Form 8-K - Current report

 

 

 

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 12, 2024

 

Commission File No. 000-55000

 

EARTH SCIENCE TECH, INC.

(Exact name of registrant as specified in its charter)

 

florida		80-0961484
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

 

8950 SW 74 ^th CT

Suite 1401

Miami, FL 33156, USA

(Address of principal executive offices, zip code)

 

[phone]

(Registrant’s telephone number, including area code)

 

8950 SW 74 ^th CT

Suite 101

Miami, FL 33156, USA

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(g) of the Act:

 

Title of Each Class		Trading Symbol		Name of each exchange on which registered
Common Stock $0.001 par value		ETST		Over the Counter Bulletin Board

 

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 pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
	☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
	☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
	☐	Pre-commencement 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. ☐

 

 

 

 

Item 2.01 Completion of Acquisitions

 

On October 1, 2024, Earth Science Tech, Inc., a Florida corporation (OTC: ETST) (the “Company”) acquired Avenvi, LLC., a Florida limited liability company (the “Seller”) and is filing this 8-K with audited financials completed on December 12, 2024 pursuant to the previously announced Purchase and Sale Agreement dated October 1, 2024 (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 Seller.

 

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.

 

Item 9.01. Financial Statements and Exhibits.

 

(a) Financial Statements of Businesses Acquired

 

The financial statements of Avenvi, LLC. required by Item 9.01(a) to this Current Report on Form 8-K are incorporated herein by reference to (i) Avenvi, LLC’s audited consolidated balance sheets as of and for the period ended September 30, 2024.

 

(b) Exhibits

 

Exhibit No.		Description
2.1		Acquisition Agreement
23.1		Independent Auditor’s Report.
99.2		Audited Consolidated Balance Sheets of Avenvi, LLC. as of September 30, 2024
104		Cover 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 SCIENCE TECH, INC.
Dated: December 12, 2024	By:	/s/ Giorgio R. Saumat
		Giorgio R. Saumat
	Its:	CEO and Chairman of the Board
Dated: December 12, 2024	By:	/s/ Ernesto L. Flores
		Ernesto L. Flores
	Its:	Chief Financial Officer CFO

 

 

 

Exhibit 2.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit 23.1

 

 

 

 

 

 

Exhibit 99.2

 

AVENVI, LLC.

 

FINANCIAL STATEMENTS

TABLE OF CONTENTS

 

	Page
Independent Auditor’s Report	F-1
Balance Sheet	F-2
Statement of Operations	F-3
Statement of Changes in Owners’ Equity	F-4
Statement of Cash Flows	F-5
Notes to Financial Statements	F-6

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

F-1

 

AVENVI, LLC.

BALANCE SHEET

AS OF SEPTEMBER 30, 2024

 

		2024
ASSETS
Current Assets
Cash		$	282,013
Equity investments at fair value			183,756
Total Current Assets			465,769
Non-Current assets
Property and Equipment			590,371
TOTAL ASSETS		$	1,056,140
LIABILITIES AND MEMBERS’ EQUITY
Partners’ Capital		$	656,349
Accumulated Earnings			399,791
Total Members’ Equity			1,056,140
TOTAL LIABILITIES AND MEMBERS’ EQUITY		$	1,056,140

 

The accompanying notes are an integral part of this financial statement.

 

F-2

 

AVENVI, LLC.

STATEMENT OF OPERATIONS

FOR THE NINE MONTHS PERIOD FROM JANUARY 1, 2024 (DATE OF INCORPORATION) TO SEPTEMBER 30, 2024

 

Revenue		$	-
Expenses
General and Administrative Expenses			2,346
Total Expenses			2,346
Net Operating Loss			(2,346	)
Net gain on sale of investments			407,119
Dividend income			2,185
Unrealized loss of fair value changes of investments			(3,068	)
Other Income/Expenses
Other Income			2,378
Interest income			139
Interest Expense			(6,616	)
Net Income before taxes			399,791
Income Taxes			-
Net Income		$	399,791

 

The accompanying notes are an integral part of this financial statement.

