This prospectus supplement relates to the possible offer and sale from time-to-time by Digital Power Lending, LLC, a California limited liability company (the “Selling Shareholder”), including its transferees, pledgees or donees, or successors, of up to 5,246,456 shares (the “Shares”) of the common stock, par value $0.001 per share (the “Common Stock”) of Ecoark Holdings, Inc. (“we,” “Ecoark” or the “Company”) issuable pursuant to the following securities which were issued to the Selling Shareholder pursuant to that certain Securities Purchase Agreement, dated June 8, 2022 (the “Agreement”) between the Company and the Selling Shareholder. The Shares are comprised of (i) 102,881 shares of Common Stock issued by the Company to the Selling Shareholder pursuant to the Agreement (the “Commitment Shares”) and (ii) 5,143,575 shares of Common Stock (the “Conversion Shares”) issuable upon the conversion of shares of our Series A Convertible Redeemable Preferred Stock (the “Series A”). The Selling Shareholder paid the Company $12,000,000 (the “Purchase Price”) in consideration for Series A, the Commitment Shares and a Warrant to purchase up to 49% of the Company’s outstanding Common Stock (taking into account the Conversion Shares and Commitment Shares) (the “Warrant”), which Warrant only becomes exercisable following shareholder approval, approval by The Nasdaq Capital Market (“Nasdaq”), and the Company’s distribution of its three core subsidiaries as dividends to its shareholders. 570,711 additional shares of Common Stock issuable upon conversion of the Series A as well as the shares of Common Stock underlying the Warrant are not being offered by this prospectus supplement.

We will not receive any proceeds from the sale of the shares of Common Stock by the Selling Shareholder.

The Selling Shareholder may offer and sell the Shares from time-to-time and at such prices as it may determine through public or private transactions or through other means described in the section entitled “Plan of Distribution” or a supplement to this prospectus. The Selling Shareholder may also sell the shares under Rule 144 under the Securities Act of 1933 (the “Securities Act”), if available, rather than under this prospectus supplement.

The Selling Shareholder will be deemed to be an “underwriter” within the meaning of the Securities Act.

We are registering the offer and sale of the Shares pursuant to certain registration rights granted to the Selling Shareholder in the Agreement. The registration of the sale of these Shares does not necessarily mean that any or all of the Shares will be offered or sold by the Selling Shareholder. The timing and amount of any sale is within the sole discretion of the Selling Shareholder.

The Selling Shareholder will pay all underwriting discounts and selling commissions, if any, in connection with the sale of the Shares being offered hereby. In connection with the sale of the Series A, the Commitment Shares and the Warrant sold by us to the Selling Shareholder under the Agreement, we have agreed to pay certain expenses in connection with the preparation and filing of this prospectus supplement. We may also pay H.C. Wainwright & Co., LLC a cash fee in an amount up to $840,000 (representing 7% of the Purchase Price) as a financial advisor in connection with the transactions contemplated in the Agreement. To our knowledge, as of the date of this prospectus supplement, no underwriter or other person has been engaged to facilitate the sale of shares of Common Stock in this offering.

Our Common Stock is listed on Nasdaq under the symbol “ZEST.” On June 8, 2022, the last reported sales price of our Common Stock on the Nasdaq was $1.86 per share.

Investing in our securities involves a high degree of risk. Please read “Risk Factors” beginning on page S-3 of this prospectus supplement, and in the prospectus beginning on page 11 before investing in our securities.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined whether this prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.

This document is in two parts. The first part is this prospectus supplement, which describes the terms of the offering by the Selling Shareholders and also adds to and updates information contained in the accompanying prospectus and the documents incorporated by reference into this prospectus supplement and the accompanying prospectus. The second part consists of a prospectus dated December 29, 2020, included in the registration statement on Form S-3 (No. 333-249532) that was initially filed on October 16, 2020 with the Securities and Exchange Commission (“SEC”), as amended on December 22, 2020 and December 28, 2020, and was declared effective by the SEC on December 29, 2020. Since the accompanying prospectus provides general information about us, some of the information may not apply to this offering. This prospectus supplement describes the specific details regarding this offering. Generally, when we refer to the “prospectus,” we are referring to both parts of this document. Additional information is incorporated by reference in this prospectus supplement. If information in this prospectus supplement is inconsistent with the accompanying prospectus, you should rely on this prospectus supplement. You should read this prospectus supplement, the accompanying prospectus and any information incorporated by reference before you make any investment decision.

You must not rely on any information or representation not contained or incorporated by reference in this prospectus. You should rely only on the information contained in this prospectus and in any prospectus supplement (including any documents incorporated by reference herein or therein). You should not assume that the information contained in this prospectus is accurate on any date subsequent to the date set forth on the front of the document or that any information we have incorporated by reference is correct on any date subsequent to the date of the document incorporated by reference, even though this prospectus is delivered or securities are sold on a later date. We and the Selling Shareholder have not authorized anyone to provide you with any different information.

The Selling Shareholder is offering to sell, and seeking offers to buy, our securities, only in jurisdictions where such offers and sales are permitted.

Unless otherwise mentioned or unless the context requires otherwise, all references in this prospectus supplement to the “Company,” “we,” “us,” “our” and “Ecoark” refer to Ecoark Holdings, Inc., a Nevada corporation, and its consolidated subsidiaries.

To the extent this prospectus supplement contains summaries of the documents referred to herein, you are directed to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed, will be filed or will be incorporated by reference as exhibits to the registration statement of which this prospectus supplement is a part, and you may obtain copies of those documents as described below under the section entitled “Where You Can Find More Information.”

This prospectus supplement and the accompanying prospectus, including documents incorporated by reference into this prospectus supplement and the accompanying prospectus, contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). Such forward-looking statements include those statements that express plans, anticipation, intent, contingency, goals, targets or future developments and/or otherwise are not statements of historical fact. Forward-looking statements can generally be identified by the use of words such as “anticipate,” “expect,” “plan,” “could,” “may,” “will,” “should,” “would,” “intend,” “seem,” “potential,” “appear,” “continue,” “future,” believe,” “estimate,” “forecast,” “project” and other words of similar meaning, although not all forward-looking statements contain these identifying words. In particular, these forward-looking statements include, among others, statements related to our plans, projections and strategy, our expectations with respect to future results of operations, statements about our drilling program, the digital asset mining business, the consequences of the delay and potential failure to consummate the proposed underwritten initial public offering of our majority owned subsidiary Agora Digital Holdings, Inc. (“Agora”) and the expected subsequent spin-off of 80% of the Agora common stock held by us to the Company’s security holders as a stock dividend, the adverse effect of the recent volatility of the cryptocurrency market on Agora’s business, issues relating to our oil drilling program and issues relating to the spin-off of all our subsidiaries and the resulting change of control and changes to our business.

These statements are based on our current expectations and projections and involve estimates, assumptions, risks 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 in this prospectus supplement, and the accompanying prospectus, and the documents incorporated by reference herein and therein. Important factors that could cause actual results to differ from those in the forward-looking statements include, among others, the following factors:

We also refer you to the Risk Factors which begin on page S-3 of this prospectus supplement and in our most recent Annual Report on Form 10-K for the year ended March 31, 2021, under the caption “Item 1A – Risk Factors” of such report, in our prospectus supplement dated August 4, 2021, in our Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2021, and the other documents incorporated by reference into this prospectus supplement for both an expanded discussion of the risks and uncertainties described above and additional risks and uncertainties that could cause actual results to differ materially and adversely from those expressed or implied by forward-looking statements. However, factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them.

You should read this prospectus supplement, the accompanying prospectus and the documents that we reference herein and therein, completely and with the understanding that our actual future results may be materially different from what we expect. You are cautioned not to place undue reliance on the forward-looking statements contained in, or incorporated by reference into, this prospectus supplement. Each forward-looking statement speaks only as of the date of this prospectus supplement or, in the case of documents incorporated by reference, the date of the applicable document (or any earlier date indicated in the statement), and we undertake no obligation to update or revise any of these statements, whether as a result of new information, future developments or otherwise, except as required by law. We qualify all of our forward-looking statements by these cautionary statements.

PROSPECTUS SUPPLEMENT SUMMARY

This summary is not complete and does not contain all of the information that you should consider before investing in the securities offered by this prospectus supplement and the accompanying prospectus. You should read this summary together with the entire prospectus supplement and the accompanying prospectus, including our financial statements, the notes to those financial statements and the other documents that are incorporated by reference in this prospectus supplement and the accompanying prospectus, before making an investment decision. See “Risk Factors” beginning on page S-3 of this prospectus supplement for a discussion of the risks involved in investing in our securities.

Our Company

Ecoark Holdings Inc. is a diversified holding company, incorporated in the State of Nevada on November 19, 2007. Through Ecoark’s wholly-owned subsidiaries, the Company has operations in three areas: (i) oil and gas, including exploration, production and drilling operations on over 20,000 cumulative acres of active mineral leases in Texas, Louisiana, and Mississippi and transportation services, (ii) Bitcoin mining and financial services, and (iii) post-harvest shelf-life and freshness food management technology. Since the acquisition of Banner Midstream Corp. (“Banner”) on March 27, 2020, which currently comprises the exploration, production and drilling operations and energy transportation business, the Company has focused its efforts to a considerable extent on expanding its exploration and production footprint and capabilities by acquiring real property and working interests in oil and gas mineral leases. The Company’s principal subsidiaries consist of Agora Digital Holdings, Inc., a Nevada corporation (“Agora”) which is focused on Bitcoin mining, Banner which is focused on oil and gas exploration and oilfield services, and Zest Labs, Inc. (“Zest”) which is focused on monetizing a portfolio of over 75 patents in the area of fresh food technology.

Agora was organized by Ecoark to enter the cryptocurrency mining business. Because of regulatory uncertainty over cryptocurrency being deemed to be securities, Agora’s initial focus is on mining Bitcoin which has not currently been deemed as a security. Because of regulatory concerns and the changing regulatory environment, Agora intends to seek opportunities to engage with cryptocurrencies that do not involve the offer or sale of any securities.

On October 8, 2021 Agora filed a confidential draft registration statement on Form S-1 (File No. 333-261246) (the “Agora Registration Statement”) in connection with its initial public offering of 10,000,000 units comprised of shares of common stock and warrants to purchase an equal number of shares of common stock. The Agora registration statement has undergone a series of amendments since its initial confidential filing in October 2021 and has not yet been declared effective by the SEC. Agora cannot file another amendment until it receives its audited financial Statements for the 12 months ended March 31, 2022. In addition, in connection with Agora public offering, Agora has applied for its common stock and warrants to be listed on Nasdaq.

Subject to completion of the Agora public offering and Nasdaq uplisting described above, the Company intends to issue a stock dividend through a pro rata distribution of Agora’s common stock to the Company’s common shareholders and holders of common stock equivalents. The Company plans to distribute 80% of the Agora common stock it holds to its shareholders as of a future record date to be determined upon completion of regulatory compliance. The Company plans to retain its remaining ownership in Agora on its balance sheet until a later date. As a result of the approval by the Board of Directors of the Company to divest Agora, the Company has accounted for this as a disposal other than by sale. Assets to be disposed of other than by sale should continue to be classified as held and used until they are disposed of. Following the 80% stock dividend of Agora, Ecoark plans to also distribute its ownership of Banner, Zest and the remaining Agora shares to its shareholders. At some point, Ecoark expects that the Selling Shareholder or an affiliate will present a reverse merger candidate to it which will prevent Ecoark from becoming a shell or losing its Nasdaq listing. However, the parties have only engaged in very preliminary discussions. What the acquisition target will be and what the consideration will be has not been discussed. The Ecoark Board of Directors intends to obtain a valuation from a nationally recognized valuation firm and advice from investment bankers consistent with the exercise of their fiduciary duty.

Corporate Information

Our principal executive offices are located at 303 Pearl Parkway Suite 200, San Antonio, 78215 TX, and our telephone number is 1 (800) 762-7293. Our website address is www.ecoarkusa.com. Our website and the information contained on, or that can be accessed through, our website is not be deemed to be incorporated by reference into this prospectus supplement.

The Offering

Common Stock outstanding prior to the offering:		26,466,980 shares (including the Commitment Shares)

Common Stock offered by the Selling Shareholder:		Up to 5,246,456 shares of Common Stock.

Common stock outstanding immediately following the offering:		31,610,555 shares.

Use of proceeds:		We will not receive any of the proceeds from the sale of any of the shares that may be offered from time-to-time by the Selling Shareholder.

Risk Factors:		See “Risk Factors” beginning on page S-3 of this prospectus supplement for a discussion of factors you should carefully consider before deciding to invest in shares of our Common Stock.

Stock Symbol:		“ZEST”

The number of shares of common stock to be outstanding immediately after this offering is based on 26,466,980 shares of common stock outstanding as of June 8, 2022 (including the Commitment Shares) and excludes, as of that date:

●

5,020,850 shares of common stock issuable upon the exercise of outstanding warrants at a weighted average exercise price of $6.94 per share;

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1,512,428 shares of common stock issuable upon the exercise of outstanding stock options at a weighted average exercise price of $6.19 per share;

●

401,250 shares of common stock issuable upon vesting and delivery of outstanding restricted stock units; and

●

433,707 shares of common stock available for future grants under the Company’s 2013 Incentive Stock Option Plan and 56,907 shares under the 2017 Omnibus Stock Plan, respectively.

Included in the outstanding warrants referred to above, are 200,000 warrants exercisable at $9.65 per share, 60,000 warrants exercisable at $7.75 per share, and 200,000 warrants exercisable at $10.00 per share. Each of these warrants contains price protection and other adjustment provisions in the event certain matters occur including sales, at a price below the exercise prices of such warrants, of common stock and/or any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for securities of the Company or its subsidiaries. The holder of these warrants has agreed to waive these provisions solely with respect to this offering.

Except as otherwise indicated herein, all information in this prospectus supplement assumes no exercise of outstanding options or warrants described above, and no exercise of the Warrant.

In addition to the Commitment Shares, the Selling Shareholder was issued shares of Series A and a Warrant pursuant to the Agreement, which entitle it to certain rights and subjects the Company to certain restrictions. See the information under the heading “Private Placement Transaction” beginning on page S-8 for more information on the Agreement, the Series A and the Warrant and the transactions contemplated thereby.

An investment in our common stock involves a substantial risk of loss. You should carefully consider the risk factors set forth below and in the accompanying prospectus, together with the other information included or incorporated by reference into this prospectus supplement and the accompanying prospectus, before you decide to invest in our common stock. The occurrence of any of these risks could harm our business. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our operations. You should also refer to the other information contained in this prospectus supplement and the accompanying prospectus or incorporated by reference herein or therein, including our financial statements and the notes to those statements and the information set forth under the heading “Cautionary Note Regarding Forward-Looking Statements.” Investors should review the new risk factors described below involving our operations as well as those contained in our Form 10-K for the year ended March 31, 2021, those contained in our prospectus supplement dated August 4, 2021, and those contained in our Form 10-Q for the quarterly period ended September 30, 2021. Amounts in risk factors are not rounded in thousands.

If the Agora Registration Statement is not declared effective by the SEC and the proposed underwritten public offering is not consummated, it could adversely impact the repayment of certain indebtedness that we extended to Agora and may materially adversely impact our future results of operations.

