UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

orFor the fiscal year ended December 31, 2021

or

Commission file number 333-192060

Banner Energy ServicesFortium Holdings Corp.

(Exact Name of Registrant as Specified in Its Charter)

(800)203-5610

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  ] ☐ No [X] ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes [X] ☒ No [  ]☐

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] ☒ No [  ]☐

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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [  ]☐

Indicate by check mark whether the registrant ishas filed a shell company (as defined in Rule 12b-2report on and attestation to its management’s assessment of the Act).effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes [  ] ☐ No [X]☒

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant, as of June 30, 2020,2021, the last business day of the registrant’s most recently completed second fiscal quarter, was approximately $5,037,144.75$2,717,917 based upon the last sales price of the common stock as of such date. Solely for purposes of this disclosure, shares of common stock held by executive officers, directors and beneficial holders of 10% or more of the outstanding common stock of the registrant as of such date have been excluded because such persons may be deemed to be affiliates.

The number of shares outstanding of the registrant’s classes of common stock, as of October 1, 2020March 10, 2022 was 7,000,000 8,400,000 shares.

DOCUMENTS INCORPORATED BY REFERENCE

None.None.

TABLE OF CONTENTS

PART I

ITEM 1. BUSINESS.

Throughout this Annual Report on Form 10-K, the terms “we,” “us,” “our,” “registrant,” and “Company” refer to Banner Energy Services Corp., a Nevada corporation.

Cautionary Note Regarding Forward Looking Statements

This Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our entrance into the cannabis industry through the operation of cannabis distribution licenses, the anticipated acquisition of Treehouse Company, Inc. and our ability to pay the full purchase price and obtain regulatory approval for the transfer of licenses, our planned operations under our Joint Venture Agreement with 7Seeds Inc., and Firebreak Associates, Inc. and our ability to use the license thereunder to establish and operate cannabis retail stores at one or more locations, our ability to develop and grow our sporting goods and apparel business or generate revenue therefrom, our working capital needs, potential financings through the sale of our common stock or other securities, the subsequent use and sufficiency of the proceeds from any capital raising methods we may undertake to fund our operations, our further development and implementation of our business plan and our ability to locate sources of capital necessary to meet our business needs and objectives. All statements other than statements of historical facts contained in this report, 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 include those described in Item 1A. – Risk Factors. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise.

Summary of Risk Factors

Investing in our securities involves a high degree of risk. Investors should carefully consider the risks described below concerning our planned cannabis operations, in addition to the risks described under “Item 1A – “Risk Factors,” before deciding to invest in our securities.

Set forth below is a summary of some of the principal risks we face with respect to our business:

These and other material risks we face are described more fully in Item 1A. – Risk Factors, which investors should carefully review prior to making an investment decision with respect to the Company or its securities.

Description of Business

The terms “we,” “us,” “our,” “registrant,” “Fortium Holdings”, and the “Company” refer to Fortium Holdings Corp. (formerly Banner Energy Services, Corp. “Banner Energy”)), a Nevada corporation. Set forth below is an overview of the Company’s corporate history and business development. Because of our focus on our new cannabis business, much of the following discussion, including regarding the competitive and regulatory environment we face, is focused on that business and the cannabis industry.

Description of Business

The Company was incorporated in Nevada inOn November 2011 under the name TabacaleraYsidron, Inc. On December 9,18, 2019, the Company changed its name to “Banner Energy Servicesmerged with Banner Midstream Corp.” by filing, a certificate of amendment to its Articles of Incorporation with the Secretary of State of Nevada. This name change became effective with the Financial Industry Regulatory AuthorityDelaware corporation (“Banner Midstream”). Banner Midstream then had two operating subsidiaries: Pinnacle Frac Transport LLC, a Texas limited liability company (“Pinnacle Frac”) and Capstone Equipment Leasing LLC, a Texas limited liability company (“Capstone”) as of February 11, 2020.November 18, 2019.

Additionally, immediately following the closing of the merger, the Company and its secured debt holders finalized an agreement whereby the debt holders took possession of the Company’s biotechnology assets and assumed certain other Company obligations in lieu of payment by the Company of the amounts due in the secured debt instruments.