 

F-3

 

AVENVI, LLC.

STATEMENT OF MEMBERS’ EQUITY

FOR THE NINE MONTHS PERIOD FROM JANUARY 1, 2024 (DATE OF INCORPORATION) TO SEPTEMBER 30, 2024

 

			Members’ Equity
Balance at January 1, 2024			-
Capital Contributions		$	1,000,000
Partner Distributions			(343,651	)
Net Income (Loss)			399,791
Balance at September 30, 2024		$	1,056,140

 

The accompanying notes are an integral part of this financial statement.

 

F-4

 

AVENVI, LLC.

STATEMENT OF CASH FLOWS

FOR THE NINE MONTHS PERIOD FROM JANUARY 1, 2024 (DATE OF INCORPORATION) TO SEPTEMBER 30, 2024

 

		2024
Cash flows from operating activities:
Net Income		$	399,791
Adjustments to reconcile net income to net cash provided by operating activities:
Unrealized loss on investment			3,068
Gain on sale of investments			(407,119	)
Net cash used in operating activities			(4,260	)
Cash flows from investing activities:
Purchase of investments			(6,917,271	)
Sale of investments			7,137,566
Acquisition of property and equipment			(590,371	)
Net cash used in investing activities			(370,076	)
Cash flows from financing activities:
Capital Contribution			1,000,000
Distributions			(343,651	)
Net Cash provided by financing activities			656,349
Net increase (decrease) in cash and cash equivalents			282,013
Cash and cash equivalents at beginning of the period			-
Cash and cash equivalents at end of the period		$	282,013
Supplemental Disclosure of Cash Flow Information
Cash paid for interest		$	6,616
Cash paid for taxes		$	-

 

The accompanying notes are an integral part of this financial statement.

 

F-5

 

AVENVI, LLC.

NOTES TO FINANCIAL STATEMENTS

(AUDITED)

 

Note 1 — Organization and Nature of Operations

 

Avenvi, LLC (“the “Company”) was incorporated under the laws of the State of Florida on January 1^st, 2024. The Company subsequently changed its domicile to the State of Florida on January 1^st, 2024. Avenvi, LLC is a multi-faceted company specializing in multiple aspects of the real estate industry. The Company has built a portfolio of real estate ready to be developed, and it also offers financing to purchasers of Avenvi’s developed properties. The Company has thus positioned itself to be able to operate in the real estate industry from the identification of development opportunities all the way to the financing of purchases by end users. The Company also engages in short- term security investments.

 

Note 2 — Summary of Significant Accounting Policies

 

Basis of presentation

 

The accompanying consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

 

Use of estimates and assumptions

 

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (US GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

 

Carrying value, recoverability, and impairment of long-lived assets

 

The Company tests long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. As of September 30, 2024 no such impairment was needed.

 

Cash and cash equivalents

 

Cash and cash equivalents include all highly liquid debt instruments with original maturities of three months or less which are not securing any corporate obligations. As of September 30, 2024, the Company held a cash balance of $282,013, the organization’s balances exceeded federally insured limits by approximately $16,429 as of September 30, 2024.

 

F-6

 

Avenvi, LLC.

Notes to Financial Statements

(Audited)

 

Cash flows reporting

 

The Company follows ASC 230 to report cash flows. This standard classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by this standard to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments. The Company reports separately information about investing and financing activities not resulting in cash receipts or payments in the period pursuant to this standard.

 

Fair Value

 

FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) establishes a framework for all fair value measurements and expands disclosures related to fair value measurement and developments. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 requires that assets and liabilities measured at fair value are classified and disclosed in one of the following three categories:

 

Level 1 — Quoted market prices for identical assets or liabilities in active markets or observable inputs; and

 

Level 2 — Significant other observable inputs that can be corroborated by observable market data; and

 

Level 3 — Significant unobservable inputs that cannot be corroborated by observable market data.

 

The carrying amounts of cash, accounts payable and other liabilities, accrued expenses and settlement payable approximates fair value because of the short-term nature of these items.

