of ACT. However, the Company will continue to review ACT’s accounting policies. The Company does not believe that such differences would have a material impact on the accompanying unaudited pro forma combined financial information.
5