On March 27, 2020, the Company sold Banner Midstream Corp., its former wholly-owned subsidiary, along with its four operating subsidiaries, Pinnacle Frac Transport LLC, Capstone Equipment Leasing LLC, White River Holdings Corp., and Shamrock Upstream Energy LLC, through which the Company formerly operated in the oil and gas industry, towas acquired by Ecoark Holdings, Inc. (��, (“Ecoark”). In pursuant a Stock Purchase Agreement, dated March 27, 2020 (the “Banner Purchase Agreement”), between Ecoark and Banner Energy. Pursuant to the Banner Purchase Agreement, Ecoark acquired 100% of the outstanding capital stock of Banner Midstream in consideration for the sale of its assets, the Company received 8,945,2051,789,041 shares of Ecoark common stock of Ecoark valued at $2.72 per share and assumed approximately $11,774,000 in addition to Ecoark assuming all of theshort-term and long-term debt of Banner Midstream Corp. The majority of the shares of Ecoark common stock received by the Company in the transaction were used pay to the Company’s creditors and eliminate its liabilities on its balance sheet. subsidiaries.

As a result of these developments,the Banner Purchase Agreement, the Company did not have any operating subsidiaries from March 28, 2020 until March 18, 2021, when the Company formed Norr LLC (“Norr”), a Nevada limited liability company and wholly-owned subsidiary of the Company, and commenced operations as a sports equipment and apparel manufacturer and retailer. Prior to organization of Norr, the Company’s Chief Executive Officer had explored this business opportunity and commenced preparation of a business plan for the business. On March 23, 2021, the Company engaged the services of two consultants and entered into consulting agreements through Norr pursuant to which each consultant provides services to Norr which were subsequently replaced in December 2021 when we also added a third independent contractor to assist in our Norr business. The terms of these services and compensation are more fully described below.

On September 9, 2021, the Company formed Elysian Premium Corp., a Colorado corporation (“Elysian”). On September 14, 2021, Elysian entered into a Stock Purchase Agreement (“SPA”) with Treehouse Company, Inc. (“Treehouse”), and its sole assetshareholder Alex Gosselin (the “Seller”) pursuant to which Elysian agreed to purchase 80% of the capital stock of Treehouse from the Seller for $200,000. Treehouse’s key assets consist of two licenses for commercial cannabis distribution in the State of California, license numbers C11-0000999 and C9-0000379. The acquisition of Treehouse will close upon delivery of the $200,000 purchase price to the escrow agent to be held until release upon receipt of the requisite regulatory approval for the transaction. As of March 9, 2022, the acquisition has not closed.

Simultaneously with the SPA, Elysian and the Seller entered into a Memorandum of Understanding with Treehouse pursuant to which the parties agreed that Elysian will purchase the remaining 20% of the capital stock of Treehouse for an additional $200,000 and enter into a second Stock Purchase Agreement on substantially similar terms to the SPA in connection therewith, subject to state and local regulatory clearance of the transfer of ownership of the two cannabis licenses owned by Treehouse. The SPA provides that if required state and local regulatory clearance is currently 1,000,000not obtained, the SPA will terminate, Elysian will return the Treehouse capital stock to the Seller and the Seller will return the $200,000 purchase price to Elysian.

On December 2, 2021, Elysian, the Company, 7Seeds Inc. (“7Seeds”), and Firebreak Associates, Inc. (“Firebreak”) (collectively, the “Parties”) entered into a joint venture agreement (the “JVA”). Pursuant to the JVA, 7Seeds, Firebreak and Elysian agreed to cooperate in the opening and operation of cannabis distribution facilities as follows: (i) 7Seeds agreed to provide consulting services to Elysian for an initial term of 36 months, including identifying locations to open new commercial cannabis businesses, including without limitation dispensaries, delivery stores, and other businesses engaging in cannabis related activities (the “Elysian Stores”), securing proper state and local licensure, planning commercial cannabis business operations at those locations in exchange for the compensation described below, and (ii) Firebreak, as the owner of certain trademarks and service marks (the “CannaBlue Marks”), licensed the CannaBlue Marks to Elysian for an initial term of five years, pursuant to which Elysian obtained the option to open the Elysian Stores under the name “CannaBlue” and making use of the CannaBlue Marks. The Elysian Stores will be owned and operated entirely by Elysian or its affiliates. The license for the CannaBlue Marks under the JVA is for use in connection with retail Elysian Stores and related activities in the United States, subject to the following exceptions: (i) a 99-mile radius from each of Oakland, CA and South Lake Tahoe, CA are excluded from the permitted territory in which Elysian may use the license; (ii) the license excludes the use of CannaBlue Marks for online stores and related activities from the permitted uses, and (iii) the license to use the Cannablue marks is non-exclusive with respect to (A) the online promotion, advertising, and sales of products bearing the Cannablue Marks; and (B) the sale and distribution of Firebreak’s private label products by licensed cannabis distributors.

