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0001043894 WOLF ENERGY SERVICES INC. false --03-31 FY 2023 0.001 0.001 5,000,000 5,000,000 0 0 0 0 0.001 0.001 1,000,000,000 1,000,000,000 78,268,332 78,268,332 51,987,832 51,987,832 250,000,000 0 10 5 August 23, 2023 August 23, 2023 August 23, 2023 1 78,268,332 51,987,832 0 0 0 4 40,000 0.025 0 5 0 0 0 The Company entered into a Purchase and Sale of Future Receipts Agreement with EAdvance Services for a purchase price of $250,000, with a repayment of $340,000 over 32 weeks at $10,625 per week on March 28, 2023. The Company paid $7,500 in initial fees which were deducted from the agreed upon price and $242,500 was paid in cash to the Company. Unsecured Promissory Note entered into on August 23, 2022 accruing interest at the rate of 6% per annum payable monthly, maturing August 23, 2023. The note is with the former CEO of the Company. In the year ended March 31, 2023, the Company repaid $139,000. On September 7, 2022, Banner Midstream Corp merged with Wolf Energy Services Inc. (formerly Enviro Technologies U.S., Inc.) in a reverse merger. Banner Midstream's parent, BitNile Metaverse, Inc., was issued 51,987,832 shares of Wolf Energy Services Inc. (formerly Enviro Technologies U.S., Inc.) common stock in exchange for all the capital stock of Banner owned by BitNile Metaverse, which represents 100% of the issued and outstanding shares of Banner that were outstanding at the time of the reverse merger. The Company has reflected this transaction retroactively in these interim financial statements. Unsecured Convertible Promissory Note entered into on August 23, 2022 accruing interest at the rate of 6% per annum payable monthly, maturing August 23, 2023. The note is convertible into shares of the Company’s common stock at a price of $0.015 per share, which was the closing price of the common stock on the date the note was executed. The note is with the former CEO of the Company. On December 29, 2022, the Company issued 4,000,000 shares of common stock in conversion of $60,000. On September 7, 2022, Banner Midstream Corp merged with Wolf Energy Services Inc. (formerly Enviro Technologies U.S., Inc.) in a reverse merger. Banner Midstream's parent, BitNile Metaverse, Inc., was issued 51,987,832 shares of Wolf Energy Services Inc. (formerly Enviro Technologies U.S., Inc.) common stock in exchange for all the capital stock of Banner owned by BitNile Metaverse, which represents 100% of the issued and outstanding shares of Banner that were outstanding at the time of the reverse merger. The Company has reflected this transaction retroactively in these interim financial statements along with amounts due to BitNile Metaverse that were exchanged for the capital stock The Company entered into a one year promissory note with Red Road Holdings Corporation on March 27, 2023 in the amount of $165,000, plus a one-time interest charge of 12% or $22,176 charged at the inception of the note. There is an original issue discount of $19,800 on this note that is amortized over the life of the note based on the effective interest method. Should the Company default on the note, it becomes convertible with a conversion price that will be the greater of (i) $0.000075, or (ii) 75% times the average Trading Price for the common stock during the five trading days immediately prior to the conversion date. The Company entered into a Standard Merchant Cash Advance Agreement with KYF Global Partners for a purchase price of $100,000, with a repayment of $140,000 over 22 weeks at $6,363,64 per week on March 28, 2023. The Company paid $5,000 in initial fees which were deducted from the agreed upon price and $95,000 was paid in cash to the Company. Unsecured Convertible Promissory Note entered into on August 23, 2022 accruing interest at the rate of 6% per annum payable monthly, maturing August 23, 2023. The note is convertible into shares of the Company’s common stock at a price of $0.015 per share, which was the closing price of the common stock on the date the note was entered into. 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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

x☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended ~~December~~March 31, ~~2021~~2023

o☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________________ to __________________________

Commission file number: 000-30454

~~Enviro~~Wolf ~~Technologies~~Energy ~~U.S.,~~Services Inc.

(Exact name of registrant as specified in its charter)

Florida		6582-~~0742890~~0266517
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

821 NW 57 Place, Fort Lauderdale, FL		33309
408 State Highway 135 N, Kilgore, Texas		75662
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: ~~(954) 958~~903-~~9968~~392-0948

Securities registered under Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which

registered

None

Securities registered under Section 12(g) of the Act:

Common stock, par value $0.001 per share

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

o ☐ Yes ☒ No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

☐ Yes ☒ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes o ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.4.05 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). x ☒ Yes o ☐ No

Table of Contents

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o☐ Accelerated filer o☐ Non-accelerated filer x☒ Smaller reporting company x☒ Emerging growth company o☐

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. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act 915 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes   ☒ No

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked prices of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. $~~250~~1,~~606~~ 301,409 on ~~June~~September 30, ~~2021~~2022.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date. 578,~~570~~268,~~125~~ 332 shares of common stock are issued and outstanding as of ~~April~~June 1520, ~~2022~~2023.

DOCUMENTS INCORPORATED BY REFERENCE5

List hereunder the following documents if incorporated by reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is incorporated: (1) Any annual report to security holders; (2) Any proxy or information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or (c) under the Securities Act of 1933. The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1980). None.

Audit Firm Id		Auditor Name:		Auditor Location:
587		RBSM LLP		New York, NY

Table of Contents

			Page
PART I.			3
	Item 1.	Business
	Item 1 A.	Risk Factors	6
	Item 1 B.	Unresolved Staff Comments	9
	Item 2.	Properties	9
	Item 3.	Legal Proceedings	9
	Item 4.	Mine Safety Disclosures	9
PART II.			9
	Item 5.	Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	9
	Item 6.	Reserved	9
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	10
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	14
	Item 8.	Financial Statements and Supplementing Data	14
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	14
	Item 9A.	Controls and Procedures	15
	Item 9B.	Other Information	16
PART III.			16
	Item 10.	Directors, Executive Officers and Corporate Governance	16
	Item 11.	Executive compensation	18
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	20
	Item 13.	Certain Relationships and Related Transactions, and Director Independence	21
PART IV.			21
	Item 14.	Principal Accountant Fees and Services	21
	Item 15.	Exhibits and Financial Data Schedules	22
	Item 16.	Form 10-K Summary	22

TABLE OF CONTENTS

		Page Number
PART I

Item 1.	Business.	1
Item 1A.	Risk Factors.	9
Item 1B.	Unresolved Staff Comments.	25
Item 2.	Properties.	25
Item 3.	Legal Proceedings.	25
Item 4.	Mine Safety Disclosures.	25

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	25
Item 6.	Reserved.	26
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	26
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	31
Item 8.	Financial Statements and Supplementary Data.	31
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	50
Item 9A.	Controls and Procedures.	50
Item 9B.	Other Information.	51
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.	51

PART III

Item 10.	Directors, Executive Officers and Corporate Governance.	51
Item 11.	Executive Compensation.	53
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	56
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	57
Item 14.	Principal Accounting Fees and Services.	58

PART IV

Item 15.	Exhibits, Financial Statement Schedules.	58
Item 16.	Form 10-K Summary.	59

Table of Contents

PART I

ITEM 1.

BUSINESS

Throughout this Annual Report on Form 10-K (this “Report”), the terms “Wolf Energy,” the “Company,” “we,” “us,” “our,” “registrant,” and “Company” refer to Wolf Energy Services Inc., a Florida corporation. On January 17, 2023, we effected a forward split of our outstanding and authorized shares of common stock pursuant to which each one share of common stock was divided into and became four shares of common stock. All share numbers set forth in this Report give effect to the forward split.

Cautionary Note Regarding Forward Looking Statements

This Report contains, in addition to historical information, certain forward-looking statements, that includes information relating to future events, future financial performance, strategies, business opportunities, expectations including our goals and projections, the expected results from and trends and developments in our transportation and logistics activities, future plans for and anticipated transactions and relationships with respect to transportation and logistics operations, our working capital needs, potential financings through the sale of our common stock or other securities, the subsequent use and sufficiency of the proceeds from any capital raising methods we may undertake to fund our operations, our further development and implementation of our business plan and our ability to locate sources of capital necessary to meet our business needs and objectives. Such forward-looking statements include those that express plans, anticipation, intent, contingency, goals, targets or future development and/or otherwise are not statements of historical fact. These forward-looking statements are based on our current expectations and projections about future events and they are subject to risks and uncertainties known and unknown that could cause actual results and developments to differ materially from those expressed or implied in such statements.

In some cases, you can identify forward-looking statements by terminology, such as “may,” “should,” “would,” “expect,” “intend,” “anticipate,” “believe,” “estimate,” “continue,” “plan,” “potential” and similar expressions. Accordingly, these statements involve estimates, assumptions and uncertainties that could cause actual results to differ materially from those expressed in them. Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this Report or incorporated herein by reference.

You should read this Report and the documents we have filed as exhibits to this Report, completely and with the understanding that our actual future results may be materially different from what we expect. You should not assume that the information contained in this Report or in any document incorporated herein by reference is accurate as of any date other than the date on the front cover of those documents.

Risks, uncertainties and other factors that may cause our actual results, performance or achievements to be different from those expressed or implied in our written or oral forward-looking statements may be found in this Report under “Item 1A. - Risk Factors.”

Forward-looking statements speak only as of the date they are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of the information presented in this Report particularly our forward-looking statements, by these cautionary statements.

Summary Risk Factors

Our business is subject to numerous risks and uncertainties that you should consider before investing in our common stock. Set forth below is a summary of the principal risks we face:

	●	Our ability to continue as a going concern and potential need for additional capital;
	●	We have incurred significant losses since inception, we may continue to incur losses and negative cash flows in the future;

~~CAUTIONARY~~ ~~STATEMENT~~ Table ~~REGARDING~~of ~~FORWARD-LOOKING INFORMATION~~Contents

~~This~~● ~~report~~We ~~includes forward-looking~~derive ~~statements~~a significant portion of our revenue from a small number of customers, under contracts that ~~relate~~may tobe ~~future~~terminated ~~events~~on short notice without cause, and the loss of one of these customers, or a reduction in their demand for our ~~future~~services, could adversely affect our business, financial ~~performance~~condition, results of operations and ~~involve~~prospects; ~~known~~● Our future cash flows and ~~unknown~~results ~~risks~~of operations, ~~uncertainties and~~are ~~other~~highly ~~factors~~dependent ~~that~~on ~~may~~our ~~cause~~ability to efficiently develop our ~~actual~~current ~~results,~~customers ~~levels~~as ofwell ~~activity,~~as ~~performance~~find or ~~achievements~~acquire toadditional ~~differ~~customers; ~~materially~~● ~~from~~Our ~~any~~ future operating results, ~~levels~~are ofdependent ~~activity~~on oil and gas prices that are highly volatile, ~~performance~~and oreven ~~achievements~~if ~~expressed~~the orcurrent ~~implied~~high byoil ~~these~~prices ~~forward-looking~~continue, ~~statements.~~other ~~Words~~aspects of our business such as, ~~but not~~transportation ~~limited~~may ~~to,~~be ~~“believe,”~~adversely ~~“expect~~affected,” ~~“anticipate,”~~reducing ~~“estimate,”~~or ~~“intend,”~~eliminating the potential benefits; ● Future approval by the Securities and Exchange Commission (the “~~plan,~~SEC” ~~“targets,”~~) ~~“likely~~of its climate change rules and continued focus on environmental,” social and governance (“~~aim,~~ESG”) ~~“will~~regulation and sustainability initiatives,” “which would,” ~~“could~~have the effect of reducing demand for fossil fuels and negatively impact our operating results,” stock price and ~~similar~~ability ~~expressions or~~to ~~phrases~~access ~~identify~~capital ~~forward-looking~~markets; ~~statements.~~● WePotential ~~have~~future ~~based~~changes ~~these~~in ~~forward-looking~~the ~~statements~~regulation ~~largely~~of onhydraulic fracturing could materially adversely affect our ~~current~~transportation ~~expectations~~business; ~~and future~~● ~~events~~A potential inability to retain and ~~financial~~attract ~~trends~~qualified drivers, including owner-operators, subjects us to risks; ● We are subject to the potential risk that the drivers who we ~~believe~~rely ~~may~~upon ~~affect~~in our ~~financial~~transportation ~~condition,~~business ~~results~~will be classified as employees rather than independent contractors; ● The majority of ~~operation,~~our ~~business~~accounts ~~strategy~~receivable and ~~financial needs.~~revenues ~~Forward-looking~~are ~~statements~~derived ~~include~~from a very limited number of customers, ~~but~~and ~~are~~any ~~not~~loss ~~limited~~of these customers or reduction in work orders from them would materially adversely affect us; and ● Dilution to, ~~statements~~our ~~about~~shareholders ~~risks~~in ~~associated~~the ~~with:~~event of conversion of any of our outstanding convertible notes.

· Financial risks, including · our ability to continue as a going concern; · our ability to generate revenues and report profitable operations; · our ability to pay our operating expenses; and · our ability to raise working capital. · Business risks, including: · reliance on a limited number of customers and the Grant Back License; · our ability to compete; and · our dependence on our sole executive officer. · Risks related to our common stock, including: · continuing material weaknesses in our disclosure controls and internal control over financial reporting; · the illiquid nature of the market for our common stock; and · the impact of penny stock rules on our shareholders.Overview

~~You~~Wolf ~~should~~Energy ~~read~~is ~~thoroughly this~~a ~~report~~holding ~~and~~company ~~the~~which ~~documents~~operates ~~that~~primarily wein ~~refer to herein with~~ the ~~understanding~~transportation ~~that~~and ~~our~~logistics ~~actual~~services ~~future~~business ~~results~~serving ~~may~~hydraulic befracking ~~materially~~companies ~~different from~~ and~~/or~~ ~~worse~~assisting ~~than what we expect. We qualify all of our forward-looking statements by these cautionary statements including those made~~ in ~~Part~~their I.operations ~~Item~~through 1ABanner. ~~Risk~~On ~~Factors~~February ~~appearing elsewhere in this report. Other sections of this report include additional factors~~1, ~~which could adversely impact our business and financial performance. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors~~2023, ~~nor can~~ we ~~assess~~amended ~~the impact of all factors on~~ our ~~business~~articles ~~or the extent to which any factor, or combination~~ of ~~factors,~~incorporation ~~may cause actual results~~ to ~~differ~~change ~~materially from those contained in any forward-looking statements. Except for~~ our ~~ongoing~~corporate ~~obligations~~name tofrom ~~disclose~~“Enviro ~~material~~Technologies ~~information under the Federal securities laws~~U.S., weInc.” ~~undertake no obligation~~ to ~~release publicly~~“Wolf ~~any~~Energy ~~revisions~~Services toInc.” ~~any forward-looking statements,~~ to ~~report~~better ~~events~~reflect orour tobusiness ~~report the occurrence of unanticipated events. These forward-looking statements speak only as of the date of this report,~~ and ~~you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business~~operations.

~~OTHER PERTINENT~~Reverse ~~INFORMATION~~Merger Transaction

~~All~~Effective ~~share~~September ~~data~~7, ~~contained herein~~2022, ~~gives~~the ~~pro~~Company ~~forma~~completed ~~effect~~a Share Exchange Agreement with Banner Midstream Corp., a Delaware corporation (“Banner Midstream”) and Ecoark Holdings, Inc., a Nevada corporation now known as BitNile Metaverse, Inc. (“BitNile”) and the sole shareholder of Banner Midstream, pursuant to which we acquired 100% of the ~~10:1~~issued ~~reverse~~and outstanding shares of Banner Midstream in exchange for 51,987,832 shares of the Company’s common stock ~~split~~(the “Exchange”). As a result of ~~our~~the Exchange, Banner Midstream became a wholly-owned subsidiary of the Company. Immediately following the Exchange, BitNile owned approximately 70% of the issued and outstanding shares of Wolf Energy common stock. ~~which~~At the closing of the Exchange Jimmy R. Galla was ~~effective~~appointed onChief Executive Officer and Chief Financial Officer of the Company. Following the closing, Raynard Veldman and John A. DiBella resigned as directors of the Company and John A. DiBella resigned as Chief Executive Officer and Chief Financial Officer of the Company. As a result, the historical financial information of the Company is that of Banner Midstream. The transaction was accounted for as a reverse merger whereby Banner Midstream is considered the accounting acquirer. We plan to distribute (the “Spin-Off”) 51,987,832 shares of our common stock held by BitNile (the “Spin-Off Shares”) to the record shareholders of BitNile as of September 1030, ~~2020~~2022.

~~Unless~~In ~~specifically set~~connection ~~forth~~with to the ~~contrary~~Exchange, ~~when used in this report~~ the ~~terms “EVTN,” the “~~Company,” ~~“we,”~~changed ~~“our,” “us,”~~its ~~and~~fiscal ~~similar~~year ~~terms refers~~ to ~~Enviro~~March ~~Technologies~~31 ~~U.S.,~~from ~~Inc.,~~December ~~a Florida corporation~~31, ~~and~~as ~~our~~March ~~subsidiary,~~31 ~~Florida~~was ~~Precision Aerospace,~~the ~~Inc.,~~year aend ~~Florida~~for ~~corporation~~Banner ~~which we refer to as “FPA”~~Midstream. In ~~addition~~September 2022, ~~“2020”~~following ~~refers to~~ the ~~year~~closing ~~ended~~of ~~December 31,~~the ~~2020~~Exchange, ~~“2021”~~management ~~refers~~of to the ~~year~~Company ~~ended~~determined ~~December~~to ~~31,~~reclassify ~~2021~~to ~~and~~discontinued ~~“2022”~~operations ~~refers~~the toactivity ~~the~~related ~~year~~to ~~ending~~Florida ~~December~~Precision 31Aerospace, ~~2022~~Inc. We ~~maintain a corporate website at www~~(FPA).~~evtn.com.~~ ~~Unless~~FPA ~~specifically~~had ~~set~~developed, ~~forth~~manufactured, toand sold the ~~contrary~~V-Inline Separator, ~~the~~a ~~information~~technology ~~which~~that ~~appears~~efficiently onseparates ~~our website~~liquid/liquid, atliquid/solid ~~www.evtn.com~~or isliquid/liquid/solid ~~not~~fluid ~~part~~streams ofwith ~~this~~distinct ~~report~~specific gravities.

Principal Operations

The Company operates through Banner Midstream which has two operating subsidiaries: 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 operations. Capstone procures and finances equipment to oilfield transportation service contractors. Historically BitNile provided us with various corporate services. Following the Exchange, BitNile had no obligation to provide us with assistance. Accordingly, we need to provide internally or obtain from unaffiliated third parties the services we historically receive from BitNile. We may be unable to replace these services on terms and conditions as favorable as those we receive from BitNile. We may be unable to successfully establish the infrastructure or implement the changes necessary to operate independently or may incur additional costs.

~~PART~~ Table Iof Contents

~~ITEM~~Through 1Pinnacle Frac, the Company provides transportation of frac sand and logistics services to major hydraulic fracturing and drilling operations. ~~BUSINESS~~Our transportation services entail using third party drivers who assist in transporting sand and related materials to customers’ locations for the customers’ hydraulic fracturing, or fracking. The logistics services Pinnacle Frac provides for its customers’ fracking and drilling enterprises, include the operation of a 24/7 dispatch service center based in Texas through which we dispatch the trucks for hauling frac sand and related equipment. Pinnacle Frac uses independent third-party owner-operators of trucks to service its customers in their fracking operations by transporting materials, mainly frac sand. Our transportation and logistics services operations are primarily centered in the Southern United States, although we also occasionally service fracking operations in the Northeastern United States.

~~The~~Pinnacle ~~Company~~Frac ~~developed and~~uses ~~manufactured~~a ~~the~~third ~~Voraxial~~party’s ~~Separator~~licensed ~~and~~software ~~currently~~known ~~manufactures~~as “propX” and ~~sells~~"LoHi" to ~~the~~monitor ~~V-Inline~~and ~~Separator,~~execute aits ~~unique~~transportation ~~separation~~and ~~technology~~logistics ~~that efficiently~~operations. ~~separates~~This ~~large~~software ~~volumes~~is ofprovided ~~liquid/liquid,~~at ~~liquid/solids~~no orcost ~~liquid/liquid/solids~~to ~~fluid~~the ~~mixtures~~Company. ~~with~~Use ~~distinct~~of ~~specific~~this ~~gravities. Current~~service ~~and~~offers ~~potential~~the ~~commercial~~following ~~applications~~benefits ~~and markets~~ for ~~the~~customers, ~~V-Inline~~which ~~Separator~~we ~~include~~provide ~~mining,~~at ~~utilities,~~no ~~manufacturing~~charge, and ~~utilities, waste-to-energy among~~ other ~~industries.~~industry participants:

On● ~~March~~Reduced ~~13,~~road ~~2017, we entered into a Technology Purchase Agreement with Schlumberger Technology Corporation, a Texas corporation, Schlumberger Canada Limited, a Canadian entity, and Schlumberger B~~traffic.~~V.,~~ an● ~~entity~~Reduced ~~organized~~personnel ~~under~~on ~~the~~frac laws of the Netherlands (collectively, “Schlumberger”) pursuant to which we sold our intellectual property, substantially consisting of the Voraxial patents, marks, software and copyrights, to Schlumberger in consideration of $4,000,000site. As● ~~part~~Eliminate ofsilica ~~the~~dust agreement, Schlumberger granted us a non-exclusive, non-transferable, worldwide, royalty-free licenses (the “Grant Back Licenses”), to make, use, sell, offer for sale, and import products and processes embodying the Voraxial intellectual property outside the oil and gas marketparticles. Under the terms of the agreement, we can no longer use the tradename Voraxial and we subsequently branded the technology licensed to us as the “V-Inline”. Our management believes that the Grant Back Licenses can potentially provide additional revenues through the sale of V-Inline Separators outside the oil and gas industry, including, but not limited to mining, utilities, sewage and industrial wastewater. In 2021 our customer successfully commissioned a wastewater system at a nuclear facility comprised of multiple V-Inline Separators to separate solids and oil from their wastewater stream. The system is being used to process and separate oil and solids from a flow of about 100 gallons per minute. The System includes different technologies with the heart of the system being comprised of two V-Inline 2000 Separators working in parallel with a third V-Inline Separator being utilized to further dewater the reject lines from the System. Management believes there are many opportunities similar to this installation available for the V-Inline Separator not only in the utilities industry but other industries as well including those previously mentioned.

~~The~~By ~~V-Inline~~operating ~~Separator is~~ a ~~continuous~~call ~~flow~~center ~~turbo~~and ~~machine~~using ~~that~~specialized ~~generates~~licensed asoftware ~~strong~~to ~~centrifugal~~meet ~~force,~~customers’ ademand ~~vortex,~~for ~~capable~~timely ofdelivery ~~separating light~~ and ~~heavy~~movement ~~liquids, such~~of asfracking ~~oil and water~~materials, orPinnacle ~~any~~Frac ~~other~~facilitates ~~combination~~customers’ offracking ~~liquids~~operations ~~and solids at extremely high flow rates. As the fluid passes~~ through the ~~machine, the~~life ~~V-Inline~~cycle ~~Separator accomplishes this separation through the creation~~ of ~~a vortex. In liquid/liquid and liquid/solid mixtures, this vortex causes~~ the ~~heavier~~drilling compounds to gravitate to the outside of the flow and the lighter elements to move to the center where an inner core is formed. The liquid stream processed by the machine is divided into separate streams of heavier and lighter liquids and solids. As a result of this process~~, separation is achieved~~.

~~The~~With ~~benefits~~time, ofPinnacle Frac has developed and plans to continue to develop the ~~V-Inline~~ ~~Separator~~following ~~include~~business characteristics that we believe enable us to operate effectively and efficiently:

-● ~~High~~Focused ~~volume~~Business. /We ~~small~~employ ~~footprint~~a -focused Nobusiness ~~Pressure~~model ~~drop~~that ~~requirement~~enables -us ~~High~~to Gmaintain ~~force~~a -relatively ~~Treats~~narrow ascope ~~wide~~in ~~range~~terms of ~~flows~~both the services we offer and our geographic reach. Our central location is in Kilgore, ~~even~~Texas, ~~slugging~~within ~~flows~~relatively -close ~~Handles~~proximity ~~fluctuation~~to multiple states in ~~flow~~which ~~rates~~a ~~without~~large ~~any~~proportion ~~adjustments~~of -U.S. ~~Handles~~oil ~~fluctuation~~and gas basins and drilling activities takes place, allows us to strategically deploy our contractors to meet customer demand and plan routes in ~~contaminates~~a ~~without~~manner ~~any~~that ~~adjustments~~efficiently -manages ~~Separation~~limited oftime 2and orresources. 3While ~~components~~our ~~simultaneously~~limited -focus ~~Non-clogging~~and -scope ~~open~~limits ~~rotor~~our ~~assembly~~diversification -and ~~Low~~exposes ~~maintenance~~us ~~with~~to ~~ease~~potential risk, management believes at this stage of ~~operation~~our business such a structure and ~~installation~~focus -also ~~Can~~enhances ~~operate~~our ~~dry~~ability -to ~~Since~~meet ~~there~~our customers’ needs and maintain efficient and sustainable sources of revenue. This model is nosupplemented ~~pressure~~by ~~drop~~our relatively low employee count, ~~there~~as iswe ~~very~~instead ~~little~~rely ~~wear~~on ~~caused~~outside bythird-party ~~sand~~owner-operate truck drivers which are independent contractors to assist us in performing services.

~~The~~● VLong-~~Inline~~Standing ~~Separator is~~Relationships. As mentioned above, we rely on a ~~self-contained~~network of independent contractors to provide quality and timely transportation services to our customers. We enter into contracts with these individuals what enable us to promptly call upon them to perform work when needed. Similarly, ~~non~~we have established long-~~clogging~~term ~~device~~relationships ~~that~~with ~~can~~oil beand ~~powered~~gas bycompanies anand ~~electric~~adjacent ~~motor~~services providers who consistently give us revenue-producing work. We believe these relationships will enable us to create a brand and reputation as a reliable service provider who can consistently provide quality, ~~diesel~~compliant ~~engine~~and ortimely bytransportation ~~hydraulic~~and ~~power~~delivery ~~generation~~services. ~~Further~~Because third party drivers supply the vehicles and equipment used to perform the services, ~~its~~ ~~scalability~~we ~~allows~~also itbelieve this arrangement causes us to be ~~utilized~~relatively ininsulated from supply chain issues when compared to companies who depend on a ~~variety~~steady supply of ~~industries~~materials and toequipment ~~process~~from ~~various~~that ~~amounts~~they ofpurchase ~~liquid~~or lease directly. ~~The~~Any ~~following~~issues ~~are~~with shortages on the ~~various sizes~~part ~~and~~of our contractors are frequently solved by the ~~corresponding~~volume ~~capacity~~of ~~range:~~available truck owner-drivers we have available to deploy.

Model Number	Diameter Size	Capacity Range Gallons Per Minute
V1000	1 inch	3-5
V2000	2 inches	20-70
V4000	4 inches	100-500
V8000	8 inches	1,000-3,500

Table of Contents

~~While~~● ~~our~~Industry ~~net~~Knowledge ~~revenues in~~and ~~2021~~Systems. ~~have~~Our ~~not~~personnel ~~rebounded~~have ~~from~~gained ~~the~~valuable ~~pre-pandemic~~experience ~~period, we remain firm~~ in ~~our~~operating ~~belief~~an ~~that~~oil ~~the~~and ~~need~~gas ~~for~~transportation ~~effective~~ and ~~cost~~logistics ~~efficient wastewater~~company, ~~treatment~~including ~~and~~an ~~separation~~understanding ~~technology~~of iscustomers’ ~~global~~operations in ~~scale.~~the ~~Moreover,~~hydraulic ~~virtually~~fracturing ~~every~~and ~~industry~~the ~~requires~~energy ~~some~~industry ~~type~~and ofthe ~~separation process~~roles ~~either~~we ~~during~~play ~~the~~within ~~manufacturing~~those ~~process,~~processes. ~~prior~~We tohave ~~treatment~~also ordeveloped ~~discharge~~an understanding of ~~wastewater~~the ~~into~~transportation ~~the~~infrastructure ~~environment,~~we ~~for~~and ~~general~~our ~~clean up,~~contractors oruse ~~emergency~~in ~~response~~the ~~capability.~~territory ~~Separation~~in ~~processes,~~which ~~however,~~our operations are ~~largely~~focused. ~~unknown~~Similarly, to the ~~average~~certification ~~consumer.~~and ~~These~~compliances processes ~~are deeply~~impacting ~~integrated~~the intransportation ~~almost~~and ~~all~~oil ~~industrial~~and ~~processes~~gas ~~from~~businesses ~~oil~~in towhich ~~wastewater~~we toare ~~manufacturing.~~involved ~~Management~~are ~~believes~~complex ~~that~~and ~~the~~require ~~separation technology~~constant ~~has~~monitoring ~~applications~~and inawareness ~~most,~~of ifthe ~~not~~requirements ~~all~~and ~~major separation industries~~ramifications. ~~The~~Finally, ~~unique~~our ~~characteristics~~call ofcenter ~~the~~and technology ~~allow~~systems itthat we use to be ~~utilized~~provide ~~either~~these services as adescribed ~~stand-alone~~elsewhere ~~unit~~in orthis ~~within~~Report are an ~~existing~~integral ~~system~~part toof ~~provide~~our aoperations ~~more efficient~~ and ~~cost~~enable ~~effective~~us ~~way~~ to ~~handle~~monitor ~~the separation~~and ~~needs~~supply ofpunctual ~~the~~and ~~customer.~~complete Wedelivery ~~believe~~services ~~the~~while ~~separation~~servicing ~~technology~~multiple ~~can~~clients ~~result in a cost savings~~ and ~~other~~projects ~~benefits~~throughout to the ~~customer. These~~territories ~~benefits~~in ~~result~~which inwe ~~and~~provide ~~include:~~those services.

●Business A reduction in water and energy usage, ● Requires no pressure drop to perform separation, ● Less space needed to implement the V-Inline Separator, the V-Inline Separator weights less than some competing technologies, ● A reduction time to process and separate the fluids, allowing the customer to be more efficient, ● Creation of more efficient and faster process to treat water to increase the overall productivity of the end-user, ● Fewer employees needed to operate the system, and ● Reduction of ongoing maintenance and servicing costs.Strategy

WeOur ~~believe~~principal ~~that~~business ~~this separation~~objective ~~technology~~ is ato ~~unique~~deliver ~~front~~high-~~end~~quality ~~solution~~services ~~for~~that ~~the~~help ~~separation~~enable ~~industry~~our ~~that~~customers ~~can~~to ~~offer~~unlock ~~increased~~valuable ~~productivity~~sources ~~while~~of ~~reducing~~ energy for the ~~physical~~American ~~space~~people and ~~energy~~economy. ~~required~~By contributing to ~~operate~~our ~~the~~customers’ ~~unit.~~success, ~~These~~as ~~advantages~~well ~~translate~~as ~~into~~those of the ~~potential~~oil and gas drilling activities assisted thereby, we in turn position our Company to generate revenue and create opportunity for ~~substantial~~growth. ~~operating~~We ~~cost efficiencies~~believe that ~~would~~by ~~increase~~successfully ~~the~~deploying ~~profitability~~this ofstrategy, ~~the~~we ~~solution’s~~can ~~end~~establish ~~user.~~a sustainable ~~The~~business ~~unique~~model ~~characteristic~~and toenhance ~~conduct~~stockholder ~~separation~~value. ~~without~~ We maintain a ~~pressure~~focus ~~loss~~on ~~allows~~developing, ~~the~~managing, ~~unit~~and togrowing bemutually ~~installed~~rewarding relationships with our current and prospective customers in ~~locations~~the ~~other~~oil ~~technologies~~and ~~cannot.~~gas ~~For~~space ~~instance~~as well as our contractors and other personnel, ~~another~~and ~~separation~~maintaining ~~technology~~and ~~called a~~improving ~~hydrocyclone~~upon ~~requires~~cost-effective aand ~~significant~~efficient ~~pressure~~systems ~~loss~~and customer-centric solutions. We plan to ~~perform~~achieve ~~separation.~~these objectives through:

~~Although~~● wedeveloping ~~have~~and ~~strong beliefs~~expanding inour ~~the~~relationships ~~potential~~with ofexisting ~~the~~and ~~technology~~new customers; ● continuing to focus on providing consistent quality, wetiming doand ~~not~~safety ~~have~~performance; ~~the~~● ~~funds~~investing tofurther ~~successfully~~in ~~market~~enhancing ~~the~~efficiencies ~~technology.~~and Asstrategic ~~such,~~growth weinitiatives; ~~have~~● ~~focused~~ generating revenue organically and raising capital as needed to sustain and grow our ~~efforts~~operations; onand ~~finding~~● aevaluate potential ~~merger~~opportunities to expand or ~~acquisition~~enter ~~candidate.~~into ~~During~~strategic ~~this~~alliances ~~period~~and wetransaction ~~have~~that ~~also~~strengthen ~~marketed~~our capabilities, increase our ~~manufacturing~~geographic ~~capabilities to~~scope ~~local~~and ~~South~~create ~~Florida~~stockholder ~~companies~~value.

~~Manufacturing~~As described above, we believe our focused business model, concentrating efforts on a single step in the oil and gas exploration and drilling process, limiting our scope to a small number of connected states, and nurturing existing operational relationships, positions us well for organic growth within an industry characterized with consistent demand, we also face challenges for some of the same reasons, as described in more detail elsewhere in this Report, particularly under “Risk Factors.” Navigating and overcoming these challenges will be critical to our ability to maintain and grow our operations, increase our revenue streams and establish new sources of income, and cultivate and build on value for our shareholders.

WeOur ~~manufacture~~principal ~~and~~operations ~~assemble our~~involve ~~products~~the atprovision ~~our~~of ~~Fort~~transportation ~~Lauderdale,~~services ~~Florida~~wherein ~~facilities.~~we ~~The~~deploy ~~materials~~truck ~~needed~~drivers toand ~~manufacture~~trucks ~~the~~to ~~components~~transport ofmaterials, ~~the~~mainly ~~products~~frac ~~we sell~~sand, ~~including~~to ~~the~~productive ~~separation~~drilling ~~technology,~~locations ~~have~~to ~~been~~enable ~~provided~~customers byto ~~leading~~conduct ~~companies~~their indrilling ~~the~~activities ~~precision equipment industry~~there. We ~~do not~~maintain ~~have~~an ~~any~~organized ~~long~~network ~~term~~of ~~contracts~~Company ~~with~~personnel ~~any~~and ~~supplier.~~contractors Weto doensure ~~not~~we ~~anticipate~~meet ~~any~~customer ~~shortage~~needs ofin ~~component~~a ~~parts~~timely manner. WeSet ~~maintain~~forth below is a ~~limited~~summary ~~inventory~~ of ~~finished~~the ~~parts~~hydraulic ~~until~~fracturing weprocess, ~~receive~~which ~~a customer order. Most of~~ our ~~inventory~~customers isconduct, ~~comprised~~and ofon ~~raw~~which ~~materials~~our services and ~~finished~~the ~~Separator~~revenue ~~components that~~we ~~can~~generate betherefrom ~~used~~primarily ~~for future sales~~depend.

~~Marketing~~Hydraulic Fracturing

~~During~~Hydraulic ~~2020~~fracturing, ~~and~~or ~~2021~~fracking, we ~~limited~~is ~~our~~a ~~marketing~~process ~~and~~that ~~advertising~~creates ~~due~~fractures toextending ~~COVID-19~~from ~~and~~the well bore into the ~~downturn~~rock formation to enable natural gas or oil contained in the ~~oil~~rock ~~and~~to ~~gas~~move ~~markets~~more ~~and~~easily ~~lack~~from the rock pores to a production conduit, or an opening at the surface designed to allow for extraction of ~~available~~the ~~working~~energy ~~capital~~resource. ~~Although~~ The hydraulic fracturing technique is used to enable the extraction of natural gas or oil from shale and ~~gas~~other ~~markets~~forms ~~have~~of ~~improved~~“tight” rock, weor doin ~~not~~other ~~have~~words, ~~sufficient~~impermeable ~~funds~~rock toformations ~~market~~that ~~the~~lock ~~technology.~~in Weoil ~~anticipate~~and ~~increasing~~gas ~~spending on~~and ~~marketing~~make ~~efforts,~~fossil ~~such~~fuel asproduction ~~tradeshows~~difficult. The process entails blasting water, ~~when~~chemicals, and ~~if,~~sand ~~our~~into ~~cash~~these ~~flow~~formations ~~and~~at ~~market~~pressures ~~conditions~~high ~~improve.~~enough ~~From~~to ~~June~~crack ~~2017~~the ~~through~~rock ~~June~~in ~~2020~~which the targeted resources is embedded, we ~~primarily~~allowing ~~focused~~the ~~our~~once-trapped ~~marketing~~gas and oil to flow to the surface.

Because the process is highly reliant on an ample supply of sand and other materials, Pinnacle Frac capitalizes on this demand by helping its customers timely supply the materials to the drilling site in sufficient quantities to complete the process. Our customers consist of oil and gas drilling to which we may be the prime contractor, and third-party contractors assisting with another party’s drilling operation for which we serve as the subcontractor.

~~resources~~ to Table ~~develop a strong rapport with Schlumberger, which included scaling up our manufacturing capabilities. In addition, we started to pursue projects in industries outside~~ of ~~the oil and gas market, and primarily marketed our products by developing relationships within the~~Contents separation markets. Our marketing efforts were compromised as we anticipated using the revenues from the Schlumberger Supply Agreement to invest in new applications and industries for the V-Inline Separator unit sales. However, sales from Schlumberger were lower than management anticipated and the Supply Agreement has expired.