The Agora registration statement has undergone a series of amendments since its initial filing in October 2021 and has not yet been declared effective by the SEC. In addition, in connection with Agora public offering, Agora has applied for its common stock and warrants to be listed on Nasdaq.

On November 13, 2021, Agora issued the Company, a $7.5 million term note with 10% per annum interest. As of May 18, 2022, the principal balance of $5,022,992 is outstanding pursuant to the line of credit. Agora will be required to repay any sums it borrowed on March 31, 2023 with accrued interest. While Agora plans to repay the loan with cash flow from operations, it may not be able to generate positive cash flow and may be required to use the proceeds from the planned underwritten public offering. If the underwritten public offering is not consummated, Agora may not have the ability to repay this loan which would adversely affect our operations.

Because of the recent decline in the cryptocurrency markets in general and in the price of Bitcoin specifically, our loan to Agora and its business may be adversely affected.

Agora’s principal business is focused on Bitcoin mining. Its planned initial public offering is seeking to raise capital to purchase Bitcoin miners and accelerate its presence in this sector. To date, Agora has engaged in limited mining with less effective miners. The price of Bitcoin has been volatile and recently it has traded at its lowest level in the last year. On May 16, 2021, Bitcoin traded at approximately $46,750. It fell to approximately $29,796 on July 20, 2021, rose to approximately $69,000 on November 9, 2021 and fell to a low of approximately $25,338 on May 11, 2022. While lower prices may reduce the prices for high speed miners, the low prices may make the Bitcoin mining business unattractive and unprofitable. To the extent that recent low prices adversely affect Agora’s ability to complete its initial public offering or reduce its gross proceeds, it could either prevent us from receiving payment of our loan to Agora or adversely affect its future business and results of operations.

If Coinbase or another cryptocurrency exchange where we deposit our Bitcoin or other cryptocurrency experiences financial difficulties, there is a risk that creditors of the exchange will be able to treat our cryptocurrency as an asset of the exchange which may result in a loss of some or all of our cryptocurrency.

In its Quarterly Report for the quarter ended March 31, 2022, filed with the SEC on May 10, 2022 (the “Coinbase 10-Q”), Coinbase Global, Inc. (“Coinbase”) disclosed that uncertainties in or changes to regulatory or financial accounting standards could result in the need to change Coinbase’s accounting methods and restate its financial statements and impair its ability to provide timely and accurate financial information, which could adversely affect its financial statements, result in a loss of investor confidence, and more generally impact its business, operating results, and financial condition. Coinbase’s disclosure caused many retail customers concern that their cryptocurrency assets on the exchange remain at a high risk of loss in the event of the exchange’s bankruptcy since an unsecured creditor typically loses most of their funds if the exchange declares bankruptcy. Coinbase went on to disclose that digital assets it holds on behalf of its customers could be subject to bankruptcy proceedings brought against Coinbase. Agora uses Coinbase to store the Bitcoin it mines. As a result of recent disclosure in the Coinbase 10-Q alerting investors to this possible risk, Agora has decided to no longer permit Coinbase or other exchanges to have access to its private key. We believe this means it will be treated as a traditional escrow account which would impair the rights of the creditors of the exchange and protect Agora’s cryptocurrency. However, no court has decided this and it is possible that one or more courts may disagree with our position and Agora could sustain losses, which losses may be material.

If we are unable to obtain shareholder approval for our transaction with the Selling Shareholder, it will impair our ability to spin-off all of our subsidiaries and may adversely effect our future business and results of operations.

We have publicly disclosed our intent to spin-off 80% of our ownership of Agora to our shareholders within six months of the closing of Agora’s initial public offering. On June 8, 2022, we entered into a Securities Purchase Agreement (the “Agreement”) with the Selling Shareholder and received $12 million in gross proceeds. In exchange, we issued the Selling Shareholder 102,881 shares of our Common Stock as Commitment Shares, the Series A convertible into Common Stock at $2.10 per share or 5,714,286 shares of Common Stock, and a Warrant to acquire 49% of our Common Stock (which includes the Commitment Shares and the shares issuable upon conversion of the Series A). We may issue the Selling Shareholder up to 5,246,456 shares of Common Stock without shareholder approval under Nasdaq Rules. Thus, we may not issue 570,711 shares upon conversion of the Series A or any shares upon exercise of the Warrant until we receive shareholder approval. Under Nasdaq Rules, the Selling Shareholder may not vote on the proposal. In addition, to avoid tracing of the Conversion Shares, the Selling Shareholder may not convert the Series A until after the record date for shareholders eligible to vote at a meeting in order to approve the share issuances.

Further, the Warrant will not vest or be exercisable without shareholder approval. One of the other conditions of the Warrant vesting and becoming exercisable is for us to spin-off all of our remaining subsidiaries to our shareholders. Under Nevada law, we believe that our shareholders may also have to approve our spin-off of our Common Stock of our oil and gas subsidiary, Banner. Our planned spin-offs are based upon an expectation that an affiliate of the Selling Shareholder will sell a business or assets to us in exchange for some consideration. This will result in a change of control and if we issue more than 50% of our Common Stock will also require Nasdaq approval. We cannot assure you we will receive shareholder approval for the transactions contemplated by the Agreement or the subsequent transaction and change of control or that Nasdaq will approve them in the present form. See “Recent Developments.”

Although the Agreement and contemplated transactions including the spin-offs of our assets will result in both a change of control and fundamental change in our business, investors have no information concerning the nature of our future business.

Both the Agreement and our discussions with the Selling Shareholder are premised upon our need for capital and our plan to distribute all of our operating assets to our shareholders as dividends. Assuming shareholder approval, we expect to acquire an operating business at the time of our final spin-off. We do not have any information concerning any such acquisition so purchasers of our Common Stock have no ability to determine the nature of such business, its financial condition, its management or other material information. While we expect that the future Board of Directors and management may include the Selling Shareholder designees or affiliates, it is possible it may not. The Selling Shareholder has the right to designate one director initially.

If Congress enacts the proposed price gouging bill, it could have a material adverse effect on our oil and gas operations and 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, the Congress has Democratic majorities (with the vice president breaking a tie in the Senate) and a Democratic President so 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 Banner, our oil and gas drilling subsidiary and the Company.

If you purchase Shares in this offering, you may suffer immediate and substantial dilution of your investment, and you will experience further dilution if we issue additional equity securities in future financing transactions or under derivative securities outstanding as of the date of this prospectus supplement.

Because the offering price per Share in this offering may be higher than the net tangible book value per share of our Common Stock, you could suffer immediate and substantial dilution in the net tangible book value of the Shares purchased in this offering. Depending on the sale price by the Selling Shareholder for a specific sale of Shares, were that to occur, investors purchasing Shares in this offering would incur immediate dilution. In addition, we have stock options and warrants outstanding that are exercisable for shares of our Common Stock, and as a result of our recent sale of securities to the Selling Shareholder, the Selling Shareholder could convert additional shares of the Series A and/or exercise the Warrant it holds in the future and cause further dilution to investors in this offering. When it becomes vested, the Warrant alone will be exercisable into 49% of the outstanding Common Stock, without giving effect to the shares of Common Stock issued or issuable to the Selling Shareholder under the other securities sold to it pursuant to the Agreement. To the extent that such outstanding securities are converted or exercised into shares of our Common Stock, or securities are issued in future financings, investors purchasing Shares in this offering may experience further dilution.

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 26,466,980 shares of Common Stock outstanding as of June 8, 2022 (including the Commitment Shares), approximately 20,341,630 shares are held by investors who are not our affiliates or holders of restricted stock. All of these shares of unrestricted stock are freely tradeable. The remaining shares may be sold subject to the volume limits of Rule 144 which limits sales by any affiliate to 1% of outstanding shares in any three-month period. 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.

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 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.

Future changes in the fair value of outstanding warrants could result in volatility of our reported results of operations.

Because of the derivative liability caused by our outstanding warrants, the increase or decrease in our Common Stock price each quarter (measured from the first day to the last day) is either a non-cash expense or income. If the price rises, we are required to report the expense, which increases our actual operating loss. Contrarily a price decrease in a given quarter will cause to report income. The risk is investors will react to our reported bottom line, which will increase volatility in our stock price.

During our fiscal year ended March 31, 2022, we made a conscious decision to enter the Bitcoin mining business. To advance that goal, we formed Agora on September 17, 2021, transferred our financial services business, Trend Discovery Holdings, to Agora and provided loans to enable it to commence its mining business and initiate its planned public offering. While that offering has been delayed to regulatory factors outside the Company’s control, we expect we will be able consummate it in the near future subject to both the regulatory environment and market conditions for both Bitcoin and the stock market in general. Agora expects to file an amendment to its Registration Statement in the next several weeks after completion of its audit for the year ended March 31, 2022.

Because of our need to raise capital for current business operations and growth of existing business lines, we entered into the Agreement with the Selling Shareholder, which is a subsidiary of BitNile Holdings, Inc. (“BitNile”) (NYSE American: NILE). BitNile is also engaged in the Bitcoin mining business and is therefore a competitor of Agora.

The Warrant provides the holder with the right to purchase a number of shares of Common Stock as would enable the holder together with its affiliates to beneficially own 49% of the Company’s Common Stock, calculated on a fully diluted basis, at an exercise price of $0.001 per share. The Warrant becomes exercisable beginning after the completion by the Company of distributions to the Company’s security holders of the Company’s equity ownership of its three principal subsidiaries: Agora, Banner and Zest (the “Distributions”), provided that as of such time (i) the Warrant has been approved by the Company’s shareholders and Nasdaq, and (ii) the holder together with its affiliates does not beneficially own at least 50% of the Company’s outstanding Common Stock.

To date, discussions between BitNile have centered upon Ecoark being able to spin-off to its shareholders each of 100% of Agora, Banner and Zest Labs, Inc. Other than the initial spin-off of 80% of Agora within six months of Agora’s closing of its initial public offering, the timing of the remaining spin-offs as well as any acquisition of another business is uncertain. BitNile files reports with the SEC which investors are encouraged to review at www.SEC.gov/EDGAR.

Recently, Ecoark and Bitstream Mining LLC (“Bitstream”), an Agora subsidiary, were sued as defendants by Print Crypto Inc. (“Print”) in state court in Texas. Print is seeking to recover $256,733 plus interest and attorneys fees based on Bitstream’s alleged breach of contract. The complaint expresses no independent basis for suing Ecoark. Both defendants have filed an answer denying liability which answer includes a special exception for Ecoark since it was not a party to the contract in question. In addition, Bitstream filed a counterclaim seeking actual damages of $1.4 million it previously paid Print in addition to interest and attorneys fees. Bitstream alleges that the contract required Print to test the computers prior to delivery which Print failed to do based upon the various defects. In addition to its breach of contract claim, Bitstream is seeking actual and punitive damages alleging Print engaged in fraudulent acts.

We will not receive any proceeds from the sale of our Common Stock by the Selling Shareholder. We will receive $12,000,000 of net proceeds which we will use in our drilling program, a loan to Agora for use in deploying power and infrastructure for its Bitcoin mining operations, fees and expenses in connection with distributions of certain of our subsidiaries, and for general corporate purposes and working capital.

Pursuant to the Agreement, the Company sold the Selling Shareholder the Commitment Shares, 1,200 shares of Series A and the Warrant for a total purchase price of $12,000,000. The material terms of the Series A and the Warrant are summarized below, which descriptions do not purport to be complete and are summarized in their entirety by the Warrant and the Certificate of Designation of the Series A (the “Series A Certificate”), which have been filed as exhibits to the Company’s Current Report on Form 8-K filed on June 9, 2022 disclosing the Agreement and the transactions contemplated thereby.

The Series A Certificate designates and authorizes the issuance of up to 1,200 shares of Series A, all of which were issued to the Selling Shareholder pursuant to the Agreement.

Each share of Series A has a stated value of $10,000 and is convertible into shares of Common Stock at a conversion price of $2.10 per share, subject to certain adjustment provisions. The holder’s conversion of the Series A is subject to a beneficial ownership limitation of 19.9% of the issued and outstanding Common Stock as of the issuance date of the Series A, unless and until the Company obtains shareholder and Nasdaq approval for the conversion of more than that amount, in order to comply with Nasdaq Rules. In addition, the conversion rights in general do not become effective until the first day after the record date for the shareholders meeting seeking such shareholder approval.

The Series A is entitled to vote with the Common Stock as a single class on an as-converted basis, subject to applicable law and the Nasdaq Rules. In addition, as long as the holder continues to hold at least 25% of the shares of Series A issued to it on the issuance date, the holder is entitled to elect a number of directors to the Company’s Board of Directors equal to a percentage determined by (i) the number of Series A beneficially owned by the holder, calculated on an “as converted” basis, (ii) divided by the sum of the number of shares of Common Stock outstanding plus the number of Series A outstanding on an “as converted” basis; and such director(s) so elected may only be removed without cause by the affirmative vote of the holder. Initially, the Selling Shareholder may designate one director. The holders of record of the shares of Common Stock and of any other class or series of voting stock (including the Series A), exclusively and voting together as a single class, are entitled to elect the balance of the total number of directors of the Company. The Selling shareholder is not eligible to vote at the shareholders meeting on the proposal to approve the issuance of more than 19.9% of shares outstanding on June 8, 2022.

The holder of shares of the Series A is entitled to receive cumulative cash dividends at an annual rate of 12.6% of the stated value, which is equivalent to $1,260 per year per share, payable monthly beginning on the issuance date and continuing until the earlier of (a) June 8, 2024, and (b) the date on which the holder no longer holds any shares of Series A. If the Company fails to make a dividend payment, a default dividend rate of 18% per annum will apply until all accumulated dividend payments have been made.

The shares of Series A have a liquidation preference over the Common Stock and any subsequent series of junior preferred stock of $1,200 per share of Series A, plus accrued but unpaid dividends.

At any time beginning on or after June 8, 2024, the holder of Series A may cause the Company to redeem some or all of the shares of Series A it holds at a redemption price of $1,200 per share, plus any accumulated and unpaid dividends thereon.

The Series A Certificate subjects the Company to negative covenants restricting its ability to take certain actions without prior approval from the holder(s) of the Series A for as long as such holder(s) continue to hold at least 25% (or such higher percentage as set forth in the Series A Certificate) of the Series A shares issued on the closing date under the Agreement. These restrictive covenants apply to the following actions by the Company, among others and subject to certain exceptions and limitations:

The Warrant provides the holder with the right to purchase a number of shares of Common Stock as would enable the holder together with its affiliates to beneficially own 49% of the Company’s Common Stock, calculated on a fully diluted basis, at an exercise price of $0.001 per share. The Warrant becomes exercisable beginning after the completion by the Company of distributions to the Company’s security holders or to any other subsidiary of the Company’s equity ownership of its three principal subsidiaries: Agora, Banner and Zest (the “Distributions”), provided that as of such time (i) the Warrant has been approved by the Company’s shareholders and Nasdaq, and (ii) the holder together with its affiliates does not beneficially own at least 50% of the Company’s outstanding Common Stock.

The Warrant is subject to forfeiture if (i) the Distributions have not occurred within two years, (ii) the shareholder approvals have not been obtained following three meetings for such purpose, or (iii) the holder and its affiliates collectively beneficially own 50% or more of the Company’s outstanding Common Stock. However, in the event of the failure of the Company to complete the Distributions as contemplated by clause (i) or obtain shareholder approval as contemplated by clause (ii) and provided the event contemplated by clause (iii) has not occurred, the Warrant may be exercised notwithstanding anything in the Warrant to the contrary.