In exchange for the license, Elysian has agreed to pay Firebreak a $5,000 annual license fee, and a quarterly royalty fee equal to the greater of 6% of gross sales or $5,000 for each Cannablue-branded Elysian Store that did not directly result from the consulting services of 7Seeds. In exchange for the consulting services, Elysian has agreed to pay 7Seeds a monthly fee beginning at $5,000 to be incrementally increased up to $15,000 during the initial term of the services. Further, for each Elysian Store for which 7Seeds directly assists in obtaining a cannabis license (exclusive of California license numbers C11-0000999 and C9-0000379), Elysian has agreed to pay 7Seeds a one-time issuance of $50,000 in shares of EcoarkFortium’s common stock. Becausestock and a quarterly royalty fee of 6% of gross sales.

In December 2021, Norr entered into a term sheet for an Advisory Agreement with three individual contractors. The Advisory Agreements, were effective upon the signing of the definitive documents on January 24, 2022 and are for a period of five years. If any advisor voluntarily or involuntarily terminates his services, his agreement will automatically terminate. All advisors will be paid $1,000 per month for the first eighteen months immediately following execution of the Advisory Agreement. In addition to the cash compensation, the Company holdsshall compensate the advisors who have not terminated their relationship with Norr based on the following events (amounts have been aggregated among the advisors):

The maximum ownership the advisors may collectively in Norr shall be 25%.

In addition, the advisors may receive shares of Fortium common stock based on meeting enumerated net operating free cash flow thresholds ranging from $1,000,000 to $5,000,000, for a total potential Fortium equity compensation to these advisors of up to $900,000 of shares and has no other assets, weof Fortium common stock.

On March 8, 2022, the Company entered into a stock purchase agreement whereby the Company paid a non-refundable $50,000 purchase price to Firebreak Associates, Inc. in exchange for a total of 5% equity in any of the corporations that Firebreak Associates, Inc. controls if they are currently an “investment company” as such term is defined underselected through the Investment Company ActState of 1940 (the “1940 Act”). The Company intends to sell these shares for cashCalifornia’s retail cannabis license lottery process in fiscal year 2021 and terminate its status as an investment company under the 1940 Act. Encinitas, California.

The Company is currently consideringsubject to a number of risks, including the subsequent useneed to develop the Elysian and Norr businesses and/or acquire and successfully operate a new business, the risk of our need for additional capital and potentially attempting to raise such capital through equity and/or debt financings. See Part II, Item 1A, herein and Item 1A “Risk Factors” included in the cash proceeds resulting fromAnnual Report on Form 10-K for the proposed sale of the shares, including potentially making a cash distribution to its shareholders.year ended December 31, 2020 filed February 4, 2021.

On July 31, 2020, Mr. Jay Puchir notified ourthe Board of Directors (the “Board”) that he was resigning as the Chairman of the Board and Chief Executive Officer of the Company. On July 31, 2020, the Board appointed Mr. Richard Horgan 36, as the Chief Executive Officer, and as our sole director and Chairman of the Board, effective August 1, 2020. Mr. Puchir was appointed Chief Accounting Officer of Ecoark as of March 27, 2020.

The Company currently has no operations and is seeking to acquire a new business in the United States, including potentially by means of a reverse merger with an operating entity. We have not generated revenues since we divested our operating subsidiaries and do not expect to do so in the short-term due to the early stage nature of our Company.

We anticipate that the evaluation and selection of a business opportunity will be a complex and uncertain process. Business opportunities that we believe are in the best interestsOn January 7, 2021, shareholders of the Company and its shareholders may be scarce, or we may be unablerepresenting approximately 57% of the outstanding common shares, acted by written consent in lieu of a meeting to obtainapprove an amendment to the businesses we identify as viable for our objectives, including dueCompany’s Articles of Incorporation to competitive forces inchange the marketplace beyond our control. There can be no assurance that we will be ablename of the Company to locate compatible business opportunities forFortium Holdings Corp. The Financial Industry Regulatory Authority approved the Company. See “Item 1A - Risk Factors.”name change on May 18, 2021.