WeDue ~~have~~to ~~shifted~~concerns ~~our near~~surrounding ~~term~~health, ~~focus~~safety toand ~~market~~environmental, ~~our~~or ~~machining~~HSE, ~~capabilities~~impacts toof ~~companies~~hydraulic ~~located~~fracturing, Pinnacle Frac takes an active role in ~~South~~assessing ~~Florida~~occupational risk and finding methods to ~~help~~better ~~stabilize~~manage ~~cash~~these ~~flow~~issues. ~~During~~To ~~2022~~further these efforts, ~~the~~ ~~Company~~we ~~does~~have ~~not~~implemented ~~currently~~an ~~have~~HSE ~~plans~~program towhich ~~present~~consists of the following key features aimed at ~~any~~avoiding, ~~tradeshows.~~preventing, detecting and mitigating certain hazards that are inherent in operating as a participant in the hydraulic fracturing field:

~~Regulation~~● Jobs Safety Analysis (JSA) Program ● Near-Miss Reporting System ● Accident Reporting System

~~Our~~All ~~operations~~programs are ~~subject to~~designed ~~extensive~~with ~~and~~the ~~frequently~~purpose ~~changing~~of ~~federal,~~mitigating ~~state, and local laws and substantial regulation by government agencies, including~~ the ~~United~~ ~~States~~risk ~~Environmental~~of ~~Protection~~future ~~Agency~~safety ~~(EPA)~~incidents, ~~the~~while ~~United~~also ~~States~~ensuring ~~Occupational~~that ~~Safety~~when ~~and~~rare ~~Health~~instances ~~administration~~occur ~~(OSHA)~~when ~~and~~a ~~the~~safety ~~Federal Aviation~~incident ~~Administration~~does ~~(FAA). Among other matters~~occur, ~~these~~that ~~agencies regulate~~ the ~~operation,~~Company ~~handling,~~has ~~transportation~~a ~~and~~plan ~~disposal~~to ofaddress ~~hazardous materials~~in ~~used~~a byconsistent, usformal ~~during~~manner ~~the~~to ~~normal~~ensure ~~course of our operations, govern~~ the ~~health~~utmost ~~and~~ safety offor ~~our~~its employees and ~~certain standards and licensing requirements for our aerospace components that we contract manufacture~~contractors. ~~We are subject to significant compliance burden from this extensive regulatory framework, which may substantially increase our operational costs.~~

WeTo ~~believe~~enhance ~~that~~safety, ~~we have~~each ~~been~~of ~~and~~our ~~are~~Pinnacle inFrac ~~compliance~~employees ~~with environmental requirements~~ and ~~believe~~contractors ~~that~~are ~~we have~~put nothrough ~~liabilities~~our ~~under~~safety ~~environmental~~program ~~requirements.~~to ~~Further,~~meet wethe ~~have~~needs ~~not~~of ~~spent~~our ~~any~~customers ~~funds specifically~~while onmaintaining ~~compliance~~adequate ~~with~~safety ~~environmental laws~~protocols. ~~However,~~Through ~~some~~this ~~risk~~system, ofworkers ~~environmental~~gain ~~liability~~knowledge ~~is inherent in the nature~~ of ~~our~~how ~~business, and we might incur substantial costs~~ to ~~meet~~maintain ~~current~~optimum orwork ~~more~~conditions ~~stringent~~and ~~compliance,~~be ~~cleanup, or~~prepared ~~other~~for ~~obligations pursuant to environmental requirements in~~ the ~~future.~~variety ~~This could result in a material adverse effect to our results~~ of ~~operations~~potential ~~and~~challenges ~~financial~~that ~~condition~~may arise.

~~Product~~We ~~Liability~~monitor performance under our HSE program throughout the year to evaluate our goals are being met and to address any concerns in this regard should they arise.

~~Our~~Key business exposes us to possible claims of personal injury, death or property damage, which may result from the failure, or malfunction of any component or subassembly manufactured or assembled by us. However, until we start shipping the V-Inline Separator again, we do not plan to have product liability insurance. Any product liability claim made against us may have a material adverse effect on our business, financial condition or results of operations in light of our poor financial condition, losses and limited revenues. We also maintain general insurance coverage.Contracts

~~Competition~~We enter into certain key contracts in our operations, which can generally be divided into two board categories: (i) contracts with independent contractor owner-operator truck drivers, and (ii) contracts with customers. Each of these categories of contracts and counter parties are summarized as follows:

WeTruck ~~are~~Driver subject to competition from other manufacturing facilities who have greater manufacturing capacity, which allows them to utilize economy of scale to reduce cost. We are also subject to competition from a number of companies who have greater experience, research abilities, engineering capability and financial resources than we have to market and sell separation technology. Although we believe the separation technology offers applications which accomplish better or similar results on a more cost-effective basis than existing products, other products have, in some instances, attained greater market and regulatory acceptance.Agreements

~~Human~~We ~~Capital~~enter into standard independent contractor agreements with owner-operate truck drivers, which are for-hire interstate motor carrier individuals or entities that employ such individuals. Under these agreements, we procure the driving services from the contractor while simultaneously leasing their vehicles for transporting frac materials in bulk to a specified destination. Under these agreements, we are given inspection rights with respect to the vehicles prior to commencement of the service, as well as the ability to determine whether a particular driver is qualified to perform the service. Thereafter the contractor/driver is responsible for determining the route, stops and other details of delivering the materials in transit at the agreed upon time. We compensate the contractors a percentage of the fees we receive for completion of the delivery. We also provide for the applicable insurance coverage in accordance with applicable law. These agreements generally have a one-year term and are subject to earlier termination and automatic renewal.

AsCustomer of the date of this report we have five employees, including Mr. John A. DiBella, our sole executive officer, one individual who provides administrative and support services to us and three individuals who are involved in the manufacturing, shipping and installation, if required, of our products. All of our employees work from our principal offices in Fort Lauderdale, Florida, other than Mr. DiBella who works from time to time remotely from his home. All of our employees are full-time and none are covered by collective bargaining agreements. Our non-executive employees have been employed “at will” by our company from 5 years to 15 years.Agreements

We enter into master services agreements with our customers which provide the general terms of our provision of transportation and logistics services to them. These agreements generally provide that we will provide transportation services with respect to moving frac materials (most commonly sand) from one location to another in the furtherance of oil and gas drilling activities. Our customers, the counter parties to these agreements, are either oil and gas drilling companies which we perform the work for directly, or other transportation and logistics services companies who serve the oil and gas industry through which we provide trucking assistance in the provision of services to a third-party oil and gas drill operator by our customer (in essence making us the subcontractor in such project). These agreements provide for us to transport frac materials from one specified location to another under work orders. We perform our obligations under these agreements using the independent contractor agreements with owner-operator truck drivers described above. We typically submit invoices for customers under these agreements either on a periodic or on a per-project basis. We are generally required to maintain insurance under these agreements and assume liability for the loss of all cargo lost, damaged, delayed or lost. Furthermore, these contracts may be terminated without cause on 30 day notice or less. Our contracts with our major customers currently contain terms consistent with our agreements with our other customers.

~~Our executive officer~~ ~~receives~~ Table ~~an annual salary and may receive bonuses at the discretion~~ of ~~the board of directors. Information regarding Mr. DiBella’s~~Contents compensation appear later in this report. All of our employees receive health insurance and one week paid leave. Our employees are compensated based on their responsibilities as such, some are hourly while others are salaried. Our hourly employees may also receive overtime pay. At the discretion of our management, the non-executive employees may receive bonus paid either at the end of the year or after completion of certain projects.

~~Our History~~Competition

~~The~~With ~~Company~~respect ~~was~~to ~~incorporated in~~our ~~Idaho~~frac onsand ~~October~~transportation 19and logistics business, ~~1964~~which ~~under~~constitutes ~~the~~substantially ~~name~~all ~~Idaho~~of ~~Silver~~our revenue, ~~Inc.~~we Incompete ~~June~~against ~~1996~~other wethird-party ~~changed~~services ~~our~~company ~~corporate~~as ~~name~~well toas ~~Enviro~~owners ~~Voraxial~~major ~~Technology~~global, ~~Inc.~~ national and inregional ~~June~~oil ~~2017~~and wegas ~~changed~~companies ~~our~~with ~~corporate~~vertically ~~name~~integrated operations which also provided similar services to ~~Enviro~~other ~~Technologies,~~oil ~~Inc~~and gas companies. OnThese ~~August~~competitors ~~20,~~offer ~~2020~~the transportation services we do, ~~the~~but ~~Company’s~~also ~~shareholders approved~~offer aadditional ~~change~~services ofwe ~~domicile~~do ofnot, including the ~~Company~~equipment ~~from~~and ~~Idaho~~labor needed to ~~Florida.~~complete Onother ~~December~~steps ~~28,~~in ~~2020,~~ the ~~Company~~hydraulic ~~received~~fracturing ~~the~~process. ~~file~~Similarly, ~~stamped~~as ~~Certificate of~~oil ~~Domestication~~ and ~~Articles~~gas ofcompanies ~~Incorporation~~which ~~from~~comprise our prospective market base grow, the ~~Secretary~~often ofattempt ~~State~~to develop and deploy more of ~~Florida,~~their ~~which~~activities ~~was~~using ~~effective~~in-house onpersonnel ~~December~~and 18assets, ~~2020,~~which ~~thereby completing~~diminishes ~~the~~our ~~change~~prospective market and could result in ~~domicile~~new ~~from~~sources ~~Idaho~~of competition to ~~Florida~~us. InMany ~~connection~~of ~~with~~these ~~the~~competitors ~~change~~possess ingreater ~~domicile~~financial, ~~from~~technical, ~~Idaho~~human toand ~~Florida~~other resources than we do, ~~the~~and ~~Company’s name~~our ~~changed~~financial toresources ~~“Enviro~~are ~~Technologies~~relatively ~~U.S.,~~limited ~~Inc~~when contrasted with those of many of these competitors.”

~~Additional~~Sales ~~Information~~and Marketing

WeThrough ~~file~~Banner ~~annual~~Midstream and ~~quarterly reports~~its ~~on Forms 10-K and 10-Q~~subsidiaries, ~~current reports on Form 8-K and other information with~~ the ~~Securities~~Company ~~and~~sells ~~Exchange Commission (“SEC” or the “Commission”). The Commission also maintains an Internet site at http://www.sec.gov that contains reports, proxy~~ and ~~information~~provides ~~statements,~~services ~~and~~to ~~other~~its ~~information~~customers ~~regarding~~via ~~issuers~~blanket ~~that~~master ~~file~~services ~~electronically with the Commission~~agreements.

~~Other~~Government information about the Company can be found on our website www.evtn.com. Reference in this document to that website address does not constitute incorporation by reference of the information contained on the website.Regulation

~~ITEM~~Set 1Aforth below is an overview of the government regulations we presently face or could face as a result of our current and planned operations. ~~RISK~~As ~~FACTORS~~the regulatory and legal environment evolves, we may become subject to new laws, such as further regulation by the SEC and other agencies, which may affect our mining and other activities. For additional discussion regarding our belief about the potential risks existing and future regulation pose to our business, see “Risk Factors.”

~~Before~~Transportation you invest in our securities, you should be aware that there are various risks. You should consider carefully these risk factors, together with all of the other information included in this annual report before you decide to purchase our securities. If any of the following risks and uncertainties develop into actual events, our business, financial condition or results of operations could be materially adversely affected.Regulation

~~FINANCIAL~~In ~~RISKS~~connection with our operations, particularly the transportation and relocation of hydraulic fracking equipment and shipment of frac sand, the Company and its independent contractors operates trucks and other heavy equipment. As such, we operate as a motor carrier in providing our services and therefore are subject to regulation by the United States Department of Transportation (“DOT”) and by state agencies in the states in which we provide our services. These regulatory authorities exercise broad powers, governing activities such as the authorization to engage in motor carrier operations, driver licensing, insurance requirements, financial reporting and review of certain mergers, consolidations and acquisitions, and transportation of hazardous materials. Interstate motor carrier operations are subject to safety requirements prescribed by the DOT. To a large degree, intrastate motor carrier operations are subject to state safety regulations that mirror or supplement federal regulations. Matters such as the weight and dimensions of equipment are also subject to federal and state regulations. Certain motor vehicle operators require registration with the DOT. This registration requires an acceptable operating record. The DOT periodically conducts compliance reviews and may revoke registration privileges based on certain safety performance criteria that could result in a suspension of operations.

~~Our~~Commonly, ~~independent~~our ~~auditors~~contracts ~~have~~with ~~raised substantial~~customers ~~doubt~~require ~~about~~that ~~our~~we ~~ability~~be registered with DOT and/or the Federal Carrier Safety Administration. We in turn impose similar requirements on the owner-operator truck drivers we utilize to ~~continue~~provide asservices apursuant ~~going~~to ~~concern~~our contractual arrangements with them.

~~Our~~Occupational ~~consolidated~~Health ~~financial statements have been prepared assuming we will continue as a going concern. At December 31, 2021 we have a working capital deficit of $1,160,325~~ and anSafety; ~~accumulated~~Independent deficit of $16,636,521. While our revenues increased approximately 34% in 2021 from 2020, for 2021 we reported a net loss of $714,092. In addition, we used $499,511 in net cash in our operations during 2021. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Contractors

~~Our~~We ~~ability~~are subject to ~~generate~~the ~~revenues~~requirements of the federal Occupational Safety and Health Act, which is administered and enforced by the Occupational Safety and Health Administration, commonly referred to as OSHA, and of comparable state laws that regulate the protection of the health and safety of workers. In addition, the OSHA hazard communication standard requires that information be maintained about hazardous materials used or ~~profitable~~ produced in operations and that this information be provided to employees, state and local government authorities and the public. By deploying truck drivers who transport materials used in hydraulic fracturing and related oil and gas exploratory and drilling activities over long distances, we and our personnel (including independent contractors we hire to perform services) are subject to health and safety risks that subject us to relatively high compliance requirements and costs. We believe that our operations are in compliance with the ~~future~~OSHA isrequirements, including general industry standards, record keeping requirements and monitoring of occupational exposure to regulated substances. OSHA continues to evaluate worker safety and to propose new regulations, such as but not ~~assured~~limited to, the new rule regarding respirable silica sand, which required the oil and gas industry to implement engineering controls and work practices to limit exposures below the new limits by June 23, 2021. As of the date of this Report, the applicability of proposed additions to the current regulatory framework to our operations and those of our current and prospective customers remains uncertain.

Since entering into the Grant Back License in June 2017, we have generated limited revenues under the terms of this agreement, nor are there any guarantees that we will be able to generate any meaningful revenues in the future. Our ability to generate future revenues will depend on a number of factors, many of which are beyond our control, including competitive efforts and general economic trends. In addition, we reported a net loss of approximately $714,092 for 2021. There are no assurances we will be able to continue to generate revenues or report profitable operations in the future.

~~If our revenues do not increase substantially,~~ we Table doof ~~not have sufficient funds to pay our operating expenses.~~Contents

AtWe ~~December~~continue ~~31,~~to ~~2021~~monitor ~~we had~~the ~~$11,740~~regulatory oflandscape ~~cash~~with ~~and~~respect ato ~~working~~our ~~capital~~personnel ~~deficit~~and ofoperations ~~$1,160,325.~~to Wemaintain ~~used~~compliance ~~$499,511~~with inapplicable ~~net cash in our operations in 2021~~requirements. WeAn ~~do not~~additional ~~have~~factor ~~any~~as ~~external~~we ~~sources~~continue ofand ~~liquidity.~~attempt ~~Although~~to wegrow ~~believe~~ our ~~revenues~~operations will ~~increase~~be inensuring ~~2022~~we ~~from~~are ~~2021,~~appropriately ~~mainly~~categorizing ~~initially~~and ~~due~~corresponding ~~to machining~~with ~~work~~our ~~for~~contractors ~~local~~and ~~South~~government ~~Florida~~entities ~~customers,~~in ~~there~~the ~~are~~jurisdictions noin ~~assurances~~which ~~this~~we isoperate. ~~correct~~For orexample, ~~that~~the ~~any~~tax ~~increase~~treatment inof ~~our~~independent ~~revenues~~contractors inis ~~2022 will~~unique ~~be sufficient~~ to ~~pay~~that ~~our~~of ~~operating~~employees, ~~expenses.~~such Inthat anif ~~effort~~we fail to ~~conserve~~successfully ~~our~~react ~~cash~~and ~~resources~~adapt to ~~sustain~~regulatory ~~our~~developments ~~operations~~and ~~until~~applicable ~~such~~requirements, ~~time as~~it ~~the~~will ~~economy~~expose ~~begins~~us ~~returning~~ to ~~pre~~potential non-~~Covid-19~~compliance ~~pandemic~~and ~~activity~~liability. ~~levels,~~Some westates ~~reduced~~are ~~employee hours,~~considering ~~accrued~~legislation ~~a portion of management’s salary~~ and ~~have~~regulations ~~begun marketing our machining capabilities~~ to ~~local~~expand ~~manufacturers.~~the ~~Our management~~scope ~~has~~of ~~also~~the ~~begun~~definition ~~exploring~~of ~~possible~~“employee” ~~opportunities~~ for ~~the~~these ~~Company~~and ~~involving~~other ~~mergers,~~purposes. ~~acquisitions~~If orthis ~~other~~trend ~~business~~continues ~~combination transactions~~and/or inwe anseek ~~effort~~ to ~~diversify~~expand ~~our~~into ~~business.~~affected ~~There~~markets ~~are~~or nojurisdictions ~~assurances,~~in ~~however~~the future, ~~that~~the ~~these~~resulting ~~efforts~~laws ~~will~~and beregulations ~~sufficient~~could toapply ~~permit us~~in toa ~~pay~~manner ~~our operating expenses. In~~ that ~~event,~~raises our ~~ability~~compliance tocosts ~~continue~~or asotherwise aadversely ~~going~~impacts ~~concern is in jeopardy~~us. ~~Furthermore,~~See ~~our PPP Loan in~~ the ~~aggregate~~risk ~~principal~~factor ~~amount~~titled of“If ~~$111,971~~owner-operators ~~matures~~and ondrivers ~~May~~that 4,we ~~2022.~~rely ~~While~~upon wein ~~believe~~ our ~~company~~transportation ~~has~~business ~~used~~were ~~the~~to ~~entire~~be ~~PPP~~classified ~~Loan~~as ~~amount for~~employees ~~qualifying~~instead ~~expenses and we applied for forgiveness~~ of ~~the~~independent ~~PPP~~contractors, ~~Loan~~our inbusiness ~~accordance~~would ~~with~~be ~~the~~materially ~~terms~~and ofadversely ~~the~~affected” ~~CARES~~for ~~Act,~~more ~~there~~information ~~are~~regarding ~~no assurances that~~ the ~~PPP~~risks ~~Loan~~and ~~will~~uncertainties besurrounding ~~forgiven.~~our Weuse doand ~~not~~characterization ~~have~~of ~~available~~independent ~~working~~contractors ~~capital~~given tothese ~~satisfy~~past ~~the~~and ~~PPP~~potential ~~Loan in the event it becomes due and payable~~developments.

WeOil ~~have been limited by insufficient capital,~~ and weGas ~~may continue to be so limited.~~Industry

InFederal ~~the~~regulation past, we have lacked the required capital to market the V-Inline Separator. Our inability to raise the funding or to otherwise finance our capital needs could adversely affect our financial condition and our results of ~~operations,~~oil and ~~could~~gas ~~prevent~~is ~~us from implementing our business plan~~extensive. WeThe ~~may~~recent ~~seek~~increases toin ~~raise~~gasoline ~~capital through public~~ and ~~private~~other ~~equity~~fuel ~~offerings,~~costs ~~debt~~is ~~financing~~at orleast ~~collaboration,~~in ~~and~~part ~~strategic~~been ~~alliances. Such~~driven ~~financing~~by ~~may~~the ~~not~~Biden beAdministration’s ~~available~~efforts ~~when we need it or may not be available on terms that are favorable~~ to ~~us.~~reduce Ifoil wedrilling ~~raise additional capital through the sale of our equity securities, your ownership interest will be diluted~~ and ~~the~~transition ~~terms~~away offrom ~~the~~fossil ~~financing may adversely affect your holdings or rights as a stockholder~~fuels. IfThese ~~we fail to raise additional funds when needed~~efforts, orincluding dothe ~~not~~regulatory ~~have~~developments ~~sufficient~~described ~~cash flows from sales~~below, weimpact ~~may~~our beoperations ~~required~~either todirectly ~~scale back~~ or ~~cease~~by ~~operations,~~affecting ~~sell~~our orcustomers ~~liquidate~~in ~~our~~the ~~assets~~oil and ~~possibly~~gas ~~seek bankruptcy protection~~industry.

~~BUSINESS~~Since ~~RISKS~~he took office in January 2021, President Biden has signed a series of executive orders seeking to adopt new regulations to address climate change and to suspend, revise, or rescind certain prior agency actions which were part of the Trump Administration’s de-regulatory push, including oil drilling. The Biden Administration is expected to continue to aggressively seek to regulate the energy industry and has stated its goal to eliminate fossil fuels. The new executive orders include, among other things, orders requiring a review of current federal lands leasing and permitting practices, as well as a temporary halt of new leasing of federal lands and offshore waters available for oil and gas exploration, directing federal agencies to eliminate subsidies for fossil fuels, and to develop a plan to improve climate-related disclosures. Federal agencies including the Environmental Protection Agency (“EPA”) and the SEC have followed suit in pushing ahead with new regulations which will adversely affect our future business, as more particularly described below.

WeIn ~~currently~~January ~~rely~~2021, President Biden also issued an executive order calling for methane emissions regulations to be reviewed and for the EPA to establish new standards by September 2021. This resulted in the EPA finalizing what it refers to as “the most ambitious federal greenhouse gas emissions standards for passenger cars and light trucks ever” in December 2021. The EPA has also adopted regulations under existing provisions of the Clean Air Act that, among other things, establish Prevention of Significant Deterioration (the “PSD”), construction and Title V operating permit reviews for certain large stationary sources. Facilities required to obtain PSD permits for their greenhouse gas emissions also will be required to meet “best available control technology” standards that will be established on a ~~limited number~~case-by-case basis. The EPA also has adopted rules requiring the monitoring and reporting of ~~customers~~greenhouse gas emissions from specified onshore and offshore natural gas and oil production sources in the ~~Grant~~United ~~Back~~States ~~License~~on ~~for~~an annual basis, which include certain of our ~~revenues~~operations.

~~Revenues~~In ~~from~~November ~~two~~2021, ~~customers~~the ~~accounted~~EPA ~~for approximately~~released ~~54%~~new ~~and~~proposed ~~22%~~methane ofrules ~~total~~which ~~revenues,~~would ~~respectively~~impose regulations on methane release at existing wells nationwide, ~~during~~although ~~2021~~methane ~~and~~primarily ~~revenues~~affects ~~from~~gas ~~two~~production ~~customers~~rather ~~accounted~~than ~~for~~oil ~~approximately~~which ~~20% and~~is ~~10%~~our offocus. ~~total~~These ~~revenues~~new rules, ~~respectively~~among other things, ~~during~~would ~~2020.~~implement Asa ofcomprehensive ~~December~~monitoring ~~31,~~program ~~2021,~~to ~~two~~require ~~customers~~companies ~~represented~~to ~~52%~~find and ~~38%~~fix leaks. Additionally, ofthe ~~total~~new ~~accounts receivables.~~rules Aswould ofrequire ~~December~~well ~~31,~~operators ~~2020,~~to ~~three~~place ~~customers~~gas ~~represented~~that ~~68%,~~is ~~17%~~produced ~~and~~in ~~15%,~~a ~~respectively,~~pipeline ofto ~~total~~be ~~accounts~~sold, ~~receivables.~~when Wepossible, ~~do not~~to ~~have~~prevent ~~any~~wasting ~~contracts~~the ~~with~~gas, ~~minimum~~which ~~guaranteed~~could ~~orders~~force ~~with~~us ~~these~~or ~~customers.~~well ~~Furthermore,~~operators weon ~~currently~~which we rely onto sell the ~~Grant~~gas ~~Back~~at ~~License~~lower prices and thereby reduce our revenues. If ~~these~~As ~~customers~~with ~~fail~~most toregulations, ~~order~~smaller ~~additional~~participants ~~products~~like orus wewill ~~are~~face ~~unable~~more burdens due to ~~attract~~the ~~new~~compliance ~~customers~~and orother wecosts doand ~~not~~the ~~comply~~limited ~~with~~revenue ~~the~~to ~~terms~~absorb ~~of the~~such ~~Grant~~costs. ~~Back~~In ~~License~~November 2022, the EPA announced it ~~could~~intends ~~have~~to anstrengthen ~~adverse~~its ~~effect~~proposed onmethane ~~our~~standards ~~financial~~and ~~condition~~cut methane and ~~results~~other ofharmful ~~operations~~air pollution.

Our market is subject to intense competition. If we are unable to compete effectively, our product may be rendered non-competitive or obsolete.

We are engaged in a segment of the water filtration industry that is highly competitive and rapidly changing. Many large companies, academic institutions, governmental agencies, and other public and private research organizations are pursuing the development of technology that can be used for the same purposes as the V-Inline Separator. We face, and expect to continue to face, intense and increasing competition, as new products enter the market and advanced technologies become available. We believe that a significant number of products are currently under development and will become available in the future that may address the water filtration segment of the market. If other products are successfully developed, it may be better received by the market or introduced before the V-Inline Separator. Our competitors' products may be more effective, or more effectively marketed and sold, than any of our products. Many of our competitors have

~~significantly~~ ~~greater~~ Table ~~financial,~~of ~~technical and human resources than we have and may~~Contents be better equipped to discover, develop, manufacture and commercialize products; and more extensive experience in marketing water treatment products. Competitive products may render the V-Inline Separator obsolete or noncompetitive.

WeWhile a recent U.S. Supreme Court case imposed limitations on the EPA’s authority under the Clean Air Act, including by holding that the EPA’s attempted energy generation shifting entailed an overly broad interpretation of the statute’s delegation of authority, if the EPA adopts the above or other regulations and such regulations are ~~dependent~~held to be valid, the resulting new regulatory framework could impose additional restrictions and costs on ~~key~~our ~~personnel~~operations which could materially adversely affect our business. The regulations at issue in the recent case pertained to an attempt to shift a portion of U.S. energy production from coal to natural gas by an enumerated percentage by 2030. In February 2022, a federal judge blocked a Biden Administration executive order which used the “social cost of carbon.” The Interior Department responded by suspending permits for oil and gas drilling.

WeAlthough ~~are~~Congress ~~dependent~~from ~~upon the~~time-to-time ~~availability~~has ~~and~~considered ~~the~~legislation ~~continued~~to ~~performance~~reduce emissions of greenhouse gases, there has not been significant activity in the ~~services~~form of ~~John~~adopted A.legislation ~~DiBella,~~to ~~our~~reduce ~~Chief~~greenhouse ~~Executive~~gas ~~Officer~~emissions at the federal level in recent years. WeIn ~~are~~the ~~not~~absence of such federal climate legislation, a ~~party~~number of states, including states in which we operate, have enacted or passed measures to ~~any~~ ~~employment~~track ~~agreement~~and ~~with~~reduce ~~him~~emissions of greenhouse gases, primarily through the planned development of greenhouse gas emission inventories and regional greenhouse gas cap-and-trade programs. ~~The~~Most ~~loss~~of these cap-and-trade programs require major sources of emissions or major producers of fuels to acquire and surrender emission allowances, with the ~~services~~number of Mrallowances available for purchase reduced each year until the overall greenhouse gas emission reduction goal is achieved. ~~DiBella~~These ~~could~~reductions ~~have~~may acause ~~material~~the ~~adverse~~cost ~~effect~~of onallowances usto escalate significantly over time.

~~RISKS~~Additionally, ~~RELATED TO~~the ~~OUR~~United ~~COMMON~~States ~~STOCK~~re-joined, effective February 19, 2021, the non-binding international treaty to reduce global greenhouse gas emissions (the “Paris Agreement”), adopted by over 190 countries in December 2015. The Paris Agreement entered into force in November 2016 after more than 70 nations, including the United States, ratified or otherwise indicated their intent to be bound by the agreement. The United States had previously withdrawn from the Paris Agreement effective November 4, 2020. Following the United States re-joining the Paris Agreement, President Biden announced in April 2021 the United States’ pledge to achieve an approximately 50% reduction from 2005 levels in “economy-wide” net greenhouse gas emissions by 2030. To the extent that the United States implements this agreement or imposes other climate change regulations on the oil and natural gas industry, or that investors insist on compliance regardless of legal requirements, it could have an adverse effect on our business, operating results and future growth.

WeIndependent have material weaknesses in our disclosure controls and our internal control over financial reporting. If we fail to remediate any material weaknesses or if we fail to establish and maintain effective control over financial reporting, our ability to accurately and timely report our financial results could be adversely affected.Contractors

~~Our~~Because ~~management~~we isdeploy ~~responsible for~~independent ~~establishing~~contractor ~~and~~owner-operate ~~maintaining~~truck ~~adequate~~drivers ~~internal~~for ~~control~~our ~~over~~transportation ~~financial~~operations, ~~reporting.~~we ~~Internal~~depend ~~control~~on ~~over~~the ~~financial~~classification ~~reporting~~of isthose aindividuals ~~process designed~~as toindependent ~~provide~~contractors ~~reasonable~~under ~~assurance~~applicable ~~regarding~~federal ~~the~~and ~~reliability~~state oflaws ~~financial reporting~~ and ~~the~~regulations ~~preparation~~to ofconduct ~~financial~~our ~~statements in accordance with U~~business.S. ~~GAAP.~~While Awe ~~material~~strive ~~weakness~~to isoperate ~~a deficiency, or a combination of deficiencies,~~ in ~~internal control over financial reporting such that there is~~ a ~~reasonable~~manner ~~possibility~~consistent ~~that~~with athese ~~material~~requirements, ~~misstatement~~these oflaws ~~annual~~ or ~~interim~~regulations ~~financial~~may ~~statements will not~~ be ~~prevented~~altered, supplemented or ~~detected~~interpreted onin a ~~timely~~manner ~~basis.~~that ~~Historically~~is weinconsistent ~~have~~with ~~reported material weaknesses in~~ our ~~disclosure~~present ~~controls~~understanding ~~and~~of ~~internal~~their ~~control~~applicability ~~over~~or ~~financial reporting~~scope. AsFor ~~required~~more byinformation about the ~~rules and~~ regulations ofimpacting ~~the SEC,~~ our ~~management assessed~~truck ~~the~~drivers ~~effectiveness~~and oftransportation ~~our internal control over financial reporting as of December 31~~operations, ~~2021.~~see ~~Based~~“Risk onFactors” ~~this assessment,~~ and ~~as described~~specifically ~~later~~the isrisk ~~this~~factor ~~report,~~titled ~~our~~“If ~~management~~owner-operators ~~concluded~~and drivers that aswe ofrely ~~December 31,~~upon ~~2021,~~in our ~~internal~~transportation ~~control~~business ~~over~~were ~~financial reporting was not effective~~ to ~~provide~~be ~~reasonable~~classified ~~assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP~~ as aemployees ~~result~~instead of ~~material~~independent ~~weaknesses. Our failure to remediate the material weaknesses or the identification of additional material weaknesses in the future could adversely affect our ability to report financial information~~contractors, ~~including~~ our ~~filing~~business ofwould ~~quarterly~~be ormaterially ~~annual reports with the SEC on a timely~~ and accurate basis. Moreover, our failure to remediate the material weaknesses identified above or the identification of additional material weaknesses could prohibit us from producing timely and accurate financial statements, which may adversely ~~affect the market price of shares of our common stock~~affected.”

WeEnvironmental ~~do not know whether an active, liquid and orderly trading market will develop for our common stock and as a result it may be difficult for you to sell your shares of our common stock.~~Compliance

Our ~~common~~operations ~~stock~~are ~~is quoted~~or onmay ~~the~~become ~~Pink~~subject ~~tier~~to ofnumerous ~~the~~laws ~~OTC Markets~~ and isregulations ~~thinly~~relating ~~traded.~~to Anenvironmental ~~active~~protection ~~trading~~and ~~market~~climate inchange. ~~our~~These ~~common~~laws ~~stock~~and ~~may~~regulations ~~never~~change ~~develop or~~frequently, ~~if developed,~~and ~~sustained.~~the ~~The~~effect ~~lack~~ of anthese ~~active~~changes ~~market~~is ~~may~~often ~~impair your ability~~ to ~~sell~~impose ~~your~~additional ~~shares~~costs ator ~~the~~other ~~time~~restrictions ~~you~~on ~~wish~~our tooperations. ~~sell~~We ~~them~~cannot orpredict ~~at a~~the ~~price~~occurrence, ~~that~~timing, ~~you~~nature ~~consider~~or ~~reasonable.~~effect ~~The lack~~ of anthese ~~active~~changes. ~~market~~We ~~may~~ also ~~reduce~~operate ~~the~~under ~~fair~~a ~~market~~number ~~value~~ of ~~your~~environmental ~~shares~~permits and authorizations. ~~Further,~~The ~~an inactive~~issuing ~~market~~agencies may ~~also~~take ~~impair~~the ~~our~~position ~~ability~~that tosome ~~raise~~or ~~capital~~all ~~by selling shares~~ of ~~our~~these ~~common~~permits ~~stock~~ and ~~may~~authorizations ~~impair~~are ~~our~~subject ~~ability~~ to ~~enter into~~modification, ~~business~~suspension, ~~combinations~~or ~~with~~revocation ~~other~~under ~~companies~~certain bycircumstances, ~~using~~but ~~our~~any ~~shares~~such ofaction ~~common~~would ~~stock~~have asto ~~consideration.~~comply ~~The~~with ~~market~~applicable ~~price~~procedures ~~of our common stock may be volatile,~~ and ~~you could lose all or part of your investment~~requirements.

~~Because~~While ~~our~~we ~~stock~~are currently ~~trades~~ ~~below~~not ~~$5.00~~experiencing ~~per~~any ~~share~~material ~~and~~expenses isrelated ~~quoted~~to on the ~~Pink~~environmental ~~tier~~compliance, we may become subject to requirements of environmental or other related laws and regulations in the ~~OTC~~future, ~~Markets~~which may result from a number of causes, ~~our~~including ~~stock~~potentially isnew regulations being considered. aPlease ~~"penny~~review ~~stock"~~the ~~which~~Risk ~~can~~Factors ~~adversely affect~~in ~~its~~this ~~liquidity~~Report and the paragraph that follows with regard to potential environmental and other compliance expenses.

AsOn ~~the~~March ~~trading~~21, ~~price of~~2022, ~~our~~the ~~common~~SEC ~~stock~~released isproposed ~~less~~rule ~~than~~changes $5on climate-related disclosure.00 ~~per~~The ~~share,~~proposed ~~our~~rule ~~common~~changes ~~stock~~would isrequire ~~considered~~registrants aincluding ~~"penny~~the ~~stock,"~~Company ~~and~~to ~~trading~~include certain climate-related disclosures in ~~our~~registration ~~common~~statements ~~stock~~and ~~is subject~~periodic reports, including information about climate-related risks that are reasonably likely to have a material impact on the ~~requirements~~registrant’s business, results of ~~Rule~~operations, ~~15g~~or financial condition, and certain climate-9related ~~under~~financial ~~the~~statement ~~Securities~~metrics ~~Exchange~~in ~~Act~~a ofnote ~~1934.~~to ~~Under~~their ~~this~~audited ~~rule,~~financial ~~broker/dealers~~statements. ~~who~~The ~~recommend~~required ~~low~~information about climate-~~priced securities~~related torisks ~~persons~~also ~~other~~would ~~than~~include ~~established~~disclosure ~~customers~~of a registrant’s greenhouse gas emissions, information about climate-related targets and ~~accredited~~goals, ~~investors~~and ~~must~~transition ~~satisfy~~plan, ~~special~~if ~~sales~~any, ~~practice~~and requires extensive attestation requirements. The ~~broker/dealer~~ ~~must~~proposed ~~make~~new anrules ~~individualized~~would ~~written~~also ~~suitability~~require ~~determination~~companies ~~for~~to disclose multiple levels of climate impact, including primary direct impacts from the ~~purchaser~~registrant’s own operations, as well as secondary and ~~receive~~tertiary effects of the ~~purchaser's~~operations ~~written~~and ~~consent prior~~uses toby contractors that the ~~transaction~~registrant utilizes and end-users of the registrant’s products and/or services. ~~SEC~~If ~~regulations~~adopted ~~also~~as ~~require~~proposed, ~~additional~~the ~~disclosure~~rule inchanges ~~connection~~will ~~with~~result ~~any~~in ~~trades~~material ~~involving~~additional acompliance ~~"penny~~and ~~stock~~reporting costs," including ~~the~~monitoring, ~~delivery~~collecting, ~~prior~~analyzing and reporting the new metrics and implementing systems and procuring additional internal and external personnel with the requisite skills and expertise to ~~any~~serve ~~penny~~those ~~stock~~functions. ~~transaction~~We expect that the rules will be adopted in large part at least, ofand our compliance costs will be material. However, following a ~~disclosure~~June ~~schedule~~2022 ~~explaining~~U.S. ~~the~~Supreme ~~penny~~Court ~~stock~~administrative ~~market~~decision, ~~and~~we ~~its~~expect ~~associated risks~~a court challenge to any SEC Rule. We cannot predict the outcome of any challenge.

~~These~~ ~~requirements~~ Table ~~severely limit the liquidity~~ of ~~our common stock in the secondary market because few brokers or dealers are likely to undertake~~Contents ~~these compliance activities. Purchasers of our common stock may find it difficult to resell the shares in the secondary market.~~

Seasonality

Our business experiences a certain level of seasonality due to our transportation and logistics business which is dependent upon the oil and gas drilling operations of our customers. Demand for oil, on which our operations largely depend through our services to oil and gas company customers, is typically higher in the third and fourth quarters resulting in higher prices. But higher fuel costs may adversely affect our transportations business.

Due to these seasonal fluctuations, results of operations for individual quarterly periods may not be indicative of the results that may be realized on an annual basis. Seasonal weather conditions, including the annual flooding of coastal properties, and lease stipulations can limit our trucking business. These seasonal anomalies can pose challenges for our customers and drivers and can increase competition for equipment, supplies and personnel during the spring and summer months, which could lead to shortages and increase costs or delay operations, thus, lowering the demand for trucking services. Also, the volatility of commodities prices and supply chain issues can potentially delay customers’ drilling projects and in turn our provision of services to and receipt of revenue from those customers.

Dependence on Major Customers

From time-to-time we have had and may continue to have customers generating 10 percent or more of the Company’s consolidated revenues, and loss of such customers could have a material adverse effect on the Company.

In the fiscal year ended March 31, 2022, in our continuing operations, two of our customers accounted for a total of 88% of our accounts receivable, and two customers accounted for 96% of our total revenues. In the fiscal year ended March 31, 2023, in our continuing operations, one customer accounted for a total of 85%of our accounts receivable, and two customers accounted for 82% of our total revenues. The two customers accounting for the majority of our revenue are Halliburton Energy Services, Inc. and Bulk Logic, LLC. As discussed above, our agreements with these customers are generally consistent with the terms and conditions of our other customer agreements.

Human Capital Resources

As of the date of the filing of this Report, we have 12 full-time employees, no part-time employees and 31owner-operator independent contractor truck drivers.