 

All investments were at quoted prices and level 1 at September 30, 2024.

 

Property and equipment

 

Property and equipment are stated at cost. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When property and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. During the nine months ended September 30, 2024, the Company added various real estate lots to be developed in the amount of $260,724 and a building for $329,647, which no depreciation was recorded in this period since the assets were not placed in service at the end of the period. Depreciation on property will be charged using straight-line method over the estimated useful life of 27.5 years, once the property is placed in service or available to use.

 

Income Taxes

 

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.

 

F-7

 

Legal Matters:

 

From time to time and in the course of business, we may become involved in various legal proceedings seeking monetary damages and other relief. The amount of the ultimate liability, if any, from such claims cannot be determined. As of the date hereof, there are no legal claims currently pending or, to our knowledge, threatened against us or any of our officers or directors in their capacity as such or against any of our properties that, in the opinion of our management, would be likely to have a material adverse effect on our financial position, results of operations or cash flows.

 

Note 3 – Equity investments at fair value

 

The Company accounted for equity securities using the trading method under ASU 2016-01, securities are reported at fair value, and valuation changes directly recorded in current period earnings, impacting net income.

 

		As of September 30, 2024
Cost Basis		$	186,824
Unrealized gain/(loss)		$	(3,068	)
Equity securities - Fair value		$	183,756

 

The Company had a net gain on sales of investments of $407,119 and $2,185 in dividend income.

 

During the nine months ended September 30, 2024, the Company purchased Earth Science Tech’s common stock. As of September 30, 2024, as part of the repurchase program, Earth Science Tech, Inc. paid Avenvi LLC $444,078 for stock repurchases with no gain or loss on these transactions.

 

F-8

 

Note 4 – Property and Equipment

 

		As of September 30, 2024
Land		$	260,724
Building		$	329,647
Accumulated depreciation		$	-
Total		$	590,371

 

No depreciation was recorded, since the assets were not placed in service at the end of the period.

 

Note 5 – Members’ Equity

 

During the nine months ended September 30, 2024 Giorgio R. Saumat purchased from the other partners members of the entities, leaving Girogio R. Saumat as the sole owner of Avenvi, LLC. The Company distributed to Giorgio R. Saumat a total of $343,651.

 

Note 6 – Subsequent Events

 

On October 1, 2024, Earth Science Tech, Inc., a Florida corporation (the “Company”), completed the acquisition of Avenvi, LLC., (“Avenvi”), a Florida limited liability company owned by Giorgio R. Saumat, as an asset acquisition for a total of $1,058,788., with an initial payment of $258,788, followed by subsequent monthly payments of $200,000 for the next four months. The acquisition encompasses approximately four acres of vacant residential real estate intended for development, one commercial property comprising nearly half an acre featuring a standalone building with five thousand square feet, and cash or cash equivalents held by Avenvi. Visit: avenvi.com.

 

Related Party Transaction

 

Giorgio R. Saumat, who is the owner of Avenvi, LLC as of September 30th, 2024 and also serves as Earth Science’s Tech, Inc Chief Executive Officer (CEO) and the Chairman of Board, is the seller in this transaction. The transaction was reviewed and approved by the Board of Directors to ensure that the terms were no less favorable to the Company than those that could be obtained from unaffiliated third parties.

 

F-9

 

Cover	Dec. 12, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Dec. 12, 2024
Entity File Number	000-55000
Entity Registrant Name	EARTH SCIENCE TECH, INC.
Entity Central Index Key	0001538495
Entity Tax Identification Number	80-0961484
Entity Incorporation, State or Country Code	FL
Entity Address, Address Line One	8950 SW 74 th CT
Entity Address, Address Line Two	Suite 1401
Entity Address, City or Town	Miami
Entity Address, State or Province	FL
Entity Address, Country	US
Entity Address, Postal Zip Code	33156
City Area Code	(305)
Local Phone Number	724-5684
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock $0.001 par value
Trading Symbol	ETST
Entity Emerging Growth Company	false

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