Competition and Market Conditions

We will face substantial competition in our efforts to identifygrow our operations, particularly as we shift our focus towards the retail sale of cannabis products. The cannabis retail industry is fiercely competitive, as a growing number of companies, including many larger, well-capitalized cannabis retail companies, have entered the market in an attempt to capitalize on more lenient government restrictions in the United States compared to prior periods. We also face competition from companies which offer a broader range of products than we intend to market in our cannabis operations, such as tobacco, alcohol, cosmetic products and pursue a business venture. The primary sourcewellness products. Among the barriers to entry is the requirement to be licensed in state and local jurisdictions. To this end, we are in the process of competition isacquiring two commercial cannabis licenses in California.

Numerous other factors are expected to be from other companies organizedcritical to our ability to be competitive in this endeavor, including product quality and fundedprices, brand strength, production and distribution capabilities and geographic scope of operations and market presence. Additionally, market conditions can shift demand for similar purposes, including small venture capital firms, blank check companies,cannabis products, such as competitive pricing, the effects of inflation, regulatory changes and wealthy investors, many ofeconomic or geopolitical turmoil. In the short-term we intend to focus our commercial cannabis efforts in a single state, California, which may have substantially greater financial and other resources than we do. In light of our limited financial and human resources, we anticipate beingrender us at a relative competitive disadvantage when compared to other cannabis retail companies whose operations expand into a larger geographic territory for a number of reasons including longer operating histories, greater access to capital, industry relationships, brand recognition and others. In addition, many competitors are able to commercialize their cannabis products through online sales, which we will not be able to do using the Cannablue Marks due to restrictions in the JVA that provides for the license. Additionally, many of our competitors are more vertically integrated, including some with “seed-to-sale” operations in which they cultivate, produce, sell or distribute their cannabis or cannabis-related products entirely or mostly in-house or by using a well-structured network of interrelated parties, which allows them to enjoy reduced operational costs and a higher volume of sales than is anticipated for our planned cannabis operations. Alternatively, we expect to depend on third parties to obtain products to sell at our stores, and on the development and maintenance of key business and industry relationships in order to execute our business plan, including opening new stores and potentially expanding to new regions in the future.

With respect to our Norr operations, we face competition from larger competitors with longer operating histories, greater access to capital and human resources and vertically integrated sporting goods operations, including many larger retail and online companies which offer a broader range of sporting and athletic gear and apparel than our Norr product offerings. We also face competition from smaller online and retail businesses which offer similar products to ours. Because of these competitive conditions and our limited capital, we currently focus on online sales for our Norr products.

Government Regulation

Below is a discussion of the federal and state-level regulatory regimes in the jurisdictions where the Company is currently operating through its subsidiaries.

U.S. Federal Regulation of Cannabis

The U.S. federal government regulates drugs through the Controlled Substances Act (21 U.S.C. § 811), which places controlled substances, including cannabis, in a schedule. Cannabis is classified as a Schedule I controlled substance. A Schedule I controlled substance is defined as a substance that has no currently accepted medical use in the United States, a lack of safety for use under medical supervision and a high potential for abuse. Schedule I controlled substances are federally illegal and the manufacturing, sale and use of cannabis is a violation of federal law.

Due to the conflicting views between state legislatures and the federal government regarding cannabis, cannabis businesses are subject to inconsistent laws and regulations. The Obama Administration attempted to address these inconsistencies in the Cole Memorandum that Deputy Attorney General James Cole sent to all U.S. Attorneys in August 2013, which outlined certain priorities for the Department of Justice relating to the prosecution of cannabis offenses. The Cole Memorandum noted that, in jurisdictions that have enacted laws legalizing cannabis in some form and that have also implemented strong and effective regulatory and enforcement systems to control the cultivation, processing, distribution, sale and possession of cannabis, conduct in compliance with such laws and regulations was not a prosecution or enforcement priority for the Department of Justice. However, the Department of Justice did not provide (and has not provided since) specific guidelines for what regulatory and enforcement systems would be deemed sufficient under the Cole Memorandum. However, on January 4, 2018, then U.S. Attorney General Jeff Sessions issued a new memorandum which rescinded the Cole Memorandum, largely restoring the uncertainty as to potential federal regulatory enforcement on the cannabis industry.