Our ability to successfully execute our strategic initiatives is highly dependent on recruiting and retaining skilled personnel and qualified drivers. Our compensation philosophy is based on incentivizing and rewarding performance, with alignment of individual, corporate, and stockholder interests. Compensation includes salaries, benefits, and equity participation. Our owner operator drivers are not salaried employees.

We believe our relations with our employees and drivers are satisfactory.

ITEM 1A.

RISK FACTORS

The following important business risks and factors, and those business risks and factors described elsewhere in this Report or our other Securities and Exchange Commission filings, could cause our actual results to differ materially from those stated in our forward-looking statements, and which could affect the value of an investment in the Company.

Table of Contents

Risks Relating to Our Financial Condition

We had incurred net losses from operations for our fiscal year ended March 31, 2023 may continue to experience losses and negative cash flow in the future.

The financial statements of the Company have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable period. As of March 31, 2023, we had cash (not including restricted cash) of $574,233. We have not been profitable on an annual cash basis since inception and had previously incurred significant operating losses and negative cash flow from operations. We recorded net losses from continuing operations (not including provisions of income taxes) of ($13,029,424) for the fiscal year ended March 31, 2023. Although we expect our revenues to increase, we will likely continue to incur losses and experience negative cash flows from operations for the foreseeable future. If we cannot achieve positive cash flow from operations or net income, it may make it more difficult to raise capital based on our common stock on acceptable terms.

Because we may require additional capital and may need or desire to engage in strategic transactions in the future to fund our business objectives and support our growth, our inability to generate and obtain such capital or to enter into strategic transactions, could harm our business, operating results, financial condition and prospects.

We intend to continue to make substantial investments to fund our business and support our growth. Because or for other reasons, we may not be able to obtain any additional financing or engage in strategic transactions to the extent needed or desired in the future on the terms favorable to us, or at all. If we are unable to obtain adequate financing or enter into strategic transactions on terms satisfactory to us, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired, and our business may be adversely impacted. In addition, our inability to generate or obtain the financial resources needed may require us to delay, scale back, or eliminate some or all of our operations and business objectives and sell some of our assets.

Further, if we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity or debt securities we issue could have rights, preferences and privileges superior to those of holders of our common stock.

We cannot predict our future results because we have a limited operating history.

Given our limited operating history, it may be difficult to evaluate our future performance or prospects. You should consider the uncertainties that we may encounter as a company that should still be considered an early-stage company. These uncertainties include:

	●	the effect of the Biden Administrations’ attempts to eliminate fossil fuels;
	●	the impact from the SEC’s climate change rules;
	●	the price of oil;
	●	our ability to repay our debt;
	●	our ability to market our services and products for a profit;
	●	our ability to secure and retain key customers; and
	●	our ability to adapt to changing market conditions.

If we are not able to successfully address some or all of these uncertainties, we may not be able to expand our business, compete effectively or achieve profitability.

We derive a significant portion of our revenue from a small number of customers, under contracts that may be terminated on short notices without cause, and the loss of one of these customers, or a reduction in their demand for our services, could adversely affect our business, financial condition, results of operations and prospects.

Our customer base is highly concentrated, with 85% of our accounts receivable derived from one customer and 82% of our revenue derived from two customers in the fiscal year ended March 31, 2023. A limited number of customers are expected to continue to comprise a substantial portion of our revenue for the foreseeable future. Because of the concentration of our revenue and accounts receivable among a small number of customers, the loss of one or more of our major customers could have a material adverse effect on our results of operations. Furthermore, contracts with our major customers may be terminated on short notice without cause. The revenue derived from our transportation business is factored non-recourse, so the Company has less exposure to payment defaults and more exposure to a future loss of revenue in the event a significant customer is lost. Since many of our customer contracts allow our customers to terminate the contract without cause and on relatively short notice, any such termination could impair our business, financial condition, results of operations and prospects.

Table of Contents

Risks Relating to Our Transportation and Logistics Services Operations

We have significant ongoing capital requirements that could affect our operations if we are unable to generate sufficient cash from operations or obtain financing on favorable terms.

If we were unable to generate sufficient cash from operations, we would need to seek alternative sources of capital, including the incurrence of indebtedness or the issuance of equity securities in a financing transaction, to meet our capital requirements. To the extent that our working capital is insufficient, we may have to scale back operations, or in more extreme cases suspend or cease operations to the extent we are unable to generate sufficient cash flow to support our operations. Further, an inability to access capital necessary to execute our business plan will hinder our growth or limit us from executing on growth initiatives within timeframes desired which may be tied to market conditions that are fleeting, such as oil and gas prices and demand which often determined customer spending patterns.

Legislation, regulations, or government actions related to climate change, greenhouse gas emissions and sustainability initiatives and other ESG laws, regulations and government action, could result in increased compliance and operating costs and reduced demand for fossil fuels.

As described under “Business-Government Regulations”, our operations and those of the oil and gas drilling customers on which our operations depend are regulated extensively at the federal, state and local levels, and lawmakers and government agencies continue to consider potential new laws and regulations that would regulate or otherwise affect our industry. Environmental and other governmental laws and regulations have increased the costs to plan, design, drill, install, operate and abandon oil and natural gas wells. The trend in recent years has been increased scrutiny and regulatory oversight of the oil and gas industry, including among other things increasingly the proposal of new laws and regulations aimed at reducing or restricting oil and gas production and use. For example, in a rulemaking notice in mid-November 2022, the EPA announced a new calculation that would raise the damage estimate referred to as the “Social Cost of Carbon” of from $51 per metric ton, which had been the rate for the last several years, to $190 per metric ton by 2022 and as much as $410 by the year 2080. This amount is expected to guide or influence numerous laws and regulations in the future that are designed to reduce carbon emissions and the harm they cause to the environment. Under these laws and regulations, we could also be liable for personal injuries, property damage and other damages. In addition, failure to comply with these laws and regulations may result in the suspension or termination of our operations or those of our customers and subject us to administrative, civil and criminal penalties and fines.

The adoption and implementation of these and other similar regulations could require our customers to incur material costs to monitor and report on greenhouse gas emissions or install new equipment to reduce emissions of greenhouse gases. . In addition, these regulatory initiatives could drive down demand for our products and services in the oil and gas industry by stimulating demand for alternative forms of energy that do not rely on combustion of fossil fuels that serve as a major source of greenhouse gas emissions, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Because we expect the SEC will adopt most, if not all of its proposed climate rules, as a small transporter, the compliance costs may adversely affect our future results of operating and financial condition.

On March 21, 2022, the SEC released proposed rule changes that would require new climate-related disclosure in SEC filings, including certain climate-related metrics and greenhouse gas emissions, information about climate-related targets and goals, transition plans, if any, and extensive attestation requirements. In addition to requiring filers to quantify and disclose direct emissions data, the new rules would also require disclosure of climate impact arising from the operations and uses by the filer’s business partners and contractors and end-users of the filer’s products and/or services. If adopted as proposed, the rule changes could result in the Company incurring material additional compliance and reporting costs, including monitoring, collecting, analyzing and reporting the new metrics and implementing systems and procuring additional internal and external personnel with the requisite skills and expertise to serve those functions. Such costs are likely to materially and adversely affect our future results of operations and financial condition. We expect the rule will be adopted during 2023 and effective beginning at some point after its adoption. We cannot predict the outcome of litigation which we expect will challenge any new climate change rules.

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If Congress enacts the proposed price gouging bill, it could have a material adverse effect on the Company.

Senator Elizabeth Warren and others have introduced legislation aimed at rising gasoline and other prices and would empower the Federal Trade Commission (“FTC”) to investigate and penalize companies with “unconscionably excessive price increases.” The proposed legislation does not define what this phrase means so it will permit the FTC to define it. While we cannot predict whether the legislation will pass, there is a likelihood that it will pass. If it does, the FTC will enact Rules although it is possible it may enact an emergency Rule like other regulatory agencies have recently done. Any such legislation will likely affect gasoline prices especially in an election year. We believe price controls will have a material adverse effect on the Company.

A negative shift in investor and public sentiment of the oil and gas industry could have adverse effects on us and our customers’ operations, including our ability to raise debt and equity capital.

Certain segments of the investor community and the public in general have developed negative sentiment towards investing in the oil and gas and related industries. This could result in discounted equity valuations for our securities regardless of perceived or estimated intrinsic value of such securities based on traditional methods of evaluating a business such as financial information and operational results. Some investors, including investment advisors and funds, have stated or informally follow policies to avoid or limit investments in the oil and gas sector based on their social and environmental considerations. The number and extent of these policies has increased as adverse public and investor sentiment towards out industry has intensified due to climate change, nature preservation and other concerns. Such developments, including environmental activism and initiatives aimed at limiting climate change and reducing air pollution, could result in downward pressure on the stock prices of oil and gas companies and those who rely upon such companies, including us. This may also potentially result in a reduction of available capital funding for potential transactions and strategic business initiatives, impacting our future financial results.

Negative public perception could restrict or limit customers’ ability to profitably conduct their businesses, which would also reduce demand for our services. Ultimately, this could make it more difficult for us to continue to generate our grow revenue or secure funding for our current and planned operations.

In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters. Such ratings are used by some investors to inform their investment and voting decisions. Unfavorable ESG ratings and recent activism directed at shifting funding away from companies with fossil fuel-related assets could lead to increased negative investor sentiment toward us and our industry and to the diversion of investment to other industries, which could have a negative impact on the price of our common stock and our or our customers’ access to and cost of capital. Also, institutional lenders may decide not to provide funding for fossil fuel energy companies based on climate change-related concerns, which could affect us or our customers’ access to capital for potential growth projects.

As the price of oil increases, it may indirectly adversely affect the costs of our transportation business if the owner-operators of trucks we utilize pass on some or all of the higher costs incurred by them to us.

The high price of oil has the potential to have an adverse effect on our transportation business, to the extent the owner-operators of trucks we hire to transport fracking materials pass on the higher costs they incur based on the increased price of oil including diesel fuel to us via higher prices for their services. Such a development, in isolation or in combination with other price-driving factors such as the recent truck-driving shortages, could materially increase our operational expenses and increase net losses or reduce our ability to become profitable.

Federal, state, and local legislative and regulatory initiatives in the United States relating to hydraulic fracturing or fracking could result in decreased demand for our transportation services, which would have a material adverse effect on our results of operations, cash flows and financial condition.

In the United States, hydraulic fracturing is currently generally exempt from regulation under the Underground Injection Control program established under the federal Safe Drinking Water Act and is typically regulated by state oil and gas commissions or similar agencies. From time to time, the U.S. Congress has considered adopting legislation intended to provide for federal regulation of hydraulic fracturing and to require disclosure of the additives used in the hydraulic-fracturing process. In addition, certain states have adopted, and other states are considering adopting, regulations that could impose new or more stringent permitting, disclosure, disposal and well-construction requirements on hydraulic-fracturing operations. The adoption of any federal, state or local laws or the implementation of regulations regarding hydraulic fracturing could cause a decrease in the completion of new oil and gas wells and an associated decrease in demand for our transportation services, which would have a material adverse effect on our results of operations, financial condition and cash flows.

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Our transportation operations are subject to stringent environmental, oil and gas-related and occupational safety and health laws and regulations, and noncompliance with such laws and regulations could expose us to material costs and liabilities.

Our operations are subject to a number of federal and state laws and regulations, including the federal occupational safety and health and comparable state statutes, aimed at protecting the health and safety of employees. We are also subject to various environmental laws and regulations dealing with the hauling and handling of hazardous materials, air emissions from our vehicles and facilities, and engine idling and discharge. Our transportation operations often involve traveling on unpaved roads located in rural areas, increasing the risk of accidents, and our staging pads often are located in areas where groundwater or other forms of environmental contamination could occur. Our operations involve the risks of environmental damage and hazardous waste disposal, among others. If we are involved in an accident involving hazardous substances, if there are releases of hazardous substances we transport, if soil or groundwater contamination is found at our facilities or results from our operations, or if we are found to be in violation of applicable environmental laws or regulations, we could owe cleanup costs and incur related liabilities, including substantial fines or penalties or civil and criminal liability, any of which could have a materially adverse effect on our business and operating results.

Failure to comply with these laws and regulations may subject the Company to sanctions, including administrative, civil or criminal penalties, remedial cleanups or corrective actions, delays in permitting or performance of projects, natural resource damages and other liabilities. In addition, these laws and regulations may be amended, and additional laws and regulations may be adopted in the future with more stringent legal requirements.

Conservation measures and technological advances could reduce demand for oil and natural gas.

Fuel conservation measures, future legislation and regulation increasing consumer demand for alternatives to oil, and natural gas, technological advances in fuel economy and energy generation devices could reduce demand for oil. For example, the Biden Administration issued an executive order banning the federal government’s purchase of new gas vehicles by 2035, although executive orders are subject to change. Additionally, private companies have increasingly pledged to reduce carbon emissions caused by the use of gas vehicles, such as General Motors which in January 2021 announced its plan to sell only zero-emission vehicles by 2035. The impact of the changing demand for oil may have a material adverse effect on our business, financial condition, results of operations and cash flows.

Our operating results fluctuate due to the effect of seasonality in the oil and gas industry.

We derive our revenue from customers which are participants in the oil and gas industry. The oil and gas industry is a historically cyclical industry with levels of activity that are significantly affected by the levels and volatility of oil and natural gas prices as well as external forces such as weather and major events impacting productivity and supply and demand levels. For example, operating levels of the oil industry have historically been lower in the winter months because of adverse weather conditions. Accordingly, our revenue generally follows a seasonal pattern. Revenue can also be affected by other adverse weather conditions, holidays and the number of business days during a given period because revenue is directly related to the available working days. From time-to-time, we may also suffer short-term impacts from severe weather and similar events, such as tornadoes, hurricanes, blizzards, ice storms, floods, fires, earthquakes, and explosions that could harm our results of operations or make our results of operations more volatile.

Similarly, if the currently high oil prices decline, work orders under which we derive our revenue may decline as well. As a result of these factors, we have in the past experienced, and may in the future experience, fluctuations in operating results as a result of the reactions of our customers to changes in oil and natural gas prices. Even if order levels are sustained, we may be forced to accept lower prices for our services based on the lower commodities prices, lack or decline of customer profitability or inability to make payments, or other reasons tied to external forces and beyond our control.

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In addition, a majority of the service revenue we earn is based upon a charge for a relatively short period of time (for example, a day, a week or a month) for the actual period of time the service is provided to our customers. By contracting services on a short-term basis, we are exposed to the risks of a rapid reduction in market prices and utilization and resulting volatility in our revenues.

Our operations and those of the customers and oil and gas drilling entities on which our operations directly or indirectly depend are subject to unforeseen interruptions and hazards inherent in the oil and natural gas industry, for which these other stakeholders may not be adequately insured and which could cause us to lose customers and substantial revenue or otherwise be subject to substantial losses or liability.

Our operations and those of our customers and/or the oil and gas drilling operators we serve indirectly through our customers are exposed to the risks inherent in the oil and gas industry, such as equipment defects, vehicle accidents, fires, explosions, blowouts, surface cratering, uncontrollable flows of gas or well fluids, pipe or pipeline failures, abnormally pressured formations and various environmental hazards, such as oil spills and releases of, and exposure to, hazardous substances. For example, the operations and activities on which we depend to generate revenue are subject to risks associated with hydraulic fracturing, including any mishandling, surface spillage or potential underground migration of fracturing fluids, including chemical additives. In addition, these operations and activities are exposed to potential natural disasters, including blizzards, tornadoes, storms, floods, other adverse weather conditions and earthquakes. The occurrence of any of these events could result in substantial losses to us due to injury or loss of life, severe damage to or destruction of property, natural resources and equipment, pollution or other environmental damage, clean-up responsibilities, regulatory investigations and penalties or other damage resulting in curtailment or suspension of our operations. Similarly, to the extent our customers or the oil and gas drilling entities on which we depend to provide services experience these foregoing adverse consequences, such a result could also lead to losses or harm to us. The cost of managing such risks may be significant and may be experienced directly by us or passed down through our contractual arrangements with third parties. The frequency and severity of such incidents will affect operating costs, insurability and relationships with customers, contractors, regulators, and other stakeholders. In particular, our current or prospective customers may elect not to use our services in the future if they view the environmental or safety record that we or our customers or other strategic partners hold as unacceptable, which could cause us to lose customers and substantial revenues. Further our insurance may not be adequate to cover all losses or liabilities we may suffer, and we may be unable to maintain or obtain insurance of the type and amount we desires or need at reasonable rates or with sufficient coverage to protect us from these adverse contingencies. A loss not fully covered by insurance could have a material adverse effect on our financial position, results of operations and cash flows.

If any of the above developments occur with respect to our operations or those of others on which we rely, it could materially adversely impact our financial condition and results of operations.

We may be subject to various claims and lawsuits in the ordinary course of business and increases in the amount or severity of these claims and lawsuits could adversely affect us.

We are exposed to various claims and litigation related to commercial disputes, personal injury, property damage, environmental liability, and other matters. Proceedings include claims by third parties, and certain proceedings have been certified or purport to be class actions. Developments in regulatory, legislative, or judicial standards, material changes to litigation trends, or a catastrophic accident or series of accidents, involving any or all of property damage, personal injury, and environmental liability could have a material adverse effect on our operating results, financial condition and liquidity.

We operate with most of our customers under master service agreements, or “MSAs”. Generally, under these MSAs, we assume responsibility for potential adverse events which may occur during operations, including that which may result from automotive collisions or personal injury that may arise in the transportation process. Our MSAs generally require us to carry insurance coverage for these and other events, but such insurance may not adequately cover losses that occur, and insurance premiums would rise based on such events, potentially to the point where it is no longer economically feasible to continue to continue to carry the insurance. For example, we may have liability in such cases if we or in some circumstances our contractors are negligent or commit willful acts. Even in situations where we believe the risks are allocated to another party, be contractually or otherwise, we might not succeed in enforcing such allocation, might incur an unforeseen liability falling outside the scope of such allocation or may be required to enter into an MSA with terms that vary from the allocations of risk to which we generally agree. Litigation arising from occurrences at a location or in transit where our services are involved may result in us being named as a defendant in lawsuits. As a result, we may incur substantial losses which could materially and adversely affect our financial condition and results of operation.

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Our future revenue will depend upon the size of the markets which we target and our ability to achieve continuous and sufficient market acceptance.

Even if we procure enough drivers to satisfy the demand for transportation services in the market, our future revenue will depend upon the size of the markets which we target and our ability to achieve continuous and sufficient market acceptance, and such factors as pricing, reimbursement from third-party payors and adequate market share for our services at the target markets. We anticipate that our expenses will increase substantially if and as we:

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expand the scope of our operations in the geographic territory in which operate;

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establish a supply-demand chain and a respective trucking infrastructure to commercialize our market opportunities;

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acquire existing businesses and revitalize their operations with the Company’s framework;

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seek to attract and retain skilled personnel; and

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create additional infrastructure to support our operations as a public company and plan future commercialization efforts.

Our transportation business is affected by industry-wide economic factors that are largely outside our control.

The majority of our revenue is from providing services to customers engaged in operations in the oil and exploration industry. As such, our volumes are largely dependent on the economy and our results may be more susceptible to trends in unemployment and how it affects oil prices than carriers that do not have this focus. We believe that some of the most significant factors beyond our control that may negatively impact our operating results are economic changes that affect supply and demand in transportation markets. In recent months, the economy has been bombarded with unique challenges, including supply chain shortages, inflation and Federal Reserve interest rate increases in response, stock market volatility and recession fears.

The risks associated with these factors are heightened when the United States economy is weakened. Recently, many executive officers of large companies believe our economy is entering a recessionary period. If the U.S. economy enters a recession, among other potential adverse consequences, demand for our products and services and customer and consumer spending patterns will diminish in a manner and possibly to an extent that is materially adverse to our business. Some of the other principal risks during such times are as follows:

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low overall demand levels, which may impair our asset utilization;

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customers with credit issues and cash flow problems we are not currently aware of;

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customers bidding out our services or selecting competitors that offer lower rates, in an attempt to lower their costs, forcing us to lower our rates or lose revenue; and

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more unbilled miles incurred to obtain loads.

Economic conditions that decrease shipping demand or increase the supply of capacity in the trucking transportation industry can exert downward pressure on rates and equipment utilization, thereby decreasing asset productivity. Declining freight levels and rates, a prolonged recession or general economic instability could result in declines in our results of operations, which declines may be material.

We also are subject to cost increases outside our control that could materially reduce our profitability if we are unable to increase our rates sufficiently. Such cost increases include, but are not limited to, fuel and energy prices, driver wages, taxes and interest rates, tolls, license and registration fees, insurance premiums, regulations, revenue equipment and related maintenance costs and healthcare and other benefits for our associates. We cannot predict whether, or in what form, any such cost increase or event could occur. Any such cost increase or event could materially and adversely affect our results of operations.

In addition, events outside our control, such as strikes or other work stoppages at our facilities or at customers, shipping locations, ports, distribution facilities, weather, or terrorist attacks, could lead to reduced economic demand, reduced availability of credit or temporary closing of shipping locations. Such events or enhanced security measures in connection with such events could impair our operations and result in higher operating costs.

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Fluctuations in the price or availability of fuel, the volume and terms of diesel fuel purchase commitments and surcharge collection may increase our costs related to our transportation operations, which could materially and adversely affect our profits.

Fuel represents a significant expense for our transportation business while the sale of oil provides revenues for our business. Diesel fuel prices fluctuate greatly due to factors beyond our control, such as political events, terrorist activities, armed conflicts, inflation, and the depreciation of the dollar against other currencies and weather, such as hurricanes, tornadoes and other natural or man-made disasters, each of which may lead to an increase in the cost of fuel. Fuel prices also are affected by the rising demand in developing countries and could be adversely impacted by diminished drilling activity and by the use of crude oil and oil reserves for other purposes. Such events may lead not only to increases in fuel prices, but also to fuel shortages and disruptions in the fuel supply chain. Because Banner Midstream’s transportation operations are dependent upon diesel fuel, significant diesel fuel cost increases, shortages or supply disruptions could materially and adversely affect our operating results and financial condition.

Increases in fuel costs, to the extent not offset by rate per mile increases or fuel surcharges, have an adverse effect on our operations and profitability. Recently, fuel prices have soared to the highest levels in history, increasing our operating costs. While the majority of our fuel costs are covered by pass-through provisions in customer contracts and compensatory fuel surcharge programs, we also incur fuel costs that cannot be recovered even with respect to customers with which we maintain fuel surcharge programs, such as those associated with unbilled miles, or the time when our engines are idling. Because our fuel surcharge recovery lags changes in fuel prices, our fuel surcharge recovery may not capture the increased costs we pay for fuel, especially when prices are rising, leading to fluctuations in our levels of reimbursement. Further, during periods of low freight volumes, shippers can use their negotiating leverage to impose less compensatory fuel surcharge policies. In addition, the terms of each customer’s fuel surcharge agreement vary, and customers may seek to modify the terms of their fuel surcharge agreements to minimize recoverability for fuel price increases. Such fuel surcharges may not be maintained indefinitely or may not be sufficiently effective to cover increased fuel prices.

If we fail to retain owner-operators, it could materially adversely affect our results of operations and financial condition.

In our transportation operations, we rely on the fleet of vehicles owned and operated by independent contractors. These independent contractors are responsible for maintaining and operating their own equipment and paying their own fuel, insurance, licenses, and other operating costs. Due to high turnover rates, the pool of qualified independent contractor drivers is often limited, which increases competition for their services, especially during times of increased economic activity. We currently face and may in the future continue to face from time-to-time, difficulty in attracting and retaining sufficient number of qualified independent contractor drivers. Additionally, our agreements with independent contractor drivers are terminable by either party without penalty and upon short notice. Our specialty equipment services targeting servicing oil exploration and oil development industries require special training to handle unique operating requirements. We may be legally obligated or otherwise subjected by the industry standards to use physical function tests and hair follicle and urine testing to screen and test all driver applicants, which we believe is a rigorous standard and could decrease the pool of qualified applicants available to us. If we are unable to retain our existing independent contractor drivers or recruit new qualified independent contractor drivers, our business and results of operations could be materially and adversely affected.

The rates we offer our independent contractor drivers are subject to market conditions. Accordingly, we may be required to increase owner-operator compensation or take other measures to retain existing and attract new qualified independent contractor drivers. If we are unable to continue to attract and retain a sufficient number of independent contractor drivers, we could be in a position where we would have to turn down customer requests to deliver loads of freight or frac sand which would in turn have a material adverse effect on our operating results and financial condition.

If owner-operators and drivers that we rely upon in our transportation business were to be classified as employees instead of independent contractors, our business would be materially and adversely affected.

A number of companies in the logistics industry have been faced with legislation or regulation that requires that many independent contractors be treated as employees and receive benefits only available to employees which increases costs. Moreover, states have also adopted provisions for severe fines and stop-work orders for employers that misclassify employees as independent contractor. To date, this legislation and regulation has been limited to, or considered in, states where we do not operate, such as California, New Jersey, and Virginia.

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Some companies recently involved in lawsuits, including class actions, and state tax and other administrative proceedings that claim that owner-operators or their drivers should be treated as employees, rather than independent contractors. These lawsuits and proceedings involve substantial monetary damages (including claims for unpaid wages, overtime, and failure to provide meal and rest periods, unreimbursed business expenses and other items), injunctive relief, or both. While we believe that owner-operators and their drivers are properly classified as independent contractors rather than as employees, if their independent contractor status is challenged, we may not be successful in defending against such challenges in some or all jurisdictions in which we offer transportation services.

We also may encounter risk if the Department of Labor (“DOL”) or the National Labor Relations Board (“NLRB”) were to pass rules expanding the definition of an employee, this could occur under the Biden administration.

The U.S. Department of Labor published a Notice of Proposed Rulemaking in October 2022 to help employers and workers determine whether a worker is an employee or an independent contractor under the Fair Labor Standards Act. The proposed rule would provide guidance on classifying employees and independent contractors. Publication of the Notice of Proposed Rulemaking in the Federal Register started a 45-day comment period, which closed on November 28, 2022. If the proposed rule is adopted, it will be more difficult to classify workers as independent contractors for Fair Labor Standards Act purposes.

On December 27, 2021, the NLRB invited parties to submit briefs addressing whether NLRB should reconsider its standard for determining the independent contractor status of workers under the National Labor Relations Act (“NLRA”). If the NLRB adopts a more expansive standard for determining who qualifies as an employee, the number of individuals who may unionize or bring unfair labor practices charges under the NLRA would likely increase.

Because of the Biden administration’s regulatory push, we expect DOL will enact a rule narrowly defining independent contractors which will adversely affect Banner’s transportation business and increase its costs. If NLRB passes a rule expanding the definition of an employee, or a court or an administrative agency determines that owner-operators and their drivers must be classified as employees rather than independent contractors, we could become subject to additional regulatory requirements, including but not limited to tax, wages, and wage and hour laws and requirements (such as those pertaining to minimum wage and overtime); employee benefits, social security, workers’ compensation and unemployment; discrimination, harassment, and retaliation under civil rights laws; claims under laws pertaining to unionizing, collective bargaining, and other concerted activity; and other laws and regulations applicable to employers and employees. Compliance with such laws and regulations would require us to incur significant additional expenses, potentially including without limitation, expenses associated with the application of wage and hour laws (including minimum wage, overtime, and meal and rest period requirements), employee benefits, social security contributions, taxes, and penalties. Additionally, any such reclassification would require us to change our business model, and consequently have an adverse effect on our business and financial condition. Expansion of state legislation that broadly defines an employee into states where we operate could also have a material adverse effect on Banner.

Increasing trucking regulations may increase our costs and negatively impact our results of operations.

Is described more fully under “Business-Government Regulation,” in connection with our transportation business, which involves the transportation of frac sand, through our contractors we operate trucks and other heavy equipment. As such, we and our contractors are subject to regulation by the United States Department of Transportation, or “DOT” and by applicable state agencies. These regulatory authorities exercise broad powers with regulations impacting various aspects of our operations and those of third parties with which we are involved. Our trucking operations are also subject to possible regulatory and legislative changes that may increase our costs, be it directly or through third parties with which we contract. Some of these possible changes might include increasingly stringent environmental regulations, changes in the hours of service regulations which govern the amount of time a driver may drive or work in any specific period, onboard black box recorder device requirements or limits on vehicle weight and size. To ensure compliance with regulatory requirements, our customers require us to meet certain standards and we may provide further rights and obligations to address these issues and assume a portion of the risks of regulatory problems arise during the transportation process, which may be due to our contractors over whom we only exercise limited or no control. If we or the third parties on whom we rely are unable to continue to monitor and comply with current transportation-based regulations or requirements as well as any new regulations or requirements to which our operations may become subject, it could materially adversely harm our business.

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We face significant competition that may cause a loss of market share or hinder our growth.

The provision of transportation services for the oil and gas industry is highly competitive and has relatively few barriers to entry. Among the principal competitive factors impacting our sales are price, reputation, equipment and service quality and health and safety standards. The market is also fragmented and includes numerous small companies capable of competing effectively in our markets on a local or regional basis, as well as several large companies that possess substantially greater financial and other resources than we do. Our larger competitors’ greater resources could allow those competitors to compete more effectively than we can. For instance, our larger competitors may offer services at below-market prices or bundle ancillary services at no additional cost to customers, making those competitors a more attractive choice to prospective customers. We compete with large national and multi-national companies that have longer operating histories, greater financial, technical and other resources and greater name recognition than we do. Some of our main customers are also competitors within the industry we serve.

The competitive environment may be further intensified by mergers and acquisitions among oil and natural gas companies or other events that have the effect of reducing the number of available customers. As a result of a combination of continued pressure from increased competition and/or other adverse events, we may be forced to lower the prices for our services, which would adversely affect our results of operations. If competition remains the same or increases as a result of industry downturn or other factors, we may be required to lower prices, which would adversely affect its results of operations. In the future, we may lose market share or be unable to maintain or increase prices for our services or to expand our geographic reach or acquire additional business opportunities, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Because of their greater resources or other advantages, our competitors may be able to respond more quickly or effectively to new or emerging technologies and services and changes in customer requirements. The amount of labor and equipment available may exceed demand, which could result in active price competition. In addition, depressed commodity prices lower demand for hydraulic fracturing related services and equipment, which results in lower utilization rates and declines in demand for and at times the rates at which we can market our services. In addition, some oil and gas drilling companies have undertaken efforts to become more vertically integrated by eliminating the need for third party service providers such as us. Any increase in the development and utilization of in-house transportation and logistics capabilities by our customers and/or their customers (typically oil and gas drilling operators) could decrease the demand for our services and have a material adverse impact on our business.

We currently rely on a limited number of suppliers for trucks and equipment to provide our transportation services, which exposes us to risks including price and timing of delivery.

We currently rely on a limited number of suppliers for trucks and related equipment to we deploy in our transportation services business. During periods in which our services are in high demand, we may experience delays in providing those services or be unable to meet the demand within the timeframes desired or at all, in which case our results of operations and ability to capitalize on those opportunities will be diminished. If this were to occur, we could be required to seek other suppliers for such vehicles and equipment, which we may be unable to obtain at reasonable price points, in the volumes or within the timelines necessary to complete a project, or at all. Further the owner-operator truck drivers and the customers with which we do business may face similar challenges that delay or prevent us from completing our services.

Similar to many companies, we have experienced a spike in our insurance costs, which could have a material adverse effect on our operating results.

Insurance premiums have recently escalated, and we are facing a similar increase in our insurance costs. Our future insurance and claims expense might exceed historical levels, which could reduce our earnings. We self-insure or maintain a high deductible for a portion of our claims exposure resulting from workers’ compensation, auto liability, general liability, cargo and property damage claims, as well as associated health insurance. Estimating the number and severity of claims, as well as related judgment or settlement amounts is inherently difficult. This, along with legal expenses, incurred but not reported claims and other uncertainties can cause unfavorable differences between actual claim costs and our reserve estimates. We plan to reserve for anticipated losses and expenses and periodically evaluate and adjust our claims reserves to reflect our experience. However, ultimate results may differ from our estimates, which could result in losses over our reserved amounts.

We maintain insurance with licensed insurance carriers above the amounts which we retain. Although we believe our general liability and related insurance limits should be sufficient to cover reasonably expected claims, the amount of one or more claims could exceed our coverage limits. If any claim were to exceed our coverage, we would be required to bear the excess, in addition to our other self-insured/retained amounts. As a result, our insurance and claims expense could increase, or we could raise our self-insured retention or deductible when our policies are renewed or replaced. Our operating results and financial condition could be materially and adversely affected if (i) cost per claim, premiums, or the number of claims significantly exceed our estimates, (ii) there is one or more claims in excess of our coverage limits, (iii) our insurance carriers refuse to pay our insurance claims or (iv) we experience a claim for which coverage is not provided.

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Oil and natural gas companies’ operations using hydraulic fracturing are substantially dependent on the availability of water, and restrictions on the use and disposal of water and other products used and byproducts produced in the fracking process may impact customers’ operations and have a corresponding adverse effect on our business, results of operations and financial condition.

Water is an essential component of shale oil and natural gas production during both the drilling and hydraulic fracturing processes. The access by oil and natural gas producing entities’ on which our operations depend to water to be used in these processes may be adversely affected due to reasons such as periods of extended drought, privatization, third party competition for water in localized areas or the implementation of local or state governmental programs to monitor or restrict the beneficial use of water subject to their jurisdiction for hydraulic fracturing to assure adequate local water supplies. The occurrence of these or similar developments may result in limitations being placed on allocations of water due to needs by third party businesses with more senior contractual or permitting rights to the water. Our customers’ and end users’ inability to locate or contractually acquire and sustain the receipt of sufficient amounts of water could adversely impact their oil and gas drilling operations and have a corresponding adverse effect on our business, results of operations and financial condition.

Moreover, the imposition of new environmental regulations and other regulatory initiatives could include increased restrictions on oil and gas producing entities’ ability to dispose of flow back and produced water generated by hydraulic fracturing or other fluids resulting from their exploration and drilling activities. Applicable laws impose restrictions and strict controls regarding the discharge of pollutants into waters of the United States and require that permits or other approvals be obtained to discharge pollutants to such waters. Additionally, regulations implemented under both federal and state laws prohibit the discharge of produced water and sand, drilling fluids, drill cuttings and certain other substances related to the natural gas and oil industry into coastal waters. These laws provide for civil, criminal and administrative penalties for any unauthorized discharges of pollutants and unauthorized discharges of reportable quantities of oil and hazardous substances. Compliance with current and future environmental regulations and permit requirements governing the withdrawal, storage and use of surface water or groundwater necessary for hydraulic fracturing of wells and any inability to secure transportation and access to disposal wells with sufficient capacity may increase customers’ and end users’ operating costs and could result in restrictions, delays, or cancellations of our customers’ operations, the extent of which cannot be predicted.

General Risks

Because of the Russian invasion of Ukraine, as well as high inflation and increase Federal Reserve interest rates in response, the effect on the capital markets and the economy is uncertain, and we may have to deal with a recessionary economy and economic uncertainty including possible adverse effects upon the oil and gas industry.

As a result of the Russian invasion of Ukraine, certain events have affected the global and United States economy including increased inflation, Federal Reserve interest rate increases in response, substantial increases in the prices of oil and gas, dramatic declines in the capital markets, and large Western companies ceasing to do business in Russia. The duration of this war and its impact are at best uncertain, and continuation may result in Internet access issues if Russia, for example, began illicit cyber activities. Ultimately the economy may turn into a recession with uncertain and potentially severe impacts upon public companies and us. We cannot predict how this will affect the market for oil and gas and related services, but the impact may be adverse.

Our future success depends on our ability to retain and attract high-quality personnel, and the efforts, abilities and continued service of our senior management.

Our future success depends on our ability to attract, hire, train and retain a number of highly skilled employees and on the service and performance of our senior management team and other key personnel for each of our subsidiaries. The loss of the services of our executive officers or other key employees and inadequate succession planning could cause substantial disruption to our business operations, deplete our institutional knowledge base and erode our competitive advantage, which would adversely affect our business. Competition for qualified personnel possessing the skills necessary to implement our strategy is intense, and we may fail to attract or retain the employees necessary to execute our business model successfully. We do not have “key person” life insurance policies covering any of our executive officers.

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Our success will depend to a significant degree upon the continued efforts of our key management, engineering and other personnel, many of whom would be difficult to replace. In particular, we believe that our future success is highly dependent on Jimmy R. Galla, our Chief Executive Officer and Chief Financial Officer and JD Reedy, our Chief Operating Officer. If any members of our management team leave our employment, our business could suffer, and the share price of our common stock could decline.

Mr. Galla may not devote his full time and attention to our company.

Mr. Galla, our Chief Executive Officer and Chief Financial Officer, has business interests outside our company, including serving as principal accounting officer of BitNile. Accordingly, from time to time he may not devote his full time and attention to our affairs. There are no assurances that our business and operations may not be adversely impacted in future periods as a result of the time he may devote to his other business interests instead of a sole focus by him on the affairs of our company.

If we cannot manage our growth effectively, our results of operations would be materially and adversely affected.

Our business model relies on rapidly growing the transportation businesses. Businesses that grow rapidly often have difficulty managing their growth while maintaining their compliance and quality standards. If we continue to grow as rapidly as we anticipate, we will need to expand our management by recruiting and employing additional executive and key personnel capable of providing the necessary support. There can be no assurance that our management, along with our staff, will be able to effectively manage our growth. Our failure to meet the challenges associated with rapid growth could materially and adversely affect our business and operating results.

Our failure to maintain an effective system of disclosure controls and internal control over financial reporting, may affect our ability to produce timely and accurate financial statements or our ability to comply with applicable regulations could be impaired.

We are subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act which requires, among other things, that public companies maintain effective disclosure controls and procedures and internal control over financial reporting. Our management concluded that our disclosure controls and procedures were not effective as of March 31, 2023, and any failure to maintain effective controls or any difficulties encountered in their implementation or improvement in the future could cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods. If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired, which could result in loss of investor confidence and could have an adverse effect on our stock price.

Failure of information technology systems or data security breaches, including as the result of cyber security attacks, affecting us, our business associates, or our industry, may adversely affect our financial condition and operating results.

We depend on information technology systems and services in conducting our business. We and others in the industries in which we operate use these technologies for internal purposes, including data storage and processing, transmissions, as well as in our interactions with our business associates. Examples of these digital technologies include analytics, automation, and cloud services. If any of our financial, operational, or other data processing systems are compromised, fail, or have other significant shortcomings, it could disrupt our business, require us to incur substantial additional expenses, result in potential liability or reputational damage or otherwise have a material adverse effect on our financial condition and operating results.