The Warrant may be exercised on a cashless basis. The Warrant expires on June 8, 2027.

As described in the section of this prospectus entitled “Prospectus Summary,” the Selling Shareholder has the right to receive 5,246,456 shares of our Common Stock representing 5,143,575 Conversion Shares and the 102,881 Commitment Shares which were issued to the Selling Shareholder pursuant to the Agreement between the Company and the Selling Shareholder. The shares represent the right to acquire 19.9% of our Common Stock effective as of the date of the Agreement. Pursuant to the Agreement, the Selling Shareholder may also convert an additional Conversion Shares and Common Stock under a Warrant to purchase up to 49% of the Company’s outstanding Common Stock (taking into account the Conversion Shares and Commitment Shares), which extra Conversion Shares may only be issued and which Warrant only becomes exercisable following shareholder approval, approval by Nasdaq, and the Company’s distribution of its three core subsidiaries. If the shareholder approval is not obtained by June 8, 2024, the Warrant will never vest or be exercisable and the extra shares Conversion Shares may not be issued. The sale of the extra Conversion and the shares of Common Stock underlying the Warrant are not being registered by this prospectus supplement.

The following table sets forth for the Selling Shareholder, the name, the number and percentage of shares of Common Stock beneficially owned as of June 8, 2022, the maximum number of shares of Common Stock that may be offered pursuant to this prospectus supplement and the number and percentage of shares of Common Stock that would be beneficially owned after the sale of the maximum number of shares of Common Stock pursuant to this prospectus supplement. The information presented in the table is based on 26,466,980 shares of our Common Stock outstanding as of June 8, 2022 (including the Commitment Shares).

Only the Selling Shareholder listed below may offer and sell the Common Stock pursuant to this prospectus supplement. The Selling Shareholder may offer all or less than all of the Shares listed in the table below for sale pursuant to this prospectus supplement from time-to-time. Accordingly, no estimate can be given as to the shares of Common Stock that the Selling Shareholder will hold upon consummation of any such sales, but for purposes of the last two columns below, we have assumed that all of the shares of Common Stock that may be offered pursuant to this prospectus supplement will be sold by the Selling Shareholder.

Beneficial ownership is determined in accordance with the rules of the SEC. Unless otherwise indicated, this table is based on information supplied to us by the Selling Shareholder and certain of our otherwise indicated, to our knowledge, the persons named in the table have sole voting and investment power with respect to all shares beneficially owned, subject to community property laws where applicable.

Except for the transactions described herein and in documents filed by us with the SEC pursuant to Sections 13(a), 13(c), or 14 of the Securities Exchange Act of 1934 (the “Exchange Act”), the Selling Shareholder does not have, or within the last three years has not had, any position, office or other material relationship (legal or otherwise) with us or any of our subsidiaries.

We are registering the offer and sale from time to time after the date of this prospectus supplement of the shares of Common Stock to be issued to the Selling Shareholder pursuant to the Agreement. We will not receive any of the proceeds from the sale by the Selling Shareholder of these shares. We will pay all fees and expenses incident to our obligation to register the sale of the shares, except that, if the shares are sold through underwriters or broker-dealers, the Selling Shareholder will be responsible for any underwriting discounts or commissions or agent’s commissions.

The Selling Shareholder, which may include donees, pledgees, transferees or other successors in interest selling shares or interests in shares received after the date of this prospectus from the Selling Shareholder as a gift, pledge, partnership, distribution or other transfer, may sell all or a portion of the Shares beneficially owned by them and offered hereby from time to time directly or through one or more underwriters, broker-dealers or agents. The Shares may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale, or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions, on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale. The Selling Shareholder may use any one or more of the following methods when disposing of the Shares:

If the Selling Shareholder effects such transactions by selling shares to or through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the Selling Shareholder or commissions from purchasers of the shares for whom he may act as agent or to whom he may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary in the types of transactions involved).

In connection with sales of the shares or otherwise, the Selling Shareholder may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares in the course of hedging in positions they assume. The Selling Shareholder may also sell the shares short and deliver the shares covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales. The Selling Shareholder may also loan or pledge the shares to broker-dealers that in turn may sell such shares.

The Selling Shareholder may pledge or grant a security interest in some or all of the shares owned by it, and, if it defaults in the performance of its secured obligations, the pledgees or secured parties may offer and sell the shares from time to time pursuant to this prospectus or other applicable provisions of the Securities Act, amending, if necessary, the list of selling shareholders to include such pledgee, transferee or other successors in interest as a Selling Shareholder under this prospectus. The Selling Shareholder also may transfer and donate the shares in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.

The Selling Shareholder also may resell all or a portion of the shares in open market transactions, rather than under this prospectus, in reliance upon Rule 144 under the Securities Act, provided that he meets the criteria and conform to the requirements of that rule.

In connection with sales of the shares of Common Stock covered hereby, the Selling Shareholder will be deemed to be an “underwriter” within the meaning of the Securities Act. Any broker-dealer participating in the distribution of the shares may be deemed to be “underwriters” within the meaning of the Securities Act. Accordingly, any profits realized by the Selling Shareholder will be, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be, deemed to be underwriting commissions or discounts under the Securities Act. As an “underwriter” under the Securities Act, the Selling Shareholder must deliver this prospectus supplement in the manner required by the Securities Act. This prospectus delivery requirement may be satisfied in accordance with Rule 174 under the Securities Act.

Under the securities laws of some states, the shares may be sold in such states only through registered or licensed brokers or dealers. In addition, in some states, the shares may not be sold unless such shares have been registered or qualified for sale in such state or an exemption from registration or qualification is available and is complied with.

There can be no assurance that the Selling Shareholder will sell any or all of the shares registered pursuant to the registration statement of which this prospectus supplement forms a part.

The Selling Shareholder and any other person participating in such distribution will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of by the Selling Shareholder and any other participating person. Regulation M may also restrict the ability of any person engaged in the distribution of the shares to engage in market-making activities with respect to the shares. All of the foregoing may affect the marketability of the shares and the ability of any person or entity to engage in market-making activities with respect to the shares.

We will pay all expenses of the registration of the offer and sale of the shares pursuant to the registration statement of which this prospectus supplement forms a part, including, without limitation, filing fees payable to the Commission and expenses of compliance with state securities or “blue sky” laws; provided, however, that the Selling Shareholder will pay all underwriting discounts and selling commissions, if any.

Once sold under the registration statement of which this prospectus supplement forms a part, the shares will be freely tradable in the hands of persons other than our affiliates.

Nason, Yeager, Gerson, Harris & Fumero, P.A., Palm Beach Gardens, Florida, will pass upon certain legal matters relating to this offering.

The consolidated financial statements of the Company as of and for the fiscal years ended March 31, 2021 and 2020 incorporated by reference in this prospectus supplement have been so incorporated in reliance on the report of RBSM LLP, our independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

We file annual, quarterly and current reports, proxy statements and other information with the SEC. The SEC maintains an internet website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including the Company at www.sec.gov. You may also access our SEC reports and proxy statements free of charge at our website, www.ecoarkusa.com. The information contained in, or that can be accessed through, our website is not part of this prospectus supplement.

This prospectus supplement and the accompanying prospectus are part of the registration statement on Form S-3 filed with the SEC under the Securities Act for the common stock offered by this prospectus supplement. This prospectus supplement does not contain all of the information set forth in the registration statement, certain parts of which have been omitted in accordance with the rules and regulations of the SEC. For further information, reference is made to the registration statement and its exhibits. Whenever we make references in this prospectus supplement or the accompanying prospectus to any of our contracts, agreements or other documents, the references are not necessarily complete and you should refer to the exhibits attached to the registration statement for the copies of the actual contract, agreement or other document.

The SEC allows us to incorporate by reference the information we file with it, which means that we can disclose important information to you by referring you to another document that we have filed separately with the SEC. Any information that we incorporate by reference is considered part of this prospectus supplement. We hereby incorporate by reference the following information or documents into this prospectus supplement and the accompanying prospectus:

Any information in any of the foregoing documents will automatically be deemed to be modified or superseded to the extent that information in this prospectus supplement or the accompanying prospectus or in a later filed document that is incorporated or deemed to be incorporated herein by reference modifies or replaces such information.

We also incorporate by reference any future filings (excluding information furnished under Item 2.02 or Item 7.01 of Form 8-K and exhibits filed on such form that are related to such items) made with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, until we sell all of the securities offered by this prospectus supplement. Information in such future filings updates and supplements the information provided in this prospectus supplement. Any statements in any such future filings will automatically be deemed to modify and supersede any information in any document we previously filed with the SEC that is incorporated or deemed to be incorporated herein by reference to the extent that statements in the later filed document modify or replace such earlier statements.

Upon written or oral request, we will provide to you, without charge, a copy of any or all of the documents that are incorporated by reference into this prospectus supplement and the accompanying prospectus but not delivered with the prospectus, including exhibits which are specifically incorporated by reference into such documents. Requests should be directed to:

Ecoark Holdings, Inc. intends to offer and sell from time to time the securities described in this prospectus. The total offering price of the securities described in this prospectus will not exceed a total of $80,000,000.

This prospectus describes some of the general terms that apply to the securities. We will provide specific terms of any securities we may offer in supplements to this prospectus. You should read this prospectus and any applicable prospectus supplement carefully before you invest. The prospectus supplement also may add, update or change information contained or incorporated in this prospectus.

We may offer and sell these securities to or through one or more underwriters, brokers or agents, or directly to purchasers on a continuous or delayed basis. The prospectus supplement for each offering of securities will describe the plan of distribution for that offering. For general information about the distribution of securities offered, see “Plan of Distribution” in this prospectus. The prospectus supplement also will set forth the price to the public of the securities and the net proceeds that we expect to receive from the sale of such securities.

Our common stock is quoted on OTCQB under the symbol “ZEST.” On December 24, 2020, the last reported sales price of our common stock on OTCQB was $12.00 per share. The numbers of shares of common stock contained in the financial statements do not give effect to a 1-for-5 reverse stock split effective as of December 17, 2020. See “Prospectus Summary – Selected Financial Data” for further information.

Investing in our securities involves risks. You should read carefully and consider “Risk Factors” included in our most recent Annual Report on Form 10-K and on page 11 of this prospectus and in the applicable prospectus supplement before investing in our securities.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined whether this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

You should rely only on information contained in this prospectus. We have not authorized anyone to provide you with information that is different from that contained in this prospectus. We are not offering to sell or seeking offers to buy shares of common stock or other securities in jurisdictions where offers and sales are not permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of our common stock or other securities. We are responsible for updating this prospectus to ensure that all material information is included and will update this prospectus to the extent required by law.

PROSPECTUS SUMMARY

This summary only highlights the more detailed information appearing elsewhere in this prospectus or incorporated by reference in this prospectus. It may not contain all of the information that is important to you. You should carefully read the entire prospectus and the documents incorporated by reference in this prospectus before deciding whether to invest in our securities. Unless otherwise indicated or the context requires otherwise, in this prospectus and any prospectus supplement hereto references to “Ecoark,” the “Company,” “we,” “us,” and “our” refer to Ecoark Holdings, Inc. and its consolidated subsidiaries.

About This Prospectus

This prospectus is part of a “shelf” registration statement that we have filed with the Securities and Exchange Commission (the “Commission”). By using a shelf registration statement, we may sell, at any time and from time to time, in one or more offerings, any combination of the securities described in this prospectus. The exhibits to our registration statement contain the full text of certain contracts and other important documents we have summarized in this prospectus. Since these summaries may not contain all the information that you may find important in deciding whether to purchase the securities we offer, you should review the full text of these documents. The registration statement and the exhibits can be obtained from the Commission as indicated under the section entitled “Incorporation of Certain Information by Reference.”

This prospectus only provides you with a general description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement that contains specific information about the terms of those securities. The prospectus supplement also may add, update or change information contained in this prospectus. If there is an inconsistency between the information in this prospectus and any prospectus supplement, you should rely on the information in the prospectus supplement. You should read carefully both this prospectus and any prospectus supplement together with the additional information described below under the section entitled “Incorporation of Certain Information by Reference.”

We are not making an offer of these securities in any jurisdiction where the offer is not permitted. You should not assume that the information in this prospectus or a prospectus supplement is accurate as of any date other than the date on the front of the document.

Our Company

Ecoark Holdings, Inc., a Nevada corporation, is a diversified holding company with operations in three areas: (i) oil and gas, including exploration, production and drilling operations on over 20,000 cumulative acres of active mineral leases in Texas, Louisiana, and Mississippi and transportation services, (ii) post-harvest shelf-life and freshness food management technology, and (iii) financial services. Since the acquisition of Banner Midstream Corp. (“Banner Midstream”) on March 27, 2020, which currently comprises our exploration, production and drilling operations (the “Banner Acquisition”), the Company has focused its efforts to a considerable extent on expanding its exploration and production footprint and capabilities by acquiring real property and working interests in oil and gas mineral leases, including the following transactions:

●

acquisition on June 11, 2020 of certain energy assets, including 262 total wells in Mississippi and Louisiana, approximately 9,000 acres of active mineral leases, and drilling production materials and equipment, from SR Acquisition I, LLC as part of the ongoing bankruptcy reorganization of Sanchez Energy Corporation. The acquired wells included 57 active producing wells, 19 active disposal wells, 136 shut-in with future utility wells, and 50 shut-in pending plugging wells;

●

acquisition on June 18, 2020 of certain energy assets, including wells, active mineral leases, and drilling production materials and equipment, from SN TMS, LLC as part of the ongoing bankruptcy reorganization of Sanchez Energy Corporation;

●

acquisition of certain real property and working interests in oil and gas mineral leases pursuant to the Asset Purchase Agreement with Rabb Resources, Ltd., dated August 14, 2020;

●

acquisition of certain additional working interests in the Harry O’Neal oil and gas mineral lease, the related well bore, crude oil inventory and equipment, pursuant to three Asset Purchase Agreements, dated September 30, 2020; and

●

participation agreement entered into on October 9, 2020 with BlackBrush Oil & Gas, L.P. related to a joint drilling venture in the Austin Chalk formation and the acquisition in connection therewith of two contiguous oil and gas mineral leases in the Austin Chalk formation, including shallow and deep drilling rights.

Our efforts with respect to the freshness food management solution offered through Zest Labs, Inc., our wholly owned subsidiary (“Zest”), have been focused on preparing for trial in our previously disclosed lawsuit against Walmart, Inc., which is scheduled to begin in late March 2021 in Little Rock, Arkansas.

In its most recent quarter ended September 30, 2020, almost all of the Company’s revenues came from the oil and gas business with a minor contribution from its advisory business, Trend Discovery Holdings LLC.

Reverse Stock Split

Effective with the opening of trading on December 17, 2020, the Company effected a one-for-five reverse split of its outstanding common stock (the “Reverse Split”). As of that date, there were approximately 21,571,588 shares of common stock outstanding. The Reverse Split was implemented without obtaining shareholder approval as permitted by Nevada law, and the authorized common stock was proportionately reduced to 40,000,000 shares. See “Description of Capital Stock” for information on the Reverse Split and the special shareholders’ meeting to ratify an action taken at our annual shareholders’ meeting in February 2020 and approve a proposed reduction of our authorized common stock.

