BANM - Banner Announces Divestiture of Operating Subsidiaries
FRISCO, Texas, March 31, 2020 (GLOBE NEWSWIRE) -- Banner Energy Services Corp (“Banner Energy” or the “Company”) (OTC: BANM) announced that it has entered into an agreement to sell its wholly owned subsidiary Banner Midstream Corp. (“Banner Midstream”) to Ecoark Holdings, Inc. (“Ecoark”) (OTC: ZEST). Pursuant to the transaction, Ecoark will issue Banner Energy 8,945,205 shares of common stock and assume $11,161,710 of indebtedness of Banner Midstream.
Immediately prior to the transaction with Ecoark, the Company has consummated the acquisitions of White River Holdings Corp (“White River”) and Shamrock Upstream Energy LLC (“Shamrock”) as a closing condition to the transaction. White River and Shamrock are engaged in oil and gas exploration, production, and drilling operations on over 10,000 cumulative acres of active mineral leases in Texas, Louisiana, and Mississippi. White River and Shamrock were acquired for aggregate consideration of $8,000,000 comprised of (i) $2,200,000 of cash, (ii) a $1,800,000 Subordinated Note of Banner Midstream, and (iii) $4,000,000 of Preferred Stock of Banner Midstream. As part of the transaction, White River shareholders and Shamrock shareholders have agreed to convert the Subordinated Note and Preferred Stock into Ecoark common stock at $0.73 per share, or a 40% premium to the closing price of Ecoark common stock on the date of the transaction, resulting in such shareholders receiving a total of 7,945,205 of the shares of Ecoark common stock received by the Company in the Ecoark transaction. The balance of the shares of Ecoark common stock received by the Company in the Ecoark transaction will be distributed to shareholders of Banner Energy.
The transaction has received the approval of Company shareholders holding in excess of 57% of the current issued and outstanding shares of common stock of Banner Energy. As a result of the divestiture, Banner Energy will file to become a non-reporting company under SEC Form 15. The business will be temporary idled until the acquisition of a new operating subsidiary can be completed, at which time the company will resume filings as a current SEC registrant.
“While I remain highly confident in our Company’s prospects, especially after our opportunistic purchase of high-quality oil and gas operations, which has positioned us for long-term growth and success, diversity of assets and access to capital have become more important than ever, making it logical to be the part of a larger, more diverse company such as Ecoark with better access to capital, superior financial resources and whose common stock has significant upside potential,” said Jay Puchir, Chairman and Chief Executive Officer of Banner Energy. “The current energy market environment is extremely challenging, driven by the dramatic recent decline in crude oil prices, compounded by significant negative impacts from the global outbreak of COVID-19. I feel that this transaction best positions the Company for long-term growth and success and provides our shareholders with maximum potential return on their investment.”
About Banner Energy Services Corp
Based in Frisco, Texas, Banner Energy Services Corp. (“Banner Energy”) is a fully integrated U.S. energy services company. The Company provides transportation, equipment rental, and other services to oil and gas producers, with operations in Texas, Louisiana, Oklahoma and Pennsylvania. Banner operates under its two wholly owned subsidiaries, which includes Pinnacle Frac Transport LLC (“Pinnacle Frac”), and Capstone Equipment Leasing LLC (“Capstone”). Pinnacle Frac provides transportation of frac sand and logistics services to major hydraulic fracturing and drilling operators. Capstone procures and finances equipment to oilfield transportation services contractors. The company focuses on providing safe, reliable and affordable services and solutions to customers across the energy value chain. For more information, please visit www.banneres.com.
Contact Information
Banner Midstream Corp.
Marc Silverberg, Managing Director (ICR)
marc.silverberg@icrinc.com
(800) 203-5610