For example, the operator of the Colonial Pipeline was forced to pay $4.4 million in ransom to hackers as the result of a cyber attack disabling the pipeline for several days in May 2021. The attack also resulted in gasoline price increases and shortages across the East Coast of the United States. As we depend on the availability and price of gasoline in our transportation business, any significant increase in the price and/or shortage of gasoline such as that experienced from the May 2021 cyber attack would have a material adverse effect on our business and operating results.

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The price of our common stock is subject to volatility, including for reasons unrelated to our operating performance, which could lead to losses by investors and costly securities litigation.

The trading price of our common stock is likely to be highly volatile and could fluctuate in response to several factors, some of which may be outside our control, including but not limited to, the following factors:

	●	changes in market valuations of companies in the oil and gas industry;
	●	future oil prices;
	●	regulatory initiatives from the Biden Administration;
	●	announcements of developments by us or our competitors;
	●	the continuation of the stock market slump and any related adverse events affecting the economy;
	●	announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, capital commitments, significant contracts, or other material developments that may affect our prospects;
	●	actual or anticipated variations in our operating results;
	●	adoption of new accounting standards affecting our industry;
	●	additions or departures of key personnel; and
	●	other events or factors, many of which are beyond our control.

The stock market is subject to significant price and volume fluctuations. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been initiated against such a company. Litigation initiated against us, whether or not successful, could result in substantial costs and diversion of our management’s attention and Company resources, which could harm our business and financial condition.

Risks related to our Common Stock

The issuance of shares of our common stock upon exercise of our outstanding convertible debt may cause immediate and substantial dilution to our existing shareholders.

Our common stock may be affected by limited trading volume and may fluctuate significantly.

Our common stock is quoted on the OTCQB tier of the OTC Markets. There is a limited public market for our common stock and there can be no assurance that an active trading market for our common stock will develop. As a result, this could adversely affect our shareholders’ ability to sell our common stock in short time periods, or possibly at all. Thinly traded common stock can be more volatile than common stock traded in an active public market. Our common stock has experienced, and is likely to experience in the future, significant price and volume fluctuations, which could adversely affect the market price of our common stock without regard to our operating performance. In addition, we believe that factors such as quarterly fluctuations in our financial results and changes in the overall economy or the condition of the financial markets could cause the price of our common stock to fluctuate substantially.

Our common stock is deemed to be “penny stock,” which may make it more difficult for investors to sell their shares due to suitability requirements.

Our common stock is deemed to be “penny stock” as that term is defined under the Exchange Act. Penny stocks generally are equity securities with a price of less than $5.00 (other than securities registered on certain national securities exchanges. Our common stock is covered by an SEC rule that imposes additional sales practice requirements on broker-dealers who sell such securities to persons other than established customers and accredited investors, which are generally institutions with assets in excess of $5,000,000, or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouse.

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Broker/dealers dealing in penny stocks are required to provide potential investors with a document disclosing the risks of penny stocks. Moreover, broker/dealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor. These requirements may reduce the potential market for our common stock by reducing the number of potential investors. This may make it more difficult for investors in our common stock to sell shares to third parties or to otherwise dispose of them. This could cause our stock price to decline.

Because we can issue “blank check” preferred stock without stockholder approval, it could adversely impact the rights of holders of our common stock.

Under our Articles of Incorporation our Board of Directors may approve an issuance of up to 5,000,000 shares of “blank check” preferred stock without seeking stockholder approval. Any additional shares of preferred stock that we issue in the future may rank ahead of our common stock in terms of dividend or liquidation rights and may have greater voting rights than our common stock. In addition, such preferred stock may contain provisions allowing those shares to be converted into shares of common stock, which could dilute the value of common stock to current stockholders and could adversely affect the market price of our common stock. In addition, the preferred stock could be utilized, under certain circumstances, as a method of discouraging, delaying or preventing a change in control of our Company. Although we have no present intention to issue any shares of authorized preferred stock, there can be no assurance that we will not do so in the future.

If we are not successful, you may lose your entire investment.

Prospective investors should be aware that if we are not successful in our business, their entire investment in the Company could become worthless. Even if the Company is successful, we can provide no assurances that investors will derive a profit from their investment. We need additional capital to meet our obligations and achieve our business objectives, and we cannot guarantee we will be successful in locating additional required capital as and when needed or that any such amounts will be sufficient for us to establish material revenue growth. If we are not successful, you may lose your entire investment.

The price of our common stock is subject to volatility, including for reasons unrelated to our operating performance, which could lead to losses by investors and costly securities litigation.

The trading price of our common stock is likely to be highly volatile and could fluctuate in response to a number of factors, some of which may be outside our control, including but not limited to, the following factors:

	●	the large number of shares of our common stock which BitNile stockholders will receive in the Spin-Off;
	●	the large number of shares issuable upon conversion of outstanding convertible notes;
	●	sales of our common stock by these BitNile stockholders;
	●	the sporadic trading of our common stock which means that the limited demand and high supply may lead to price declines;
	●	future events related to the market for oil and gas related services or other services we may offer in the future, including regulation;
	●	changes in market valuations of companies involved in the oil and gas industry;
	●	regulatory initiatives from the Biden Administration or other government agencies;
	●	announcements of developments by us or our competitors;
	●	the continuation of the stock market slump and any related adverse events affecting the economy;
	●	announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, capital commitments, significant contracts, or other material developments that may affect our prospects;
	●	actual or anticipated variations in our operating results;
	●	adoption of new accounting standards affecting our industry;
	●	additions or departures of key personnel;
	●	the adverse consequences of future variants of COVID-19; and
	●	other events or factors, many of which are beyond our control.

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There is currently a limited trading market for the Company’s common stock.

Our common stock is quoted on the OTCQB under the symbol “WOEN.” There is currently a limited trading market in our common stock, and we cannot give an assurance that a consistent, active trading market will develop. Trading on the OTCQB is less liquid than the leading national securities exchanges. If an active market for our common stock develops, there is no assurance that such market will be maintained. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable.

Furthermore, there is a significant risk that our stock price may fluctuate in the future in response to any of the following factors, some of which are beyond our control:

	●	Material declines in the price of or market for oil and natural gas on which our operations depend;
	●	Regulation by the federal government including the SEC’s proposed climate change rules and whether such rules when adopted as we expect will apply to smaller reporting companies like the Company;
	●	Our ability to maintain relationships with truck drivers and customers in the oil and gas space;
	●	The impact of inflation;
	●	Economic conditions including the onset of a recession or stagflation;
	●	Variations in our quarterly operating results;
	●	Announcements that our revenue or income is below analysts’ expectations;
	●	Sales of large volume of our common stock especially after the Spin-Off; and
	●	Announcements by us or our competitors of significant contracts, strategic partnerships, joint ventures or capital commitments.

Future sales of our common stock in the public market could lower the price of our common stock and impair our ability to raise funds in future securities offerings.

Of 78,268,332 shares of common stock outstanding as of June 15, 2023, approximately 15,774,652 shares (or approximately 20%) are held by investors who are not our affiliates. The Spin-Off Shares, which currently account for 66% of our issued and outstanding common stock, will become unrestricted and freely tradeable stock following the effectiveness of a registration statement (provided we continue to comply with the period reporting obligations under the Exchange Act). Future sales of a substantial number of shares of our common stock in the public market, or the perception that such sales may occur, could adversely affect the then prevailing market price of our common stock and could make it more difficult for us to raise funds in the future through an offering of our securities. Future sales of substantial amounts of our common stock in the public market, or the anticipation of these sales, could materially and adversely affect market prices prevailing from time-to-time, and could impair our ability to raise capital through sales of equity or equity-related securities. In addition, the market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market or the perception that these sales may occur.

Our common stock is a “penny stock” and thereby be subject to additional sale and trading regulations that may depress the price of our common stock.

Our common stock is a “penny stock” if it does not qualify for one of the exemptions from the definition of “penny stock” under Section 3a51-1 of the Exchange Act. Our common stock may be a “penny stock” if it meets one or more of the following conditions: (i) it trades at a price less than $5 per share; (ii) it is not traded on a “recognized” national securities exchange which excludes the OTC Pink Market or the OTCQB and OTCQX; or (iii) is issued by a company that has been in business less than three years with net tangible assets less than $5 million. Thus, our common stock is a penny stock.

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The principal result or effect of being designated a penny stock is that securities broker-dealers participating in sales of our common stock are discouraged from soliciting purchases of our common stock by the SEC’s rules which generally results in low prices and limited trading volume. For example, SEC Rule 15g-2 requires broker-dealers dealing in penny stocks to provide potential investors with a document disclosing the risks of penny stocks and to obtain a manually signed and dated written receipt of the document at least two business days before effecting any transaction in a penny stock for the investor’s account. Moreover, Rule 15g-9 requires broker-dealers in penny stocks to approve the account of any investor for transactions in such stocks before selling any penny stock to that investor. This procedure requires the broker-dealer to: (i) obtain from the investor information concerning his or her financial situation, investment experience and investment objectives; (ii) reasonably determine, based on that information, that transactions in penny stocks are suitable for the investor and that the investor has sufficient knowledge and experience as to be reasonably capable of evaluating the risks of penny stock transactions; (iii) provide the investor with a written statement setting forth the basis on which the broker-dealer made the determination in (ii) above; and (iv) receive a signed and dated copy of such statement from the investor, confirming that it accurately reflects the investor’s financial situation, investment experience and investment objectives. Compliance with these requirements may make it more difficult and time consuming for holders of our common stock to resell their shares to third parties or to otherwise dispose of them in the market or otherwise. In addition, clearing firms, which hold retail accounts dislike penny stocks and through extra compliance efforts and costs they impose, make it hard to sell penny stocks.

We have no transition or services agreements with BitNile and may be unable to make, on a timely or cost-effective basis, the changes necessary to operate as an independent publicly-traded company, and we may experience increased costs after the Exchange and/or Spin-Off.

Historically BitNile provided us with various corporate services. Following the Exchange, BitNile had no obligation to provide us with assistance. Accordingly, we need to provide internally or obtain from unaffiliated third parties the services we historically receive from BitNile. We may be unable to replace these services on terms and conditions as favorable as those we receive from BitNile. We may be unable to successfully establish the infrastructure or implement the changes necessary to operate independently or may incur additional costs. If we fail to obtain the services necessary to operate effectively or if we incur greater costs in obtaining these services, our business, financial condition and results of operations may be adversely affected.

We may be unable to achieve some or all of the benefits that we expect to achieve from the Spin-Off.

We believe that, as an independent publicly-traded company, we will be able to, among other things, better focus our financial and operational resources on our specific business, implement and maintain a capital structure designed to meet our specific needs, design and implement corporate strategies and policies that are targeted to our business, more effectively respond to industry dynamics and create effective incentives for our management and employees that are more closely tied to our business performance. Further, we expect that the Spin-Off will assist us in complying with certain requirements to have our securities listed on a national securities exchange operated by The Nasdaq Stock Market LLC (“Nasdaq”) or the New York Stock Exchange (“NYSE”). However, we may fail to achieve these goals or realize these benefits, and could also face adverse consequences, such as being more susceptible to market fluctuations and have less support from BitNile who will no longer be a principal stockholder following the Spin-Off. We have been advised that unless we complete a $40 million public offering, we cannot seek to be listed on Nasdaq or the NYSE until following our fiscal year ended March 31, 2024. In addition, we may be unable to uplist our securities in the time we intend, if at all. The completion of the Spin-Off will also require significant amounts of our management’s and other personnel’s time and effort, which may divert their attention away from operating and growing our business.

Until the Spin-Off occurs, the BitNile Board of Directors has sole discretion to change the terms of the Spin-Off in ways that may be unfavorable to us.

Until the Spin-Off occurs, BitNile will remain a principal stockholder. Completion of the Spin-Off remains subject to the discretion of BitNile, including approval by the BitNile board of directors. Additionally, BitNile has the discretion to change the terms of the Spin-Off, including the ratio, which changes could be unfavorable to us or our stockholders, or the security holders of BitNile. In addition, BitNile may decide at any time prior to the completion of the Spin-Off not to proceed with the Spin-Off.

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The future issuance of equity or of debt securities that are convertible into, or exercisable for common stock could have negative pressure on the market price of our common stock and could have a material adverse effect on our ability to raise additional equity capital.

We presently have outstanding 6% convertible notes held by our former officers and directors in the principal amount of $845,565 that if converted would result in the issuance of approximately an additional 56,371,000 shares of our common stock. Furthermore, on March 29, 2023, we issued a promissory note in the principal amount of $165,000, net of discount, with a maturity date of March 27, 2024. The investor may in its option, at any time following an Event of Default, as defined in the Note, convert all or any part of the outstanding and unpaid amount of the note into fully paid and non-assessable shares of common stock at a conversion price per share equal to 75% of the average closing bid price of our common stock during the 5 trading days prior to the date of conversion. To meet our continuing working capital needs, we may choose to raise additional capital in the future, depending on market conditions, strategic considerations and operational requirements. To the extent that additional capital is raised through the issuance of shares or other securities convertible into, or exercisable for, shares of common stock, our stockholders will be diluted. Future issuances of our common stock or other equity securities, or the perception that such sales may occur, could adversely affect the prevailing market price of our common stock and impair our ability to raise capital through future offerings of equity or equity-linked securities. Accordingly, the adverse market and price pressures resulting from an offering pursuant to a registration statement may continue for an extended period of time and continued negative pressure on the market price of our common stock and could have a material adverse effect on our ability to raise additional equity capital.

We have not paid cash dividends in the past and do not expect to pay dividends in the future, so any return on investment may be limited to the value of our common stock.

We have never paid cash dividends on our common stock and do not anticipate doing so in the foreseeable future. The payment of dividends on our common stock will depend on earnings, financial condition and other business and economic factors affecting us at such time as our board of directors may consider relevant. If we do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if our stock price appreciates.

ITEM 1B.

UNRESOLVED STAFF COMMENTS.

~~None~~Not applicable.

ITEM 2. PROPERTIES.

InThe ~~December 2018, the~~ Company’s ~~entered~~leases ~~into~~approximately a14,300 ~~three~~square ~~year~~feet ~~lease~~of ~~for an~~ office and ~~manufacturing~~shop ~~facility~~space ~~located~~in atKilgore, ~~821~~Texas NWcommencing 57August ~~Place~~1, ~~Fort Lauderdale~~2022, for ~~FL 33309. The lease has~~ a ~~one-time~~term ~~renewal~~of ~~option~~5 ~~for three~~ years~~, which was exercised in October 2021~~. ~~The~~This ~~Company~~space ~~has~~is ~~the~~sufficient ~~option~~ to ~~terminate the~~maintain ~~lease~~our ~~with~~current ~~three months’ notice. The lease is for approximately 9,000 square feet of executive~~ and ~~manufacturing~~planned ~~space, at $4,839 per month, which includes common area maintenance, taxes and insurance~~operations.

ITEM 3.

LEGAL PROCEEDINGS.

~~Please~~From ~~see~~time-to-time, ~~Note~~we ~~H to~~may ~~the~~be ~~notes~~involved in litigation relating to ~~consolidated~~claims ~~financial~~arising ~~statements~~out ~~appears~~of ~~later~~our operations in ~~this~~the ~~report~~normal ~~for~~course aof ~~discussion~~business. As of the date of this Report, we are not aware of any pending or threatened ~~litigation~~ ~~involving~~lawsuits that could reasonably be expected to have a material effect on the ~~Company~~results of our operations.

~~ITEM 4~~ITEM4. MINE SAFETY DISCLOSURES.

Not applicable.

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

~~Our~~Market ~~common stock is quoted on the Pink tier of OTC Markets under the symbol “EVTN”.~~Information

~~The~~Our ~~last sale price of our~~ common stock asissued ~~reported~~is quoted on the ~~Pink~~OTCQB ~~tier~~under of the ~~OTC~~symbol ~~Markets~~“WOEN.” onOn ~~April~~June 520, ~~2022~~ 2023, ~~was~~the ~~$0.069~~last ~~per~~reported ~~share.~~sale Asprice of ~~April~~our 5,common ~~2022,~~stock ~~there were~~on ~~approximately~~the ~~791~~OTCQB ~~record~~was ~~owners of our common stock~~$0.03.

Stockholders

As of June 20, 2023, there were an estimated 790 holders of record of our common stock. A total of 9,915,648 shares of common stock are held in street name and are held by additional beneficial owners.

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Dividends

We have ~~not~~never paid a cash dividend on ~~the~~our common stock since ~~current management joined our company in 1996~~inception. The payment of dividends may be made at the discretion of our ~~board~~Board, ~~of directors~~ and will depend upon, ~~among~~but ~~other~~not ~~things~~limited to, our operations, ~~our~~ capital requirements, and ~~our~~ overall financial condition. ~~As of the date of this report, we have no intention to declare dividends.~~

We do not anticipate paying cash dividends on our common stock in the foreseeable future. The payment of dividends on our common stock will depend on earnings, financial condition and other business and economic factors affecting it at such time as the Board may consider relevant. We intend to follow a policy of retaining all of our earnings to finance the development and execution of our strategy and the expansion of our business. If we do not pay dividends, our common stock may be less valuable because a return on your investment will occur only if our stock price appreciates.

Recent Sales of Unregistered Securities

Except for those unregistered securities previously disclosed in reports filed with the Commission during the period covered by this report, we have not sold any securities without registration under the Securities Act of 1933, as amended, during the period covered by this reportNone.

Issuer Purchase of Equity Securities

None.

ITEM 6. ~~SELECTED FINANCIAL DATA~~RESERVED.

RESERVED.

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion of our financial condition and results of operations for ~~2021~~the fiscal year ended March 31, 2023 ("FY 2023") and ~~2020~~fiscal year ended March 31, 2022 ("FY 2022") and should be read in conjunction with the financial statements and the notes to those statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives, expectations and intentions. Actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under Cautionary Statement Regarding Forward Looking Information, Item 1A. Business and Item 1A. Risk Factors in this report. We use words such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions to identify forward-looking statements.

Overview

~~The~~Wolf ~~Covid-19~~Energy ~~pandemic has~~is ~~hurt~~a ~~our~~holding ~~operations~~company ~~significantly.~~which ~~Prior~~operates toprimarily ~~the Covid-19 pandemic, we experienced significant revenue growth~~ in ~~2019 mainly through~~ the ~~sale~~transportation ~~of Voraxial Separator~~ and ~~V-Inline~~logistics ~~Separators.~~services ~~However,~~business ~~2020~~serving ~~and~~hydraulic ~~2021~~fracking ~~proved~~companies ~~to be an extremely challenging~~ and ~~disappointing period~~assisting ~~due~~in totheir ~~the~~operations ~~Covid-19~~through ~~pandemic.~~Banner ~~In 2021~~Midstream, ~~our~~which ~~revenues~~has ~~were~~two ~~mainly~~operating ~~derived~~subsidiaries: ~~from~~Pinnacle ~~machining~~Frac ~~projects for local South Florida customers~~ and ~~auxiliary parts for the Voraxial and V-Inline Separator~~Capstone. ~~The~~Pinnacle ~~drop~~Frac inprovides ~~capital~~transportation ~~expenditures from the overall market, both from the oil industry and industries outside~~ of ~~oil~~frac ~~and~~sand ~~gas, coupled with the lack of a sales~~ and ~~marketing~~logistics ~~budget,~~services ~~hindered sales opportunities for the V-Inline Separator. Customer inquiries decreased significantly as well during this period due~~ to amajor ~~drop~~hydraulic infracturing ~~capital~~and ~~expenditures. The~~drilling ~~Supply Agreement we signed with Schlumberger in June 2017 as part of the Technology Purchase Agreement expired in 2020~~operations. AsCapstone weprocures ~~did not~~and ~~generate~~finances ~~significant~~equipment ~~revenues from this agreement, we did not pursue an extension of such agreement under its initial terms. However, we may continue~~ to ~~work~~oilfield ~~together~~transportation onservice ~~a project by project basis with Cameron Solutions, Inc~~contractors. until such time a new agreement is reached, if at all. As we have reduced our marketing budget for the V-Inline Separator, we have shifted our near term focus on machining work to help stabilize our cash flow.

WeThe ~~believe~~Company ~~there~~has ~~is a~~included ~~market~~in ~~for~~its historical ~~the~~consolidated ~~V-Inline~~financial ~~Separator~~statements certain operating expenses and other income (expense) from BitNile that have been allocated to them in FY 2023 (prior to the ~~mining,~~sale ~~utilities~~to the Company on September 7, ~~sewage~~2022) and ~~industrial~~FY ~~wastewater industries~~2022, ~~among~~which ~~others~~are part of the Consolidated Statements of Operations for each of these periods. WeThe ~~intend~~allocations ~~to continue~~represented tocharges ~~seek~~incurred ~~opportunities~~by BitNile for ~~the~~certain ~~V-Inline~~corporate, ~~Separator~~infrastructure ~~through~~and ~~our~~shared ~~rights~~services ~~under~~expenses, ~~our~~including ~~Grant~~legal, ~~Back~~human ~~License.~~resources, Wepayroll, ~~have~~finance ~~branded~~and ~~our~~accounting, ~~licensed products~~employee asbenefits, ~~the~~insurance, ~~V-Inline~~information ~~Separator~~technology, telecommunications, treasury, and other expenses. InWhere ~~2021~~possible, wethese ~~commissioned~~charges awere ~~wastewater~~allocated ~~system~~based aton adirect ~~nuclear~~usage, ~~facility~~with ~~that~~the ~~consisted~~remainder allocated on a pro rata basis of ~~multiple~~headcount, ~~V-Inline Separators~~asset, toor ~~separate~~other ~~solids~~allocation ~~and~~methodologies ~~oil~~that ~~from~~are ~~their~~considered ~~wastewater~~to ~~stream.~~be ~~The~~a ~~system~~reasonable isreflection ~~being~~of ~~used~~the toutilization ~~process~~of ~~and~~services ~~separate~~provided ~~oil~~or ~~and~~the ~~solids~~benefit ~~from a~~received ~~flow~~by ofthe ~~about~~Company ~~100~~during ~~gallons~~the ~~per~~periods ~~minute~~presented pursuant to SAB Topic 1.B.1. The ~~system~~allocations ~~includes~~may ~~different~~not, ~~technologies~~however, ~~with~~reflect the ~~heart~~expense ofthe Company would have incurred as a standalone company for the ~~system~~periods ~~being~~presented. ~~comprised~~These ofcosts ~~two V-Inline~~also ~~2000~~may ~~Separators~~not ~~working~~be inindicative ~~parallel~~of ~~with~~the aexpenses ~~third~~that ~~V-Inline~~the ~~Separator~~Company will ~~being~~incur ~~utilized~~in tothe ~~further~~future ~~dewater~~or would have incurred if the ~~reject~~Company had ~~lines~~ obtained these services from ~~the~~a ~~System.~~third party.

~~Going Concern~~ 26

~~For 2021 we reported~~ a Table ~~net loss~~ of ~~$714,092. At December 31, 2021, we had cash on hand of $11,740, a working capital deficit of $1,160,325 and an accumulated~~Contents deficit of $16,636,521. The report of our independent registered public accounting firm on our consolidated financial statements for the year ended December 31, 2021 contains an explanatory paragraph regarding our ability to continue as a going concern based upon our working capital deficit, accumulated deficit and negative cash flows from operations. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. There are no assurances we will be successful in our efforts to raise capital, develop a source of revenues, report profitable operations or to continue as a going concern, in which event investors would lose their entire investment in our company.

10Results of Operations for the Year ended March 31, 2023 and 2022

~~Results of Operations~~Revenue

~~Revenues~~The following table shows the Company’s revenues for the year ended March 31:

Revenues for 2021 increased by approximately 34% from 2020. Although our revenues increased from 2020, our revenues are down significantly from the higher historical revenues we earned in the last fiscal year prior to Covid-19. The decrease in revenues as compared to historical revenues reflect the harsh economic climate we faced in 2021 due to Covid-19 pandemic and the liquidity issues limiting our sales and marketing budget we continue to experience since the start of Covid-19 pandemic. Although we achieved significant revenue growth in 2019 from the sale of Voraxial Separator to the oil industry and the sale of a wastewater system that included multiple V-Inline Separators to a nuclear facility, the damage experienced from the 2020 and 2021 pandemic may hinder our ability to generate sales and increase revenues quickly. We expect that our revenues in 2022 from machine manufacturing will continue to increase and we expect that sales of Voraxial and V-Inline Separators will begin to rebound. However, it may take longer than expected for business related to the V-Inline Separator to resume normal sales cycle. Accordingly, at this time we are unable to predict the ultimate impact to our revenues in 2022.

	Year Ended
	March 31,
	2023		2022
Revenue:
Transportation Services	$	19,872,292	$	18,457,567
Fuel Rebate		221,004		251,877
Equipment Rental and other		17,500		40,609
	$	20,110,796	$	18,750,053

~~Cost~~Revenues for the year ended March 31, 2023 (FY 2023) were $20,110,796 as compared to $18,750,053 for the year ended March 31, 2022 (FY 2022). The increase of 7% ~~goods~~was due to a higher mix of loads of concrete (average of approximately 760 loads per month at an average of $2,800 per load in FY 2023) compared to no concreate loads in FY 2022 offset by decreased loads of frac sand (average of approximately 1,700 loads per month in FY 2023 compared to approximately 2,800 loads per month in prior year) as well as lower rates per frac sand load (average of approximately $400 per load compared in FY 2023 compared to approximately $486 in FY 2022). Equipment Rental and Other decreased in FY 2023 due to completion of an outstanding Capstone financing agreement in June 2022.

~~Cost~~Costs ~~of goods sold decreased approximately 20% in 2021 from 2020,~~ and reflects the change in the margins of the items sold during this period. Our cost of goods sold as a percentage of revenues decreased to approximately 36% in 2021 from approximately 60% in 2020 as a result of the higher margin revenues we earned with the sale of auxiliary parts for the Voraxial and V-Inline Separators projects we completed as compared to the lower margin products manufactured in 2020, including the manufacturing of face shields. Further, in 2020 we experience inventory impairment as a result of extra face shields we have in inventory. Our cost of goods continues to be reviewed by management in effort to obtain the best available pricing while maintaining high quality standards.Expenses

~~Costs~~The ~~and~~following table shows operating expenses for the year ended March 31:

Total costs and expenses decreased by approximately 21% for 2021 as compared to 2020. The decrease was due to decrease in payroll expense, professional fees and decreases in selling, general and administrative expenses.

	Year Ended
	March 31,
	2023		2022
Costs and Expenses
Costs of revenues (excludes items below)	$	15,592,278	$	13,447,203
Salaries and salary related costs		1,138,406		2,494,942
Selling, general and administrative		4,638,670		7,781,350
Depreciation, amortization, and impairment		10,397,900		783,324
Total	$	31,767,254	$	24,506,819

~~Selling~~There was an increase in total costs and expenses of approximately 30% for the year ended March 31, 2023 compared to prior year. The increase was driven by $9,614,576 higher depreciation, amortization and impairment expenses due to the impairment of goodwill of $8,514,017 and impairment of intangible assets of $1,459,358, increased costs of revenues (exclusive of other items shown) of $2,145,075 due to costs related to independent third-party owner-operator trucks and insurance costs, offset by $3,142,680 lower selling, general and administrative expenses (“SG&A”), $1,356,536 lower salary and salary related costs.

~~Selling, general and~~ ~~administrative expenses decreased by 28% for 2021 as compared to 2020. We continue to reduce our expenses. We experienced decreases in~~ 27 our insurance expense of approximately $5,100 mainly from the termination of employee health insurance and D&O insurance and a decrease in legal and professional fees of approximately $38,500 as a result of an effort to reduce expenditures.

~~Payroll~~ ~~Expenses~~ Table of Contents

~~Payroll~~Selling, ~~expense~~General ~~in 2021 decreased by approximately 16% as compared to 2020. The decrease in payroll expense was due to a higher utilization~~ and ~~absorption of labor cost into cost of goods sold as compared to 2020 and a reduction in payroll hours.~~Administrative

~~Professional Fees~~The following table shows SG&A expenses for the year ended March 31:

Professional fees decreased by approximately 23% for 2021 from 2020. The decrease was primarily due to a decrease in advisory and consulting services as a result of our cost cutting measure to conserve cash. A reduction in such fees may have a negative effect on future sales opportunities. Additionally, legal fees decreased by approximately $40,000 and were partially offset by legal expenses for advancement of intellectual property claims.

	Year Ended
	March 31,
	2023		2022
Selling, General and Administrative Expenses:
Insurance	$	2,305,066	$	2,559,116
Capital raising costs		16,750		1,603,346
Equipment rental		637,575		600,432
Factoring expense		337,970		417,338
Repairs and maintenance		248,983		663,920
Rents		155,164		221,872
Taxes and licenses		54,471		207,302
Legal and professional		359,719		975,400
Other		522,972		532,624
Total	$	4,638,670	$	7,781,350

~~Interest Expense~~Total SG&A costs decreased $3,142,680 from the year ended March 31, 2022 primarily due to lower capital raising expense related to a registered direct offering in August 2021, decreased repairs and maintenance costs as we utilized more owner operators than company owned trucks, and lower legal and professional costs due to lower stock-based compensation for consultant incurred in prior year.

~~Interest~~Depreciation ~~expense, which represents interest we pay on an equipment note payable, increased approximately 43% in 2021 from 2020 as a result of the sale of our CNC equipment~~ and ~~the fees associated with early termination.~~Amortization

11The following table shows depreciation and amortization expenses for the year ended March 31:

Liquidity and Capital Resources

	Year Ended
	March 31,
	2023		2022
Depreciation of frac sand transportation equipment	$	167,552	$	434,510
Amortization of intangible assets		1,716,331		348,814
Impairment of Goodwill		8,514,017		-
Total	$	10,397,900	$	783,324

AtTotal ~~December 31, 2021,~~depreciation ~~cash~~and ~~was~~amortization ~~$11,740~~expense ~~as compared to $336,564 at December 31, 2020. Working capital deficit at December 31, 2021~~ was ~~$1,160,325 as compared to a working capital deficit at December~~ ~~31, 2020 of~~ $~~750~~10,~~481. At December 31~~397,900 ~~2021,~~for ~~we had an accumulated deficit of $16,636,521. Our current assets decreased by 69% at December~~the ~~31,~~year ~~2021~~ended asMarch ~~compared to December~~ 31, ~~2020~~2023, ~~which reflects decreases in our cash and cash equivalents and prepaid expenses which were offset by an increase in accounts receivable. Our current liabilities increased 7% at December 31, 2021 as~~ compared to ~~December~~ 31$783,324 ~~2020,~~last ~~which is primarily attributable to an increase accrued expense-related party and Loans Payable – current portion as a result of the SBA loans and PPP loans we received~~year. ~~We expect that such loans will be forgiven but we cannot provide any assurances. Increases were offset by decrease in equipment loans that was fully paid.~~

WeThe doCompany ~~not~~recorded ~~have~~a ~~any external~~total ~~sources~~ of ~~liquidity~~$4,900,873 ~~and~~of ~~have~~goodwill ~~been~~in ~~dependent~~connection ~~upon~~with the ~~funds~~acquisition weof ~~received~~Banner ~~under~~Midstream ~~the~~by ~~SBA~~BitNile. At ~~and~~March ~~PPP loans and advances from our chief executive officer and directors~~31, and limited customer’s revenues to provide working capital for our company. We do not have any commitment for capital expenditures. We anticipate we will need approximately $1 million to operate the business over the next twelve months. Our ability to generate future revenues2023, ~~generate~~as ~~sufficient~~required ~~cash~~by Financial ~~flow~~Accounting toStandards ~~pay~~Board ~~our~~(FASB) ~~operating~~Accounting ~~expenses~~Standards ~~and~~Codification ~~report profitable~~(ASC) ~~operations~~section in350-20-35 ~~future~~"Subsequent ~~periods will depend on a number of factors~~Measurement", ~~many~~goodwill ofwas ~~which~~tested ~~are~~for ~~beyond our control~~impairment. Based ~~If we fail to achieve profitability~~ on aqualitative ~~quarterly or annual basis~~testing, orit towas ~~raise~~determined ~~additional~~that ~~funds~~there ~~when~~was ~~needed,~~evidence orof doimpairment ~~not~~and ~~have~~the ~~sufficient~~goodwill ~~cash~~was fully ~~flows from~~impaired ~~sales,~~at weMarch ~~may be required to scale back or cease operations~~31, ~~sell or liquidate our assets and possibly seek bankruptcy protection~~2023.

OnAs ~~January~~the 5reverse merger transaction resulted in the owner of Banner gaining control over the combined entity after the transaction, ~~2022~~and the shareholders of Wolf Energy Services Inc. (formerly Enviro Technologies U.S., ~~John~~ AInc.) ~~DiBella~~continuing only as passive investors, the ~~Company’s~~transaction ~~chief~~was not considered ~~executive~~a ~~officer,~~business ~~advanced~~combination under the ~~Company~~ASC. ~~$30~~Instead,~~000~~ ~~pursuant~~this transaction was considered to ~~the~~be ~~terms~~a capital transaction of athe 4%legal ~~unsecured~~acquiree ~~promissory note.~~(Banner) ~~The~~and ~~note~~was isequivalent ~~payable~~to onthe ~~December~~issuance ~~31,~~of ~~2022~~shares ~~and~~by ~~accrues~~Banner ~~interest~~for atthe anet ~~rate~~monetary assets of 4%Wolf ~~per~~Energy ~~annum~~Services Inc. In(formerly Enviro ~~addition~~Technologies U.S., ~~from~~Inc.) ~~February~~accompanied 15by a recapitalization, ~~2022~~except ~~through April~~for 7,the ~~2022~~purchase of the 22,280,500 shares ~~Mr.~~of ~~DiBella~~issued ~~has~~and ~~advanced~~outstanding ~~the~~common ~~Company~~shares anof ~~additional~~Wolf ~~$29~~Energy Services Inc. (formerly Enviro Technologies U.S.,~~000~~ ~~under~~Inc.) ~~the~~which ~~same~~were ~~terms~~considered as ~~the~~purchase ~~note~~consideration resulting in $3,613,144 of goodwill that was impaired immediately.

OnIn ~~April~~the ~~12,~~acquisition ~~2022,~~of ~~Ray Veldman,~~Banner ~~member~~Midstream ofby BitNile, the ~~Company’s~~intangible ~~Board~~assets acquired consisted of ~~Directors,~~customer ~~advanced~~relationships ~~the~~and ~~Company~~non-compete agreements valued at $202,350,000. ~~pursuant~~The toestimated ~~the~~useful ~~terms~~lives of athe 4%customer ~~unsecured~~relationships ~~promissory note.~~are ~~The~~ten ~~note~~years based on the estimated cash flows from those customer contracts, and the estimated useful lives of the non-compete agreement is ~~payable~~five onyears ~~December~~amortized over a straight-line method. At March 31, ~~2022~~2023, as required by Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) section 360 "Property, Plant and ~~accrues~~Equipment", ~~interest~~the atcustomer arelationship ~~rate~~and non-compete agreements were tested for impairment. Based on qualitative testing, it was determined that there was evidence of 4%impairment ~~per~~and ~~annum~~the agreements were fully impaired at March 31, 2023.

The presentation of depreciation has been included in our operating expenses based on SAB topic 11:B. Depreciation is not considered a key performance indicator by management and is immaterial as a percentage of revenues.

Other Income (Expense)

The following table shows other income (expense) for the year ended March 31:

	Year Ended
	March 31,
	2023			2022
Change in fair value of derivative liabilities	$	-		$	10,975,737
Loss on disposal of fixed assets		(1,326,450	)		(6,770	)
Interest expense, net of interest income		(46,516	)		(321,159	)
Total	$	(1,372,966	)	$	10,647,808

Total other (expense) was ($1,372,966) for the year ended March 31, 2023, compared to total other income of $10,647,808 in prior year. Change in fair value of derivative liabilities for the year ended March 31, 2022 was a non-cash income of $10,975,737 as compared to zero in current year. As noted, the changes in the derivative liability in FY 2022 were for a derivative liability recognized on BitNile’s books as it was indexed to their common stock. The Company recorded the advances received from its former parent, BitNile as additional paid in capital in the Exchange.

Table of Contents

For the year ended March 31, 2023 there was a (loss) on disposal of fixed assets of ($1,326,450), compared to a loss of ($6,770) in prior year. The current year loss was a result of a disposal and impairment of assets worth $2,953,687 that had a net value of $1,039,737 for cash proceeds of $587,500.

Interest expense, net of interest income, for the year ended March 31, 2023 was ($46,516) as compared to ($321,159) for the prior year. The decrease in interest expense was the result of the expense incurred on the debt assumed in the Banner Midstream acquisition as well as the value related to the granting of warrants for interest in FY 2022.

Summary of cash flows

The following table summarizes our cash flows:

	Year Ended December 31,
	Year Ended
	2021			2020
	March 31,
	2023			2022
Cash flow data:
Cash used in operating activities	$	(499,511)		$	(541,249)
Cash provided by operating activities	$	753,862		$	1,589,387
Cash provided by (used in) investing activities	$	275,000		$	(8,228)
Cash provided by investing activities	$	483,324		$	—
Cash (used in) provided by financing activities	$	(100,313)		$	211,197
Cash used in financing activities	$	(762,405	)	$	(1,785,351	)

Net cash provided of $753,862 from ~~used in~~ operating activities in ~~2021~~the year ended March 31, 2023 was primarily attributable to our ($13,274,207) net loss for ~~and~~ the ~~gain~~period onconsisting ~~the forgiveness~~ of ~~PPP loan and interest~~ $10,397,900 depreciation, ~~offset~~amortization inand ~~part by~~impairment ~~increases~~expense ~~in accounts payable~~and $1,326,450 loss ~~accrued~~on ~~expenses~~disposal ~~and~~of ~~accrued~~fixed ~~expenses – related party~~assets.

Net cash provided of $1,589,387 from operating ~~used~~activities in ~~operating activities~~the inyear ~~2020~~ended March 31, 2022 was primarily attributable to net ~~loss~~income ~~and a decrease in accounts payable and accrued expenses~~of $4, 806,042 offset ~~in part~~ by a ~~decrease in accounts receivable and~~ an increase in ~~accrued~~home ~~expenses~~office –allocations ~~related party. Decrease in accounts receivable are a result~~ of some parts we manufactured and shipped in 2020 in fulfillment of orders we received in 2019. Decreases in deposit from customer is primarily attributable to deposit recognized as revenues as a result of the shipment of the wastewater system to the utility company. ($2,954,442)

Net cash ~~used~~provided in investing activities induring ~~2021~~the year ended March 31, 2022 was attributable to ~~the~~proceeds from sale of ~~our~~fixed ~~manufacturing~~assets ~~equipment~~of $587,500 , weoffset ~~purchased~~by inpurchase ~~2017.~~of fixed assets of ($261,089) Net cash ~~used~~provided in investing activities in ~~2020~~during ~~was~~the ~~primarily~~year ~~attributable~~ended toMarch an31, ~~increase~~2022 inwas ~~manufacturing equipment we purchased for machining projects we pursued~~zero.