Selected Financial Data

The share and per-share data in our Annual Report on Form 10-K for the fiscal year ended March 31, 2020, and our Quarterly Reports on Form 10-Q for the three months ended June 30, 2020 and for the three months ended September 30, 2020, in each case incorporated by reference in this prospectus, has not been retroactively adjusted to give effect to the Reverse Split. However, except specified otherwise, all historical share and per-share data included in this prospectus has been adjusted to reflect the impact of the Reverse Split.

The following selected financial data has been derived from our audited financial statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2020, and our unaudited financial statements included in our Quarterly Reports on Form 10-Q for the three months ended June 30, 2020 and for the three months ended September 30, 2020, as adjusted to reflect the Reverse Split for all periods presented. Our historical results are not indicative of the results that may be expected in the future and results of interim periods are not indicative of the results for the entire year.

AS REPORTED (in thousands, except per share amounts):

	Years Ended March 31,
	2020			2019
Consolidated Statement of Operations Data:
Revenues	$	581		$	1,062
Net loss from continuing operations	$	(12,139	)	$	(11,405	)
Net loss per share, basic and diluted	$	(0.18	)	$	(0.27	)
Shares used in calculation of net loss per share, basic and diluted		64,054			51,010

	As of March 31
	2020		2019
Consolidated Balance Sheet Data:
Total assets	$	24,916	$	2,528
Long-term debt, net of current portion	$	421	$	-
Lease liability, net of current portion	$	510	$	-
Common stock, $0.001 par value; 200,000 and 100,000 shares authorized; 85,876 shares issued 85,291 shares outstanding as of March 31, 2020 and 52,571 shares issued and 51,986 shares outstanding as of March 31, 2019	$	86	$	53
Additional paid-in capital	$	135,355	$	113,310
Total shareholders’ equity (deficit)	$	5,747	$	(4,194	)

	Three Months Ended June 30,
	2020			2019
	(unaudited)
Consolidated Statement of Operations Data:
Revenues	$	2,313		$	35
Net loss from continuing operations	$	(21,181	)	$	(1,648	)
Net loss per share, basic and diluted	$	(0.23	)	$	(0.03	)
Shares used in calculation of net loss per share, basic and diluted		91,784			53,819

	As of
	June 30,			March 31,
	2020			2020
	(unaudited)
Consolidated Balance Sheet Data:
Total assets	$	27,828		$	24,916
Long-term debt, net of current portion	$	3,231		$	421
Lease liability – financing and operating leases, net of current portion	$	460		$	510
Common stock, $0.001 par value; 200,000 shares authorized; 98,604 shares issued 98,019 shares outstanding as of June 30, 2020 and 85,876 shares issued 85,291 shares outstanding as of March 31, 2020	$	99		$	86
Additional paid-in capital	$	148,100		$	135,355
Total shareholders’ equity (deficit)	$	(2,676	)	$	5,747

	Three Months Ended September 30,
	2020		2019
	(unaudited)
Consolidated Statement of Operations Data:
Revenues	$	3,278	$	44
Net income (loss) from continuing operations	$	8,985	$	(4,389	)
Net income (loss) per share, basic	$	0.09	$	(0.07	)
Net income (loss) per share, diluted	$	0.08	$	(0.07	)
Shares used in calculation of net income (loss) per share, basic		100,879		61,967
Shares used in calculation of net loss per share, diluted		118,223		61,967

	Six Months Ended September 30,
	2020			2019
	(unaudited)
Consolidated Statement of Operations Data:
Revenues	$	5,591		$	79
Net loss from continuing operations	$	(12,196	)	$	(6,035	)
Net loss per share, basic and diluted	$	(0.13	)	$	(0.10	)
Shares used in calculation of net loss per share, basic and diluted		96,357			58,227

	As of
	September 30,		March 31,
	2020		2020
	(unaudited)
Consolidated Balance Sheet Data:
Total assets	$	33,502	$	24,916
Long-term debt, net of current portion	$	3,558	$	421
Lease liability – financing and operating leases, net of current portion	$	734	$	510
Common stock, $0.001 par value; 200,000 shares authorized; 106,016 shares issued 105,431 shares outstanding as of September 30, 2020 and 85,876 shares issued 85,291 shares outstanding as of March 31, 2020	$	106	$	86
Additional paid-in capital	$	159,575	$	135,355
Total shareholders’ equity	$	17,791	$	5,747

AS ADJUSTED FOR ONE-FOR-FIVE REVERSE STOCK SPLIT

(unaudited, in thousands, except per share amounts):

	Years Ended March 31,
	2020			2019
	(unaudited)
Consolidated Statement of Operations Data:
Revenues	$	581		$	1,062
Net loss from continuing operations	$	(12,137	)	$	(13,650	)
Net loss per share, basic and diluted	$	(0.90	)	$	(1.35	)
Shares used in calculation of net loss per share, basic and diluted		12,811			10,202

	As of March 31
	2020		2019
	(unaudited)
Consolidated Balance Sheet Data:
Total assets	$	24,916	$	2,528
Long-term debt, net of current portion	$	421	$	-
Lease liability, net of current portion	$	510	$	-
Common stock, $0.001 par value; 40,000 and 20,000 shares authorized, 17,175 shares issued and 17,058 shares outstanding as of March 31, 2020 and 10,515 shares issued and 10,397 outstanding as of March 31, 2019	$	17	$	11
Additional paid-in capital	$	135,424	$	113,352
Total shareholders’ equity (deficit)	$	5,747	$	(4,194	)

	Three Months Ended June 30,
	2020			2019
	(unaudited)
Consolidated Statement of Operations Data:
Revenues	$	2,313		$	35
Net loss from continuing operations	$	(21,181	)	$	(1,648	)
Net loss per share, basic and diluted	$	(1.15	)	$	(0.15	)
Shares used in calculation of net loss per share, basic and diluted		18,357			10,764

	As of
	June 30,			March 31,
	2020			2020
	(unaudited)
Consolidated Balance Sheet Data:
Total assets	$	27,828		$	24,916
Long-term debt, net of current portion	$	3,231		$	421
Lease liability – financing and operating leases, net of current portion	$	460		$	510
Common stock, $0.001 par value; 40,000 shares authorized; 19,721 shares issued 19,604 shares outstanding as of June 30, 2020 and 17,175 shares issued and 17,058 shares outstanding as of March 31, 2020	$	20		$	17
Additional paid-in capital	$	148,179		$	135,424
Total shareholders’ equity (deficit)	$	(2,676	)	$	5,747

	Three Months Ended September 30,
	2020		2019
	(unaudited)
Consolidated Statement of Operations Data:
Revenues	$	3,278	$	44
Net income (loss) from continuing operations	$	8,985	$	(4,389	)
Net income (loss) per share, basic	$	0.45	$	(0.35	)
Net income (loss) per share, diluted	$	0.40	$	(0.35	)
Shares used in calculation of net loss per share, basic		20,176		12,393
Shares used in calculation of net loss per share, diluted		23,645		12,393

	Six Months Ended September 30,
	2020			2019
	(unaudited)
Consolidated Statement of Operations Data:
Revenues	$	5,591		$	79
Net loss from continuing operations	$	(12,196	)	$	(6,035	)
Net loss per share, basic and diluted	$	(0.65	)	$	(0.50	)
Shares used in calculation of net loss per share, basic and diluted		19,271			11,645

	As of
	September 30, 2020		March 31, 2020
	(unaudited)
Consolidated Balance Sheet Data:
Total assets	$	33,502	$	24,916
Long-term debt, net of current portion	$	3,558	$	421
Lease liability – financing and operating leases, net of current portion	$	734	$	510
Common stock, $0.001 par value; 40,000 shares authorized; 21,203 shares issued 21,086 shares outstanding as of September 30, 2020 and 17,175 shares issued and 17,058 shares outstanding as of March 31, 2020	$	21	$	17
Additional paid-in capital	$	159,660	$	135,424
Total shareholders’ equity	$	17,791	$	5,747

Unaudited Pro Forma Selected Financial Data

Also included below is selected unaudited pro forma consolidated statement of operations data derived from the notes to the financial statements included in the Annual Report on Form 10-K for the fiscal year ended March 31, 2020, and the Quarterly Reports on Form 10-Q for the three months ended June 30, 2020 and the three months ended September 30, 2020, giving effect to the merger with Trend Discovery Holdings Inc. on May 31, 2019, and the acquisition of Banner Midstream Corp. on March 27, 2020, as adjusted to reflect the Reverse Split for all periods presented. The unaudited pro forma consolidated statement of operations data presents what our selected results of operations would have been if we had owned Trend Discovery Holdings Inc. as of April 1, 2018 and Banner Midstream Corp.as of April 1, 2019, as further retroactively adjusted to give effect to the Reverse Split.

PRO FORMA, AS REPORTED (in thousands, except per share amounts):

	Years Ended March 31,
	2020			2019
	(unaudited)
Revenues	$	16,297		$	10,101
Net loss from continuing operations	$	(17,618	)	$	(17,351	)
Net loss per share, basic and diluted	$	(0.28	)	$	(0.34	)
Shares used in calculation of net loss per share, basic and diluted		64,054			51,010
Common shares outstanding at year-end		85,291			51,986

	Three Months Ended June 30,
	2020			2019
	(unaudited)
Revenues	$	2,313		$	4,894
Net loss from continuing operations	$	(21,181	)	$	(2,270	)
Net loss per share, basic and diluted	$	(0.23	)	$	(0.04	)
Shares used in calculation of net loss per share, basic and diluted		91,784			53,819
Common shares outstanding at period end		98,019			57,486

	Three Months Ended September 30,
	2020		2019
	(unaudited)
Revenues	$	3,278	$	606
Net income (loss) from continuing operations	$	8,985	$	(9,413	)
Net income (loss) per share, basic	$	0.09	$	(0.16	)
Net income (loss) per share, diluted	$	0.08	$	(0.16	)
Shares used in calculation of net income (loss) per share, basic		100,879		61,967
Shares used in calculation of net income (loss) per share, diluted		118,223		61,967
Common shares outstanding at period end		105,431		62,063

PRO FORMA, AS ADJUSTED FOR ONE-FOR-FIVE REVERSE STOCK SPLIT

(unaudited, in thousands, except per share amounts):

	Years Ended March 31,
	2020			2019
	(unaudited)
Revenues	$	16,297		$	10,101
Net loss from continuing operations	$	(17,618	)	$	(17,351	)
Net loss per share, basic and diluted	$	(1.40	)	$	(1.70	)
Shares used in calculation of net loss per share, basic and diluted		12,811			10,202
Common shares outstanding at year-end		17,058			10,397

	Three Months Ended June 30,
	2020			2019
	(unaudited)
Revenues	$	2,313		$	4,894
Net loss from continuing operations	$	(21,181	)	$	(2,270	)
Net loss per share, basic and diluted	$	(1.15	)	$	(0.20	)
Shares used in calculation of net loss per share, basic and diluted		18,357			10,764
Common shares outstanding at period end		19,604			11,497

	Three Months Ended September 30,
	2020		2019
	(unaudited)
Revenues	$	3,278	$	606
Net income (loss) from continuing operations	$	8,985	$	(9,413	)
Net income (loss) per share, basic	$	0.45	$	(0.80	)
Net income (loss) per share, diluted	$	0.40	$	(0.80	)
Shares used in calculation of net loss per share, basic		20,176		12,393
Shares used in calculation of net loss per share, diluted		23,645		12,393
Common shares outstanding at period end		21,086		12,413

	Six Months Ended September 30,
	2020			2019
	(unaudited)
Revenues	$	5,591		$	5,500
Net loss from continuing operations	$	(12,196	)	$	(11,683	)
Net (loss) per share, basic and diluted	$	(0.65	)	$	(1.00	)
Shares used in calculation of net loss per share, basic and diluted		19,271			11,645
Common shares outstanding at period end		21,086			12,413

Risks associated with our business

Our business is subject to a number of risks and uncertainties, including those discussed under “Risk factors” beginning on page 11 of this prospectus. These risks include, among others, the following:

●

until recently, we had incurred significant losses since inception, we may continue to incur losses in the future and may not be able to generate sufficient revenue to achieve and maintain profitability;

●

we require additional capital to fund our business and support our growth, including approximately $4.7 million of drilling and completion expenses of an initial deep horizontal well in the Austin Chalk formation payable in January 2021, and our inability to generate and obtain such capital on acceptable terms, or at all, could harm our business, operating results, financial condition and prospects;

●

significant volatility of oil and gas prices, including as the result of the COVID-19 pandemic and the uncertainty relating to its continuation and impact on the U.S. and global economy;

●

uncertainty related to the delay in closing the proposed $35 million secured loan transaction;

●

the uncertainty of future results due to limited operating history;

●

we may be required to recognize goodwill impairment charges, which could have a material adverse impact on our operating results;

●

we may be required to record significant non-cash impairment charges related to a reduction in the carrying value of our proved oil and gas properties;

●

our near-term success will depend on our ability to grow our oilfield services and transportation operations;

●

we face intense competition in the oil and gas industry;

●

our future cash flows and results of operations, are highly dependent on our ability to efficiently develop our current oil reserves and economically find or acquire additional recoverable reserves;

●

we face significant risks related to drilling and production activities;

●

future changes in the climate change regulatory regime, which would have the effect of reducing demand for fossil fuels and negatively impact our stock price and ability to access capital markets;

●

potential future changes in the regulation of hydraulic fracturing;

●

potential inability to retain and attract qualified drivers, including owner-operators;

●

potential risk that the drivers who we rely upon in our transportation business will be classified as employees rather than independent contractors; and

●

the uncertainty related to the outcome of the pending litigation related to the protection of our intellectual property rights.

Corporate Information

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

This prospectus including the documents incorporated by reference contains forward-looking statements. All statements other than statements of historical facts, including statements regarding our future financial position, liquidity, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.

The results anticipated by any or all of these forward-looking statements might not occur. Important factors, uncertainties and risks that may cause actual results to differ materially from these forward-looking statements are contained in the risk factors that follow and elsewhere in this prospectus and the documents incorporated by reference. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise. For more information regarding some of the ongoing risks and uncertainties of our business, see the risk factors that follow and or that are disclosed in our incorporated documents.

Investing in our common stock involves a high degree of risk. You should carefully consider the following information about these risks, together with the other information appearing elsewhere in this prospectus and the information set forth in our reports on Forms 10-K, 10-Q and 8-K incorporated herein by reference, and in the applicable prospectus supplement, before deciding to invest in our common stock. For a description of these reports and documents, and information about where you can find them, see “Incorporation of Certain Information By Reference.” The occurrence of any of the following risks could have a material adverse effect on our business, reputation, financial condition, results of operations and future growth prospects, as well as our ability to accomplish our strategic objectives. As a result, the trading price of our common stock could decline and you could lose all or part of your investment. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations and stock price.

Until recently we had incurred net losses since our inception and may continue to experience losses and negative cash flow in the future.