Net cash used in financing activities during ~~each~~the ofyear ~~2021~~ended ~~and~~March 31, ~~2020~~ 2023 was primarily ~~attributable~~due to ~~the~~repayments ~~repayment~~ of ~~the~~long-term ~~equipment~~debt ~~note~~on ~~payable~~equipment and ~~loan~~notes payable ~~issuance for~~offset ~~the~~by ~~PPP~~proceeds ~~and~~from ~~EIDL~~short ~~loans~~term wedebt. ~~received~~Net ~~for~~cash used in financing activities during the ~~Covid~~year ended March 31, 2022 was primarily due to repayments of long-19term ~~pandemic~~debt on equipment and payments made to reduce lease liabilities.

12Our ability to generate future revenues, generate sufficient cash flow to pay our operating expenses and report profitable operations in future periods will depend on several factors, many of which are beyond our control. Our independent auditors have included in their audit report an explanatory paragraph that states that our working capital deficits and accumulated deficit raises substantial doubt about our ability to continue as a going concern. If the Company fails to achieve profitability on a quarterly or annual basis, or to raise additional funds when needed, or does not have sufficient cash flows from sales, we may be required to scale back operations. As a result of the above, there is substantial doubt about the ability of the Company to continue as a going concern and the accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty.

~~Looking~~Liquidity ~~Forward~~and Capital Resources:

AsGoing a result of the uncertainties facing our company as discussed elsewhere in this report, we are unable to predict the overall impact in 2022 and beyond on our company at this time. Our loss of revenues will materially impact our liquidity, and we do not expect to be able to access the capital markets for additional working capital in the near future. Our senior management will continue to monitor our situation on a daily basis, however, we expect that these factors and others we have yet to experience will materially adversely impact our company, its business and operations for the foreseeable future. Our management has also begun exploring possible opportunities for the Company involving mergers, acquisitions or other business combination transactions in an effort to diversify our business. We are not currently a party to any agreement or understandings with any third parties, and there are no assurances even if our management locates an opportunity which it believes will be in the best interests of our shareholders what we will ever consummate such a transaction. Accordingly, investors should not place undue reliance on these efforts.Concern

~~Our~~For ~~ability~~the toyear ~~generate future~~ended ~~revenues~~March 31, ~~generate~~2023 ~~sufficient~~and ~~cash~~2022, ~~flow~~the toCompany ~~pay~~had ~~our~~a ~~operating~~net ~~expenses~~(loss) ~~and~~income ~~report~~from ~~profitable~~ operations in(not ~~future~~including ~~periods~~the ~~will depend~~provision onfor aincome ~~number~~taxes) of ($13,029,424) and $4,891,042, ~~factors~~respectively, ~~many~~has ofa ~~which~~working ~~are~~capital ~~beyond~~deficit ~~our~~of $1,654,456 and $1,607,004, ~~control.~~respectively, ~~Our~~and ~~independent~~has ~~auditors~~an ~~have~~accumulated ~~included~~deficit inas ~~their~~of ~~audit~~March ~~report~~31, ~~an explanatory~~2023 ~~paragraph~~of ($16,032,980). ~~that~~The ~~states~~report ~~that~~of our ~~working~~independent ~~capital~~registered ~~deficits~~public ~~and~~accounting ~~accumulated~~firm ~~deficit~~on ~~raises~~our ~~substantial~~consolidated ~~doubt~~financial ~~about~~statements ~~our~~for ~~ability to~~the ~~continue~~year asended aMarch ~~going~~31, ~~concern.~~2023, Iffiled weas ~~fail~~an exhibit to ~~achieve~~this ~~profitability~~report, oncontains aan ~~quarterly~~explanatory orparagraph ~~annual~~regarding ~~basis,~~our orability to ~~raise~~continue ~~additional~~as ~~funds~~a ~~when needed,~~going orconcern dobased ~~not~~upon ~~have~~our ~~sufficient~~working capital deficit, accumulated deficit and negative cash flows from ~~sales~~operations. These factors, weamong ~~may~~others, beraise ~~required~~substantial doubt about our ability to ~~scale~~continue ~~back~~as ora ~~cease~~going ~~operations,~~concern. ~~sell~~Our orconsolidated ~~liquidate~~financial ~~our assets~~statements ~~and~~do ~~possibly~~not ~~seek~~include ~~bankruptcy~~any ~~protection.~~adjustments Asthat amight result offrom the ~~above,~~outcome ~~there~~of isthis ~~substantial~~uncertainty. ~~doubt~~There ~~about~~are ~~the~~no ~~ability~~assurances of the Company to will ~~continue~~be assuccessful ain ~~going~~our ~~concern~~efforts ~~and~~to ~~the~~raise ~~accompanying~~capital, ~~consolidated~~develop ~~financial~~a ~~statements~~source ~~have~~of ~~been~~revenues, ~~prepared~~report ~~assuming~~profitable ~~that~~operations ~~the~~or ~~Company~~to ~~will~~ continue as a going concern., ~~The~~in ~~accompanying~~which ~~consolidated~~event ~~financial~~investors ~~statements~~would dolose ~~not~~their ~~include~~entire ~~any~~investment ~~adjustments~~in ~~that~~our ~~may result from the outcome of this uncertainty~~company.

~~Critical Accounting Estimates~~ 29

~~Our financial statements~~ ~~have~~ Table ~~been prepared in accordance with accounting principles generally accepted in the United States~~ of ~~America (“U.S. GAAP”).~~Contents The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Note C of the Notes to Consolidated Financial Statements appearing later in this report describes the significant accounting policies used in the preparation of the consolidated financial statements. Certain of these significant accounting policies are considered to be critical accounting policies, as defined below.

ACash ~~critical~~at ~~accounting policy~~March is31, ~~defined~~2023 was $574,233 as ~~one~~compared ~~that is both material~~ to $99,452 at ~~the~~March 31, ~~presentation~~2022. ofOur ~~our~~working ~~financial~~capital ~~statements~~deficit ~~and~~at ~~requires~~March ~~management~~31, to2023 ~~make difficult~~was $1, ~~subjective~~654,456 as orcompared ~~complex~~to ~~judgments that could have~~ a ~~material~~working ~~effect~~capital ondeficit ~~our~~at ~~financial~~March 31, ~~condition~~2022 ~~and results~~ of ~~operations~~ $1,607,004. ~~Specifically, critical~~At ~~accounting~~March ~~estimates~~31, ~~have~~2023, the ~~following~~Company ~~attributes:~~had 1)an weaccumulated ~~are~~deficit ~~required~~of $16,032,980. toOur ~~make~~current ~~assumptions~~assets increased by 101% at ~~about~~March ~~matters~~31, ~~that~~2023 as ~~are~~compared ~~highly~~to ~~uncertain at~~March 31, ~~the~~2022, ~~time~~which ofreflects ~~the~~increases ~~estimate;~~in prepaid expenses and 2)cash. ~~different~~Our ~~estimates~~current weliabilities increased ~~could~~by -31% ~~reasonably~~at ~~have~~March ~~used~~31, or2023 as ~~changes~~compared ~~in the estimate that are reasonably likely~~ to ~~occur~~March 31, ~~would~~2022, ~~have~~primarily adue ~~material~~to ~~effect~~Notes onPayable ~~our~~to ~~financial~~prior ~~condition~~owners ~~or results~~ of ~~operations~~ $845,565.

~~Estimates~~On ~~and~~April ~~assumptions about~~5, ~~future~~2021, ~~events~~FPA ~~and~~received ~~their~~a ~~effects~~loan ~~cannot be determined with certainty. We base our estimates on historical experience and on various other assumptions believed to be applicable and reasonable under~~ (the ~~circumstances.~~“2021 ~~These~~PPP ~~estimates~~Loan”) ~~may~~from ~~change~~Cross asRiver ~~new~~Bank ~~events occur, as additional information is obtained and as our operating environment changes. These changes have historically been minor and have been included~~ in the ~~consolidated~~amount ~~financial statements as soon as they became known. Based on a critical assessment~~ of ~~our~~$75,085, ~~accounting~~pursuant ~~policies and~~to the ~~underlying~~Payroll ~~judgments~~Protection ~~and~~Plan ~~uncertainties~~(PPP) ~~affecting~~under ~~the~~Division ~~application of those policies~~A, ~~management~~Title ~~believes~~I ~~that our consolidated financial statements are fairly stated in accordance with U.S. GAAP, and present a meaningful presentation~~ of ~~our~~the ~~financial~~CARES ~~condition and results of operations~~Act. WeFPA ~~believe~~used the ~~following~~entire ~~critical~~2021 ~~accounting~~PPP ~~policies~~Loan ~~reflect~~amount ~~our~~for ~~more~~qualifying ~~significant estimates and assumptions used in the preparation of our consolidated financial statements:~~expenses.

13Under the terms of the PPP, certain amounts of the 2021 PPP Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. Notification was received that the 2021 PPP Loan has been forgiven.

~~Accounts~~The ~~Receivable~~Company does not have any external sources of liquidity and does not have any capital commitments.

~~Accounts receivable~~Our ~~are~~ability ~~presented~~to ~~net~~generate future revenues, generate sufficient cash flow to pay our operating expenses and report profitable operations in future periods will depend on a number of anfactors, ~~allowance~~many ~~for~~of ~~doubtful~~which ~~accounts~~are beyond our control. ~~The~~Our ~~company~~independent ~~maintains~~auditors ~~allowances~~have ~~for~~included ~~doubtful~~in ~~accounts~~their ~~for~~audit ~~estimated losses.~~report ~~The~~an ~~company~~explanatory ~~reviews~~paragraph that states that our working capital deficits and accumulated deficit raises substantial doubt about our ability to continue as a going concern. If the ~~accounts~~Company fails ~~receivable~~to achieve profitability on a ~~periodic~~quarterly ~~basis~~or ~~and~~annual ~~makes~~basis, ~~general~~or ~~and~~to ~~specific~~raise ~~allowance~~additional funds when needed, or does not have sufficient cash flows from sales, we may be required to scale back operations. As a result of the above, there is asubstantial doubt as toabout the ~~collectability~~ability of ~~individual~~the ~~balances.~~Company Into ~~evaluating~~continue as a going concern and the ~~collectability~~accompanying ofconsolidated ~~individual~~financial ~~receivable~~statements ~~balances,~~have been prepared assuming that the Company ~~considers many~~will ~~factors,~~continue ~~including~~as a going concern. The accompanying consolidated financial statements do not include any adjustments that may result from the ~~age~~outcome of ~~the~~this ~~balance,~~uncertainty. The ~~customer~~Company’s ~~historical~~ability ~~payment~~to ~~history~~continue as a going concern is dependent upon the Company’s ability to continue to increase revenues, control expenses, raise capital, and continue to sustain adequate working capital to finance its ~~current~~operations. ~~credit-worthiness~~The failure to achieve the necessary levels of profitability and ~~current economic~~cash ~~trends~~flows would be detrimental to the Company. ~~Accounts~~We are ~~written~~continuing ~~off~~to ~~after~~engage ~~exhaustive~~in ~~efforts~~discussions atwith ~~collections~~potential sources for additional capital, however, our ability to raise capital is somewhat limited based upon our revenue levels, net losses and limited market for our common stock. Absent an increase in revenues, we estimate we require approximately $1,000,000 of additional capital to maintain our operations for the next 12 months from the date of filing this Report. If we fail to raise additional funds when needed, or if we do not have sufficient cash flows from operations, we may be required to scale back or cease certain of our operations.

~~Inventory~~Effective March 29, 2023, the Company entered into a Securities Purchase Agreement dated March 27, 2023 (the “Purchase Agreement”) with an accredited investor (the “Investor”), pursuant to which the Company sold the Investor a promissory note in the principal amount of $165,000, net of discount (the “Note”). The Note carries a one-time interest charge of twelve percent (12%) which was applied on the issuance date to the principal (22% upon the occurrence of an event of default) and has a maturity date of March 27, 2024. The Note included an original issue discount of $19,800 and transaction expenses of $4,250. The Company received gross proceeds of $165,000 in consideration of issuance of the Note.

~~Inventory~~The ~~primarily consists~~Note ofrequires ~~components,~~that ~~including~~the ~~raw~~Company ~~material~~make monthly payments for accrued interest and ~~finished~~outstanding ~~parts~~principal, ~~for~~which ~~the~~shall ~~V-Inline~~be ~~Separator~~paid ~~and~~in ~~face~~ten ~~shields~~(10) ~~and~~payments iseach ~~priced~~in atthe ~~lower~~ amount of ~~cost~~$20,697.60 orfor ~~net~~total ~~realizable~~repayment ~~value.~~to ~~Net~~the ~~realizable~~Holder ~~value~~of is$206,976.00. ~~defined~~The asfirst ~~sales~~payment ~~price~~was ~~less~~due ~~cost~~May of15, ~~completion~~2023, ~~disposable~~with ~~and~~nine ~~transportation~~(9) subsequent payments each month thereafter. ~~Provisions~~ ~~have~~The ~~been~~Company ~~made~~has the right to ~~reduce~~accelerate ~~excess~~payments or ~~obsolete~~prepay ~~inventories~~in tofull ~~their~~at ~~net~~any ~~realizable~~time ~~value~~with no prepayment penalty.

~~Income~~Effective ~~Taxes~~March 29 2023, Pinnacle Frac entered into separate agreements with institutional financing parties (each, a “Purchaser”) to provide an aggregate net financing amount of approximately $350,000 prior to expenses and fees of approximately $12,500.

~~The Company accounts~~ ~~for income taxes under ASC 740-10-25. Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences~~ 30 attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

~~Recent~~ Table ~~Accounting~~of ~~Pronouncements~~Contents

~~Recent~~Pinnacle ~~accounting~~Frac ~~pronouncements issued~~entered into a Purchase and Sale of Future Receipts dated as of March 28, 2023 (the “PSFR”); and Pinnacle Frac entered into a Standard Merchant Cash Advance Agreement dated as of March 28, 2023 (the “MCA”). Under each agreement, Pinnacle Frac sold to a Purchaser a specified percentage of its future sales and receipts (as defined by the ~~FASB~~applicable agreement). An aggregate purchased amount of such future receipts and sales of $480,000 was sold for an aggregate amount of $350,000, less origination and other fees, which resulted in a net aggregate amount of $337,500. Each agreement provides the ~~AICPA~~Purchaser specified customary collection procedures for the collection and remittance of the ~~SEC~~weekly payable amount including direct payments from a specified authorized bank account of $10,625 ~~did~~under ~~not~~the PSFR and approximately $6,363 orunder ~~are~~the MCA. Each agreement expressly provides that the sale of the future receipts shall be construed and treated for all purposes as a true and complete sale of receivables at a discount, and not ~~believed~~a loan. Each agreement provides that the title to the sold future receivables is transferred to the Purchaser under such agreement free and clear of all liens and includes customary remedies that may be exercised by ~~management~~such Purchaser upon a breach or default, including payment of attorney fees and costs of collection and, under the MCA, an amount equal to ~~have~~25% aof ~~material~~the ~~impact~~then onoutstanding purchased amount of future receipts. Each agreement also provides customary provisions regarding, among other matters, representations, warranties and covenants, indemnification, arbitration, governing law and venue. Each agreement also provides for the ~~Company's~~grant ~~present or~~by Pinnacle Frac of a security interest in the future ~~financial~~receivables ~~statements~~and other related collateral under the Uniform Commercial Code in accounts and proceeds.

~~Off~~Critical ~~Balance~~Accounting ~~Sheet Arrangements~~Policies, Estimates and Assumptions

AsPrinciples of the date of this report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with us is a party, under which we have any obligation arising under a guarantee contract, derivative instrument or variable interest or a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.Consolidation

The Company prepares its consolidated financial statements on the accrual basis of accounting. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, all of which have a year end of March 31. All intercompany accounts, balances and transactions have been eliminated in the consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the U.S. 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 consolidated financial statements and reported amounts of revenues and expenses during the reporting period. These estimates include, but are not limited to, management’s estimate of provisions required for uncollectible accounts receivable, impaired value of equipment and intangible assets, including goodwill, liabilities to accrue, cost incurred in the satisfaction of performance obligations, permanent and temporary differences related to income taxes, cost allocations from BitNile Metaverse, Inc. to present these consolidated financial statements on a standalone basis and determination of the fair value of stock awards.

Actual results could differ from those estimates.

Revenue Recognition

The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

•	Step 1: Identify the contract with the customer

•	Step 2: Identify the performance obligations in the contract

•	Step 3: Determine the transaction price

•	Step 4: Allocate the transaction price to the performance obligations in the contract

•	Step 5: Recognize revenue when the Company satisfies a performance obligation

In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).

If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.

The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following:

•	Variable consideration

•	Constraining estimates of variable consideration

•	The existence of a significant financing component in the contract

•	Noncash consideration

•	Consideration payable to a customer

Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The standalone selling price is the price at which the Company would sell a promised service separately to a customer. The relative selling price for each performance obligation is estimated using observable objective evidence if it is available. If observable objective evidence is not available, the Company uses its best estimate of the selling price for the promised service. In instances where the Company does not sell a service separately, establishing standalone selling price requires significant judgment. The Company estimates the standalone selling price by considering available information, prioritizing observable inputs such as historical sales, internally approved pricing guidelines and objectives, and the underlying cost of delivering the performance obligation. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate.

Management judgment is required when determining the following: when variable consideration is no longer probable of significant reversal (and hence can be included in revenue); whether certain revenue should be presented gross or net of certain related costs; when a promised service transfers to the customer; and the applicable method of measuring progress for services transferred to the customer over time.

The Company recognizes revenue upon satisfaction of its performance obligation at either a point in time or over time in accordance with ASC 606-10-25.

The Company accounts for incremental costs of obtaining a contract with a customer and contract fulfillment costs in accordance with ASC 340-40, Other Assets and Deferred Costs. These costs should be capitalized and amortized as the performance obligation is satisfied, if certain criteria are met. The Company elected the practical expedient, to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that would otherwise have been recognized is one year or less, and expenses certain costs to obtain contracts when applicable. The Company recognizes an asset from the costs to fulfill a contract only if the costs relate directly to a contract, the costs generate or enhance resources that will be used in satisfying a performance obligation in the future and the costs are expected to be recovered. The Company recognizes the cost of sales of a contract as expense when incurred or when a performance obligation is satisfied. The incremental costs of obtaining a contract are capitalized unless the costs would have been incurred regardless of whether the contract was obtained, are not considered recoverable, or the practical expedient applies.

The Company recognizes revenue for their proportionate share of revenue when: (i) the Company receives notification of the successful sale of a load of crude oil to a buyer; (ii) the buyer will provide a price based on the average monthly price of crude oil in the most recent month; and (iii) cash is received the following month from the crude oil buyer.

Cost of sales for Pinnacle Frac includes all direct expenses incurred to produce the revenue for the period. This includes, but is not limited to, direct employee labor, direct contract labor and fuel.

Revenue under master service agreements is recorded upon the performance obligation being satisfied. Typically, the satisfaction of the performance obligation occurs upon the frac sand load being delivered to the customer site and this load being successfully invoiced and accepted by the Company’s factoring agent.

Accounts Receivable and Concentration of Credit Risk

The Company considers accounts receivable, net of allowance for doubtful accounts, to be fully collectible. The allowance is based on management’s estimate of the overall collectability of accounts receivable, considering historical losses, credit insurance and economic conditions. Based on these same factors, individual accounts are charged off against the allowance when management determines those individual accounts are uncollectible. Credit extended to customers is generally uncollateralized, however credit insurance is obtained for some customers. Past-due status is based on contractual terms.

For Pinnacle Frac, accounts receivable is comprised of unsecured amounts due from customers that have been conveyed to a factoring agent for both with and without recourse. Pinnacle Frac receives an advance from the factoring agent of 98% of the amount invoiced to the customer within one business day. The Company recognizes revenue for 100% of the gross amount invoiced, records an expense for the 2% finance charge by the factoring agent, and realizes cash for the 98% net proceeds received.

Fair Value Measurements

ASC 820 Fair Value Measurements defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosure about fair value measurements. ASC 820 classifies these inputs into the following hierarchy:

Level 1 inputs: Quoted prices for identical instruments in active markets.

Level 2 inputs: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 inputs: Instruments with primarily unobservable value drivers.

The carrying values of the Company’s financial instruments such as cash, accounts payable, and accrued expenses approximate their respective fair values because of the short-term nature of those financial instruments.

Impairment of Long-lived Assets

Management reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the undiscounted future cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Earnings (Loss) Per Share of Common Stock

Basic net income (loss) per common share is computed using the weighted average number of common shares outstanding. Diluted earnings (loss) per share (“EPS”) include additional dilution from common stock equivalents, such as convertible notes, preferred stock, stock issuable pursuant to the exercise of stock options and warrants. The Company as of and for the years ended March 31, 2023 and 2022 had no common stock equivalents.

Cost Allocations

The accompanying consolidated financial statements and footnotes of the Company have been prepared in connection with the expected separation and have been derived from the consolidated financial statements and accounting records of BitNile Metaverse, Inc. operated on a standalone basis during the periods presented and were prepared in accordance with accounting principles generally accepted in the United States of America.

The consolidated financial statements reflect allocations of certain BitNile Metaverse corporate, infrastructure and shared services expenses, including centralized research, legal, human resources, payroll, finance and accounting, employee benefits, real estate, insurance, information technology, telecommunications, treasury, and other income and expenses for interest expense on debt that portions were used for Banner Midstream, changes in derivative liabilities on the books of BitNile Metaverse for warrants granted in offerings of which proceeds went towards the operations of Banner Midstream, and conversions of debt. As noted, the derivative liabilities are included in BitNile Metaverse's books however, the advances made by BitNile Metaverse related to the proceeds received that were recognized as a derivative liability are included in the March 31, 2022 balance sheet as “Due to BitNile Metaverse, Inc.” which was reclassified to additional paid in capital. Where possible, these charges were allocated based on direct usage, with the remainder allocated on a pro rata basis of headcount, asset, or other allocation methodologies that are considered to be a reasonable reflection of the utilization of services provided or the benefit received by the Company during the periods presented pursuant to SAB Topic 1.B.1. The allocations may not, however, reflect the expense the Company would have incurred as a standalone company for the periods presented. These costs also may not be indicative of the expenses that the Company will incur in the future or would have incurred if the Company had obtained these services from a third party.

Management believes the assumptions underlying our financial statements, including the assumptions regarding the allocation of general corporate expenses from our Parent are reasonable. Nevertheless, our financial statements may not include all of the actual expenses and income that would have been incurred had we operated as a standalone company during the periods presented and may not reflect our results of operations, financial position and cash flows had we operated as a standalone company during the periods presented.

Actual costs that would have been incurred if we had operated as a standalone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure.

We also may incur additional costs associated with being a standalone, publicly listed company that were not included in the expense allocations and, therefore, would result in additional costs that are not included in our historical results of operations, financial position and cash flows.

Recently Issued Accounting Standards

The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

~~This~~Not ~~information is not required by smaller reporting company~~applicable.

ITEM 8. FINANCIAL STATEMENTS AND ~~SUPPLEMENTING~~SUPPLEMENTARY DATA.

~~The~~REPORT ~~financial~~OF ~~statements required~~INDEPENDENT byREGISTERED ~~this~~PUBLIC ~~report~~ACCOUNTING ~~are included, commencing on F-1.~~FIRM

To the Board of Directors

Wolf Energy Services Inc. (formerly known as Enviro Technologies U.S., Inc.)

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Wolf Energy Services Inc. (formerly known as Enviro Technologies U.S., Inc.) (the “Company”) as of March 31, 2023 and 2022, and the related consolidated statements of operations, stockholders deficit and cash flows for each of the two years in the period ended March 31, 2023, and the related notes and schedule (collectively referred to as “the consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2023, and the results of its operations and its cash flows for each of the two years ended March 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

Substantial doubt about the Company's Ability to Continue as a Going Concern

The accompanying combined consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring losses from operations and had an accumulated deficit that raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The combined consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the combined consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures including examining, on a test basis, evidence regarding the amounts and disclosures in the combined consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the combined consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there were no critical audit matters.

/s/ RBSM LLP

We have served as the Company’s auditor since 2020.

New York, NY

June 26, 2023

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WOLF ENERGY SERVICES INC.

(FORMERLY ENVIRO TECHNOLOGIES U.S. INC.)

CONSOLIDATED BALANCE SHEETS

MARCH 31, 2023 AND MARCH 31, 2022

	*MARCH 31,*			*MARCH 31,*
	*2023*			*2022*

ASSETS
CURRENT ASSETS:
Cash	$	574,233		$	99,452
Accounts receivable		146,836			164,388
Prepaid expenses and other current assets		516,370			382,373
Current assets of discontinued operations		60,362			-

Total current assets		1,297,801			646,213

NON-CURRENT ASSETS:
Property and equipment, net		686,327			2,506,738
Right of use asset - operating lease		297,744			64,094
Right of use asset - financing lease		-			301,126
Intangible assets, net		-			1,716,331
Goodwill		-			4,900,873

Total non-current assets		984,071			9,489,162

TOTAL ASSETS	$	2,281,872		$	10,135,375

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

LIABILITIES
CURRENT LIABILITIES
Accounts payable	$	229,267		$	373,697
Accrued liabilities		1,055,862			1,116,698
Due to BitNile Metaverse, Inc. (*)		-			-
Notes payable		845,565			-
Short-term debt, net of discount		511,777			-
Current portion of long-term debt		-			572,644
Current portion of lease liability - operating lease		71,758			45,004
Current portion of lease liability - financing lease		-			145,174
Current liabilities of discontinued operations		238,028			-

Total current liabilities		2,952,257			2,253,217

NON-CURRENT LIABILITIES
Lease liability - operating lease, net of current portion		227,786			22,519
Lease liability - financing lease, net of current portion		-			149,884
Long-term debt, net of current portion		-			67,511
Non-current liabilities of discontinued operations		150,000			-

Total non-current liabilities		377,786			239,914

Total Liabilities		3,330,043			2,493,131

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $0.001 par value, 5,000,000 shares authorized and none issued and outstanding		-			-
Common stock, $0.001 par value, 1,000,000,000 shares authorized and 78,268,332 and 51,987,832 shares issued and outstanding		78,268			51,988
Additional paid in capital (*)		14,906,541			10,349,029
Accumulated deficit		(16,032,980	)		(2,758,773	)

Total stockholders' equity (deficit)		(1,048,171	)		7,642,244

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	2,281,872		$	10,135,375

(*) On September 7, 2022, Banner Midstream Corp merged with Wolf Energy Services Inc. (formerly Enviro Technologies U.S., Inc.) in a reverse merger. Banner Midstream's parent, BitNile Metaverse, Inc., was issued 51,987,832 shares of Wolf Energy Services Inc. (formerly Enviro Technologies U.S., Inc.) common stock in exchange for all the capital stock of Banner owned by BitNile Metaverse, which represents 100% of the issued and outstanding shares of Banner that were outstanding at the time of the reverse merger. The Company has reflected this transaction retroactively in these interim financial statements.

The accompanying notes are an integral part of these consolidated financial statements.

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WOLF ENERGY SERVICES INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED MARCH 31, 2023 AND 2022

	*YEAR ENDED*
	*MARCH 31,*
	*2023*			*2022*

REVENUES	$	20,110,796		$	18,750,053

COSTS AND EXPENSES
Costs of revenues (excludes items below)		15,592,278			13,447,203
Salaries and salaries related costs		1,138,406			2,494,942
Selling, general and administrative costs		4,638,670			7,781,350
Depreciation, amortization, and impairment		10,397,900			783,324

Total costs and expenses		31,767,254			24,506,819

LOSS FROM OPERATIONS BEFORE OTHER INCOME (EXPENSE)		(11,656,458	)		(5,756,766	)

OTHER INCOME (EXPENSE)
Change in fair value of derivative liabilities		-			10,975,737
Loss on disposal of fixed assets		(1,326,450	)		(6,770	)
Interest expense, net of interest income		(46,516	)		(321,159	)
Total other income		(1,372,966	)		10,647,808

(LOSS) INCOME FROM OPERATIONS BEFORE PROVISION FOR INCOME TAXES		(13,029,424	)		4,891,042

DISCONTINUED OPERATIONS:
Loss from discontinued operations		(207,576	)		-
Gain on disposal of discontinued operations		-			-
Total discontinued operations		(207,576	)		-

(LOSS) INCOME FROM OPERATIONS BEFORE PROVISION FOR INCOME TAXES		(13,237,000	)		4,891,042

PROVISION FOR INCOME TAXES		(37,207	)		(85,000	)

NET (LOSS) INCOME	$	(13,274,207	)	$	4,806,042

NET (LOSS) INCOME PER SHARE - BASIC
Continuing operations	$	(0.20	)	$	0.09
Discontinued operations		-			-
NET (LOSS) INCOME PER SHARE	$	(0.20	)	$	0.09


WEIGHTED AVERAGE SHARES OUTSTANDING		65,448,714			51,987,832

The accompanying notes are an integral part of these consolidated financial statements.

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WOLF ENERGY SERVICES INC.

STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

FOR THE THREE AND TWELVE MONTHS ENDED MARCH 31, 2023 AND 2022

									*Additional*
	*Preferred Stock*				**Common Stock ()***				*Paid-In*			*Accumulated*
	*Shares*		*Amount*		*Shares*		*Amount*		**Capital ()***			*Deficit*			*Total*

Balance - March 31, 2021 (*)		-	$	-		51,987,832	$	51,988	$	11,140,143		$	(7,564,815	)	$	3,627,316

Cost allocations from BitNile Metaverse, Inc.		-		-		-		-		(2,954,442	)		-			(2,954,442	)
Advances from BitNile Metaverse, Inc. to Banner Midstream Corp		-		-		-		-		2,163,328			-			2,163,328
Net income for the year		-		-		-		-		-			4,806,042			4,806,042

Balance - March 31, 2022		-	$	-		51,987,832	$	51,988	$	10,349,029		$	(2,758,773	)	$	7,642,244


Balance - March 31, 2022		-	$	-		51,987,832	$	51,988	$	10,349,029		$	(2,758,773	)	$	7,642,244

Advances from BitNile Metaverse, Inc. to Banner Midstream Corp		-		-		-		-		1,834,027			-			1,834,027
To reflect the reverse merger of Banner Midstream Corp.		-		-		22,280,500		22,280		2,611,235			(349,764	)		2,283,751
Common shares issued for conversion of note payable		-		-		4,000,000		4,000		56,000			-			60,000
Share-based compensation		-		-		-		-		56,250			-			56,250
Net loss for the year		-		-		-		-		-			(12,924,443	)		(12,924,443	)

Balance - March 31, 2023		-	$	-		78,268,332	$	78,268	$	14,906,541		$	(16,032,980	)	$	(1,048,171	)

The accompanying notes are an integral part of these consolidated financial statements.

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WOLF ENERGY SERVICES INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED MARCH 31, 2023 AND MARCH 31, 2022

	*MARCH 31,*
	*2023*			*2022*

CASH FLOW FROM OPERATING ACTIVITIES
Net (loss) income	$	(13,274,207	)	$	4,806,042
Adjustments to reconcile net (loss) income to net cash provided by operating activities
Home office allocation		-			(2,954,442	)
Depreciation, amortization and impairment		10,397,900			783,325
Loss on disposal of fixed assets		1,326,450			6,770
Stock based compensation - RSU		56,250			-
Changes in assets and liabilities
Accounts receivable		17,552			99,185
Prepaid expenses and other current assets		(133,997	)		107,556
Amortization of right of use asset - operating leases		73,797			81,653
Amortization of right of use asset - financing leases		40,036			143,726
Due to BitNile Metaverse, Inc.		2,183,791			(1,287,553	)
Due to related party		-			10,511
Interest on lease liability - financing leases		(3,073	)		(8,952	)
Operating lease expense		(75,426	)		(88,574	)
Accrued payable and accrued liabilities		(205,266	)		(109,860	)
Total adjustments		13,678,014			(3,216,655	)
Net cash provided by operating activities of continuing operations		403,807			1,589,387
Net cash provided by operating activities of discontinued operations		350,055			-
Net cash provided by operating activities		753,862			1,589,387

CASH FLOWS FROM INVESTING ACTIVITES
Proceeds from the sale of fixed assets		587,500			-
Purchase of fixed assets		(261,089	)		-
Net cash provided by investing activities of continuing operations		326,411			-
Net cash provided by investing activities of discontinued operations		156,913			-
Net cash provided by investing activities		483,324			-

CASH FLOWS FROM FINANCING ACTIVITES
Reduction of finance lease liability		(30,895	)		(131,962	)
Repayments of long-term debt		(643,378	)		(1,403,389	)
Repayment of note payable		(92,667	)		-
Repayment of related party debt		-			(250,000	)
Proceeds from short term debt		515,000			-
Net cash (used in) financing activities of continuing operations		(251,940	)		(1,785,351	)
Net cash (used in) financing activities of discontinued operations		(510,465	)		-
Net cash (used in) financing activities		(762,405	)		(1,785,351	)

NET INCREASE (DECREASE) IN CASH		474,781			(195,964	)

CASH - BEGINNING OF YEAR		99,452			295,416

CASH - END OF YEAR	$	574,233		$	99,452

SUPPLEMENTAL DISCLOSURES
Cash paid for interest expense	$	12,189		$	-
Cash paid for income taxes	$	-		$	-



SUMMARY OF NON-CASH ACTIVITIES:
Conversion of notes and accrued payroll to notes payable (sellers)	$	1,044,565		$	-
Conversion of notes payable	$	60,000		$	-
Contribution by BitNile Metaverse	$	10,961,335		$	-
Net liabilities acquired from Wolf Energy Services (formerly Enviro Technologies US, Inc.)	$	1,329,392		$	-
Right of use asset incurred for lease liability - operating leases	$	306,547		$	-
Finance cost of short term loans	$	16,750		$	-
Debt discount	$	19,800		$	-

The accompanying notes are an integral part of these consolidated financial statements.

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WOLF ENERGY SERVICES INC.

(FORMERLY ENVIRO TECHNOLOGIES U.S. INC.)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2023 AND 2022

NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Wolf Energy Services Inc., formerly known as Enviro Technologies U.S., Inc., a Florida corporation (the “Company”), prior to September 7, 2022 was a manufacturer and provider of environmental and industrial operation technology. The Company had developed, manufactured, and sold the V-Inline Separator, a technology that efficiently separates liquid/liquid, liquid/solid or liquid/liquid/solid fluid streams with distinct specific gravities. Current and potential commercial applications and markets included mining, utilities, manufacturing, waste-to-energy among other industries.

The Company had one subsidiary, Florida Precision Aerospace, Inc., a Florida corporation (“FPA”) prior to the closing of the Exchange Agreement (defined below).

Effective September 7, 2002, BitNile Metaverse, Inc. (formerly Ecoark Holdings, Inc.), a Nevada corporation (“BitNile” or “Ecoark”) and Banner Midstream Corp. (“Banner” or “Banner Midstream”) completed a Share Exchange Agreement (the “Exchange Agreement”) with Wolf Energy Services Inc. Under the Agreement, BitNile acquired 51,987,832 shares of Wolf Energy Services Inc., common stock in exchange for all the capital stock of Banner owned by BitNile, which represents 100% of the issued and outstanding shares of Banner (the “Merger”). Upon closing of the Exchange Agreement, Banner became a wholly-owned subsidiary of Wolf Energy Services Inc. via a reverse merger. As a result, the historical financial information of the company is that of Banner. The transaction was accounted for as a reverse merger whereby Banner Midstream is considered the accounting acquirer. Since the reverse merger occurred with a non-shell public company, the transaction included the purchase of the non-controlling interest of Wolf Energy Services Inc.

Banner was organized under the name Pinnacle Frac Holdings Corp, under the laws of the State of Delaware on April 2, 2018. Pinnacle Frac Holdings Corp was renamed Banner Midstream Corp on December 6, 2018.

Banner Midstream established Pinnacle Frac Sales & Service LLC dba Capstone Equipment Leasing (“Capstone”) as a limited liability company pursuant to the laws of the State of Texas on May 23, 2018, with the Company having ownership of one hundred percent of the issued and outstanding membership interests of Capstone. Capstone is currently structured as a wholly owned subsidiary of the Company. Pinnacle Frac Sales & Service LLC was renamed Capstone Equipment Leasing, LLC by the Office of the Secretary of State of Texas on October 4, 2018. Capstone commenced operations in October 2018 and is engaged in the business of procuring and financing equipment to various oilfield transportation services contractors (“owner-operators”).

Banner Midstream has two active operating subsidiaries: Pinnacle Frac Transport LLC (“Pinnacle Frac”), and Capstone.

Pinnacle Frac provides transportation of frac sand and logistics services to major hydraulic fracturing and drilling operations. Capstone procures and finances equipment to oilfield transportation service contractors. These two operating subsidiaries of Banner Midstream are revenue producing entities.

In September 2022, the Company’s board of directors and management determined that the FPA business will be sold. As this determination represents a strategic shift that will have a major effect on the Company’s operations and financial results, in accordance with ASC 205-20-45-1E, the Company has reclassified FPA’s assets and liabilities as held for sale and presented the results of operations of FPA as discontinued operations, and when FPA is sold, will recognize a gain or loss on disposal.

On September 22, 2022, the board of directors approved a change to the Company’s fiscal year from December 31 to March 31, as a result of the Merger to conform to Banner's year end.

Forward Split and Corporate Name Change

On January 13, 2023, the Company completed a 4-for-1 forward stock split of its issued and outstanding shares of its common stock to shareholders of record as of the close of business on December 30, 2022. The Company filed articles of amendment to its articles of incorporation with the Secretary of State of the State of Florida effective January 17, 2023. Pursuant to a unanimous written consent of the Company’s board of directors, the only change reflected in the articles of amendment is an increase in the authorized number of shares of common stock of the Company from 250,00,000 shares to 1,000,000,000 shares in connection with the Company’s 4-for-1 forward stock split. Throughout these financial statements, common stock share and per share information, including stock award units, options and the Company's convertible note conversion ratio in common stock shares have been revised for all periods presented to give effect to the forward stock split.

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On December 30, 2022 the Company’s board of directors and majority shareholder approved a name change of the Company to “Wolf Energy Services Inc.”, as the new name will better reflect the Company’s business and operations. On January 30, 2023, the Company filed articles of amendment to its articles of incorporation with the Secretary of State of Florida and after processing by FINRA, the Company formally changed its name to Wolf Energy Services Inc. effective February 1, 2023. Additionally, effective February 1, 2023, Wolf Energy Services Inc. began begin trading under its new ticker symbol, WOEN.

Basis of Presentation

The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (GAAP). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Update (ASU) of the Financial Accounting Standards Board (FASB).

As the reverse merger transaction resulted in the owner of Banner gaining control over the combined entity after the transaction, and the shareholders of Wolf Energy Services Inc. continuing only as passive investors, the transaction was not considered a business combination under the ASC. Instead, this transaction was considered to be a capital transaction of the legal acquiree (Banner) and was equivalent to the issuance of shares by Banner for the net monetary assets of Wolf Energy Services Inc. accompanied by a recapitalization, except for the purchase of the 22,280,500 shares of issued and outstanding common shares of Wolf Energy Services Inc. which were considered as purchase consideration resulting in $3,613,144 of goodwill that was impaired immediately. As a result, the historical balances represent Banner. See Note 2, “Reverse Merger” for full details on the accounting for the reverse merger.

Principles of Consolidation

The Company prepares its consolidated financial statements on the accrual basis of accounting. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, all of which have a year end of March 31. All intercompany accounts, balances and transactions have been eliminated in the consolidation.

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the U.S. 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 consolidated financial statements and reported amounts of revenues and expenses during the reporting period. These estimates include, but are not limited to, management’s estimate of provisions required for uncollectible accounts receivable, impaired value of equipment and intangible assets, liabilities to accrue, cost incurred in the satisfaction of performance obligations, permanent and temporary differences related to income taxes, to present these consolidated financial statements on a standalone basis and determination of the fair value of stock awards.

Actual results could differ from those estimates.

Revenue Recognition

The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers. The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

	●	Step 1: Identify the contract with the customer
	●	Step 2: Identify the performance obligations in the contract

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	●	Step 3: Determine the transaction price
	●	Step 4: Allocate the transaction price to the performance obligations in the contract
	●	Step 5: Recognize revenue when the Company satisfies a performance obligation

In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606’s definition of a “distinct” good or service (or bundle of goods or services) if both of the following criteria are met: The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct), and the entity’s promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract).

If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct.

The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all the following:

	●	Variable consideration
	●	Constraining estimates of variable consideration
	●	The existence of a significant financing component in the contract
	●	Noncash consideration
	●	Consideration payable to a customer

Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The standalone selling price is the price at which the Company would sell a promised service separately to a customer. The relative selling price for each performance obligation is estimated using observable objective evidence if it is available. If observable objective evidence is not available, the Company uses its best estimate of the selling price for the promised service. In instances where the Company does not sell a service separately, establishing standalone selling price requires significant judgment. The Company estimates the standalone selling price by considering available information, prioritizing observable inputs such as historical sales, internally approved pricing guidelines and objectives, and the underlying cost of delivering the performance obligation. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate.

The Company recognizes revenue upon satisfaction of its performance obligation at a point in time or over time in accordance with ASC 606-10-25.

The Company accounts for incremental costs of obtaining a contract with a customer and contract fulfilment costs in accordance with ASC 340-40, Other Assets and Deferred Costs. These costs should be capitalized and amortized as the performance obligation is satisfied if certain criteria are met. The Company elected the practical expedient, to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that would otherwise have been recognized is one year or less, and expenses certain costs to obtain contracts when applicable. The Company recognizes an asset from the costs to fulfill a contract only if the costs relate directly to a contract, the costs generate or enhance resources that will be used in satisfying a performance obligation in the future and the costs are expected to be recovered. The Company recognizes the cost of sales of a contract as expense when incurred or when a performance obligation is satisfied. The incremental costs of obtaining a contract are capitalized unless the costs would have been incurred regardless of whether the contract was obtained, are not considered recoverable, or the practical expedient applies.

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The Company recognizes revenue for their proportionate share of revenue when: (i) the Company receives notification of the successful delivery of a load of frac sand or other material to a buyer; (ii) the buyer will provide a fixed price based on distance between origination and destination point; and (iii) cash is received within one business day from the factoring agent.

Cost of sales for the Company includes all direct expenses incurred to produce the revenue for the period. This includes, but is not limited to, direct employee labor, direct contract labor and fuel.

Accounts Receivable and Concentration of Credit Risk

For the Company, accounts receivable is comprised of unsecured amounts due from customers that have been conveyed to a factoring agent for both with and without recourse. The Company receives an advance from the factoring agent of 98% of the amount invoiced to the customer within one business day. The Company recognizes revenue for 100% of the gross amount invoiced, records an expense for the 2% finance charge by the factoring agent, and realizes cash for the 98% net proceeds received.

Fair Value Measurements

ASC 820 Fair Value Measurements defines fair value, establishes a framework for measuring fair value in accordance with GAAP, and expands disclosure about fair value measurements. ASC 820 classifies these inputs into the following hierarchy:

Level 1 inputs: Quoted prices for identical instruments in active markets.

Level 2 inputs: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 inputs: Instruments with primarily unobservable value drivers.

Impairment of Long-lived Assets

Management reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the undiscounted future cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets.

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Earnings (Loss) Per Share of Common Stock

Basic net income (loss) per common share is computed using the weighted average number of common shares outstanding. Diluted earnings (loss) per share (“EPS”) include additional dilution from common stock equivalents, such as convertible notes. The Company as of and for the years ended March 31, 2023 and 2022 had no common stock equivalents.

Recently Issued Accounting Standards

The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

Liquidity

For the years ended March 31, 2023 and 2022, the Company had a net (loss) income from continuing operations (not including the provisions for income taxes) of ($13,029,424) and $4,891,042, respectively, has a working capital deficit of $1,654,456 and $1,607,004 as of March 31, 2023 and 2022, and has an accumulated deficit as of March 31, 2023 of ($16,032,980). As of March 31, 2023, the Company has $574,233 in cash and cash equivalents.

Banner has historically relied on BitNile to provide the necessary capital to sustain its operations. The Company has included cost allocations as noted herein to reflect the operations as if they were a standalone entity.

The Company plans include the raising of capital through a private placement of its securities, although there are no assurances the Company will be successful at raising any capital.

Impact of COVID-19

COVID-19 did not have a material effect on the Statements of Operations or the Balance Sheets for the years ended March 31, 2023 and 2022. While COVID-19 has contributed to global supply chain disruptions, such disruptions have not had a material effect for the Company. The Company will continue to monitor the supply chain shortages affecting the world.

NOTE 2: REVERSE MERGER

In accordance with ASC 805-40-45-1, the consolidated financial statements prepared following a reverse acquisition are issued under the name of the legal parent (Wolf Energy Services Inc.) but described in the notes to the financial statements as a continuation of the financial statements of the legal subsidiary (Banner), with one adjustment, which is to retroactively adjust the accounting acquirer’s legal capital to reflect the legal capital of the accounting acquiree. That adjustment is required to reflect the capital of the legal parent. Comparative information presented in the consolidated financial statements also is retroactively adjusted to reflect the legal capital of the legal parent.

Under ASC 805-40-45-2, the consolidated financial statements represent the continuation of the legal subsidiary except for the capital structure, as follows:

(a)

The assets and liabilities of the legal subsidiary recognized and measured at their precombination carrying amounts;

(b)

The assets and liabilities of the legal parent recognized and measured in accordance with the guidance in this topic applicable to business combinations (ASC 805);

(c)

The retained earnings and other equity balances of the legal subsidiary before the business combination;

(d)

The amount recognized as issued equity interests in the consolidated financial statements determined by adding the issued equity interest of the legal subsidiary outstanding immediately before the business combination to the fair value of the legal parent determined in accordance with the guidance in ASC 805 applicable to business combinations. However, the equity structure reflects the equity structure of the legal parent, including the equity interests the legal parent issued to affect the combination. Accordingly, the equity structure of the legal subsidiary is restated using the exchange ratio established in the acquisition agreement to reflect the number of shares of the legal parent issued in the reverse acquisition.

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Wolf Energy Services Inc., issued BitNile Metaverse, Inc. 51,987,832 shares of common stock valued at $5,328,753 in the reverse merger transaction.

On September 7, 2022, the Company completed the reverse merger transaction of Banner Midstream. As a result of this transaction, which is accounted for as a reverse merger, Banner is a wholly owned subsidiary of Wolf Energy Services Inc. In accordance with the terms of the Merger, at the effective time of the Merger, each outstanding share of the common stock of Banner was acquired by the Company in consideration of 51,987,832 shares of Common Stock of the Company. This exchange of shares and the resulting controlling ownership of Banner constitutes a reverse acquisition resulting in a recapitalization of Banner and purchase accounting being applied to Wolf Energy Services Inc. under ASC 805 due to Banner being the accounting acquirer and Wolf Energy Services, Inc. being deemed an acquired business as they were not a shell corporation. This requires financial reporting from the Merger close date forward to reflect only the historic consolidated results of Banner and to include the consolidated results for Wolf Energy Services from September 7, 2022, forward. There has been no change in basis from the standpoint of Banner.

The primary reason Banner consummated the Merger with Wolf Energy Services Inc. was the opportunity for the Banner subsidiary previously wholly owned by BitNile to immediately become a standalone public company without the process of doing its own initial public offering, affording it the opportunity to raise capital more quickly. Following the closing of the Merger, management of the Company determined to discontinue the historical and existing business of Wolf Energy Services.

The estimated allocation of the purchase price of the assets acquired and liabilities assumed for the acquisition by Banner of Wolf Energy Services Inc. via the reverse acquisition are set forth below in accordance with the guidance under ASC 805:

Purchase Price Allocation of Wolf Energy Services, Inc.

Current assets	$	124,760
Fixed assets		6,912
Right of use assets		128,755
Other non-current assets		10,000
Notes payable		(436,471	)
Lease liabilities		(128,755	)
Accounts payable and accrued expenses		(1,034,594	)
Goodwill		3,613,144

Purchase price	$	2,283,751

This allocation is based on management’s estimated fair value of the Wolf Energy Services assets and liabilities as of September 7, 2022, utilizing the guidance in ASC 820-10-35 which included the measurement based on a known level one input regarding the applicable share price as well as the level of activity in the Company. Wolf Energy Services Inc.’s net liabilities were derived from a total value of $2,283,751, based on 22,280,500 shares of common stock on September 7, 2022, and the price of $0.10 per share which was a price on September 6, 2022. The Company impaired the goodwill effective with the Exchange on September 7, 2022, as they had decided at that time to sell the FPA business.

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The following table shows the unaudited pro-forma results for the years ended March 31, 2023 and 2022, as if the acquisition had occurred on April 1, 2022 and 2021 respectively.

	Year Ended March 31, 2022

Revenues	$	$18,750,053
Net income	$	$4,891,042
Net earnings per share	$	0.09

	Year Ended March 31, 2023

Revenues	$	$20,110,796
Net loss	$	($13,029,424)
Net loss per share	$	(0.21	)

The consolidated statements of operations and cash flows represent the operations of Banner for the years ended March 31, 2023 and 2022 and include cost allocations from Banner’s former parent BitNile as discussed below.

Cost Allocations

The accompanying consolidated financial statements and footnotes of Banner have been prepared in connection with the closing of the Exchange and have been derived from the consolidated financial statements and accounting records of BitNile operated on a standalone basis during the periods presented and were prepared in accordance with accounting principles generally accepted in the United States of America.

The consolidated financial statements reflect allocations of certain BitNile corporate, infrastructure and shared services expenses, including centralized research, legal, human resources, payroll, finance and accounting, employee benefits, real estate, insurance, information technology, telecommunications, treasury, and other income and expenses for interest expense on debt that portions were used for Banner Midstream, changes in derivative liabilities on the books of BitNile for warrants granted in offerings of which proceeds went towards the operations of Banner Midstream, and conversions of debt. As noted, the derivative liabilities are included in BitNile's financial statements however, the advances made by BitNile related to the proceeds received that were recognized as a derivative liability are included in the March 31, 2022 balance sheet as "Due to BitNile". Where possible, these charges were allocated based on direct usage, with the remainder allocated on a pro rata basis of headcount, asset, or other allocation methodologies that are considered to be a reasonable reflection of the utilization of services provided or the benefit received by the Company during the periods presented pursuant to SAB Topic 1.B.1. The allocations may not, however, reflect the expense the Company would have incurred as a standalone company for the periods presented. These costs also may not be indicative of the expenses that the Company will incur in the future or would have incurred if the Company had obtained these services from a third party.

Management believes the assumptions underlying our financial statements, including the assumptions regarding the allocation of general corporate expenses from BitNile are reasonable. Nevertheless, our financial statements may not include all actual expenses and income that would have been incurred had the Company operated as a standalone company during the periods presented and may not reflect our results of operations, financial position and cash flows had we operated as a standalone company during the periods presented.

Actual costs that would have been incurred if the Company had operated as a standalone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure.

NOTE 3: REVENUE

The Company recognizes revenue when it transfers promised services to customers in an amount that reflects the consideration to which it expects to be entitled in exchange for those services.

The following table disaggregates the Company’s revenue by major source for the years ended March 31:

	*Year Ended*
	*March 31,*
	*2023*		*2022*
Revenue:
Transportation Services	$	19,872,292	$	18,457,567
Fuel Rebate		221,004		251,877
Equipment Rental and other		17,500		40,609
	$	20,110,796	$	18,750,053

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There were no significant contract asset or contract liability balances for all periods presented. The Company elected the practical expedients in paragraphs 606-10-50-14 and 50-14A and does not disclose the amount of transaction price allocated to remaining performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed, or variable consideration related to future service periods.

Collections of the amounts billed are typically paid by the customers within 30 to 60 days.

NOTE 4: PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of March 31, 2023 and 2022:

	March 31,			March 31,
	2023			2022

Leasehold improvements	$	-		$	18,052
Machinery and equipment		2,034,300			3,333,045
Total property and equipment		2,034,300			3,351,097
Accumulated depreciation and impairment		(1,347,973	)		(844,359	)
Property and equipment, net	$	686,327		$	2,506,738

As of March 31, 2023, the Company performed an evaluation of the recoverability of these long-lived assets. The analysis resulted in no impairment as of related to these assets.

On April 1, 2021, the Company placed back in service equipment of $201,388 with accumulated depreciation of $7,484, which were part of discontinued operations related to Pinnacle Vac, a historical subsidiary of Banner Midstream. These assets are equipment related to Capstone who is servicing the debt related to the assets.

In February 2022, the Company traded in a vehicle valued at $51,806 for a new vehicle valued at $91,132.

In May 2022, the Company sold $1,530,024 of fixed assets for $580,000.

In October 2022, the Company sold equipment and incurred a loss of $21,227.

In January 2023, the Company sold equipment and incurred a loss of $333,976.

In February 2023, the Company sold $28,723 of fixed assets for $7,500 and incurred a loss of $21,223

Depreciation expense for the years ended March 31, 2023 and 2022:

	*Year Ended March 31,*
	*2023*		*2022*


Depreciation expense	$	167,552	$	434,510

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NOTE 5: INTANGIBLE ASSETS AND GOODWILL

Intangible assets consisted of the following as of March 31, 2023 and 2022:

	*Year Ended*
	*March 31,*
	*2023*			*2022*

Customer relationships	$	2,100,000		$	2,100,000
Non-compete agreements		250,000			250,000
Total intangible assets		2,350,000			2,350,000
Accumulated amortization and impairment		(2,350,000	)		(633,669	)
Intangible assets, net	$	—		$	1,716,331

In the acquisition of Banner Midstream by BitNile, the intangible assets acquired consisted of customer relationships and non-compete agreements valued at $2,350,000. The estimated useful lives of the customer relationships are ten years based on the estimated cash flows from those customer contracts, and the estimated useful lives of the non-compete agreement is five years amortized over a straight-line method. At March 31, 2023, as required by Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) section 360 "Property, Plant and Equipment", the customer relationship and non-compete agreements were tested for impairment. Based on qualitative testing, it was determined that there was evidence of impairment and the agreements were fully impaired at March 31, 2023.

In addition to the statutory based intangible assets noted above, the Company recorded a total of $4,900,873 of goodwill in connection with the acquisition of Banner Midstream by BitNile. At March 31, 2023, as required by Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) section 350-20-35 "Subsequent Measurement", goodwill was tested for impairment. Based on qualitative testing, it was determined that there was evidence of impairment and the goodwill was fully impaired at March 31, 2023.

Amortization expense for the years ended March 31, 2023 and 2022:

	*Year Ended*
	*March 31,*
	*2023*		*2022*

Amortization expense	$	256,973	$	348,814
Impairment of intangibles		1,459,358		—
	$	1,716,331	$	348,814

NOTE 6: ACCRUED LIABILITIES

Accrued liabilities consisted of the following as of March 31, 2023 and 2022:

	*March 31,*		*March 31,*
	*2023*		*2022*

Insurance	$	382,196	$	343,726
Compensation		615,200		245,179
Taxes		12,947		85,000
Interest		29,979		-
Professional fees and consulting costs		15,540		442,793
Total	$	1,055,862	$	1,116,698

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NOTE 7: LONG-TERM DEBT

Long-term debt consisted of the following as of March 31, 2023 and 2022. All of the long-term debt (a – e) in the chart below was repaid prior to the Merger on September 7, 2022.

	*March 31,*		*March 31,*
	*2023*		*2022*


Note payable – Alliance Bank (a)	$	-	$	236,755
Commercial loan – Firstar Bank (b)		-		245,217
Auto loan 1 – Firstar Bank (c)		-		16,839
Auto loan 4 – Ally Bank (d)		-		23,012
Tractor loan 6 – Tab Bank (e)		-		118,332
Total long-term debt		-		640,155
Less: current portion		-		(572,644	)
Long-term debt, net of current portion	$	-	$	67,511

Interest expense on long-term debt during the years ended March 31, 2023 and 2022 are $8,685 and $65,248, respectively.

FPA entered into a Payroll Protection Plan (PPP) loan with Bank of America and an EIDL loan with the Small Business Administration dated May 4, 2020 and June 23, 2020, respectively in the amounts of $111,971 and $150,000, respectively. In the year ended March 31, 2023, $73,994 of the PPP loan was forgiven. $37,977 balance remains. These loans are reflected in current and long-term liabilities held for sale as of March 31, 2023.

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NOTE 8: NOTES PAYABLE

During the year ended March 31, 2023, Wolf Energy Services Inc. had been advanced certain amounts by the former directors/officers and the former directors/officers had converted accrued compensation to both convertible and non-convertible promissory notes as reflected below.

	*March 31,*			*March 31,*
	*2023*			*2022*


Unsecured Convertible Promissory Note (a)	$	755,565		$	-
Unsecured Convertible Promissory Note (b)		90,000			-
Unsecured Promissory Note (c)		-			-
Unsecured Promissory Note (d)		250,000			-
Unsecured Promissory Note (e)		96,777			-
Unsecured Promissory Note, net of discount (f)		165,000			-
Total notes payable		1,357,342			-
Less: current portion		(1,357,342	)		-
Notes payable, net of current portion	$	-		$	-

(a)

Unsecured Convertible Promissory Note entered into on August 23, 2022 accruing interest at the rate of 6% per annum payable monthly, maturing August 23, 2023. The note is convertible into shares of the Company’s common stock at a price of $0.015 per share, which was the closing price of the common stock on the date the note was executed. The note is with the former CEO of the Company. On December 29, 2022, the Company issued 4,000,000 shares of common stock in conversion of $60,000.

(b)

Unsecured Convertible Promissory Note entered into on August 23, 2022 accruing interest at the rate of 6% per annum payable monthly, maturing August 23, 2023. The note is convertible into shares of the Company’s common stock at a price of $0.015 per share, which was the closing price of the common stock on the date the note was entered into. The note is with a former director of the Company.

(c)	Unsecured Promissory Note entered into on August 23, 2022 accruing interest at the rate of 6% per annum payable monthly, maturing August 23, 2023. The note is with the former CEO of the Company. In the year ended March 31, 2023, the Company repaid $139,000.

(d)

The Company entered into a Purchase and Sale of Future Receipts Agreement with EAdvance Services for a purchase price of $250,000, with a repayment of $340,000 over 32 weeks at $10,625 per week on March 28, 2023. The Company paid $7,500 in initial fees which were deducted from the agreed upon price and $242,500 was paid in cash to the Company.

(e)

The Company entered into a Standard Merchant Cash Advance Agreement with KYF Global Partners for a purchase price of $100,000, with a repayment of $140,000 over 22 weeks at $6,363.64 per week on March 28, 2023. The Company paid $5,000 in initial fees which were deducted from the agreed upon price and $95,000 was paid in cash to the Company.

(f)

The Company entered into a one year promissory note with Red Road Holdings Corporation on March 27, 2023 in the amount of $165,000 (net of discount) plus a one-time interest charge of 12% or $22,176 charged at the inception of the note. There is an original issue discount of $19,800 on this note that is amortized over the life of the note based on the effective interest method. Should the Company default on the note, it becomes convertible with a conversion price that will be the greater of (i) $0.000075, or (ii) 75% times the average Trading Price for the common stock during the five trading days immediately prior to the conversion date.

Interest expense on the notes payable during the years ended March 31, 2023 and 2022 are $37,103 and $0, respectively.

NOTE 9: STOCKHOLDERS’ EQUITY (DEFICIT)

The Company has 5,000,000 shares of preferred stock and 1,000,000,000 shares of common stock authorized at $0.001 par value per share, and there were 78,268,332 and 51,987,832 common shares issued and outstanding at March 31, 2023 and 2022, respectively, and no shares of preferred stock issued and outstanding, respectively.

In September 2022, the Company issued 51,987,832 shares of common stock in a Share Exchange Agreement with BitNile and Banner Midstream Corp. The shares were valued at $0.10 per share ($5,328,753) as that was the value per share of the common stock at closing.

On December 19, 2022, the Company's Board of Directors approved a four-for-one forward stock split for shareholders of record as of December 30, 2022.

On December 29, 2022, the Company issued 4,000,000 shares of common stock in conversion of convertible promissory notes in the amount of $60,000.

There were no equity transactions for the year ended March 31, 2022.

Stock Options

As of March 31, 2023 and 2022, there remains 40,000 fully vested stock options that expire November 2023 at a $0.025 strike price. There is no stock-based compensation for the years ended March 31, 2023 and 2022. The intrinsic value of these options at March 31, 2023 is $2,300.

Restricted Stock Units

Pursuant to the Employment Agreement with the Company's CEO, Jimmy Galla dated November 15, 2022, the Company granted 10,000,000 restricted stock units that vest quarterly for 20 consecutive quarters (500,000 per quarter). The Company has expensed $56,250 in these restricted stock units for the year ended March 31, 2023. There was no expense for the year ended March 31, 2022.

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NOTE 10: CONCENTRATIONS

Customer Concentration. One and two customers accounted for more than 10% of the accounts receivable balance at each of March 31, 2023 and 2022, respectively for a total of 85% and 88% of accounts receivable, respectively. In addition, two and two customers represent approximately 82% and 96% of total revenues for the Company for the years ended March 31, 2023 and 2022, respectively.

The Company occasionally maintains cash balances in excess of the FDIC insured limit. The Company does not consider this risk to be material.

NOTE 11: LEASES

The Company has adopted ASU No. 2016-02, Leases (Topic 842) and accounts for their leases in terms of the right of use assets and offsetting lease liability obligations under this pronouncement. The Company recorded these leases at present value, in accordance with the standard, using a discount rate between 2.5% and 11.36%. The right of use asset is composed of the sum of all lease payments, at present value, and is amortized straight line over the life of the expected lease term. For the expected term of the lease the Company used the initial terms ranging between 42 and 60 months.

Upon the election by the Company to extend the lease for additional years, that election will be treated as a lease modification and the lease will be reviewed for re-measurement.

The Company has chosen to implement this standard using the modified retrospective model approach with a cumulative-effect adjustment, which does not require the Company to adjust the comparative periods presented when transitioning to the new guidance. The Company has also elected to utilize the transition related practical expedients permitted by the new standard. The modified retrospective approach provides a method for recording existing leases at adoption and in comparative periods that approximates the results of a modified retrospective approach. Adoption of the new standard did not result in an adjustment to retained earnings for the Company.

As of March 31, 2023, the value of the unamortized lease right of use asset for the operating leases is $297,744 (through maturity in September 2027). As of March 31, 2023, the Company’s lease liability was $299,544 from operating leases.

Maturity of lease liability for the operating leases for the period ended March 31,
2023	$	85,672
2024		69,000
2025		72,000
2026		72,000
2027		36,000
Imputed interest		(35,128	)
Total lease liability	$	299,544

Disclosed as:
Current portion	$	71,758
Non-current portion	$	227,786

Amortization of the right of use asset for the period ended March 31,
2023	$	75,359
2024		59,511
2025		62,633
2026		65,960
2027		34,281

Total	$	297,744

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Total Lease Cost

Individual components of the total lease cost incurred by the Company is as follows:



	*March 31,*		*March 31,*
	*2023*		*2022*

Operating lease expense	$	78,333	$	65,606

Finance lease expense
Depreciation of capitalized finance lease assets		-		161,603
Interest expense on finance lease liabilities		-		10,372
Total lease cost	$	78,333	$	237,581

NOTE 12: DISCONTINUED OPERATIONS

In September, 2022, the Company’s Board of Directors and management after the Share Exchange Agreement, determined that the FPA business will be sold. As this determination represents a strategic shift that will have a major effect on the Company’s operations and financial results, in accordance with ASC 205-20-45-1E, the Company has reclassified FPA’s assets and liabilities as held for sale and presented the results of operations of FPA as discontinued operations, and when FPA is sold, will recognize a gain or loss on disposal.

Current assets as of March 31, 2023 and 2022 – Discontinued Operations:

	*March 31,*		*March 31,*
	*2023*		*2022*
Cash	$	9,362	$	-
Accounts receivable		51,000		-
	$	60,362	$	—

Current liabilities as of March 31, 2023 and 2022 –Discontinued Operations:

	*March 31,*		*March 31,*
	*2023*		*2022*
Accounts payable and accrued expenses	$	200,051	$	-
Current portion of long-term debt		37,977		-
	$	238,028	$	—

Non-current liabilities as of March 31, 2023 and 2022 –Discontinued Operations:

	March 31,		March 31,
	2023		2022
Long-term debt	$	150,000	$	-

	$	150,000	$	—

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The Company reclassified the following operations to discontinued operations for the years ended March 31, 2023 and 2022, respectively.

	March 31,			March 31,
	*2023*			*2022*
Revenue	$	62,008		$	-
Operating expenses		295,021			-
Other (income) loss		(25,437	)		-
Net loss from discontinued operations	$	(207,576	)	$	-

NOTE 13: COMMITMENT

On November 15, 2022, the Company entered into a five-year Employment Agreement with its CEO, Jimmy Galla. Under the terms of the Employment Agreement, the Company agreed to compensate its CEO at a rate of $250,000 annually (“Base Pay”). In addition to the Base Pay, Mr. Galla shall be eligible to earn an annual bonus of up to 100% of the Base Pay based on terms and conditions, including the financial performance of the Company, as well as individual performance goals, as set forth in a bonus plan that is to be determined by the Company’s Board of Directors. The Company also granted Mr. Galla 10,000,000 restricted stock units that vest quarterly for 20 consecutive quarters (500,000 per quarter). Through March 31, 2023, Mr. Galla has vested 1,000,000 restricted stock units. Those shares have not been issued to Mr. Galla.

NOTE 14: INCOME TAXES

The following table summarizes the significant differences between the U.S. Federal statutory tax rate and the Company’s effective tax rate for financial statement purposes for the years ended March 31, 2023 and 2022:

	2023			2022
Federal income taxes at statutory rate		21.00	%		%
State income taxes at statutory rate		-	%		%
Permanent differences and one-time adjustments		(16.00	)%		%
True-up impact		(9.00	)%		%
Change in valuation allowance		-	%		%
Totals		(4.00	)%		%

The following is a summary of the net deferred tax asset (liability) as of March 31, 2023 and 2022:

	As of			As of
	March 31, 2023			March 31, 2022
Deferred tax assets:
Net operating losses	$	152,614		$	-
Accrued expenses		23,134			-
Stock options		12,894			-
ROU Liability		68,665			-
Total deferred tax assets		257,307			-

Deferred tax liabilities:
Intangible assets		(334,530	)		-
ROU Assets		(68,252	)		-
Depreciation		(38,365	)		-
Total deferred tax liabilities		(441,147	)		-

		(183,840	)		-

Valuation allowance		183,840			-

Net deferred tax assets/liabilities	$	-		$	-

The Federal net operating loss at March 31, 2023 is $672,811. There is also State net operation loss of $388,137 in LA and $18,722 in OK. After consideration of all the evidence, both positive and negative, management has recorded a full valuation allowance at March 31, 2023, due to the uncertainty of realizing the deferred income tax assets. The federal, LA and OK States net operating losses carry forward has an indefinite life due to tax law change from 2017 TCJA.

The Company is subject to taxation in the U.S. and various states jurisdictions. No income tax returns are currently under examination as the Company files its initial tax return for 2022. As of March 31, 2023, the Company does not have any unrecognized tax benefits, and continues to monitor its current and prior tax positions for any changes. The Company recognizes penalties and interest related to unrecognized tax benefits as income tax expense. For the year ended March 31, 2023, there were no penalties or interest recorded in income tax expense.

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The Company classifies accrued interest and penalties, if any, for unrecognized tax benefits as part of income tax expense. The Company did not accrue any penalties or interest as of March 31, 2023 and 2022.

The provision (benefit) for income taxes for the year ended March 31, 2023 and 2022 is as follows:

Current	$	37,207	$	85,000
Deferred		-		-
Total	$	37,207	$	85,000

The Company has not identified any uncertain tax positions and has not received any notices from tax authorities.

NOTE 15: SUBSEQUENT EVENTS

None through date of filing

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

~~None~~Not applicable.

ITEM 9A.

CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures.

We are required to maintain “disclosure controls and procedures” (as such term is defined in ~~Rules~~Rule 13a-15(e) ~~and~~under ~~15d-15(e)~~the Exchange Act. Based on their evaluation as of the ~~Securities~~end ~~Exchange~~of ~~Act~~the ofperiod ~~1934~~covered by this Report, Mr. Jimmy Galla, who is presently serving as ~~amended~~our ~~(the~~Chief ~~“Exchange Act”)~~Executive Officer and Chief Financial Officer, has concluded that ~~are~~our ~~designed~~disclosure tocontrols beand ~~effective~~procedures inwere ~~providing~~not ~~reasonable~~effective ~~assurance~~to ensure that the information relating to our company, required to be disclosed in our SEC reports ~~under~~ ~~the~~(i) ~~Exchange Act~~ is recorded, processed, summarized and reported within the time periods specified in ~~the~~SEC rules and forms ~~of the SEC~~, and ~~that~~(ii) ~~such information~~ is accumulated and communicated to our management, including our Chief Executive Officer, to allow timely decisions regarding required disclosure as a result of material weaknesses in our internal control over financial reporting.

~~The Company~~Management’s ~~management, under~~Report ~~the~~on ~~supervision~~Internal ~~and~~Control ~~with~~over ~~the participation of the Company's Chief Executive Officer who also serves as our Chief~~ Financial Officer, carried out an evaluation of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Exchange Act) as of December 31, 2021Reporting. Based upon that evaluation at the end of the period covered by this annual report our Chief Executive Officer concluded that our disclosure controls and procedures were not effective to ensure that the information relating to our company, required to be disclosed in our SEC Reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communications to our management, including our Chief Executive Officer, to allow timely decisions regarding required disclosure as a result of material weaknesses in our internal control over financial reporting.

~~Management’s~~Our ~~Report~~management onis ~~Internal Control~~responsible for establishing and maintaining adequate internal control over ~~Financial~~financial ~~Reporting~~reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:

~~Our~~● ~~management~~pertain ~~assessed~~ to the ~~effectiveness~~maintenance of ~~our~~records ~~internal control over financial reporting as of December 31~~that, ~~2021 based on the 2013 criteria established~~ in ~~Internal~~reasonable ~~Control~~detail, -accurately Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management's assessment included an evaluation of the design of our internal control over financial reporting and ~~testing~~fairly ofreflect the ~~operational~~transactions effectiveness of these controls. Based on this assessment, our Chief Executive Officer who also serves as our Chief Financial Officer has concluded that as of December 31, 2021, our internal control over financial reporting was not effective to provide reasonable assurance regarding the reliability of financial reporting and ~~the~~dispositions ~~preparation~~ of financial statements for external purposes in accordance with U.S. GAAP as a result of material weaknesses. A “material weakness” is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of our annual or interim financial statement will not be presented or detected by our employees. The specific material weaknesses that management identified in our internal controls as of December 31, 2021 that persist are as follows:assets;

● weprovide ~~did~~reasonable ~~not~~assurance ~~have~~that ~~adequate~~transactions ~~staffing~~are ~~resources~~recorded as necessary to ~~provide~~permit ~~appropriate~~preparation ~~segregation~~of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of ~~duties~~our management and directors; and

● weprovide ~~did~~reasonable ~~not~~assurance ~~have~~regarding aprevention ~~sufficient~~or ~~number~~timely detection of ~~adequately~~unauthorized ~~trained~~acquisition, ~~technical~~use ~~accounting~~or ~~personnel~~disposition toof ~~support~~our ~~multiple~~assets ~~level~~that ofcould ~~review~~have ina material effect on the financial ~~close process;~~statements.

~~● we did not have personnel with sufficient experience with U.S. GAAP; and~~ 50

● Table weof ~~did not have adequate personnel to document, timely review and support all transactions.~~Contents

~~These~~Because ~~listed~~of ~~material weaknesses~~its ininherent ~~our~~limitations, internal control over financial reporting ~~are~~may ~~legacy~~not ~~issues~~prevent ~~dating~~or ~~back~~detect ~~many years~~misstatements. InAlso, ~~order~~projections of any evaluation of effectiveness to ~~remediate~~future ~~these~~periods ~~material weaknesses~~are insubject ~~our~~to ~~internal~~the ~~control~~risk ~~over~~that ~~financial~~controls ~~reporting~~may become inadequate because of changes in conditions, weor ~~will~~that ~~need~~the ~~to:~~degree of compliance with policies or procedures may deteriorate.

●Our ~~create~~management aassessed ~~position~~the toeffectiveness ~~segregate~~of ~~duties~~our ~~consistent~~internal ~~with~~ control ~~objectives~~over ~~and~~financial ~~will~~reporting ~~increase~~based ~~our~~on ~~personnel~~the ~~resources;~~parameters set forth above and ●has ~~hire~~concluded ~~experienced~~that ~~independent~~as ~~third~~of ~~parties~~March or31, ~~consultants~~2023, our internal control over financial reporting was not effective to provide ~~additional~~reasonable ~~expert~~assurance ~~advice~~regarding asthe ~~needed~~reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles as a result of the following material weaknesses:

We● ~~made~~The ~~efforts~~Company todoes ~~improve these~~not ~~weaknesses~~have insufficient ~~our~~segregation ~~internal~~of ~~control~~duties ~~over~~within ~~financial~~accounting ~~reporting~~functions ~~results~~due byto ~~focusing~~only onhaving ~~upgrading~~one ~~our~~individual ~~internal~~serving ~~accounting~~as ~~processes and~~its ~~managing~~principal ~~the daily accounting responsibilities~~executive, ~~maintaining~~financial ~~the~~and ~~new~~ accounting ~~software~~officer and ~~modifying~~no ~~the~~other ~~inventory~~internal ~~system~~financial weor ~~implemented in~~accounting ~~the past to manage inventory and having~~personnel.

15● The Company does not have written documentation of our internal control policies and procedures.

~~duplicity in~~● ~~reviewing~~The ~~our~~Company’s accounting records by retaining an outside CPA to review our financials on a quarterly and annual basis. We believe these steps have helped and will continue to further mitigate issues that may arise from a limited staff. In 2022 we plan to further improve our financial ~~controls.~~reporting ~~Until~~is ~~such~~carried ~~time,~~out ~~however,~~with ~~as we remediate~~ the ~~material~~assistance ~~weaknesses~~of inan ~~our~~outside ~~internal control over~~ financial ~~reporting,~~ ~~there is a likelihood that our financial statements in future periods may contain errors which will require a restatement~~consultant.

~~Limitations~~We onplan ~~Effectiveness~~to rectify these weaknesses by implementing written policies and procedures for our internal control of ~~Controls~~ financial reporting, and ~~Procedures~~hiring additional accounting personnel at such time as we have sufficient financial and human capital resources to do so.

~~Our~~Changes ~~management,~~in ~~including our~~Internal ~~Chief~~Control ~~Executive~~over ~~Officer who also serves as our Chief~~ Financial ~~Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud~~Reporting. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

~~Changes~~There have been no changes in ~~Internal~~our ~~Control~~internal control over ~~Financial Reporting~~financial reporting during our last fiscal quarter during the period covered by this Report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

There were no changes to our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B.

OTHER INFORMATION.

None.

ITEM 9C.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

Not applicable.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

~~Directors and executive officers~~MANAGEMENT

The ~~following~~table below sets forth ~~the~~ ~~names~~certain information concerning our executive officers and directors, including their names, ages, ofand ~~our~~positions with us. Our executive officers are chosen by our board and ~~directors~~hold their respective offices until their resignation or earlier removal by the Board.

Name	Age	Position
John A. DiBella	50	Chief Executive Officer, President, Chief Financial Officer and Director
Raynard Veldman	61	Director

Each director is elected at our annual meeting of shareholders and holds office until the next annual meeting of shareholders, or until his successor is elected and qualified. If any director resigns, dies or is otherwise unable to serve out his or her term, or if the board increases the number of directors, the board may fill any vacancy by a vote of a majority of the directors then in office, although less than a quorum exists. A director elected to fill a vacancy shall serve for the unexpired term of his or her predecessor. Vacancies occurring by reason of the removal of directors without cause may only be filled by vote of the shareholders.