As of December 21, 2020, we had cash (including restricted cash) of approximately $1,032,397. Prior to the acquisition of Banner Midstream, we funded our operations principally through the sale of our capital stock and debt instruments. We have also raised substantial operating cash through the exercise of our warrants issued in capital raises over the past two years. Banner Midstream had financed its operations primarily through the issuance of debt securities. Although we recorded net income of approximately $8,985,000 for the fiscal quarter ended September 30, 2020, we had previously incurred operating losses since our inception. For example, we recorded a net loss of approximately $21,181,000 for the fiscal quarter ended June 30, 2020. Approximately 95% of the reported net loss for that fiscal quarter was due to non-cash charges, including a $17,393,000 from a change in the fair value of our warrant derivative liabilities. While our warrant derivative liabilities cause us to incur a non cash loss if our stock price goes up in a given quarter or a non cash gain if it goes down in a quarter, we have experienced substantial exercises since the date of our July 28, 2020 prospectus registering the underlying shares of common stock. As of December 21, 2020, no warrants remained unexercised out of approximately 1,176,472 warrants (on a post-reverse split basis) we issued earlier in 2020. We have an additional approximately 260,000 warrants (on a post-reverse split basis) which have derivative liabilities that will impact our future operating results. Although we expect our revenues to increase from our energy business, 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 require additional capital to fund our business and support our growth, our inability to generate and obtain such capital on acceptable terms, or at all, could harm our business, operating results, financial condition and prospects.

We do not have sufficient working capital and are dependent upon completing a financing to meet our working capital needs over the next 12 months. Since the Banner Acquisition, we have increased our operating expenses in supporting its underlying business and consummating acquisitions of oil and gas properties. We intend to continue to make substantial investments to fund our business and support our growth. Among other things, we need to raise capital through the issuance of equity or debt in order to fund the drilling of oil wells for our recently announced joint venture with a Texas exploration company. In addition to seeking a debt facility to support our growth and acquisition strategy, we are seeking to fund our growth through equity offerings at opportune times when the price of our common stock and external factors provide an opportunity. Any future equity financing will be dependent upon the capital markets in general and those for lower priced issuers in general as well as a variety of other factors which may affect the price of our common stock including:

We may not be able to obtain such additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, 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, which may have a significant adverse impact on our business, operating results and financial condition.

Further, if we raise additional funds through future issuances of equity or convertible debt securities, our existing shareholders 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. Any debt financing that we may secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions.

Because the COVID-19 pandemic has had a material adverse effect on crude oil prices and the economy, the uncertainty relating to its continuation may have a future adverse effect on our business, results of operations, and future prospects.

The global COVID-19 pandemic and the unprecedented actions taken by U.S. federal, state and local governments and governments around the world in order to stop the spread of the virus have had and continue to have a profound impact on the U.S. and global economy, disrupting global supply chains and creating significant volatility in the financial markets. The contraction of the economy caused by the pandemic has, among other things, severely impacted demand for fossil fuels resulting in sharp decline in oil and gas prices. Oil demand significantly deteriorated as a result of the COVID-19 pandemic and corresponding preventative measures taken around the world to mitigate its spread, including “shelter-in-place” orders, quarantines, executive orders and similar government orders and restrictions for their residents to control the spread of COVID-19.

In the midst of the ongoing COVID-19 pandemic, OPEC and other oil producing nations were initially unable to reach an agreement on production levels for crude oil, at which point Saudi Arabia and Russia initiated efforts to aggressively increase production. The convergence of the COVID-19 pandemic and the crude oil production increases caused the significant dual impact of global oil demand decline and the risk of a substantial increase in supply. While OPEC and other oil producing nations agreed in April 2020 to cut production, downward pressure on commodity prices has remained and could continue for the foreseeable future.

Disruptions and/or uncertainties related to the COVID-19 pandemic for a sustained period of time could have a material adverse impact on our business, our ability to execute on our strategy and to realize the full benefits of the Banner Midstream acquisition. Our production and transportation businesses will likely be significantly affected due to the reduction in oil prices and demand for our services, in the event of a global recession caused by the ongoing effects of COVID-19.

Furthermore, the effect of the pandemic on financial markets and on our Company may limit our ability to raise additional capital in the future on the terms acceptable to us at the time we need it, or at all.

Because of the delay in closing of a $35 million secured loan transaction, we may need additional capital to support our operations and growth.

We have had preliminary conversations about a future financing but have not reached an agreement on terms pending the filing of the registration statement which contains this prospectus. If we are able to close an equity financing, it may be very dilutive to our existing shareholders. We cannot assure you that we will complete any financing in which case we may have to reduce our operations or sell assets.

The Company has secured a commitment for a $35 million long-term loan to be provided to Banner Midstream by a project finance company which would permit us to expand our oil and gas operations. However, the definitive agreement is still pending and is not guaranteed to close. The loan will provide the lender with a pledge of Banner Midstream capital stock, will result in increased fixed payment obligations, and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or sell other entities and other operating restrictions that could adversely impact our ability to conduct our business. We continue to seek additional financing in order to support current operations as well as execute on our growth strategy.

We may not be able to obtain additional financing in sufficient amounts or on terms acceptable to us, if at all. We could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be desirable, and we may be required to relinquish rights to some of our current master service agreements or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects. Even if we believe that we have sufficient funds for our current or future operating plans, we may seek additional capital if market conditions are favorable or if we have specific strategic considerations.

If we are unable to obtain funding on a timely basis, we may be required to significantly curtail, delay or discontinue one or more of the lines of operations of our wholly owned subsidiaries or be unable to expand our operations or otherwise capitalize on our business opportunities, as desired, which could materially affect our business, financial condition and results of operations.

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

We acquired our oil and gas business on March 27, 2020, which currently accounts for almost all of our revenues. 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:

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

Because we must periodically evaluate our goodwill for impairment, we could be required to recognize non cash impairment charges in future periods which could have a material adverse impact on our operating results.

A considerable portion of our consolidated assets consists of goodwill. The Company recorded approximately $3.2 million of goodwill in connection with the Trend Holdings acquisition in May 2019, and approximately $7.0 million in connection with the Banner Midstream acquisition in March 2020. We assess goodwill for impairment annually during the fourth fiscal quarter and whenever facts or circumstances indicate that the carrying value of the Company’s goodwill may be impaired. Impairment analysis involves comparing the estimated fair value of a reporting unit to its carrying value. If the carrying value of a reporting unit exceeds its estimated fair value, we record an impairment charge. Determination of fair value requires considerable judgment and is sensitive to changes in underlying assumptions, estimates and market factors. Those assessments may be affected by (i) positive or negative reserve adjustments, (ii) results of drilling activities, (iii) management’s outlook for commodity prices and costs and expenses, (iv) changes in our market capitalization, (v) changes in our weighted average cost of capital and (vi) changes in income taxes. If we are required to recognize noncash charges related to impairment of goodwill, our results of operations would be materially and adversely affected.

Risk Factors Relating to Our Exploration and Production and Transportation Operations

Our energy business will be significantly affected by fluctuations in natural gas and oil prices and future prices will greatly affect our revenues, potential profits, liquidity, growth, and ability to repay our debt.

Our revenues, profitability, liquidity, growth, ability to repay our debt and the value of our assets greatly depend on prices for oil and natural gas. The markets for these commodities are volatile, and we expect that volatility to continue. According to Bloomberg as of December 7, 2020 oil prices declined by approximately 29% since the beginning of 2020. The prices of oil and natural gas fluctuate in response to changes in supply and demand (global, regional and local), transportation costs, market uncertainty and other factors that are beyond our control. Short- and long-term prices are subject to a myriad of factors such as:

Oil and gas prices have generally been in a down cycle for over five years even when the economy in the United States grew rapidly. While lower oil prices are helpful to our transportation business since it reduces our costs, it has an inverse effect on our exploration and production business.

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

The Company has agreed to fund 100% of the cost, estimated to be approximately $4,700,000, associated with the drilling and completion of an initial deep horizontal well in the Austin Chalk formation as part of their Participation Agreement with Blackbrush Oil & Gas, L.P. The Company has agreed to pay the amount of the drilling costs into a designated escrow account by the commencement of the drilling, which is expected in January 2021. In addition, our transportation business is capital intensive and asset heavy, and our policy of maintaining a young, technology-equipped fleet requires us to expend significant amounts in capital expenditures annually. We expect to pay for projected capital expenditures with cash flows from operations, proceeds from equity sales or financing available under our existing debt instruments. If we were unable to generate sufficient cash from operations, we would need to seek alternative sources of capital, including financing, to meet our capital requirements. In the event that we are unable to generate sufficient cash from operations or obtain financing on favorable terms in the future, we may have to limit our fleet size, enter into less favorable financing arrangements or operate our revenue equipment for longer periods, any of which could have a materially adverse effect on our profitability.

Competition in the oil and natural gas industry is intense, making it more difficult for us to market oil and gas we produce, to acquire interests in new leases, to secure trained personnel and appropriate services, and to raise capital.

Banner Midstream is a relatively small participant in its industry and we face significant competition from major energy companies with substantial financial, management, technical and other resources as well as large and other privately held businesses which have competitive advantages. Our cost of operations is highly dependent on third-party services, and competition for these services can be significant, especially in times when commodity prices are rising. Similarly, we compete for trained, qualified personnel, and in times of lower prices for the commodities we produce, we and other companies with similar production profiles may not be able to attract and retain this talent. Our ability to acquire and develop reserves in the future will depend on our ability to evaluate and select suitable properties and to consummate transactions in a highly competitive environment for acquiring properties, marketing oil and gas and securing trained personnel. Also, there is substantial competition for capital available for investment in the oil and gas industry. Our competitors may be able to pay more for personnel, property and services and to attract capital at lower rates. This may become more likely if prices for natural gas increase faster than prices for oil, as oil comprises a greater percentage of our overall production and transportation business. Because of our small size, we may be more affected than larger competitors.

If we fail to successfully integrate the operations of Banner Midstream with our legacy operations, it may have a material adverse effect on our results of operations.

Since March 27, 2020 when we completed the Banner Acquisition, we have been acquiring oil and gas properties. In addition, we are seeking to acquire additional energy assets in the future. The integration of Banner Midstream and any other assets and businesses we may acquire in the future may be complex and time-consuming and we may encounter difficulties related to such integration, including, among other things:

Some of these factors are outside our control including the impact from COVID-19. Our failure to successfully integrate these acquisitions, or otherwise realize any of the anticipated benefits of these acquisitions, could adversely affect our future results of operations. The integration process may be more difficult, costly or time-consuming than we anticipate, which could cause our stock price to decline.

Unless we replace our reserves with new reserves and develop those reserves, our reserves and production will decline, which would adversely affect our future cash flows and results of operations.

Producing oil reservoirs generally are characterized by declining production rates that vary depending upon reservoir characteristics and other factors. Unless we conduct successful ongoing exploration and development activities or continually acquire properties containing proved reserves, our proved reserves will decline as those reserves are produced. Our future reserves and production, and therefore our future cash flow and results of operations, are highly dependent on our success in efficiently developing our current reserves and economically finding or acquiring additional recoverable reserves. We may not be able to develop, find or acquire sufficient additional reserves to replace our current and future production. If we are unable to replace our current and future production, the value of our reserves will decrease, and our business, financial condition and results of operations would be materially and adversely affected.

Drilling for and producing crude oil involves significant risks and uncertainties that could adversely affect our business, financial condition or results of operations.

Our drilling and production activities are subject to many risks, including the risk that we will not discover commercially productive reservoirs. Drilling for crude oil can be unprofitable, not only from dry holes, but from productive wells that do not produce sufficient revenues to return a profit. In addition, our drilling and producing operations may be curtailed, delayed or cancelled as a result of other factors, including but not limited to:

Any of these risks can cause substantial losses, including personal injury or loss of life, severe damage to or destruction of property, natural resources and equipment, pollution, environmental contamination, clean-up responsibilities, loss of wells, repairs to resume operations; and regulatory fines or penalties. Further, our exposure to operational risks may increase as our drilling activity expands.

We may not be insured or fully insured against certain of the above operational risks, either due to unavailability of such insurance or the high premiums and deductibles. The occurrence of an event that is not covered in full or in part by insurance could have a material adverse impact on our business, financial condition and results of operations.

Climate change legislation or regulations governing the emissions of greenhouse gases could result in increased operating costs and reduce demand for fossil fuels and concern in financial and investment markets over greenhouse gasses and fossil fuel production could adversely affect our access to capital and the price of our common stock.

In response to findings that emissions of carbon dioxide, methane and other greenhouse gases present an endangerment to human health and the environment, the United States Environmental Protection Agency (the “EPA”) has 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 case-by-case basis. EPA rulemakings related to greenhouse gas emissions could adversely affect our operations and restrict or delay our ability to obtain air permits for new or modified sources.

The EPA also has adopted rules requiring the monitoring and reporting of greenhouse gas emissions from specified onshore and offshore natural gas and oil production sources in the United States on an annual basis, which include certain of our operations. In May 2016, the EPA finalized additional regulations to control methane and volatile organic compound emissions from certain oil and gas equipment and operations. However, in September 2018 and August 2019, the EPA issued proposed revisions to those regulations, which, if finalized, would reduce certain obligations thereunder.

Although Congress from time to time has considered legislation to reduce emissions of greenhouse gases, there has not been significant activity in the form of adopted legislation to reduce greenhouse gas emissions at the federal level in recent years. In the absence of such federal climate legislation, a number of states, including states in which we operate, have enacted or passed measures to track and reduce emissions of greenhouse gases, primarily through the planned development of greenhouse gas emission inventories and regional greenhouse gas cap-and-trade programs. Most of these cap-and-trade programs require major sources of emissions or major producers of fuels to acquire and surrender emission allowances, with the number of allowances available for purchase reduced each year until the overall greenhouse gas emission reduction goal is achieved. These reductions may cause the cost of allowances to escalate significantly over time.

The adoption and implementation of regulations that require reporting of greenhouse gases or otherwise limit emissions of greenhouse gases from our equipment and operations could require us to incur costs to monitor and report on greenhouse gas emissions or install new equipment to reduce emissions of greenhouse gases associated with our operations. In addition, these regulatory initiatives could drive down demand for our products 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. At the same time, new laws and regulations are prompting power producers to shift from coal to natural gas, which is increasing demand.

In December 2015, over 190 countries, including the United States, reached an agreement to reduce global greenhouse gas emissions (the “Paris Agreement”). 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. In November 2019, the United States formally initiated the process for withdrawing from the Paris Agreement and the withdrawal was effective November 4, 2020. President-elect Joe Biden has stated that he intends to rejoin the Paris Agreement. The terms on which the United States will re-enter the Paris Agreement are uncertain at this time. However, after rejoining the United States will likely need to submit updated emission reduction targets. To the extent that the United States implements this agreement or impose 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.

The energy business has benefited from the Trump Administration’s de-regulatory push. The Biden administration is expected to aggressively seek to regulate the energy industry and seek to eliminate in time the use of fossil fuels. This regulatory push will be magnified if the Democrats control both houses of Congress.

We will be further subject to our regulatory efforts such as California announced goal of eliminating the sale of vehicles which use gas by 2035.

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, financial condition and cash flows.

Although we do not rely on hydraulic fracturing or fracking techniques in our exploration and production operations, our transportation business, which accounted for approximately 79% of our operating revenue in the fiscal quarter ended September 30, 2020, depends to a considerable extent on a continued use of such techniques. We expect to continue to derive a substantial portion of our revenue from our transportation operations for the foreseeable future.

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.

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

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.

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.

The extension of our active oil and gas mineral leases may be subject to performing continuous drilling operations.

Our oil and gas mineral leases may contain acreage that is either held by production or not. In order to extend the leased acreage not held by production, the Company must maintain minimum continuous drilling operations in order to extend these leases to future periods. The Company’s inability to perform operations during any given period could result in the Company’s losing the rights to future operations on that lease.