John A. DiBella has served as a member of the board of directors since August 2006 and Chief Executive Officer and Chief Financial Officer since November 2011. From 2000 through January 2002 Mr. DiBella provided consulting services to our Company. In January 2002 we hired him to serve as a Vice President and Director of Business Development, and thereafter prior to be named Chief Executive Officer Mr. DiBella served as our Chief Operating Officer. Mr. DiBella co-founded and served as President of PBCM, a financial management company located in New Jersey from 1997 to 1999. Prior to co-founding PBCM, Mr. DiBella worked for Donaldson, Lufkin and Jenrette, a NYSE member firm. Mr. DiBella’s operational experience with our company were factors considered by our board of directors in concluding that he should be serving as a director of our company.

Name	Age	Position(s)

Jimmy R. Galla	56	Chief Executive Officer, Chief Financial Officer and Director
Jimmy “JD” Reedy	53	Director and Chief Operating Officer of Banner Midstream

16 51

~~Raynard Veldman has~~ ~~served~~ Table ~~as a director~~ of ~~the Company since August 2014. Since 2014, Mr. Veldman has operated Veldman Consulting Corporation which provides~~Contents consulting services, commission sales, and has made investments in the oil and gas and chemical industries where he is an active participant in the businesses. He served as vice president for Magnablend, Inc., a custom chemical blending and manufacturing company from February 2012 to July 2014. From April 2001 through February 2012 he served as business and product manager for Weatherford, Inc. in their Engineered Chemistry Division. He has over 30 years of experience in the domestic and international oil and gas industry. Mr. Veldman has a M.S. in Chemical Engineering from the University of Houston and a B.S. in Chemical Engineering from the University of Texas. He has also periodically served as a consultant to the Company since 2009. Mr. Veldman’s professional background as an engineer and his professional experience in the oil and gas industry were factors considered by our board of directors in concluding that he should be serving as a director of our company.

~~There~~The ~~are~~following noinformation ~~family relationships~~pertains ~~between~~to ~~any~~the members of ~~the~~our board and executive officers, their principal occupations and ~~directors.~~other public company directorships for at least the last five years and information regarding their specific experiences, qualifications, attributes and skills:

Jimmy R. Galla. He has served as our Chief Executive Officer, Chief Financial Officer and director since September 2022. He has served as BitNile’s Chief Accounting Officer since October 22, 2020. He had previously served as BitNile’s Director of Financial Reporting since July 20, 2020, and prior to that he served as an accounting consultant to BitNile from January 2017 to March 2020. From October 2017 to July 2020, Mr. Galla served as VP, Financial Accounting Lead Analyst, Deputy Controller Department of Citibank, Inc. Mr. Galla’s management and leadership experience and background in financial services qualifies him to serve on the Company’s board of directors.

JD Reedy has served as our director since September 2022. He has served as Chief Operating Officer of Banner Midstream since April 2019. During the two years prior to that he was general manager of Pinnacle Frac since April 2017. Mr. Reedy’s experience in the logistics and transportation services industries qualifies him to serve on the Company’s board of directors.

CORPORATE GOVERNANCE

Appointment of Officers

Each executive officer serves at the discretion of our board of directors and holds office until his successor is duly elected and qualified or until his earlier resignation or removal.

Code of Business Conduct and Ethics

During the year ended December 31, 2003 we adopted a code of ethics which was amended and restated in June 2023. The code of ethics is filed with this Form 10-K annual report for the year ended March 31, 2023. The code of ethics may be obtained by contacting the Company’s executive offices. The code applies to our officers, director, employees, and certain consultants. The code provides written standards that are designed to deter wrongdoing and promote: (i) honest and ethical conduct; (ii) full, fair, accurate, timely and understandable disclosure; (iii) compliance with applicable laws and regulations; (iv) promote reporting of internal violations of the code; and (v) accountability for the adherence to the code.

Board of Directors

~~Each~~Our ~~director~~business ~~is elected at our annual meeting of stockholders~~ and ~~holds~~affairs ~~office~~are ~~until~~managed ~~the~~under ~~next annual meeting of stockholders, or until his successor is elected and qualified. If any director resigns, dies or is otherwise unable to serve out his or her term, or if~~ the ~~Board~~direction ~~increases the number~~ of ~~directors,~~our ~~the~~board ~~Board may fill any vacancy by a vote~~ of ~~a majority of the~~ directors ~~then in office, although less than a quorum exists~~. A ~~director~~We ~~elected~~currently tohave ~~fill~~two ~~a vacancy shall serve for the unexpired term of his or her predecessor. Vacancies occurring by reason of the removal of~~ directors ~~without cause may only be filled by vote of the stockholders~~.

Director Independence

Our board has undertaken a review of the independence of each director. Based on information provided by each director concerning his or her background, employment, and affiliations, our Board has determined that each of our directors has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is not “independent” as that term is defined under the applicable rules and regulations of the SEC and the Nasdaq listing standards.

Family Relationships

There are no family relationships between any of our executive officers or directors.

Board leadership structure and board’s role in risk oversight

The board of directors is comprised of ~~one~~two ~~member~~members of our management ~~and one independent director~~. Given the size of our company, our ~~Board~~board believes the current leadership structure is appropriate for our company. As our company grows, we expect to expand our board of directors through the appointment of independent directors.

Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including credit risk, interest rate risk, liquidity risk, operational risk, strategic risk and reputation risk. Management is responsible for the day-to-day management of the risks we face and have responsibility for the oversight of risk management in their dual roles as directors.

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Committees of the board of directors; stockholder nominations; audit committee financial expert

We have not established any committees comprised of members of our board of directors, including an Audit Committee, a Compensation Committee or a Nominating Committee, or any committee performing similar functions. The functions of those committees are being undertaken by our board of directors as a whole.

We do not have a policy regarding the consideration of any director candidates which may be recommended by our stockholders, including the minimum qualifications for director candidates, nor has our board of directors established a process for identifying and evaluating director nominees, nor do we have a policy regarding director diversity. We have not adopted a policy regarding the handling of any potential recommendation of director candidates by our stockholders, including the procedures to be followed. Our Board has not considered or adopted any of these policies as we have never received a recommendation from any stockholder for any candidate to serve on our board of directors. While there have been no nominations of additional directors proposed by our shareholders, in the event such a proposal is made, all members of our Board will participate in the consideration of director nominees. In considering a director nominee, it is likely that our Board will consider the professional and/or educational background of any nominee with a view towards how this person might bring a different viewpoint or experience to our Board.

~~None~~Jim Galla, a member of our board of directors , is an “audit committee financial expert” within the meaning of Item 401(e) of Regulation S-K. In general, an “audit committee financial expert” is an individual member of the audit committee or board of directors who:

	●	understands generally accepted accounting principles and financial statements;
	●	is able to assess the general application of such principles in connection with accounting for estimates, accruals and reserves;
	●	has experience preparing, auditing, analyzing or evaluating financial statements comparable to the breadth and complexity to our financial statements;
	●	understands internal controls over financial reporting; and
	●	understands audit committee functions.

Our securities are not quoted on an exchange that has requirements that a majority of our ~~Board~~board members be independent and we are not currently otherwise subject to any law, rule or regulation requiring that all or any portion of our board of directors include “independent” directors, nor are we required to establish or maintain an Audit Committee or other committee of our board of directors.

Code of Ethics

During the year ended December 31, 2003 we adopted a code of ethics. The code of ethics was filed with the Company’s Form 10-KSB annual report for the year ended December 31, 2003. The code of ethics may be obtained by contacting the Company’s executive offices. The code applies to our officers and directors. The code provides written standards that are designed to deter wrongdoing and promote: (i) honest and ethical conduct; (ii) full, fair, accurate, timely and understandable disclosure; (iii) compliance with applicable laws and regulations; (iv) promote reporting of internal violations of the code; and (v) accountability for the adherence to the code.

Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act, requires our executive officers and directors, and persons who beneficially own more than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common shares and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% stockholders are required by the Securities and Exchange Commission regulations to furnish us with copies of all Section 16(a) reports they file. Based solely upon a review of Forms 3 and 4 and amendments thereto furnished to us under Rule 16a-3(d) of the Securities Exchange Act during the year ended December 31, 2021 and Forms 5 and amendments thereto furnished to us with respect to the year ended December 31, 2021, as well as any written representation from a reporting person that no Form 5 is required, we are not aware that any officer, director or 10% or greater stockholder failed to file on a timely basis, as disclosed in the aforementioned Forms, reports required by Section 16(a) of the Exchange Act of during the year ended December 31, 2021.

ITEM 11.

EXECUTIVE COMPENSATION.

~~The~~Summary ~~following~~Compensation ~~table summarizes all compensation recorded by us in the past two years for:~~Table

●The ~~our~~following ~~principal~~table ~~executive~~summarizes ~~officer~~all compensation paid, earned or ~~other~~accrued ~~individual~~during ~~serving~~FY in2023 aand ~~similar~~FY ~~capacity~~2022 with respect to: (i) all individuals who served as the Company’s principal executive officer during FY 2023; ●(ii) ~~our~~the Company’s two most highly compensated ~~named~~ executive officers atother ~~December~~than the principal executive officer who were serving as an executive officer of the Company as of March 31, ~~2021~~2023 and whose ~~annual~~ compensation exceeded $100,000; and ●(iii) up to two additional individuals for whom disclosure would have been ~~required~~provided under (ii) above but for the fact that the individual was not serving as an executive officer of the Company at ~~December~~March 31, ~~2021~~2023 and whose compensation exceeded $100,000 (the “Named Executive Officers”).

18 53

~~For definitional purposes,~~ ~~these~~ Table ~~individuals~~of ~~are sometimes referred to as the “named executive officers.”~~Contents

Summary Compensation Table
Name and	Year		Salary		Bonus			Stock		Option			Non-Equity Inventive Plan		Non-Qualified Deferred Compensation		All Other
Name and principal position		Year		Salary ($)	Bonus ($)		Stock Awards ($)		Option Awards ($)	No equity incentive plan compensation ($)		Non-qualified deferred compensation earnings ($)		All other compensation ($)(1)	Total ($)
Principal Position	(b)		($)(c)		($)(d)			Awards		Awards			Compensation		Earnings		Compensation		Total
John A. DiBella,		2021		210,000	—		—		—	—		—		25,936	235,936
(a)								($)(e)		($)(f)			($)(g)		($)(h)		($)(i)		($)(j)
President, Chief Executive Officer and Chief Financial Officer		2020		210,000	—		—		—	—		—		23,034	233,034
Jimmy Galla	2023			100,922		-			-		-			-		-		-		100,922
Chief Executive Officer and Chief Financial Officer(1)	2022			-		-			-		-			-		-		-		-
John A. DiBella	2023			-		-			-		-			-		-		-		-
Former Chief Executive Officer and Chief Financial Officer (2)	2022			210,000		-			-		-			-		-		17,291		227,291
Jimmy “JD” Reedy	2023			118,000		-			-		-			-		-		-		118,000
Chief Operating Officer Banner Midstream	2022			118,000		-			-		-			-		-		-		118,000
Jay Puchir	2023			-		-			-		-			-		-		-		-
Former Chief Executive Officer of Banner Midstream (1) (3)	2022			-		-			-		-			-		-		-		-

(1) ~~Represents healthcare~~ For ~~benefits~~amounts paid, earned or accrued for services provided to BitNile and paid or payable by BitNile, see below under “BitNile Compensation Information.”

~~Outstanding~~(2) Mr. ~~Equity~~DiBella ~~Awards~~resigned atas ~~December 31~~officer of the Company effective September 6, ~~2021~~2022 and as a director of the Company on October 10, 2022.

~~There~~(3) Mr. ~~are~~Puchir noresigned ~~outstanding equity~~as ~~awards~~an ~~held~~officer byof ~~our~~Banner ~~named~~Midstream ~~executive~~on ~~officers~~September ~~at December 31~~20, ~~2021~~2022.

~~How~~BitNile ~~Mr. DiBella’s~~ Compensation ~~is Determined~~Information

WeUntil ~~are~~September ~~not~~2022, athe ~~party~~Named ~~to an~~Executive ~~employment~~Officers ~~agreement~~below ~~with~~were ~~Mr.~~solely ~~DiBella.~~compensated ~~His compensation is determined~~ by ~~the board of directors of which he is one of the two members~~BitNile. ~~Effective~~ ~~for~~Beginning ~~2021~~November ~~and~~15, ~~2020~~2022, the ~~Company~~additional ~~incurred~~compensation ~~salary expenses~~ for Mr. ~~DiBella~~Galla ofover ~~$210,000~~his BitNile ~~and $210,000, respectively. For 2021 and 2020, the Company paid Mr. DiBella $151,250 and $156,650, respectively, of~~ salary has ~~and accrued salary have~~ been ~~paid.~~allocated ~~Of the $151,250 paid~~ to ~~Mr.~~Wolf ~~DiBella in 2021, $26,250 was paid in cash and $125~~Energy.~~000~~ ~~was~~The afollowing ~~reduction~~is ofan ~~his~~overview ~~accrued salary for conversion into 500,000 shares~~ of ~~common~~amounts stock of the company. Effective December 30, 2021, Mr. DiBella converted $125,000 of his accrued salary (the “Conversion Amount”) into 500,000 restricted shares of common stock of the Company in full satisfaction of the Conversion Amount. Of the $156,650 paid to ~~Mr.~~or ~~DiBella in 2020, $81,650 was a reduction of his~~ accrued ~~salary~~or inearned ~~payment for~~by ~~the~~each ~~exercise~~ of ~~options, including some options of~~ the ~~Company’s~~Named ~~employees~~Executive ~~and~~Officers ~~a related party. The unpaid accrued salary balances~~ as of ~~December~~ March 31, ~~2021~~2022 ~~and 2020, are $723,065 and $664,315, respectively. The timing of the payment of any of the accrued but unpaid compensation due Mr. DiBella may be determined~~ by ~~the board of directors at any time. In addition, Mr. DiBella’s compensation may be changed at any time by the board of directors.~~BitNile:

~~Consulting~~Jimmy ~~Fees Paid to Mr. Veldman~~Galla:

In2023: ~~addition to his compensation for serving as a member of the Company’s board of directors set forth below, since July 1, 2017, the Company has paid Mr. Veldman a fee of~~ $2,500 per month for consulting services. For 2021 and 2020, he received consulting fees of $30,000 and $30,000, respectively. Effective December 30, 2021, Mr. Veldman converted $30,000 of outstanding consulting fees into 120,000 ~~shares of restricted common stock of the Company~~ in ~~full~~salary ~~satisfaction~~and of $3050,000 ofin ~~accrued~~bonuses ~~consulting~~for ~~fees.~~a ~~The unpaid~~total ~~consulting fees and board~~ of ~~director’s fees balances as of December 31, 2021 and 2020, are~~ $54170,~~500 and $42,500, respectively~~000. ~~The timing of the payment of any of the accrued but unpaid due Mr. Veldman may be determined by the board of directors at any time.~~

2022: $120,000 in salary and $40,000 in bonuses for a total of $160,000.

Jay Puchir:

2023: $238,333 in salary.

2022: $238,333 in salary and $625,000 in stock awards.

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Outstanding Equity Awards at Fiscal Year End

The following table sets forth information concerning unvested RSUs that were granted to Named Executive Officers under an equity incentive plan and were outstanding as of March 31, 2023.

Name and Position	Number of Shares or Units of Stock That Have Not Vested		Market Value of Shares or Units of Stock That Have Not Vested (2)		Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested		Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested
Jimmy Galla, Chief Executive Officer and Chief Financial Officer(1)(2)		9,000,000	$	90,000		--		--

Jimmy “JD” Reedy, Chief Operating Officer of Banner Midstream		--		--		--		--

John DiBella, Former Chief Executive Officer and Chief Financial Officer		--		--		--		--

Jay Puchir, Former Chief Executive Officer of Banner Midstream		--		--		--		--

(1) Represents unvested RSUs granted under Mr. Galla’s employment agreement described below. The RSUs reflected in the table vest in 20 equal quarterly increments with the first vesting date on December 31, 2022. 1,000,000 vested shares are unissued on March 31, 2023.

(2) The market value of the unvested RSUs is calculated by multiplying the number of shares of common stock underlying the RSUs by $0.01, which was the closing market price of our common stock on March 31, 2023.

Equity Compensation Plan Information

The following table contains information about the Company's outstanding equity awards as of March 31, 2023.

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted- average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)		(b)		(c)
Equity compensation plans approved by stockholders:		-		-
						-
Equity compensation not approved by stockholders (1)		40,000	$	0.025		-
Total		40,000	$	0.025		-

(1) Represents stock options not granted under any existing equity compensation plans.

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Agreements with Executive Officers

On November 15, 2022 the Company entered into a five year Employment Agreement with Jimmy Galla, the Company’s Chief Executive Officer and Chief Financial Officer. Mr. Galla will receive an annual base salary of $250,000, or $210,000 for services as only the Chief Financial Officer of the Company. In addition to the annual base salary, Mr. Galla shall be eligible to earn an annual bonus of up to 100% of the annual base salary based on terms and conditions, including the financial performance of the Company, as well as individual performance goals, as set forth in a bonus plan that is to be determined by the Company’s Board of Directors. Pursuant to the Employment Agreement, Mr. Galla also received a grant of 10,000,000 shares of restricted common stock pursuant to Restricted Stock Units. The shares of restricted stock shall vest in 20 equal quarterly increments based on 5% or 500,000 shares vesting each fiscal quarter, beginning on the first fiscal quarter anniversary on December 31, 2022, subject to continued employment on each applicable vesting date. In addition, in the event the Employment Agreement is terminated by Mr. Galla for “Good Reason” or upon a “Change of Control” (as such terms are defined under the agreement) or at the end of the term after the Company provides notice of non-renewal, the grant shall fully vest. The Employment Agreement contains customary non-compete and confidentiality provisions. In addition, pursuant to the Employment Agreement the Company and Mr. Galla entered into an Indemnification Agreement.

The Company compensates JD Reedy, the Chief Operating Officer of Banner Midstream under an oral agreement whereby Mr. Reedy receives an annual base salary of $118,000 for services as the Chief Operating Officer of Banner Midstream Corp.

Director Compensation

Our ~~board~~Board compensation plan effective for non-management directors ~~consists~~prior to the Exchange consisted of a $1,000 monthly cash payment. ~~In addition, board members may be reimbursed for out-of-pocket expenses related to participation in board and committee meetings. No reimbursable payments were made during 2021.~~ The ~~table~~ ~~below~~Company ~~provides~~currently ~~information~~does ~~concerning~~not ~~the~~compensate ~~compensation~~its ~~paid in 2021 to our non-management director for his services as a member of our board of~~ directors ~~2021~~. ~~The information in the following table excludes the consulting fees paid to Mr. Veldman as described earlier in this section.~~

19Equity Incentive Plans

			Fees earned or paid in		Stock awards		Option awards		Non-equity incentive Plan compensation		Nonqualified deferred compensation earnings		All other compensation		Total
Name	Year		cash ($)		($)		($)		($)		($)		($)		($)
Raynard Veldman		2021	$	12,000		—		—		—		—		—	$	12,000

The Company has not adopted any equity incentive plan.

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

~~At April 5, 2022, we had 5,570,125 shares of our common stock issued and outstanding.~~ The following table sets forth certain information ~~regarding~~with respect to the beneficial ownership of our common stock as of ~~that~~June ~~date~~15, by2023 for:

● each ~~person~~of ~~known~~our bydirectors; us● toeach beof ~~the~~our ~~beneficial~~executive ~~owner~~officers; ● all of our current directors and executive officers as a group; and ● each person, entity or group, who beneficially owned more than 5% of each of our ~~common~~classes ~~stock;~~of securities.

●This amount does not give effect to any exercises, conversions or delivery under any options, warrants, notes, restricted sock units or other derivative instruments (“Derivative Securities”). We have deemed shares of our common stock subject to Derivative Securities that are currently exercisable, convertible or deliverable into shares of common stock within 60 days of June 15, 2023 to be outstanding and to be beneficially owned by the person holding the Derivative Securities for the purpose of computing the percentage ownership of that person. Applicable percentages are based on 78,268,332 shares of common stock outstanding as of June 15, 2023. Unless otherwise indicated, the principal business address for each of the individuals and entities listed below is our ~~directors;~~offices in 408 State Hwy 135N, Kilgore, Texas 75662. The information provided in the table is based on our records, and information provided to us, except where otherwise noted.

~~● each of our named executive officers; and~~ 56

● Table ~~our~~of ~~named executive officers and directors as a group.~~Contents

Unless specified below, the business address of each shareholder is c/o 821 NW 57 Place, Fort Lauderdale, FL 33309. The percentages in the table have been calculated on the basis of treating as outstanding for a particular person, all shares of our common stock outstanding on that date and all shares of our common stock issuable to that holder in the event of exercise of outstanding options, warrants, rights or conversion privileges owned by that person at that date which are exercisable within 60 days of that date. Except as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our common stock owned by them, except to the extent that power may be shared with a spouse.

Name	Shares of Common Stock Beneficially Owned		Percentage of Common Stock Beneficially Owned
Directors and Named Executive Officers:
Jimmy R. Galla (1)		1,500,000		1.9	%
Jimmy “JD” Reedy (2)		0		---
All directors and executive officers as a group (2 persons) (1)		1,500,000		1.9	%

5% Stockholders:
John A. DiBella (3)		60,876,848		47.3	%
Raynard Veldman (4)		6,000,000		7.1	%
BitNile Holdings, Inc. (5)		51,987,832		66.4	%

Name of Beneficial Owner	No. of Shares Beneficially Owned		% of Class
John A. DiBella (1)		1,626,462		29.2	%
Raynard Veldman		539,144		9.7	%
All officers and directors as a group (two persons)		2,165,606		38.9	%
Adele DiBella		609,550		10.9	%

(1)

Jimmy R. Galla, our Chief Executive Officer, also currently serves as Chief Accounting Officer of BitNile. Mr. Galla disclaims any beneficial ownership in the shares held by BitNile. Includes 500,000 shares of unissued restricted common stock which vested on December 31, 2022, 500,000 shares of restricted common stock which vested March 31, 2023, and 500,000 shares of restricted common stock which vest on June 30, 2023 issued pursuant to a Restricted Stock Units Agreement dated December 8, 2022 (the “RSUs”). Excludes 8,500,000 restricted shares subject to vesting under the RSUs, which vest in equal quarterly increments on the last day of each calendar quarter, subject to Mr. Galla’s continued employment with the Company.

(12) ~~The number~~ ofMr. ~~shares~~Reedy is a director of ~~common~~the ~~stock~~Company ~~beneficially~~and ~~owned~~Chief byOperating ~~Mr.~~Officer ~~DiBella~~of ~~includes~~Banner 15Midstream Corp.,~~000~~ ~~shares~~a ~~held~~wholly byowned ~~his~~subsidiary ~~minor~~of ~~children~~the Company.

~~Securities~~(3) ~~Authorized~~Mr. ~~for~~DiBella ~~Issuance~~is ~~Under Equity~~a ~~Compensation~~former ~~Plans~~officer and director of the Company. Includes 60,000 shares held by his minor children. Also includes up to 50,371,000 shares of common stock issuable upon conversion of a 6% unsecured convertible promissory note in the principal amount of $755,656. Address is 1543 Deer Path, Mountainside, NJ 07092.

~~The following~~(4) ~~table~~Includes ~~sets~~up ~~forth~~to ~~securities~~6,000,000 ~~authorized~~shares ~~for~~of ~~issuance~~common ~~under~~stock ~~any~~issuable ~~equity~~upon ~~compensation~~conversion ~~plans~~of ~~approved~~a by6% ~~our~~unsecured ~~shareholders~~convertible aspromissory ~~well as~~note ~~any~~in ~~equity~~the ~~compensation~~principal ~~plans~~amount ~~not~~of ~~approved~~$90,000. byAddress ~~our~~is ~~shareholders~~P.O. asBox of841, ~~December 31~~Bellaire, ~~2021~~Texas 77402.

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted average exercise price of outstanding options, warrants and rights ($)	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column
Plans approved by our shareholders	0	n/a	n/a
Plans not approved by shareholders	10,000	0.10	n/a

(5)	Randy May is the Chief Executive Officer of BitNile and may be deemed to beneficially own the shares held by BitNile.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

~~During~~Set ~~2021~~forth ~~and~~below ~~2020,~~is ~~Raynard~~a ~~Veldman,~~brief ~~a member~~description of the ~~Company’s~~Banner ~~board~~Midstream of(and ~~directors~~us since September 7, ~~received~~2022) ~~total~~transactions ~~consulting~~since ~~fees~~April 1, 2021 in excess of ~~$30,000~~the ~~and~~lesser of $30120,000, ~~respectively,~~and inone ~~addition~~percent ~~to fees~~of ~~for~~the ~~serving~~average onof the ~~board~~Company’s oftotal ~~directors.~~assets ~~The~~at ~~Company~~year-end ~~currently~~for ~~pays~~the ~~Mr.~~last ~~Veldman~~two $2completed fiscal years,~~500~~ ~~per~~in ~~month~~which ~~for~~we ~~consulting~~or ~~services.~~Banner ~~Effective December~~Midstream 30was a participant and in which any director or executive officer of the Company, ~~2021~~any known 5% or greater stockholder of the ~~Mr. Veldman~~Company ~~converted~~or ~~$30,000~~any immediate family member of ~~outstanding~~any ~~consulting~~of ~~fees~~the ~~into~~foregoing ~~120~~persons,~~000~~ ~~shares~~had ofa ~~restricted~~direct ~~common~~or ~~stock~~ indirect material interest as defined in ~~full~~Item ~~satisfaction~~404(a) of Regulation S-K. As permitted by the ~~$30~~SEC rules,~~000~~ discussion of ~~outstanding~~employment ~~consulting~~relationships ~~fees. During~~or ~~2020~~transactions involving the Company’s executive officers and directors, ~~Mr.~~and ~~Veldman~~compensation ~~reduced~~solely ~~his~~resulting ~~accrued~~from ~~expense~~such byemployment ~~$10~~relationships or transactions,~~000~~ or service as a director of the Company, as the case may be, has been omitted to ~~exercise~~the ~~his~~extent ~~options~~disclosed in the sections of this Report titled “Executive Compensation” or “Director Compensation”, as applicable.

~~Director~~Pursuant ~~Independence~~to the Exchange on August 23, 2022, the Company issued John A. DiBella and Raynard Veldman 6% unsecured convertible promissory notes in the principal amount of $815,565 and $90,000, respectively, convertible at the option of the holder at $0.015 per share, with a maturity date of 12 months from the Exchange in satisfaction of all of their accrued payroll and consulting fees and Mr. Veldman’s advances to the Company prior to the Exchange. On December 29, 2022, $60,000 of Mr. DiBella’s note has been converted into 4,000,000 shares of common stock. In addition, at the closing of the Exchange the Company issued John A. DiBella a 6% unsecured promissory note in the principal amount of $139,000, as amended, in satisfaction of Mr. DiBella’s advances to the Company prior to the Exchange. In the year ended March 31, 2023, the Company repaid $139,000 to Mr. DiBella.

~~The~~Jimmy ~~Company~~R. ~~has~~Galla, ~~one independent~~our ~~director,~~chief ~~Raynard~~executive ~~Veldman.~~officer ~~Mr.~~and ~~Veldman~~chief isfinancial ~~considered~~officer, ~~“independent”~~currently serves as ~~defined~~Chief ~~under~~Accounting ~~Rule~~Officer ~~5605~~ of ~~the~~BitNile, ~~Nasdaq~~our ~~Marketplace Rules~~largest shareholder.

Banner Midstream historically relied upon advances from BitNile which totaled $8,777,545 on March 31, 2022. There was no interest charged on this amount. The sum due on September 7, 2022 was reclassified to additional paid in capital as a contribution upon entering into the Exchange with the Company.

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ITEM 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES.

The following table shows the fees billed by our by our current independent registered public accounting firm (the “Principal Accountant”) for the years ended March 31, 2023 and 2022.

	2023 ($)		2022 ($)
Audit Fees (1)	35,000			-
Audit-Related Fees (2)		-		-
Tax Fees (3)		-		-
All Other Fees (4)	-			-
Total	35,000			-

(1)

Audit Fees relate to the audits of our annual financial statements and the review of our interim quarterly financial statements.

	(2)	Audit-Related fees relate to the assessment of our internal controls.

	(3)	Tax Fees relate to professional services rendered by our Principal Accountant for tax compliance, tax advice and tax planning.

	(4)	All Other Fees relate to the filing of registration statements.

PART IV

ITEM 1415. ~~PRINCIPAL~~EXHIBITS, ~~ACCOUNTANT~~FINANCIAL ~~FEES~~STATEMENT ~~AND SERVICES~~SCHEDULES.

The following table shows the fees that were billed for the audit and other services provided by Liggett & Webb, P.A. for 2021 and 2020.

		Incorporated by Reference			Filed or
No.	Exhibit Description	Form	Date Filed	Exhibit Number	Furnished Herewith

2.1	Share Exchange Agreement dated August 23, 2022 by and among Enviro Technologies U.S., Inc., Banner Midstream Corp. and Ecoark Holdings, Inc.*	8-K	8/29/2022	2.1
3.1	Certificate of Domestication and Articles of Incorporation filed in the State of Florida	8-K	12/28/20	3(v)
3.1(a)	Articles of Amendment to Articles of Incorporation effective January 17, 2023 – forward stock split	8-K	1/17/23	3.1
3.1(b)	Articles of Amendment to Articles of Incorporation – name change	8-K	2/1/23	3.1
3.2	Bylaws	10-K	3/31/21	3(ii)
3.2(a)	Amendment to Bylaws dated April 14, 2023	8-K	4/18/23	3.2
10.1	Restricted Stock Unit Agreement by and between the Company and Jimmy Galla dated December 8, 2022+	8-K	12/12/22	10.1
10.2	Employment Agreement by and between the Company and Jimmy Galla dated November 15, 2022+	8-K	11/17/22	10.1
10.3	Indemnification Agreement by and between the Company and Jimmy Galla dated November 15, 2022+	8-K	11/17/22	10.2
10.4	6% Unsecured Convertible Promissory Note dated August 23, 2022 payable to John A. DiBella	8-K	8/29/22	10.1
10.5	6% Unsecured Convertible Promissory Note dated August 23, 2022 payable to Raynard Veldman	8-K	8/29/22	10.2
10.6	6% Unsecured Promissory Note effective September 6, 2022 payable to John A. DiBella	8-K/A	9/12/22	10.3

	2021		2020
Audit Fees	$	32,000	$	32,000
Audit-Related Fees		—		—
Tax Fees		—		—
All Other Fees		—		—
Total	$	32,000	$	32,000

~~Audit Fees —~~ ~~This~~ Table ~~category includes the audit~~ of ~~our annual financial statements, review of financial statements included in our Quarterly Reports~~Contents on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with engagements for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements.

Audit-Related Fees — This category consists of assurance and related services by the independent registered public accounting firm that are reasonably related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees.” The services for the fees disclosed under this category include consultation regarding our correspondence with the Securities and Exchange Commission and other accounting consulting.

		Incorporated by Reference			Filed or
No.	Exhibit Description	Form	Date Filed	Exhibit Number	Furnished Herewith

10.7	Promissory Note issued by Wolf Energy Services Inc. in favor of Red Road Holdings Corporation dated March 27, 2023	8-K	4/3/23	10.1
10.8	Securities Purchase Agreement between Wolf Energy Services Inc. and Red Road Holdings Corporation dated March 27, 2023	8-K	4/3/23	10.2
10.9	Purchase and Sale of Future Receipts Agreement dated as of March 28, 2023 between Pinnacle Frac LLC and E-Advance Services, LLC including the Personal Guaranty of Performance dated as of even date by Jimmy Galla in favor of E-Advance Services, LLC	8-K	4/3/23	10.3
10.10	Standard Merchant Cash Advance Agreement dated as of March 28, 2023 between Pinnacle Frac LLC and KYF Global Partners including the Personal Guaranty dated as of even date by Jimmy Galla in favor of KYF Global Partners	8-K	4/3/23	10.4
10.11	Lease Agreement effective August 1, 2022	S-1	3/10/23	10.7
14.1	Code of Ethics			14.1	Filed
16.1	Letter from Liggett & Webb P.A. dated September 23, 2022	8-K	9/23/22	16.1
19.1	Form of Insider Trading Policy			19.1	Filed
21.1	List of Subsidiaries	S-1	3/10/23	21.1
31.1	Certificate of Principal Executive Officer and Principal Financial Officer (302)				Filed
32.1	Certificate of Principal Executive Officer and Principal Financial Officer (906)^				Furnished
101.INS	Inline XBRL Instance Document.				Filed
101.SCH	Inline XBRL Taxonomy Extension Schema Document.				Filed
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.				Filed
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.				Filed
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.				Filed
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.				Filed
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).				Filed

Tax Fees — This category consists of professional services rendered by our independent registered public accounting firm for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice.

*	Certain schedules and other attachments have been omitted. The Company undertakes to furnish the omitted schedules and attachments to the Securities and Exchange Commission upon request.

+	Management contract or compensatory plan or arrangement.

^	This exhibit is being furnished rather than filed and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.

~~All~~Copies ~~Other~~of ~~Fees~~this ~~— This~~report ~~category~~(including ~~consists~~the financial statements) and any of ~~fees~~the ~~for~~exhibits ~~other~~referred ~~miscellaneous~~to ~~items~~above will be furnished at no cost to our stockholders who make a written request to our Corporate Secretary at Wolf Energy Services Inc., 408 State Highway 135 N, Kilgore, Texas, 75662.

Our board of directors has adopted a procedure for pre-approval of all fees charged by our independent registered public accounting firm. Under the procedure, the Board approves the engagement letter with respect to audit, tax and review services. Other fees are subject to pre-approval by the Board, or, in the period between meetings, by a designated member of the Board. Any such approval by the designated member is disclosed to the entire Board at the next meeting. The audit and tax fees paid to the auditors with respect to 2021 were pre-approved by the board of directors.

ITEM 15. EXHIBITS AND FINANCIAL DATA SCHEDULES.

		Incorporated by Reference			Filed or
No.	Exhibit Description	Form	Date Filed	Exhibit Number	Furnished Herewith
2	Agreement and Plan of Reorganization	10	11/03/99	2
3(i)	Articles of Incorporation	10	11/03/99	3(i)
3(ii)	Bylaws	10-K	3/01/21	3(II)
3(iii)	Articles of Amendment to the Articles of Incorporation	8-K	11/13/17	3.2
3(iv)	Articles of Amendment to the Articles of Incorporation	8-K	9/9/20	3(iv)
3(v)	Statement of Domestication filed in the State of Idaho	8-K	12/28/20	3(iv)
3(vi)	Certificate of Domestication and Articles of Incorporation filed in the State of Florida	8-K	12/28/20	3(v)
10.1	Technology Purchase Agreement between Schlumberger Technology Corporation, Schlumberger Canada Limited, and Schlumberger B.V. And Enviro Voraxial Technology, Inc. and Florida Precision Aerospace, Inc. dated as of March 13, 2017(1)	8-K	03/15/17	10.1
10.2	Business Lease Agreement dated December 14, 2018		04/01/19	10.2
10.3	Promissory Note dated May 4, 2020 between Florida Precision Aerospace, Inc. and Bank of America	8-K	5/14/20	10.1
10.4	Loan Authorization and Agreement dated June 23, 2020	10-Q	8/14/20	10.2
10.5	Bill of Sale and Intellectual Property Agreement and Grant Back License Agreement June 8, 2017	10-K	3/01/21	10.5
10.6	First Amendment to Business Lease Agreement dated October 28, 2021				Filed
10.7	John A. DiBella Conversion Agreement dated December 30, 2021	8-K	1/07/22	10.1
10.8	Raynard Veldman Conversion Agreement dated December 30, 2021	8-K	1/07/22	10.2
10.9	Form of Promissory Note dated January 5, 2022	8-K	1/07/22	10.3
14	Code of Ethics	10-K	04/15/04	14
21	Subsidiaries of the Registrant	10	11/03/99	21
31.1	Rule 13a-14(a)/15d-4(a) Certification of Chief Executive Officer				Filed
31.2	Rule 13a-14(a)/15d-4(a) Certification of Chief Financial Officer				Filed
32.1	Section 1350 Certification of Chief Executive Officer, Chief Financial Officer, principal executive officer and principal financial and accounting officer				Filed
101.INS	XBRL Instance Document				Filed
101.SCH	XBRL Taxonomy Extension Schema Document				Filed
101.CAL	XBRL Taxonomy Calculation Linkbase Document				Filed
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document				Filed
101.LAB	XBRL Taxonomy Extension Label Linkbase Document				Filed
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document				Filed
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

(1) Exhibits and/or Schedules have been omitted. The Company hereby agrees to furnish to the Staff of the Securities and Exchange Commission upon request any omitted information.

ITEM 16.

FORM 10-K SUMMARY.

~~The~~Not ~~Company has elected not to provide a summary of the information required by this form~~applicable.

22 59

Table of Contents

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on June 26, 2023.

	Enviro Technologies U.S., Inc.
April 15, 2022	By:	/s/ John A. DiBella
		John A. DiBella, President, Chief Executive Officer and Chief Financial Officer


	By:	/s/ Jimmy Galla
	Name:	Jimmy Galla
	Title:	Chief Executive Officer and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed ~~below~~ by the following persons ~~on behalf of the registrant~~ in the capacities and on the dates indicated.

Name	Positions	Date
/s/ Jimmy Galla	June 26, 2023
/s/ John A. DiBella	Director, President, Chief Executive Officer, Chief	April 15, 2022
Jimmy Galla, Director
John A. DiBella	Financial Officer, principal executive officer and
/s/ Jimmy J.D. Reedy	June 26, 2023
	principal financial and accounting officer
Jimmy J.D. Reedy, Director
/s/ Raynard Veldman	Director	April 15, 2022
Raynard Veldman

23 60

INDEX TO FINANCIAL STATEMENTS ENVIRO TECHNOLOGIES U.S., INC. CONSOLIDATED FINANCIAL STATEMENTS

CONTENTS

	PAGE
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	F-2
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2021 AND 2020	F-3
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020	F-4
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIENCY) FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020	F-5
CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020	F-6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	F-7

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of:

Enviro Technologies U.S., Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Enviro Technologies U.S., Inc. and Subsidiary (the “Company”) as of December 31, 2021 and 2020, and the related consolidated statements of operations, changes in shareholders’ equity (deficiency) and cash flows for each of the two years in the period ended December 31, 2021, and the related notes (collectively referred to as “the consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020 and the results of its operations and its cash flows for each of the two years ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Explanatory Paragraph – Going concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note B to the consolidated financial statements, the Company has a working capital deficit, an accumulated deficit and negative cash flows from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plan in regard to these matters are described in Note B of the consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures including examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits include evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there were no critical audit matters.