The potential lack of availability of, or cost of, drilling rigs, equipment, supplies, personnel and crude oil field services could adversely affect our ability to execute on a timely basis our exploration and development plans within our budget.

When the prices of crude oil increase, or the demand for equipment and services is greater than the supply in certain areas, we could encounter an increase in the cost of securing drilling rigs, equipment and supplies. In addition, larger producers may be more likely to secure access to such equipment by offering more lucrative terms. If we are unable to acquire access to such resources, or can obtain access only at higher prices, our ability to convert our reserves into cash flow could be delayed and the cost of producing those reserves could increase significantly, which would adversely affect our results of operations and financial condition.

Our exploration and production 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 it to material costs and liabilities.

Our exploration and production operations are subject to stringent federal, state and local laws and regulations governing, among other things, the drilling activities, production rates, the size and shape of drilling and spacing units or proration units, the transportation and sale of crude oil, gas, and the discharging of materials into the environment and environmental protection. These laws and regulations may limit the amount of oil and gas we can produce or limit the number of wells or the locations where we can drill.

Further, we are required to obtain and maintain numerous environmental and oil and gas-related permits, approvals and certificates from various federal, state and local governmental agencies in connection with our exploration and production operations, and may incur substantial costs in doing so. The need to obtain permits could potentially delay, curtail or cease the development of oil and gas projects. The Company may in the future be charged royalties on gas emissions or required to incur certain capital expenditures for air pollution control equipment or other air emissions-related issues. Additionally, 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.

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.

Because oil prices are highly volatile, any sustained decline in oil prices could adversely affect our business, financial condition and results of operations and our ability to meet our capital expenditure obligations and financial commitments.

Our future revenues from exploration and production operations, profitability, cash flows, future growth and carrying value of our oil and gas properties will depend on oil prices. Commodity prices, including oil, are highly volatile and may fluctuate widely in response to relatively minor changes in supply and demand and market uncertainty. Additional factors which may affect oil prices and which are beyond our control include but are not limited to, the following factors:

Lower commodity prices may reduce our cash flows and borrowing ability. If we are unable to obtain needed capital or financing on satisfactory terms, our ability to develop future reserves could be adversely affected. Also, using lower prices in estimating proved reserves may result in a reduction in proved reserve volumes due to economic limits.

If we are required to curtail our drilling program, we may be unable to continue to hold leases that are scheduled to expire, which may further reduce our reserves. As a result, a substantial or extended decline in commodity prices may materially and adversely affect our future business, financial condition, results of operations, liquidity and ability to finance planned capital expenditures.

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

Fuel conservation measures, alternative requirements, 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. 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.

We may be required to record significant non-cash impairment charges related to a reduction in the carrying value of our proved oil and gas properties, which could materially and adversely affect our results of operations.

We will perform assessments of our oil and gas properties whenever events or circumstances indicate that the carrying value of those assets may not be recoverable. In order to perform these assessments, management will use various observable and unobservable inputs, including management’s outlooks for (i) proved reserves and risk-adjusted probable and possible reserves, (ii) commodity prices, (iii) production costs, (iv) capital expenditures and (v) production. Significant or extended price declines could result in the need to adjust the carrying value of our proved oil and gas properties by recording non-cash impairment charges. To the extent such assessments indicate a reduction of the estimated useful life or estimated future cash flows, the carrying value of the oil and gas properties may not be recoverable and therefore we may be required to record an impairment charge reducing the carrying value of the proved properties to their fair value. Due to the recent decline in the oil and natural gas prices, we may be required to record impairment charges related to the oil and gas properties acquired as part of the Banner Acquisition, which would materially and adversely affect our results of operations in the period incurred.

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 enter all necessary agreements with key customers in the oil industry and purchase enough equipment to satisfy the demand for freight 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 the Banner Midstream expenses will increase substantially if and as they:

We may not be able to successfully identify acquisition targets and complete strategic acquisitions to execute our growth strategy, and even if we are able to do so, we may not realize the anticipated benefits of these acquisitions.

As part of our growth strategy we intend to pursue opportunities to acquire companies or assets that will enable us to expand our product and service offerings and to increase our geographic footprint. We routinely review potential acquisitions. However, identifying suitable acquisition targets can be difficult, costly and time-consuming, and we may not be able to do so or complete acquisitions in a timely manner, on a cost-effective basis or at all. Even if completed, we may not realize the anticipated benefits of such acquisitions. Our acquisitions have previously required, and any similar future transactions may also require, significant efforts and expenditures, in particular with respect to integration of acquired assets and business into our legacy operations. We may encounter unexpected difficulties, or incur unexpected costs, in connection with strategic acquisitions and integration efforts, including without limitation:

Failure to successfully identify suitable acquisition targets, complete strategic acquisitions, or realize the anticipated benefits of completed acquisitions, would undermine our ability to execute on our growth strategy, which would in its turn have a material adverse effect on our results of operations and future prospects.

Our near-term success will depend upon our ability to grow our oilfield services and transportation operations.

Our success will depend, in part, upon our ability to grow our oilfield and transportation services operations. Attracting new customers and joining networks and demand-supply chains requires substantial time and expense. Any failure to commence operations timely would adversely affect our operating results. Many factors could affect the market acceptance and commercial success of our services, including:

Because we have limited experience operating the recently acquired oil and gas exploration and transportation businesses, our failure to effectively manage the risks and challenges inherent in such businesses could adversely affect our business, operating results, financial condition and growth prospects.

Until we acquired Banner Midstream on March 27, 2020, we had no experience in operating its oil and gas businesses, although Jay Puchir, Banner Midstream’s Chief Executive Officer joined us as our Chief Accounting Officer and continues as Banner Midstream’s Chief Executive Officer. Accordingly, we have limited experience operating these businesses, and, as a result, may encounter challenges and risks inherent in operating such businesses. If we fail to effectively manage the risks and challenges inherent in such businesses, our business, operating results, financial condition and growth prospects would be materially and adversely affected.

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

With the exception of minimal revenue from our investment advisory business, our revenue is from customers in the oil exploration and production 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.

The risks associated with these factors are heightened when the United States economy is weakened. Some of the principal risks during such times are as follows:

Economic conditions that decrease shipping demand or increase the supply of capacity in the trucking transportation industry on the Territory 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 adversely affect our profitability.

In addition, events outside our control, such as strikes or other work stoppages at our facilities or at customer, port, border or other shipping locations, weather, actual or threatened armed conflicts or terrorist attacks, efforts to combat terrorism, military action against a foreign state or group located in a foreign state or heightened security requirements could lead to reduced economic demand, reduced availability of credit or temporary closing of shipping locations or United States borders. Such events or enhanced security measures in connection with such events could impair our operations and result in higher operating costs.

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 margins.

Fuel represents a significant expense for our transportation business while the sale of oil and to a lesser extent natural gas provides revenues for our business. Diesel fuel prices fluctuate greatly due to factors beyond our control, such as political events, terrorist activities, armed conflicts, depreciation of the dollar against other currencies and weather, such as hurricanes, 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 our operations are dependent upon diesel fuel, and a portion of our business is based on fuel purchased on the spot market at prevailing market rates, 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. While a portion 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 behind 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. As of the date of this prospectus, we had no derivative financial instruments to reduce our exposure to fuel price fluctuations.

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

In our transportation operations, we rely almost exclusively 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 required to increase our mileage rates and accessorial pay or operate with fewer trucks and face difficulty meeting our clients’ demands, which would in turn have a material adverse effect on our financial condition and operating results.

If owner-operators and their 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 that requires that many independent contractors be treated as employees and receive benefits only available to employees which increases costs. To date, this legislation has been limited to California and is being considered in states where we do not operate. Some companies recently been 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, 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 a risk if the National Labor Relations Board (“NLRB”) were to pass a rule to this effect, which could occur if the Democratic nominee is elected President next month. Furthermore, the costs associated with defending or resolving lawsuits relating to the independent contractor status of owner-operators and their drivers could be material to our business.

If legislation is passed in states where we operate, the NLRB passes a rule, or a court or an administrative agency were to determine 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.

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 associate 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 aggregate insurance limits should be sufficient to cover reasonably expected claims, the amount of one or more claims could exceed our aggregate 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.

Because our transportation operations are subject to various environmental laws and regulations, violations could result in substantial fines or penalties.

We are 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.

Our ability to execute our strategy with respect to our technology segment, depends to a large extent on the outcome of the litigation related to protection of our intellectual property rights.

As previously disclosed, we have filed a complaint against Walmart Inc. in the United States District Court for the Eastern District of Arkansas, Western Division. The complaint includes claims for violation of the Arkansas Trade Secrets Act, violation of the Federal Defend Trade Secrets Act, breach of contract, unfair competition, unjust enrichment, breach of the covenant of good faith and fair dealing, conversion and fraud. The case is scheduled for trial on March 29, 2021. The Complaint seeks $2 billion in damages. Intellectual property and similar litigation is subject to uncertainty and Walmart is vigorously defending the suit. We cannot assure you we will be successful or if we are, how much we will recover.

If we are unable to develop and generate additional demand for our technology services or products, we will likely suffer serious harm to our business.

We have invested significant resources in developing and marketing our technology services and products. Some of our services and products are often considered complex and involve a new approach to the conduct of business by our customers. As a result, intensive marketing and sales efforts may be necessary to educate prospective customers regarding the uses and benefits of our services and products in order to generate additional demand. The market for our services and products may weaken, competitors may develop superior offerings, or we may fail to develop acceptable solutions to address new market conditions. Any one of these events could have a material adverse effect on our business, results of operations, cash flow and financial condition.

Undetected errors or failures in our software, products or services could result in loss or delay in the market acceptance for our products or lost sales.

Because our software services and products, and the environments in which they operate, are complex, our software and products may contain errors that can be detected at any point in its lifecycle. While we continually test our services and products for errors, errors may be found at any time in the future. Detection of any significant errors may result in, among other things, loss of, or delay in, market acceptance and sales of our services and products, diversion of development resources, injury to our reputation, increased service and warranty costs, license terminations or renegotiations or costly litigation. Additionally, because our services and products support or rely on other systems and applications, any software or hardware errors or defects in these systems or applications may result in errors in the performance of our service or products, and it may be difficult or impossible to determine where the error resides.

Sales to many of our target customers involve long sales and implementation cycles, which may cause revenues and operating results to vary significantly.

A prospective customer’s decision to purchase our services or products may often involve lengthy evaluation and product qualification processes. Throughout the sales cycle, we anticipate often spending considerable time educating and providing information to prospective customers regarding the use and benefits of our services and products. Budget constraints and the need for multiple approvals within these organizations may also delay the purchase decision. Failure to obtain the timely required approval for a particular project or purchase decision may delay the purchase of our services or products. As a result, we expect that the sales cycle for some of our services and products will typically range to more than 360 days, depending on the availability of funding to the prospective customer. These long cycles may cause delays in any potential sale, and we may spend a large amount of time and resources on prospective customers who decide not to purchase our services or products, which could materially and adversely affect our business.

Additionally, some of our services and products are designed for corporate customers, which will require us to recruit a sales force that understands the needs of these customers, engage in extensive negotiations and provide support to complete sales. If we do not successfully market our services and products to these targeted customers, our operating results will be below our expectations and the expectations of investors and market analysts, which would likely cause the price of our common stock to decline.

Patents, trademarks, copyrights and licenses are important to our technology business, and the inability to defend, obtain or renew such intellectual property could adversely affect the Company’s operating results.

Through Zest Labs, the Company currently holds rights to patents and copyrights relating to certain aspects of its RFID technology, software, and services. In addition, the Company has registered, and/or has applied to register trademarks and service marks in the U.S. and a number of foreign countries for “Intelleflex,” the Intelleflex logo, “Zest,” “Zest Data Services”, the Zest logo, and numerous other trademarks and service marks. Although the Company believes the ownership of such patents, copyrights, trademarks and service marks is an important factor in its business and that its success does depend in part on the ownership thereof, the Company relies primarily on the innovative skills, technical competence, and marketing abilities of its personnel. Loss of a significant number of licenses may have an adverse effect of the Company’s operations.

Many of Zest Labs’ products are designed to include intellectual property obtained from third parties. While it may be necessary in the future to seek or renew licenses relating to various aspects of its products and business methods, the Company believes, based upon past experience and industry practice, such licenses generally could be obtained on commercially reasonable terms; however, there is no guarantee that such licenses could be obtained at all.

The Company relies on licenses to third-party patents and intellectual property, and the Company’s future results could be materially adversely affected if it is alleged or found to have infringed intellectual property rights.

Many of Zest Labs’ products are designed to use third-party intellectual property, and it may be necessary in the future to seek or renew licenses relating to various aspects of its products and business methods. Although the Company believes that, based on past experience and industry practice, such licenses generally could be obtained on commercially reasonable terms, there is no assurance that the necessary licenses would be available on acceptable terms or at all.

If we fail to protect our proprietary information and prevent third parties from making unauthorized use of our products and technology, our financial results could be harmed.

Much of our software and underlying technology is proprietary. We seek to protect our proprietary rights through a combination of confidentiality agreements and through copyright, patent, trademark, and trade secret laws. However, all of these measures afford only limited protection and may be challenged, invalidated, or circumvented by third parties. Any patent licensed by us or issued to us could be challenged, invalidated or circumvented or rights granted thereunder may not provide a competitive advantage to us. Furthermore, patent applications that we file may not result in issuance of a patent or, if a patent is issued, the patent may not be issued in a form that is advantageous to us. Despite our efforts to protect our intellectual property rights, others may independently develop similar products, duplicate our products or design around our patents and other rights. In addition, it is difficult to monitor compliance with, and enforce, our intellectual property in a cost-effective manner.

Third parties claiming that we infringe on their proprietary rights could cause us to incur significant legal expenses and prevent us from selling our products and services.

From time to time, third parties may claim that we have infringed on their intellectual property rights, including claims regarding patents, copyrights, and trademarks. Because of constant technological change in the markets in which we compete, the extensive patent coverage of existing technologies, and the rapid rate of issuance of new patents, it is possible that the number of these claims may grow. In addition, former employers of our former, current, or future employees may assert claims that such employees have improperly disclosed to us the confidential or proprietary information of these former employers. Any such claim, with or without merit, could result in costly litigation and distract management from day-to-day operations. If we are not successful in defending such claims, we could be required to stop selling, delay shipments of, or redesign our products, pay significant amounts as monetary damages, enter into royalty or licensing arrangements, or satisfy indemnification obligations that we have with some of our customers. Royalty or licensing arrangements that we may seek in such circumstances may not be available to us on commercially reasonable terms or at all. We may incur significant expenditures to investigate, defend and settle claims related to the use of technology and intellectual property rights as part of our strategy to manage this risk.

We rely on third-party manufacturers for the final assembly of certain of our product related to our technology offerings. If these third-party manufacturers were to become unavailable, we may not be able to replace them on economical terms or at all, and our business would be harmed.

A failure by such manufacturers to provide manufacturing services to us, or any disruption in such manufacturing services, may adversely affect our business. We may incur increased business disruption risk due to the dependence on these third-party manufacturers, as we are not able to exercise direct control over the assembly or related operations of certain of our products. If these third-party manufacturers experience financial difficulties or fail to meet our manufacturing needs, then we may be unable to satisfy customer product demands, lose sales, and be unable to maintain customer relationships. Longer production lead times may result in shortages of certain products and inadequate inventories during periods of unanticipated higher demand. Without such third parties continuing to manufacture our products, we may have no other means of final assembly of certain of our products until we are able to secure the manufacturing capability at another facility or develop an alternative manufacturing facility. This transition could be costly and time consuming.

The Company is subject to risks associated with laws, regulations and industry-imposed standards related to wireless communications devices.

Laws and regulations related to wireless communications devices in the many jurisdictions in which Zest Labs operates and seeks to operate are extensive and subject to change. Such changes, which could include but are not limited to restrictions on production, manufacture, distribution, and use of the device, may have a material adverse effect on the Company’s financial condition and operating results.

Wireless communication devices, such as RFID readers, are subject to certification and regulation by governmental and standardization bodies. These certification processes are extensive and time consuming, and could result in additional testing requirements, product modifications or delays in product shipment dates, which may have a material adverse effect on the Company’s financial condition and operating results.

Because of technological changes in the business software, web and device applications, sensors and sensor-based devices, and RFID and wireless communication industries, current extensive patent coverage, and the rapid issuance of new patents, it is possible that certain components of Zest Labs’ products and business methods may unknowingly infringe the patents or other intellectual property rights of third parties. From time to time, Zest Labs may be notified that it may be infringing such rights. Responding to such claims, regardless of their merit, can consume significant time and expense. In certain cases, the Company may consider the desirability of entering into licensing agreements, although no assurance can be given that such licenses can be obtained on acceptable terms or that litigation will not occur. If there is a temporary or permanent injunction prohibiting the Company from marketing or selling certain products or a successful claim of infringement against the Company requires it to pay royalties to a third party, the Company’s financial condition and operating results could be materially adversely affected.

The inability to obtain certain components could adversely impact the Company’s ability to deliver on its contractual commitments which could negatively impact our results of operations and cash flows.

Although most components essential to the Company’s business are generally available from multiple sources, certain key components including, but not limited to, microprocessors, enclosures, certain RFID custom integrated circuits, and application-specific integrated circuits are currently obtained by the Company from single or limited sources. Some key components, while currently available to the Company from multiple sources, are at times subject to industry-wide availability constraints and pricing pressures. If the supply of a key or single-sourced component to the Company were to be delayed or curtailed or in the event a key manufacturing vendor delayed shipment of completed products to the Company, the Company’s ability to ship related products in desired quantities, and in a timely manner, could be adversely affected. The Company’s business and financial performance could also be adversely affected depending on the time required to obtain sufficient quantities from the original source, or to identify and obtain sufficient quantities from an alternative source. Continued availability of these components may be affected if suppliers were to decide to concentrate on the production of common components instead of components customized to meet the Company’s requirements. The Company attempts to mitigate these potential risks by working closely with these and other key suppliers on product introduction plans, strategic inventories, coordinated product introductions, and internal and external manufacturing schedules and levels. Consistent with industry practice, the Company acquires components through a combination of formal purchase orders, supplier contracts, and open orders based on projected demand information. However, adverse changes in the supply chain of the Company’s vendors may adversely impact the supply of key components.

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, including service center managers. 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, other than Peter Mehring, the president of Zest Labs.

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 Randy May, our Chief Executive Officer, William Hoagland, our Chief Financial officer, Jay Puchir, our Chief Accounting Officer, and Peter Mehring, President of Zest Labs. If any members of our management team leave our employment, our business could suffer, and the share price of our common stock could decline.

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

We have recently experienced significant growth commencing with and following the Banner Acquisition. Our business model relies on our rapidly growing our oil and gas drilling and 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.

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.

We are subject to the reporting requirements of the Securities Exchange Act of 1934 (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 June 30, 2020 due to inadequate segregation of duties consistent with control objectives. Any failure to develop or maintain effective controls or any difficulties encountered in their implementation or improvement 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 our information technology systems or data security breaches, including as the result of cyber security attacks, affecting us or our business associates, may adversely affect our financial condition and operating results.

We depend on information technology systems and services in conducting our business. We 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, result in potential liability or reputational damage or otherwise have a material adverse effect on our financial condition and operating results.

Because our common stock trades on the OTCQB, we are subject to the unwillingness of most institutional investors to purchase our common stock as well as the general limited liquidity of that trading market.

Our common stock is currently traded on the OTCQB, which is not a national securities exchange. Most institutional investors will only purchase securities which trade on one of the markets operated by the Nasdaq Stock Market or the New York Stock Exchange. As a result, the OTCQB is generally less liquid then the leading stock exchanges. While the market for our common stock has been relatively active, we believe our failure to be listed on a leading national securities exchange has reduced our liquidity. We cannot assure you that our recent liquidity will be maintained or that investors will not encounter difficulties in selling their common stock in the future at present levels or if the absence of sufficient liquidity will harm our shareholders in the future.

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 the 21,579,588 shares of common stock outstanding as of December 21, 2020, approximately 17,009,262 shares are held by investors who are not our affiliates or holders of restricted stock. All of these shares of unrestricted stock are freely tradeable. The remaining shares may be sold subject to the volume limits of Rule 144 which limits sales by any affiliate to 1% of outstanding shares in any three-month period. 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.

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:

Future changes in the fair value of outstanding warrants could result in volatility of our reported results of operations.

Because of the derivative liability caused by our outstanding warrants, the increase or decrease in our common stock price each quarter (measured from the first day to the last day) is either a non-cash expense or income. If the price rises as it did in the quarter ended June 30, 2020, we are required to report the expense, which increases our actual operating loss. Contrarily a price decrease in a given quarter will cause to report income. The risk is investors will react to our reported bottom line, which will increase volatility in our stock price.

Because we can issue “blank check” preferred stock without shareholder 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 shareholder 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 shareholders 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 additional shares of authorized preferred stock, there can be no assurance that we will not do so in the future. The registration statement, of which this prospectus is a part, permits us to issue preferred stock including blank check preferred stock.

Unless we specify otherwise in an accompanying prospectus supplement, we intend to use the net proceeds from the sale of the securities by us to provide additional funds for working capital and other general corporate purposes. Any specific allocation of the net proceeds of an offering of securities will be determined at the time of such offering and will be described in the accompanying supplement to this prospectus.

The number of shares of common stock issued and outstanding, the number of shares of common stock underlying outstanding options and warrants, and the number of shares of common stock the Company is authorized to issue give effect to the one-for-five reverse stock split of the Company’s common stock and a simultaneous proportionate reduction of the authorized common stock effected as of December 17, 2020.

We are soliciting proxies from our shareholders to approve the following proposals at the special meeting of the shareholders of the Company scheduled to take place at 1:00 p.m. ET on December 29, 2020 (the “Special Meeting”):

Our ability to issue shares of common stock in excess of 20,000,000 shares is subject to the approval by the shareholders at the Special Meeting of the proposal to ratify the Authorized Capital Increase, or alternatively the proposal to increase the number of shares of common stock the Company is authorized to issue from 20,000,000 to 30,000,000 shares, the filing with the Nevada Secretary of State and effectiveness of a Certificate of Validation or a Certificate of Amendment to Articles of Incorporation (as applicable), and/or any other documents, or taking any other action, as may be required under Nevada law in connection with the ratification of the Authorized Capital Increase, all as described in the revised definitive proxy statement on Schedule 14A filed and mailed to the shareholders of the Company on December 11, 2020 in connection with the Special Meeting.

We are authorized to issue 40,000,000 shares of common stock, par value $0.001 per share, subject to the ratification by our stockholders at the Special Meeting of the amendment to the Articles of Incorporation of the Company effecting the Authorized Capital Increase in March 2020. The holders of common stock are entitled to one vote per share on all matters submitted to a vote of shareholders, including the election of directors. There is no cumulative voting in the election of directors. In the event of our liquidation or dissolution, holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preferences of any outstanding shares of preferred stock. Holders of common stock have no preemptive rights and have no right to convert their common stock into any other securities and there are no redemption provisions applicable to our common stock.

The holders of common stock are entitled to any dividends that may be declared by the Board of Directors out of funds legally available for payment of dividends subject to the prior rights of holders of preferred stock and any contractual restrictions we have against the payment of dividends on common stock. We have not paid dividends on our common stock since inception and do not plan to pay dividends on our common stock in the foreseeable future.

As of December 21, 2020, we had 21,579,588 shares of common stock outstanding. In addition, as of that date, there were 2,419,569 shares underlying our outstanding stock options and 352,000 underlying outstanding warrants.

We are authorized to issue 5,000,000 shares of “blank check” preferred stock with designations, rights and preferences as may be determined from time to time by our Board of Directors. As the date of this prospectus, we had no shares of preferred stock issued and outstanding.

Preferred stock is available for possible future financings or acquisitions and for general corporate purposes without further authorization of our shareholders unless such authorization is required by applicable law, or the rules of any securities exchange or market on which our stock is then listed or admitted or trading.

Our Board of Directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of common stock. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes could, under some circumstances, have the effect of delaying, deferring or preventing a change in control of the Company. For a description of how future issuances of our preferred stock could affect the rights of our shareholders, see “Certain Provisions of Nevada Law and of Our Charter and Bylaws – Articles of Incorporation and Bylaws,” below.

A prospectus supplement relating to any series of preferred stock being offered will include specific terms relating to the offering. Such prospectus supplement will include:

We may issue warrants for the purchase of common stock. Warrants may be issued independently or together with other securities and may be attached to or separate from any offered securities. Each series of warrants will be issued under a separate warrant agreement. Set forth below is a brief summary of the general terms and provisions of the warrants that we may issue from time to time. Additional terms of the warrants and the applicable warrant agreement will be described in the applicable prospectus supplement.

The following descriptions, and any description of the warrants included in a prospectus supplement, may not be complete and is subject to and qualified in its entirety by reference to the terms and provisions of the applicable warrant agreement, which we will file with the Commission in connection with any offering of warrants.

The prospectus supplement relating to a particular issue of warrants will describe the terms of the warrants, including the following:

Each warrant will entitle the holder of the warrant to purchase the securities that we specify in the applicable prospectus supplement at the exercise price that we describe in the applicable prospectus supplement. Holders may exercise warrants at any time up to the close of business on the expiration date set forth in the applicable prospectus supplement. After the close of business on the expiration date, unexercised warrants will be void. Holders may exercise warrants as set forth in the prospectus supplement relating to the warrants being offered. Until a holder exercises the warrants to purchase any securities underlying the warrants, the holder will not have any rights as a holder of the underlying securities by virtue of ownership of warrants.

We may issue units comprised of one or more of the other securities described in this prospectus or any prospectus supplement in any combination. Each unit will be issued so that the holder of the unit is also the holder, with the rights and obligations of a holder, of each security included in the unit. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred separately, at any time or at any times before a specified date or upon the occurrence of a specified event or occurrence.

We have appointed Philadelphia Stock Transfer, Inc. as our transfer agent. Their contact information is: 2320 Haverford Rd., Suite 230 Ardmore, PA 19003.

We may currently be, or in the future become, subject to the provisions of the Nevada Revised Statutes regarding the acquisition of controlling interest (the “Controlling Interest Law”). A corporation is subject to the Controlling Interest Law if it has more than 200 shareholders of record, at least 100 of whom are residents of Nevada, and if the corporation does business in Nevada, directly or through an affiliated corporation. The Controlling Interest Law may have the effect of discouraging corporate takeovers. As of December 21, 2020, we had three shareholders of record who are residents of Nevada.

The Controlling Interest Law focuses on the acquisition of a “controlling interest,” which means the ownership of outstanding voting shares that would be sufficient, but for the operation of law, to enable the acquiring person to exercise the following proportions of the voting power of the corporation in the election of directors: (1) one-fifth or more but less than one-third; (2) one-third or more but less than a majority; or (3) a majority or more. The ability to exercise this voting power may be direct or indirect, as well as individual or in association with others.

The effect of the Controlling Interest Law is that an acquiring person, and those acting in association with such person, will obtain only such voting rights in the controlling interest as are conferred by a resolution of (1) a majority of the shareholders of the corporation and, if applicable (2) a majority of each class or series of outstanding shares of which the acquisition would adversely affect or alter a preference or relative or other right, approved at a special or annual shareholders’ meeting. The Controlling Interest Law contemplates that voting rights will be considered only once by the other shareholders. Thus, there is no authority to take away voting rights from the control shares of an acquiring person once those rights have been approved in accordance with the Controlling Interest Law. However, if the shareholders do not grant voting rights to the shares acquired by an acquiring person, those shares do not become permanent non-voting shares. The acquiring person is free to sell the shares to others, and so long as the subsequent buyer or buyers of those shares themselves do not acquire a controlling interest, those shares would not be governed by the Controlling Interest Law.

If control shares are accorded full voting rights and the acquiring person has acquired control shares with a majority or more of the voting power, a shareholder of record, other than the acquiring person, who did not vote in favor of approval of voting rights, is entitled to dissent to the acquisition and demand fair value for such shareholder’s shares pursuant to applicable provisions of Chapter 92 of the Nevada Revised Statutes governing rights and procedures for dissenting shareholders.

In addition to the Controlling Interest Law, Nevada has a business combination law, which prohibits certain business combinations between Nevada publicly traded corporations and any “interested shareholder” for two years after the interested shareholder first becomes an interested shareholder, unless the board of directors of the corporation approved the combination before the person became an interested shareholder or the corporation’s board of directors approves the transaction and at least 60% of the corporation’s disinterested shareholders approve the combination at an annual or special meeting thereof. For purposes of Nevada law, an interested shareholder is any person who is: (a) the beneficial owner, directly or indirectly, of 10% or more of the voting power of the outstanding voting shares of the corporation, or (b) an affiliate or associate of the corporation and at any time within the previous two years was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the then-outstanding shares of the corporation. The definition of “combination” contained in the statute is sufficiently broad to cover virtually any kind of transaction that would allow a potential acquirer to use the corporation’s assets to finance the acquisition or otherwise to benefit its own interests rather than the interests of the corporation and its other shareholders.

The effect of Nevada’s business combination law is to potentially discourage parties interested in taking control of the Company from doing so if they cannot obtain the approval of our Board of Directors or shareholders.

In addition, under Nevada law directors may be removed only by the vote of shareholders representing not less than two-thirds of the voting power of the issued and outstanding stock entitled to vote, which could also have an anti-takeover effect.

Provisions of our articles of incorporation, as amended, and amended and restated bylaws may delay or discourage transactions involving an actual or potential change in our control or change in our management, including transactions in which shareholders might otherwise receive a premium for their shares, or transactions that our shareholders might otherwise deem to be in their best interests. Therefore, these provisions could adversely affect the price of our common stock. Among other things, our articles of incorporation and bylaws:

We may sell the securities offered by this prospectus from time to time in one or more transactions, including without limitation:

In addition, we may issue the securities as a dividend or distribution to our existing shareholders or other security holders.

The prospectus supplement with respect to any offering of securities will include the following information:

If underwriters are used in the sale, the underwriters may resell the securities from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. Underwriters may offer securities to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as underwriters. Unless we inform you otherwise in the applicable prospectus supplement, the obligations of the underwriters to purchase the securities will be subject to certain conditions, and the underwriters will be obligated to purchase all of the offered securities if they purchase any of them. The underwriters may change from time to time any initial public offering price and any discounts or concessions allowed or re-allowed or paid to brokers.