/s/ Liggett & Webb, P.A.

We have served as the Company’s auditor since 2012.

Boynton Beach, Florida

April 15, 2022

(287)

F-2

ENVIRO TECHNOLOGIES U.S., INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS

	December 31, 2021			December 31, 2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	11,740		$	336,564
Accounts receivable, net		8,374			1,176
Inventory, net		114,247			113,335
Prepaid expenses		4,689			12,174
Total current assets		139,050			463,249
FIXED ASSETS, NET		7,325			312,468
OTHER ASSETS
Operating lease asset		153,811			200,066
Security deposits		10,143			10,143
Total other assets		163,954			210,209
Total Assets	$	310,329		$	985,926
LIABILITIES AND SHAREHOLDERS’ DEFICIENCY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	357,379		$	322,981
Accrued expenses – related party		777,565			706,815
Loans payable, current portion		113,461			65,867
Equipment note payable, current portion		—			71,812
Operating lease liability, current portion		50,970			46,255
Total current liabilities		1,299,375			1,213,730
LONG-TERM LIABILITIES
Operating lease liability, less current portion		102,841			153,811
Equipment note payable, less current portion		—			103,586
Loans payable, less current portion		148,510			196,104
Total long-term liabilities		251,351			453,501
Total Liabilities		1,550,726			1,667,231
COMMITMENTS AND CONTINGENCIES (See Note H)
SHAREHOLDERS’ DEFICIENCY
Common stock, $.001 par value, 250,000,000 shares authorized; 5,570,125 and 4,950,125 shares issued and outstanding as of December 31, 2021 and December 31, 2020		5,571			4,951
Additional paid-in capital		15,390,553			15,236,173
Accumulated deficit		(16,636,521	)		(15,922,429	)
Total shareholders’ deficiency		(1,240,397	)		(681,305	)
Total liabilities and shareholders’ deficiency	$	310,329		$	985,926

The accompanying notes are an integral part of the consolidated financial statements.

F-3

ENVIRO TECHNOLOGIES U.S., INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATIONS

		Years ended December 31,
		2021			2020
Revenues, net	$	107,315		$	79,965
Cost of goods sold		38,527			47,897
Gross profit		68,788			32,068
Costs and Expenses:
Selling, general and administrative		240,323			333,575
Payroll expenses		451,183			536,733
Professional fees		144,022			187,549
Research and development		—			2,601
Total costs and expenses		835,528			1,060,458
Loss from operations		(766,740	)		(1,028,390	)
Other income (expenses):
Other income		7,220			8,000
Gain on forgiveness of PPP loan and interest		75,352			—
Loss on sale of assets		(15,011	)		—
Interest expense		(14,913	)		(10,418	)
Total other income (expenses)		52,648			(2,418	)
Net loss before provision for income taxes		(714,092	)		(1,030,808	)
Provision for income taxes		—			—
Net loss	$	(714,092	)	$	(1,030,808	)
Net loss per share
Basic	$	(0.14	)	$	(0.24	)
Diluted	$	(0.14	)	$	(0.24	)
Weighted average number of common shares
Basic		4,951,824			4,346,815
Diluted		4,951,824			4,346,815

The accompanying notes are an integral part of the consolidated financial statements.

F-4

ENVIRO TECHNOLOGIES U.S., INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIENCY)

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

	Common Stock				Additional Paid-In		Accumulated
	Shares		Par Value		Capital		Deficit			Total
Balance - December 31, 2019		3,578,625	$	3,579	$	15,094,095	$	(14,891,621	)	$	206,053
Stock issued for exercise of options in exchange for accrued expenses – related parties and accounts payable		1,336,500		1,337		132,313		—			133,650
Stock issued for services to employees		35,000		35		9,765		—			9,800
Net loss		—		—		—		(1,030,808	)		(1,030,808	)
Balance - December 31, 2020		4,950,125	$	4,951	$	15,236,173	$	(15,922,429	)	$	(681,305	)
Stock issued in exchange for accrued expenses – related parties		620,000		620		154,380		—			155,000
Net loss		—		—		—		(714,092	)		(714,092	)
Balance - December 31, 2021		5,570,125	$	5,571	$	15,390,553	$	(16,636,521	)	$	(1,240,397	)

The accompanying notes are an integral part of the consolidated financial statements.

F-5

ENVIRO TECHNOLOGIES U.S., INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended December 31,
	2021			2020
Cash Flows from Operating Activities:
Net loss	$	(714,092	)	$	(1,030,808	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		15,132			45,137
Stock issued for services of consultant		—			9,800
Provision for bad debt		—			6,790
Provision for slow moving inventory		—			8,848
Gain on the forgiveness of PPP loan and interest		(75,352	)		—
Loss on sale of fixed assets		15,011			—
Amortization for operating lease		46,255			42,973
Changes in assets and liabilities:
Accounts receivable		(7,198	)		289,789
Inventory		(912	)		(4,199	)
Prepaid expenses		7,485			8,405
Accounts payable, accrued expenses and deposits		34,665			(62,011	)
Accrued expenses – related party		225,750			187,000
Operating lease liability		(46,255	)		(42,973	)
Net cash used in operating activities		(499,511	)		(541,249	)
Cash Flows from Investing Activities:
Proceeds on sale of fixed assets		275,000			—
Purchase of equipment		—			(8,228	)
Net cash provided by (used in) investing activities		275,000			(8,228	)
Cash Flows from Financing Activities:
Loan payable issuance – PPP & EIDL		75,085			261,971
Repayments of Equipment Note Payable		(175,398	)		(50,774	)
Net cash (used in) provided by financing activities		(100,313	)		211,197
Net decrease in cash and cash equivalents		(324,824	)		(338,280	)
Cash and cash equivalents, beginning of year		336,564			674,844
Cash and cash equivalents, end of year	$	11,740		$	336,564
Supplemental Disclosure:
Cash paid during the year for interest	$	6,452		$	10,418
Cash paid during the year for taxes	$	—		$	—

Supplemental Disclosure of non-cash investing and financing activities:

Stocks issued with exercise of options in exchange for accounts payable	$	—	$	42,000
Stocks issued with exercise of options for accrued expenses – related parties	$	—	$	91,650
Stocks issued for conversion of accrued expenses – related parties	$	155,000	$	—

The accompanying notes are an integral part of the consolidated financial statements.

F-6

ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary Notes to Consolidated Financial Statements December 31, 2021 and 2020

NOTE A - ORGANIZATION AND OPERATIONS

Enviro Technologies U.S., Inc., a Florida corporation (the “Company”), is a manufacturer and provider of environmental and industrial separation technology. The Company developed, and now manufactures and sells the V-Inline Separator, a technology that efficiently separates liquid/liquid, liquid/solid or liquid/liquid/solid fluid streams with distinct specific gravities. Current and potential commercial applications and markets include mining, utilities, manufacturing, waste-to-energy among other industries. We also, through a Grant Back License with Cameron Solutions, Inc. (“Cameron”) signed in June 2017, can utilize specific patents that were sold to Schlumberger Canada Limited, a Canadian entity, and Schlumberger B.V., an entity organized under the laws of the Netherlands (collectively, “Schlumberger”) under Technology Purchase Agreement for industries outside of oil and gas.

Florida Precision Aerospace, Inc., a Florida corporation (“FPA”), is the wholly-owned subsidiary of the Company and is used to manufacture precision parts along with the manufacture, assemble and test the V-Inline Separator. On August 20, 2020, the Company’s shareholders approved a change of domicile of the Company from Idaho to Florida. On December 28, 2020, the Company received the file stamped Certificate of Domestication and Articles of Incorporation from the Secretary of State of Florida, which was effective on December 18, 2020, thereby completing the change in domicile from Idaho to Florida. In connection with the change in domicile from Idaho to Florida, the Company’s name changed to “Enviro Technologies U.S., Inc.”.

NOTE B – GOING CONCERN

Since entering into the Technology Purchase Agreement, Supply Agreement and Grant Back License in June 2017 (see Note H), we have generated limited revenues, significantly less than we anticipated, under the terms of any of these agreements. The Supply Agreement with Cameron expired in June 2020. As we did not generate significant revenues from this agreement, we did not pursue Cameron for an extension in its current state. The Company’s non-compete agreement in the oil and gas industry also expired in June 2020 which allows us to pursue projects in the oil and gas industry. However, we may continue to work together on a project-by-project basis with Cameron until such time a new agreement is reached, if at all. The Grant Back License did not expire. There are no assurances that the Grant Back License will ever generate any material ongoing revenues. We intend to continue to seek opportunities for the V-Inline Separator. Our revenues increased approximately 34% for the year ended December 31, 2021 as compared to the year ended December 31, 2020. We reported a net loss for 2021 of $714,092 as compared to a net loss of $1,030,808 in 2020. Our ability to increase our revenues in future periods will depend on a number of factors, many of which are beyond our control, including our ability to generate sales of the V-Inline Separator, our ability to leverage the Grant Back License to generate additional revenues, competitive efforts and other general economic trends. There are no assurances we will be able to increase our revenues from 2021 levels or report profitable operations in the future.

At December 31, 2021, we had a working capital deficit of $1,160,325, an accumulated deficit of $16,636,521 and used $499,511 in net cash in our operations during the year ended December 31, 2021. We do not have any external sources of liquidity. In an effort to conserve our cash resources to sustain our operations until such time as we are able to significantly increase our revenues, we have reduced employee hours and accrued a portion of management’s salary. There are no assurances; however, that these efforts will be sufficient to permit us to pay our operating expenses. In that event, we may be required to scale back or cease operations, sell or liquidate our assets and possibly seek bankruptcy protection.

As a result of the above, there is substantial doubt about the ability of the Company to continue as a going concern and the accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty.

F-7

ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary Notes to Consolidated Financial Statements December 31, 2021 and 2020

NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of the parent company, Enviro Technologies U.S., Inc., and its wholly-owned subsidiary, Florida Precision Aerospace, Inc. All significant intercompany accounts and transactions have been eliminated.

Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates include the valuation of deferred tax assets, allowance for doubtful accounts, allowance for inventory obsolescence and valuation of stock-based compensation. Actual results may differ.

Revenue Recognition

We account for our revenues in accordance with the Accounting Standard Codification Topic 606, “Revenue from Contracts with Customers” and all the related amendments. This standards core principle is that a company should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to receive.

The Company derives its revenue from the sale of the V-Inline Separators and some high precision manufacturing projects. We have also generated revenues from the sale of the Voraxial Separator to one customer, Schlumberger, through the Supply Agreement which expired in June 2020.

Revenues that are generated from high precision manufacturing projects are recognized when we satisfy a performance obligation by transferring control of the promised goods or services to our customers at a point in time, in an amount specified in the contract with our customer and that reflects the consideration we expect to be entitled to in exchange for those goods or services. The Company also assesses our customer’s ability and intention to pay, which is based on a variety of factors including our customer’s historical payment experience and financial condition.

Revenues that are generated from sales of V-Inline separators, auxiliary equipment and parts and face shields are typically recognized upon shipment. Our standard agreements generally do not include customer acceptance or post shipment installation provisions. However, if such provisions have been included or there is an uncertainty about customer order, revenue is deferred until we have evidence of customer order and all terms of the agreement have been complied with. As of December 31, 2021, and December 31, 2020, respectively, there was $0 of deposits from customers.

Accounts Receivable

Accounts receivable are presented net of an allowance for doubtful accounts. The company maintains allowances for doubtful accounts for estimated losses. The company reviews the accounts receivable on a periodic basis and makes general and specific allowance when there is a doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, customer’s historical payment history, and its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collections. At December 31, 2021 and 2020, the Company has $7,044 and $7,044 in the allowance for doubtful accounts, respectively.

F-8

ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary Notes to Consolidated Financial Statements December 31, 2021 and 2020

Fair Value of Instruments

The carrying amounts of the Company's financial instruments, including cash and cash equivalents, inventory, prepaid expense, accounts payable, accrued expenses and deposits from customers at December 31, 2021 and 2020, approximate their fair value because of their relatively short-term nature.

ASC 820 “Disclosures about Fair Value of Financial Instruments,” requires disclosures of information regarding the fair value of certain financial instruments for which it is practicable to estimate the value. For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale of liquidation.

The Company accounts for certain assets and liabilities at fair value. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value is observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1—inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. We have no Level 1 instruments as of December 31, 2021 and 2020.

Level 2—inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. the Black-Scholes model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and forward and spot prices for currencies and commodities. We have no Level 2 instruments as of December 31, 2021 and 2020.

Level 3—inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. We have no Level 3 instruments as of December 31, 2021 and 2020.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturity of three months or less at the date of purchase to be cash equivalents. The Company maintains its cash balances with various financial institutions. Balances at these institutions may at times exceed the Federal Deposit Insurance Corporate limits. As of December 31, 2021 and 2020, we have a cash concentration in excess of the FDIC limit of $0 and $80,014, respectively.

Inventory

Inventory primarily consists of components, including raw material and finished parts for the V-Inline Separator and face shields and is priced at lower of cost or net realizable value. Net realizable value is defined as sales price less cost of completion and disposable and transportation. Inventory may include units being rented on a short-term basis or components held by third parties in connection with pilot programs as part of the continuing evaluation by such third parties as to the effectiveness and usefulness of the service to be incorporated into their respective operations. The third parties do not have a contractual obligation to purchase the equipment. The Company maintains the title and risk of loss. Provisions have been made to reduce excess or obsolete inventories to their net realizable value. Therefore, these units are included in the inventory of the Company. As of December 31, 2021, and December 31, 2020:

F-9

ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary Notes to Consolidated Financial Statements December 31, 2021 and 2020

Schedule of inventory
	December 31, 2021		December 31, 2020
Raw materials	$	24,142	$	30,145
Work in process		16,856		10,240
Finished goods		73,249		72,950
Total	$	114,247	$	113,335

Inventory amounts are presented net of allowance for inventory reserves of $75,785 and $75,785 as of December 31, 2021 and December 31, 2020 respectively.

Fixed Assets

Fixed assets are stated at cost less accumulated depreciation. The cost of maintenance and repairs is expensed to operations as incurred. Depreciation is computed by the straight-line method over the estimated economic useful life of the assets (5-10 years). Gains and losses recognized from the sales or disposal of assets is the difference between the sales price and the recorded cost less accumulated depreciation less costs of disposal.

Net Income (Loss) Per Share

In accordance with the Accounting Standard Codification Topic 260, “Earnings per Share” basic earnings (loss) per share is computed by dividing net income (loss) by weighted average number of shares of common stock outstanding during each period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period.

As of December 31, 2021 and 2020, there were 10,000 shares issuable upon the exercise of options, respectively. The Company had net losses for the years ended December 31, 2021 and 2020; therefore, common stock equivalent shares are excluded from the computation of net income per share if their effect is anti-dilutive.

Income Taxes

The Company accounts for income taxes under ASC 740-10-25. Under ASC 740-10-25, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Business Segments

The Company operates in one segment and therefore segment information is not presented.

Research and Development Expenses

Research and development costs, which includes travel expenses, consulting fees, subcontractors and salaries are expensed as incurred. There was $0 and $2,601, respectively, in research and development costs during the years ended December 31, 2021 and 2020, respectively.

Leases

The Company accounts for lease in accordance with ASC Topic 842. Refer to Note I.

F-10

ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary Notes to Consolidated Financial Statements December 31, 2021 and 2020

Advertising Costs

Advertising costs are expensed as incurred and are included in general and administrative expenses. There was $1,121 and $5,789 in advertising costs during December 31, 2021 and 2020, respectively.

Stock-Based Compensation

Recent Accounting Pronouncements

All other newly issued accounting pronouncements, but not yet effective, have been deemed either immaterial or not applicable.

NOTE D - RELATED PARTY TRANSACTIONS

For each of the years ended December 31, 2021 and 2020, the Company incurred salary expenses from the Chief Executive Officer of the Company of $210,000 and $210,000, respectively. During the years ended December 31, 2021 and 2020, $151,250 and $156,650, respectively, of salary and accrued salary have been paid. Of the $151,250 paid to Mr. DiBella in 2021, $26,250 was paid in cash and $125,000 was a reduction of his accrued salary for conversion into 500,000 shares of common stock of the Company. Of the $156,650 paid to Mr. DiBella in 2020, $81,650 was a reduction of his accrued salary in payment for the exercise of options, including some options of the Company’s employees and a related party. The unpaid balance has been included in accrued expenses- related party. As of December 31, 2021 and 2020, the accrued salary is $723,065 and $664,315, respectively.

Effective July 1, 2017, Raynard Veldman, a member of the Company’s board of directors receives a fee of $2,500 per month for consulting services. For the years ended December 31, 2021 and 2020, Raynard Veldman earned consulting fees of $30,000 and $30,000, respectively. The unpaid balance has been included in accrued expenses- related party. As of December 31, 2021 and 2020, the accrued salary is $30,500 and $30,500, respectively. Of the $30,000 paid to Mr. Veldman in 2021, $30,000 was a reduction of his accrued fees for conversion into 120,000 shares of common stock of the company.

During the years ended December 31, 2021 and 2020, Raynard Veldman, a member of the Company’s board of directors, earned compensation for being a member of the Company’s board of directors of $12,000 and $12,000, respectively. The unpaid balance has been included in accrued expenses- related party. As of December 31, 2021 and 2020, the accrued compensation is $24,000 and $12,000, respectively. Mr. John DiBella does not receive compensation for being a member of the Company’s board of directors.

On June 9, 2020, the Company issued 770,000 shares of its common stock to our Chief Executive Officer in connection with the exercise of a stock option at an exercise price of $0.10. Mr. DiBella reduced his accrued salary in the amount of $77,000 for the exercise of options.

On June 9, 2020, the Company issued 100,000 shares of its common stock to Mr. Veldman in connection with the exercise of a stock option at an exercise price of $0.10. Mr. Veldman reduced his accrued consulting and Board of Director fees in the amount of $10,000 for the exercise of options.

F-11

ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary Notes to Consolidated Financial Statements December 31, 2021 and 2020

On June 9, 2020, the Company issued 16,500 shares of its common stock to two employees in connection with the exercise of a stock option at an exercise price of $0.10. Mr. DiBella reduced his accrued salary in the amount of $1,650 for the exercise of options.

On June 9, 2020, the Company issued 380,000 shares of its common stock to a related party in connection with the exercise of a stock option at an exercise price of $0.10. Mr. DiBella reduced his accrued salary in the amount of $3,000 for the exercise of options and an outside consultant agreed to reduce her payable in the amount of $35,000 for the exercise of options.

NOTE E - FIXED ASSETS

Schedule of fixed assets
Fixed assets as of December 31 consists of:	2021			2020
Machinery and equipment	$	490,927		$	941,473
Furniture and fixtures		14,498			14,498
Autos and Trucks		—			5,294
Total		505,425			961,265
Less: accumulated depreciation		(498,100	)		(648,797	)
Fixed Assets, net	$	7,325		$	312,468

Depreciation expense was $15,132 and $45,137 for the years ended December 31, 2021 and 2020, respectively. The Company sold its CNC machining equipment for a sales price of $275,000 and incurred a loss of $15,011 from the sale of equipment. See Note F below.

NOTE F – EQUIPMENT NOTE PAYABLE

In July 2017, the Company entered into a financing agreement for the purchase of CNC machining equipment valued at approximately $426,000. The machining equipment was received in July 2017 and was used for the manufacture of Voraxial Separators under the Supply Agreement and sales of the V-Inline Separators. Under the terms of the agreement the Company made an initial down payment of $85,661 and is required to make monthly payments of $6,788 through January 2023. In April 2021, the Company entered into a purchase agreement to sell its CNC machining equipment for $275,000. The Company sold the equipment as the utilization of the CNC machining equipment for customer specific projects and the separation equipment decreased due to the Covid-19 pandemic. The Company can still manufacture the Voraxial and V-Inline Separators and manufacture customer specific projects with its current manufacturing equipment. As of December 31, 2021 and 2020 the amount owed is $0 and $175,398, respectively.

Schedule of future minimum payments
	December 31, 2021		December 31, 2020
Equipment note payable	$	—	$	175,398
Less: current portion		—		(71,812	)
Long-term equipment note payable	$	—	$	103,586

F-12

ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary Notes to Consolidated Financial Statements December 31, 2021 and 2020

NOTE G – SHAREHOLDERS’ EQUITY

Common Stock

On December 30, 2021, John A. DiBella, the chief executive officer of the Company, and Raynard Veldman, a member of the Company’s board of directors and consultant to the Company, entered into conversion agreements with the Company and agreed to accept a portion of their accrued salary and consulting fees, respectively, in shares common stock of the Company at a price of $0.25 per share. Pursuant to the conversion agreements the Company issued an aggregate of 620,000 shares of restricted common stock in satisfaction of an aggregate of $155,000 of accrued salary and consulting fees payable to Mr. DiBella and Mr. Veldman. Mr. DiBella converted $125,000 in return for 500,000 shares of restricted common stock. Mr. Veldman converted $30,000 in return for 120,000 shares of restricted common stock.

On June 9, 2020, the Company issued to 35,000 shares of its common stock to employees at $0.28 per share, or $9,800, for services rendered. The Company valued these common shares based on the fair value at the date of grant.

On June 9, 2020, the Company issued 70,000 shares of its common stock to a consultant in connection with the exercise of a stock option at an exercise price of $0.10. The consultant agreed to reduce her payable in the amount of $7,000 for the exercise of options.

On June 9, 2020, the Company issued 16,500 shares of its common stock to two employees in connection with the exercise of a stock option at an exercise price of $0.10. Mr. DiBella agreed reduce his accrued salary in the amount of $1,650 for the exercise of options.

On June 9, 2020, the Company issued 380,000 shares of its common stock to a related party in connection with the exercise of a stock option at an exercise price of $0.10. Mr. DiBella agreed reduce his accrued salary in the amount of $3,000 for the exercise of options and an outside consultant agreed to reduce her payable in the amount of $35,000 for the exercise of options.

Options

The Company accounts for stock-based instruments issued to employees for services in accordance with ASC 718 “Compensation – Stock Compensation.” ASC 718 requires companies to recognize in the statement of operations the grant-date fair value of stock options and other equity-based compensation issued to employees. The value of the portion of an employee award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The Company accounts for non-employee share-based awards in accordance with the measurement and recognition criteria of ASC 505-50, “Equity-Based Payments to Non-Employees.” The Company estimates the fair value of stock options by using the Black-Scholes option-pricing model.

F-13

ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary Notes to Consolidated Financial Statements December 31, 2021 and 2020

The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Because the Company’s stock options and warrants have characteristics different from those of its traded stock, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not necessarily provide a reliable single measure of the fair value of such stock options. The risk-free interest rate is based upon quoted market yields for United States Treasury debt securities with a term similar to the expected term. The expected dividend yield is based upon the Company’s history of having never issued a dividend and management’s current expectation of future action surrounding dividends. Expected volatility was based on historical data for the trading of our stock on the open market. The expected lives for such grants were based on the simplified method for employees and officers.

On June 9, 2020, our Chief Executive Officer exercised 770,000 stock options at an exercise price of $0.10 per share. Mr. DiBella agreed to reduce his accrued salary in the amount of $77,000 for the exercise of options.

On June 9, 2020, Mr. Veldman exercised 100,000 stock options at an exercise price of $0.10 per share. Mr. Veldman agreed to reduce his accrued consulting fees in the amount of $10,000 for the exercise of options.

On June 9, 2020, a consultant exercised 70,000 stock options at an exercise price of $0.10 per share. The consultant agreed to reduce the payables due in the amount of $7,000 for the exercise of options. In addition, a related party exercised 380,000 stock options at an exercise price of $0.10 per share. The consultant agreed to reduce the payables due in the amount of $35,000 for the exercise of options for the related party. In addition, Mr. DiBella reduced his accrued salary in the amount of $3,000 for the exercise of options for the related party.

On June 9, 2020, two employees exercised 16,500 stock options at an exercise price of $0.10 per share. Mr. DiBella reduced his accrued salary in the amount of $1,650 for the exercise of options for these three employees.

Information with respect to options outstanding and exercisable at December 31, 2021 and 2020 is as follows:

Schedule of options
	Number Outstanding			Range of Exercise Price		Number Exercisable
Balance, December 31, 2019		1,346,500		$	0.10		1,346,500
Issued		—			—		—
Expired		—			—		—
Exercised		(1,336,500	)		0.10		(1,336,500	)
Forfeited		—			—		—
Balance, December 31, 2020		10,000		$	0.10		10,000
Issued		—			—		—
Expired		—					—
Exercised		—					—
Forfeited		—					—
Balance, December 31, 2021		10,000		$	0.10		10,000

F-14

ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary Notes to Consolidated Financial Statements December 31, 2021 and 2020

The following table summarizes information about the stock options outstanding at December 31, 2021 and 2020:

Schedule of stock options outstanding
Number Outstanding at December 31, 2021		Weighted Average Remaining Contractual Life		Weighted Average Exercise Price		Number Exercisable at December 31, 2021		Weighted Average Exercise Price
	10,000		1.88	$	0.10		10,000	$	0.10

Number Outstanding at December 31, 2020				Weighted Average Remaining Contractual Life				Weighted Average Exercise Price				Number Exercisable at December 31, 2020				Weighted Average Exercise Price
	10,000				2.88			$	0.10				10,000			$	0.10

The aggregate intrinsic value represents the excess amount over the exercise price optionees would have received if all the options have been exercised on the last business day of the period indicated based on the Company’s closing stock price for such day. The aggregate intrinsic value as of December 31, 2021 is $0 because the exercise price is higher than the closing stock price at December 31, 2021.

Reverse Split

On August 27, 2020 the Company filed Articles of Amendment to its Articles of Incorporation which, on the effective date of September 10, 2020 (the “Effective Date”):

·	effected a ten for one (10:1) reverse stock split of our outstanding common stock (“Reverse Stock Split”); and
·	eliminated the existing class of preferred stock and create a new class of blank check preferred stock consisting of 5,000,000 shares.

These actions were approved by our shareholders at our 2020 Annual Meeting held on August 20, 2020.

As a result of the Reverse Stock Split, on the Effective Date each 10 shares of our common stock issued and outstanding immediately prior to the Effective Date became one share of our common stock on the Effective Date. No fractional shares of common stock were issued to any shareholder in connection with the Reverse Stock Split and all fractional shares which might otherwise be issuable as a result of the Reverse Stock Split were rounded up to the nearest whole share. On the Effective Date, each certificate representing shares of pre-Reverse Stock Split common stock was deemed to represent one-tenth of a share of our post-Reverse Stock Split common stock, subject to rounding for fractional shares.

The Reverse Stock Split also affected the Company’s outstanding stock options which resulted in the underlying shares of such instruments being reduced and exercise price being increased proportionally to the Reverse Stock Split ratio. All shares and per share data have been retroactively adjusted for all periods presented to reflect the effects of the Reverse Stock Split.

NOTE H - COMMITMENTS AND CONTINGENCIES

SBA and PPP Loans

On May 4, 2020, FPA received a loan (the “PPP Loan”) from Bank of America, N.A. in the aggregate amount of $111,971, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020.

F-15

ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary Notes to Consolidated Financial Statements December 31, 2021 and 2020

The PPP Loan, which was in the form of a Note dated May 4, 2020 issued by FPA, matures on May 4, 2022 and bears interest at a rate of 1% per annum, payable monthly commencing on November 6, 2020. The Note may be prepaid by FPA at any time prior to maturity with no prepayment penalties. Funds from the PPP Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations incurred before February 15, 2020. FPA believes it used the entire PPP Loan amount for qualifying expenses. Under the terms of the PPP Loan, certain amounts of the PPP Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. We applied for forgiveness of the PPP Loan in accordance with the terms of the CARES Act. We are waiting for an approval from the bank, but there are no assurances that the full amount will be forgiven.

On April 5, 2021, FPA received a loan (the “2021 PPP Loan”) from Cross River Bank. in the aggregate amount of $75,085, pursuant to the PPP under the CARES Act. The 2021 PPP Loan, which was in the form of a promissory note dated April 5, 2021 issued by FPA, has a 60 month term and matures on April 5, 2026 and bears interest at a rate of 1.00% per annum. The note may be prepaid by FPA at any time prior to maturity with no prepayment penalties. Funds from the PPP Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations. FPA intends to use the entire 2021 PPP Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the 2021 PPP Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. Loan payments are deferred for borrowers who apply for loan forgiveness until SBA remits the borrowers loan forgiveness amount to the lender. We have been forgiven for the full amount of the PPP Loan in accordance with the terms of the CARES Act. In accounting for the terms of the PPP Loan, the Company is guided by ASC 470 Debt, and ASC 450-30 Gain contingency. Accordingly, the Company derecognized the PPP Loan liability and related interest of $75,352 and recorded it as Other Income, as the forgiveness was certain.

On May 5, 2020, FPA also received an $8,000 grant from the U.S. Small Business Administration. The Company recognized the grant as other income during the year ended December 31, 2020.

On June 23, 2020, FPA executed the standard loan documents required for securing a loan (the “EIDL Loan”) from the SBA under its Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the Covid-19 pandemic on the Company’s business. Pursuant to that certain Loan Authorization and Agreement, the principal amount of the EIDL Loan is up to $150,000, with proceeds to be used for working capital purposes. On July 16, 2020, the Company requested $150,000 in disbursements under the EIDL Loan which were received on July 20, 2020. Interest accrues at the rate of 3.75% per annum. Installment payments, including principal and interest, are due monthly beginning June 23, 2021 (12 months from the date of the SBA note) in the amount of $731. The balance of principal and interest is payable 30 years from the date of the SBA Note. In connection therewith, FPA executed (i) a note for the benefit of the SBA, which contains customary events of default and (ii) a Security Agreement, granting the SBA a security interest in all tangible and intangible personal property of FPA, which also contains customary events of default.

On July 2, 2021 and July 7, 2021 we received an SBA Grant in the amount of $5,000 and $2,000 respectively, under the COVID-19 Economic Injury Disaster Loan (EIDL) program. These grants do not need to be repaid and recognized as Other Income on our consolidated statements of operations.

Schedule of loans payables
	December 31, 2021			December 31, 2020
Loans payable	$	261,971		$	261,971
Less: current portion		(113,461	)		(65,867)
Long-term loans payable	$	148,510		$	196,104

F-16

ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary Notes to Consolidated Financial Statements December 31, 2021 and 2020

Future minimum loans payable at December 31, 2021 are as follows:

Schedule of future minimum loans payable
2022		127,267
2023		8,772
2024		8,772
2025		8,772
2026		8,772
2027 and thereafter		206,290
Future Minimum Note Payable Payments		368,645
Less Amount Representing Interest		(106,674	)
Present Value of Minimum Note Payable Payments		261,971
Less Current Portion		(113,461	)
Long-Term Obligations under Note Payable	$	148,510

Litigation

On or about October 23, 2017, a claim was filed in the 17th Judicial Circuit Court in and for Broward County in Fort Lauderdale, Florida, by the plaintiff, Industrial and Oilfield Procurement Services, LLC, against our company. The case involves an alleged breach of contract between the parties relating to the purchase and sale of a Voraxial unit in 2015. The plaintiff has demanded a refund and damages. In an effort to avoid the continued costs and expenses of litigation, the parties entered into a settlement agreement on October 7, 2021 whereby the Company paid the plaintiff $15,000 and the parties agreed to settle and release each party of disputed claims between the parties, which settlement is not to be construed as an admission of liability on the part of either party. On November 3, 2021, the plaintiff filed a Notice of Voluntary Dismissal with Prejudice with the 17th Judicial Circuit Court in and for Broward County whereby the plaintiff agreed to dismiss the entirety of the action with prejudice.

Sale of Intellectual Property

On June 8, 2017, the Company and FPA, our wholly owned subsidiary, closed the transactions contemplated by the Technology Purchase Agreement dated March 13, 2017 with Schlumberger Technology Corporation, a Texas corporation, Schlumberger Canada Limited, a Canadian entity, and Schlumberger B.V., an entity organized under the laws of the Netherlands (collectively, “Schlumberger”). As part of the agreement, Schlumberger granted us a non-exclusive, worldwide, royalty-free licenses (the “Grant Back Licenses”), to make, use, sell, offer for sale, and import products and processes embodying the Purchase Intellectual Property outside the oil and gas market.

For a period of three years following the closing of the Technology Purchase Agreement, which expired in June 2020, the Company and Mr. Veldman and Mr. Di Bella have agreed to not participate or cause participation in the oil-and-gas market in relation to phase or constituent sensing or separation which is defined as, liquid-liquid, liquid-solid or liquid-gas separation and gas or liquid sensing, including all product lines and services related thereto and including the Voraxial product line and services. As the term has expired, the Company may review opportunities in the oil and gas industry.

NOTE I - LEASE

In October 2021, the Company entered into a first amendment to lease agreement for a three-year 3 lease renewal for an office and manufacturing facility located at 821 NW 57th Place, Fort Lauderdale, FL 33309. The lease is $4,839 per month, which includes common area maintenance, taxes and insurance and expires in September 2024. The lease has a one-time renewal option for three 3 years and an increased base rent of 3%. The Company has the option to terminate the lease with three months’ notice. The Company accounts for lease in accordance with ASC Topic 842.

Operating right of use asset and operating lease liability are recognized at the lease commencement date. Operating lease liability represents the present value of lease payments not yet paid. Operating right of use asset represent our right to use an underlying asset and are based upon the operating lease liability adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. The Company used our incremental borrowing rate to determine the present value of lease payments not yet paid.

F-17

ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary Notes to Consolidated Financial Statements December 31, 2021 and 2020

Supplemental balance sheet information related to leases was as follows:

Schedule of supplemental balance sheet information related to leases
Operating Leases	Classification	December 31, 2021		December 31, 2020
Right-of-use assets	Operating lease assets	$	153,811	$	200,066
Current lease liability	Current operating lease liability		50,970		46,255
Non-current lease liability	Long-term operating lease liability		102,841		153,811
Total lease liabilities		$	153,811	$	200,066

Lease term and discount rate were as follows:

Schedule of lease term and discount rate
	December 31, 2021		December 31, 2020
Weighted average remaining lease term (years)		2.75		3.75
Weighted average discount rate		6.75%		6.75%

The components of lease cost were as follows:

Schedule of components of lease cost
	For the Year Ended December 31
	2021		2020
Operating lease cost	$	58,353	$	58,065
Variable lease cost (1)	$	22,848	$	18,128
Total lease cost	$	81,201	$	76,193

(1) Variable lease cost primarily relates to common area maintenance, property taxes and insurance on leased real estate.

	Schedule of maturities of lease liabilities
Maturities of lease liabilities were as follows as of December 31, 2021:		Operating Leases
	2022		59,795
	2023		59,795
	2024		49,829
	Total lease payments		169,419
	Less: imputed interest		(15,608	)
	Present value of lease liabilities	$	153,811

NOTE J – MAJOR CUSTOMERS

For the year ended December 31, 2021, two customers accounted for approximately 54% and 22% of total revenues, respectively. For the year ended December 31, 2020, two customers accounted for approximately 20% and 10% of total revenues, respectively. As of December 31, 2021, two customers represented 52% and 38%, of total accounts receivables. As of December 31, 2020, three customers represented 68%, 17% and 15%, respectively, of total accounts receivables.

F-18

ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary Notes to Consolidated Financial Statements December 31, 2021 and 2020

NOTE K – INCOME TAX

The significant components of the deferred tax asset at December 31, 2021 and 2020 were as follows:

Schedule of components of deferred tax asset
	For the Years Ended December 31
	2021			2020
Statutory rate applied to income (loss) before income taxes	$	(180,987	)	$	(261,258	)
Increase (decrease) in income taxes results from:
Change in tax estimate		7,439			(47,965)
Non-deductible expense		20,872			4,511
Change in valuation allowance		152,676			304,712
Income tax expense (benefit)	$	—		$	—

The difference between income tax expense computed by applying the federal statutory corporate tax rate and provision for actual income tax is as follows:

Schedule of effective income tax rate reconciliation
	For the Years Ended December 31
	2021			2020
Income tax expense (benefit) at U.S. statutory rate of 34%		21.00	%		21.00	%
Income tax expense (benefit) - State		4.35	%		4.35	%
Change in tax estimate		(1.05)	%		4.65	%
Non-deductible expense		(2.92)	%		(0.44)	%
Change in valuation allowance		(21.38)	%		(29.56)	%
Income tax expense (benefit)		—			—

Deferred income taxes result from temporary differences in the recognition of income and expenses for the financial reporting purposes and for tax purposes. The effects of temporary differences that gave rise to deferred tax assets are as follows:

Summary of deferred tax liability
	For the Years Ended December 31
Deferred tax assets:	2021			2020
Provision for inventory reserve	$	19,208		$	19,208
Operating loss carryforwards		3,178,643			3,025,967
Gross deferred tax assets		3,197,851			3,045,175
Valuation allowance		(3,197,851	)		(3,045,175	)
Net deferred income tax asset	$	—		$	—

Increase in the deferred income tax asset is attributable to the estimated deferred income tax benefit arising from operating loss carry forward. The change in valuation allowance for the years ended December 31, 2021 and 2020 was an increase of $152,676 and $304,712, respectively.

The Company has made a 100% valuation allowance of the deferred income tax asset at December 31, 2021, as it is not expected that the deferred tax assets will be realized. The Company has a net operating loss carryforward of approximately $12,540,000 available to offset future taxable income through 2037. The Company has a net operating loss carryforward of approximately $2,480,000, which can be carried forward indefinitely subject to limitation.

The Company’s federal income tax returns for 2018, 2019, 2020 and 2021 remain subject to examination by the Internal Revenue Services and state tax authorities.

F-19

ENVIRO TECHNOLOGIES U.S., INC. and Subsidiary Notes to Consolidated Financial Statements December 31, 2021 and 2020

NOTE L – SUBSEQUENT EVENTS

On January 5, 2022, John A. DiBella, the Company’s chief executive officer, advanced the Company $30,000 pursuant to the terms of a 4% unsecured promissory note. The note is payable on December 31, 2022 and accrues interest at a rate of 4% per annum. In addition, from February 15, 2022 through April 7, 2022, Mr. DiBella has advanced the Company an additional $29,000 under the same terms as the note.

On April 12, 2022, Ray Veldman, member of the Company’s Board of Directors, advanced the Company $20,000 pursuant to the terms of a 4% unsecured promissory note. The note is payable on December 31, 2022 and accrues interest at a rate of 4% per annum.

F-20

Filing Compare · WOLF ENERGY SERVICES INC.