We will describe the name or names of any underwriters, brokers or agents and the purchase price of the securities in a prospectus supplement relating to the securities.

In connection with the sale of the securities, underwriters may receive compensation from us or from purchasers of the securities, for whom they may act as agents, in the form of discounts, concessions or commissions. Underwriters may sell the securities to or through brokers, and these brokers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agents, which is not expected to exceed that customary in the types of transactions involved. Underwriters, brokers and agents that participate in the distribution of the securities may be deemed to be underwriters, and any discounts or commissions they receive from us, and any profit on the resale of the securities they realize may be deemed to be underwriting discounts and commissions, under the Securities Act. The prospectus supplement will identify any underwriter or agent and will describe any compensation they receive from us.

Underwriters could make sales in privately negotiated transactions and/or any other method permitted by law, including sales deemed to be an “at-the-market” offering, sales made directly on OTCQB, the existing trading market for our common stock, or sales made to or through a market maker other than on OTCQB. The name of any such underwriter or agent involved in the offer and sale of our securities, the amounts underwritten, and the nature of its obligations to take our securities will be described in the applicable prospectus supplement.

Unless otherwise specified in the prospectus supplement, each series of the securities will be a new issue with no established trading market, other than our shares of common stock, which are currently traded on OTCQB. It is possible that one or more underwriters may make a market in a series of the securities, but underwriters will not be obligated to do so and may discontinue any market making at any time without notice. Therefore, we can give no assurance about the liquidity of the trading market for any of the securities.

Under agreements we may enter into, we may indemnify underwriters, brokers, and agents who participate in the distribution of the securities against certain liabilities, including liabilities under the Securities Act, or contribute with respect to payments that the underwriters, brokers or agents may be required to make.

Any compensation we pay underwriters or brokers will be subject to the guidelines of the Financial Industry Regulatory Authority, Inc. We will disclose the compensation in any applicable prospectus supplement or pricing supplement, as the case may be.

To facilitate the offering of securities, certain persons participating in the offering may engage in transactions that stabilize, maintain, or otherwise affect the price of the securities. This may include over-allotments or short sales of the securities, which involve the sale by persons participating in the offering of more securities than we sold to them. In these circumstances, these persons would cover such over-allotments or short positions by making purchases in the open market or by exercising their over-allotment option, if any. In addition, these persons may stabilize or maintain the price of the securities by bidding for or purchasing securities in the open market or by imposing penalty bids, whereby selling concessions allowed to brokers participating in the offering may be reclaimed if securities sold by them are repurchased in connection with stabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise prevail in the open market. These transactions may be discontinued at any time.

From time to time, we may engage in transactions with these underwriters, brokers, and agents in the ordinary course of business.

We may sell the securities directly. In this case, no underwriters or agents would be involved. We also may sell the securities through agents designated by us from time to time. In the applicable prospectus supplement, we will name any agent involved in the offer or sale of the offered securities, and we will describe any commissions payable to the agent. Unless we inform you otherwise in the applicable prospectus supplement, any agent will agree to use its reasonable best efforts to solicit purchases for the period of its appointment.

We may sell the securities directly to institutional investors or others who may be deemed to be underwriters within the meaning of the Securities Act with respect to any sale of those securities. We will describe the terms of any sales of these securities in the applicable prospectus supplement.

Securities also may be offered and sold, if so indicated in the applicable prospectus supplement, in connection with a remarketing upon their purchase, in accordance with a redemption or repayment pursuant to their terms, or otherwise, by one or more remarketing firms, acting as principals for their own accounts or as agents for us. Any remarketing firm will be identified and the terms of its agreements, if any, with us and its compensation will be described in the applicable prospectus supplement.

If we so indicate in the applicable prospectus supplement, we may authorize agents, underwriters or brokers to solicit offers from certain types of institutions to purchase securities from us at the public offering price under delayed delivery contracts. These contracts would provide for payment and delivery on a specified date in the future. The contracts would be subject only to those conditions described in the applicable prospectus supplement. The applicable prospectus supplement will describe the commission payable for solicitation of those contracts.

We may have agreements with the underwriters, brokers, agents and remarketing firms to indemnify them against certain civil liabilities, including liabilities under the Securities Act, or to contribute with respect to payments that the underwriters, brokers, agents or remarketing firms may be required to make. Underwriters, brokers, agents and remarketing firms may be customers of, engage in transactions with or perform services for us in the ordinary course of their businesses.

The validity of the securities offered hereby will be passed upon for us by Nason, Yeager, Gerson, Harris & Fumero, P.A., Palm Beach Gardens, Florida.

The consolidated financial statements of the Company as of and for the fiscal years ended March 31, 2020 and 2019 incorporated by reference in this prospectus and elsewhere in the registration statement have been so incorporated in reliance on the report of RBSM LLP.

The audited consolidated financial statements of Banner Midstream Corp. as of and for the years ended December 31, 2019 and 2018, the audited financial statements of Shamrock Upstream Energy LLC as of and for the years ended December 31, 2019 and 2018, and the audited combined financial statements of White River Operating LLC and White River Energy LLC as of June 30, 2019 and for the period from April 1, 2019 (inception) through June 30, 2019, which were acquired by the Company on March 27, 2020, filed as exhibits to the Company’s Current Report on Form 8-K/A on June 14, 2020, incorporated by reference in this prospectus and elsewhere in the registration statement have been so incorporated in reliance on the reports of RBSM LLP.

All reports and other documents that we file with the Commission under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act before the completion or termination of the offering of the securities hereunder, including all such reports and documents we may file with the Commission after the date of the initial filing of and prior to the effectiveness of the registration statement, will also be considered to be incorporated by reference into this prospectus from the date of the filing of these reports and documents, and will supersede the information herein; provided, however, that all reports or portions thereof that we “furnish” to the Commission will not be considered incorporated by reference into this prospectus.

We undertake to provide without charge to each person (including any beneficial owner) who receives a copy of this prospectus, upon written or oral request, a copy of all of the preceding documents that are incorporated by reference (other than exhibits, unless the exhibits are specifically incorporated by reference into these documents). You may request a copy of these materials by contacting us at:

We are an Exchange Act reporting company and are required to file periodic reports on Form 10-K and 10-Q and current reports on Form 8-K. The Commission maintains an Internet website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission, including the Company at www.sec.gov. You may also access our Exchange Act reports and proxy statements free of charge at our website, www.ecoarkusa.com/investor-relations.

	Page
PROSPECTUS SUPPLEMENT

About This Prospectus Supplement	S-ii
Cautionary Note Regarding Forward-Looking Statements	S-iii
Prospectus Supplement Summary	S-1
The Offering	S-2
Risk Factors	S-3
Use of Proceeds	S-7

Selling Shareholders	S-10
Plan of Distribution	S-11
Legal Matters	S-13
Experts	S-13
Where You Can Find More Information	S-13
Documents Incorporated By Reference	S-14

	Beneficial Ownership Prior to this Offering							Beneficial Ownership After this Offering(1)
Name of Selling Shareholder	Number of Shares		Percent of Outstanding Common Stock			Number of Shares Being Offered		Number of Shares		Percent of Outstanding Common Stock
Digital Power Lending LLC (2)		5,246,456		19.9	%		5,246,456		0		0	%

PROSPECTUS

Prospectus Summary	1
Cautionary Note Regarding Forward-Looking Statements	10
Risk Factors	11
Use of Proceeds	31
Description of Capital Stock	32
Description of Warrants	34
Description of Units	35
Certain Provisions of Nevada Law and of Our Charter and Bylaws	36
Plan of Distribution	38
Legal Matters	41
Experts	41
Incorporation of Certain Information By Reference	42

	●	investor reaction to our public announcement of the Agreement with the Selling Shareholder and the future developments;

	●	the timing and size of Agora’s initial public offering;

	●	future events related to the market for Bitcoin and cryptocurrency including regulation;

	●	actual or anticipated variations in our operating results;

	●	sales of our Common Stock or other securities in the open market;

	●	the adverse consequences of future variants of COVID-19; and

	(iii)	issuance of any shares of Common Stock or other securities convertible into or exercisable or exchangeable for shares of Common Stock;

	(iv)	incurrence of indebtedness, liens, or guaranty obligations, in an aggregate amount in excess of $50,000 in any individual transaction or $100,000 in the aggregate;

	(v)	sale, lease, transfer or disposal of any of its properties having a value calculated in accordance with GAAP of more than $50,000;

	(vi)	increase in any manner the compensation or fringe benefits of any of its directors, officers, employees; and

	●	through the writing of options;

	●	ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

	●	block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;

	●	purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

	●	an exchange distribution in accordance with the rules of the applicable exchange;

	●	privately negotiated transactions;

	●	short sales;

	●	broker-dealers may agree with the Selling Shareholder to sell a specified number of such securities at a stipulated price per security;

	●	a combination of any such methods of sale; or

	●	any other method permitted pursuant to applicable law.

	●	Our annual report on Form 10-K for the year ended March 31, 2021 filed on June 30, 2021;

	●	Our quarterly report on Form 10-Q for the quarter ended June 30, 2021 filed on August 13, 2021, quarterly report on Form 10-Q for the quarter ended September 30, 2021 filed on November 10, 2021; and the quarterly report on Form 10-Q for the quarter ended December 31, 2021 filed on February 11, 2022;

	●	Our current reports on Form 8-K filed on April 12, 2021 May 4, 2021, August 5, 2021, August 11, 2021, August 30, 2021, September 10, 2021, October 12, 2021, October 25, 2021, November 15, 2021, November 18, 2021, February 4, 2022, April 13, 2022 and June 9, 2022;

	●	Our definitive proxy statement on Schedule 14A filed on August 26, 2021.

		Page

PROSPECTUS SUMMARY		1

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS		10

RISK FACTORS		11

USE OF PROCEEDS		31

DESCRIPTION OF CAPITAL STOCK		32

DESCRIPTION OF WARRANTS		34

DESCRIPTION OF UNITS		35

CERTAIN PROVISIONS OF NEVADA LAW AND OF OUR CHARTER AND BYLAWS		36

PLAN OF DISTRIBUTION		38

LEGAL MATTERS		41

EXPERTS		41

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE		42

	●	unusual or unexpected geological formations and miscalculations;

	●	fires;

	●	explosions and blowouts;

	●	pipe or cement failures;

	●	environmental hazards, such as natural gas leaks, oil spills, pipeline and tank ruptures, encountering naturally occurring radioactive materials, and unauthorized discharges of toxic gases, brine, well stimulation and completion fluids, or other pollutants into the surface and subsurface environment;

	●	loss of drilling fluid circulation;

	●	title problems for the properties on which we drill and resulting restrictions or termination of lease for oil drilling and production operations;

	●	facility or equipment malfunctions;

	●	unexpected operational events, especially the need to drill significantly deeper than originally contemplated or finding, despite an engineering study to the contrary, that the drilling site is a dry hole that produces no appreciable amounts of crude oil or no crude oil;

	●	shortages of skilled personnel or unexpected loss of key drilling and production workers;

	●	shortages or delivery delays of equipment and services or of water used in hydraulic fracturing activities;

	●	compliance with environmental and other regulatory requirements and any unexpected remedial requirements for violations of environmental or other regulatory requirements;

	●	shareholder activism and activities by non-governmental organizations to restrict the exploration, development and production of oil and natural gas so as to minimize emissions of greenhouse gases of “GHG’s”;

	●	natural disasters; and

	●	adverse weather conditions.

	●	continue the research of the market and potential private companies to acquire;

	●	expand the scope of our operations on the Territory;

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

	●	acquire existing businesses and revitalize their operations with the Companies framework;

	●	seek to maintain, protect, and expand the Territory;

	●	seek to attract and retain skilled personnel; and

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

	●	difficulties in the post-acquisition integration of operations and systems;

	●	the termination of relationships with key personnel and customers of the acquired company;

	●	a failure to add additional employees to manage the increased volume of business;

	●	additional post acquisition challenges and complexities in areas such as tax planning, treasury management, financial reporting and legal compliance;

	●	risks and liabilities from our acquisitions, some of which may not be discovered during the pre-acquisition due diligence process;

	●	a disruption of our ongoing business or an inability of our ongoing business to receive sufficient management attention; and

	●	a failure to realize the cost savings or other financial benefits we anticipated prior to acquisition.

	●	our ability to convince our potential customers of the advantages, logistic and economic benefits of our services over competitors;

	●	the niche scope of our product menu relative to competitors;

	●	changes to policies, procedures or currently accepted best practices in transportation business, cargo, and transportation sectors;

	●	changes to policies, procedures or currently accepted best practices in the transportation and logistics-industry; and

	●	the extent and success of our marketing and sales efforts.

	●	the title and stated or par value of the preferred stock;

	●	the number of shares of the preferred stock offered, the liquidation preference per share and the offering price of the preferred stock;

	●	the dividend rate(s), period(s) and/or payment date(s) or method(s) of calculation thereof applicable to the preferred stock;

	●	whether dividends shall be cumulative or non-cumulative and, if cumulative, the date from which dividends on the preferred stock shall accumulate;

	●	the provisions for a sinking fund, if any, for the preferred stock;

	●	any voting rights of the preferred stock;

	●	the provisions for redemption, if applicable, of the preferred stock;

	●	any listing of the preferred stock on any securities exchange;

	●	the terms and conditions, if applicable, upon which the preferred stock will be convertible into our common stock, including the conversion price or the manner of calculating the conversion price and conversion period;

	●	if appropriate, a discussion of federal income tax consequences applicable to the preferred stock; and

	●	any other specific terms, preferences, rights, limitations or restrictions of the preferred stock.

	●	the title of the warrants;

	●	the offering price for the warrants, if any;

	●	the aggregate number of the warrants;

	●	the exercise price of the warrants;

	●	the terms of the security that may be purchased upon exercise of the warrants;

	●	if applicable, the designation and terms of the securities that the warrants are issued with and the number of warrants issued with each security;

	●	if applicable, the date from and after which the warrants and any securities issued with the warrants will be separately transferable;

	●	the dates on which the right to exercise the warrants commence and expire;

	●	if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;

	●	if applicable, a discussion of material United States federal income tax considerations;

	●	anti-dilution provisions of the warrants, if any;

	●	redemption or call provisions, if any, applicable to the warrants; and

	●	any additional terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the warrants.

	●	the designation and the terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately;

	●	any unit agreement under which the units will be issued;

	●	any provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units; and

	●	whether the units will be issued in fully registered or global form.

	●	through underwriters or brokers;

	●	directly to purchasers;

	●	in a rights offering;

	●	in “at-the-market” offerings, within the meaning of Rule 415(a)(4) of the Securities Act of 1933 (the “Securities Act”) to or through a market maker or into an existing trading market on an exchange or otherwise;

	●	through agents;

	●	in block trades;

	●	through a combination of any of these methods; or

	●	through any other method permitted by applicable law and described in a prospectus supplement.

	●	the terms of the offering;

	●	the names of any underwriters or agents;

	●	the name or names of any managing underwriter or underwriters;

	●	the purchase price or initial public offering price of the securities;

	●	the net proceeds from the sale of the securities;

	●	any delayed delivery arrangements;

	●	any underwriting discounts, commissions and other items constituting underwriters’ compensation;

	●	any discounts or concessions allowed or re-allowed or paid to brokers;

	●	any commissions paid to agents; and

	●	any securities exchange on which the securities may be listed.