While there have been efforts to obtain an operating business or assets necessaryreform federal cannabis law, including bills proposed in Congress which would address multiple issues regarding the cannabis industry, from banking and tax reform to commence our operations in a new field. Additionally, with the economic downturn caused by the coronavirus pandemic, many venture capital firms and similar firms and individuals have been seeking to acquire businesses at discounted rates, and we may therefore face additional competition and resultant difficulty obtaining a business on favorable terms or at all, at least until such timefull legalization, as the economy recovers. This disadvantage may also be heightened by the reality that our current sole asset is less liquid than cash, and many of our competitors have cash on hand for the purpose of making offers to purchase operating businesses. We expect to begin selling our Ecoark common stock on or after September 27, 2020, subject to market conditions. Further, even if we are successful in obtaining a business or assets for new operations, we expect there to be enhanced barriers to entry in the marketplace in which we decide to operate as a result of reduced demand and/or increased raw material costs caused by the pandemic and other economic forces that are beyond our control.

Regulation

As of the date of this Report, we voluntarily filenone have been passed into law. Therefore, as of the date of this Report, cannabis remains illegal under federal law, although federal enforcement policies have largely deferred to state regulations which are discussed below.

State Cannabis Law

State laws that permit and regulate the production, distribution and use of cannabis for medicinal and adult use are in direct conflict with federal law. Although certain reportsstates and territories of the U.S. authorize medical and/or adult use cannabis production and distribution by licensed or registered entities, under U.S. federal law, the possession, use, cultivation and transfer of cannabis and any related drug paraphernalia are criminal acts under the Securities Exchange ActControlled Substances Act. Although the Company plans to only engage in cannabis-related activities that are compliant with applicable state and local laws, strict compliance with state and local laws with respect to cannabis may not absolve us of 1934 (the “Exchange Act”), because our sole asset is shares of common stock of another corporation, weliability or enforcement actions under U.S. federal law, nor may it provide a defense to any proceeding that may be brought against the Company.

California

Our initial cannabis operations are an investment company as such term is defined by the Investment Company Act and, as such, areplanned to commence in California, subject to certain rulessatisfaction of closing and regulationspost-closing conditions including the receipt of the Securitiesrequired regulatory approval of our acquisition of Treehouse and Exchange Commission (the “SEC”its two licenses. In September 2015, the California legislature passed three bills collectively known as the Medical Cannabis Regulation and Safety Act (“MCRSA”). The MCRSA established a licensing and regulatory framework for medical marijuana businesses in California. In 2016, voters in California passed Proposition 64, the Adult Use of Marijuana Act (“AUMA”) applicablecreating an adult use marijuana program for adults 21 years of age or older. Senate Bill No. 94, known as Medicinal and Adult Use Cannabis Regulation and Safety Act (“MAUCRSA”) in June 2017, essentially combining the AUMA with the MCRSA to such entities. We may be requiredprovide a single set of regulations to make significant expenditures to be compliant with these regulations, including disclosure requirements, until such time as we are no longer subject to them.

Depending on the direction management decides to takegovern a medical and a business or businesses we may acquire in the future, we may become subject to other laws or regulations that require us to make material expenditures on compliance including the increasing state level regulation of privacy. Any such requirements could require us to divert significant human and capital resources on compliance, which could have an adverseadult use licensing. MAUCRSA went into effect on our future operating results.January 1, 2018.

Employees

In order to legally operate a medicinal or adult use cannabis business in California, the operator must have both a local and state license. This requires license holders to operate in cities with cannabis licensing programs. Municipalities in California are allowed to determine the number of licenses they will issue to cannabis operators or can choose to ban cannabis businesses outright.

There are three principal license categories in California: (1) cultivation, (2) processing and (3) retailer. Each of the two Treehouse licenses are retailer licenses, which permit the sale of cannabis and cannabis products to both medical patients and adult use customers. Only certified physicians may provide medicinal marijuana recommendations. An adult use retailer license permits the sale of cannabis and cannabis products to any adult 21 years of age or older.

We intend to follow all regulatory requirements regarding the reporting of inventory movement and sale, as well as all other data reporting and record retention requirements mandated by California.

Employees

As of the date of this Report, we have one employee, our Chief Executive Officer.

ITEM 1A. RISK FACTORS.

Investing in our common stock involves a high degree of risk. Investors should carefully consider the following Risk Factors before deciding whether to invest in the Company. Additional risks and uncertainties not presently known to us, or that we currently deem immaterial, may also impair our financial condition. If any of the events discussed in the Risk Factors below occur, our business, consolidated financial condition, results of operations or prospects could be materially and adversely affected. In such case, the value and marketability of our common stock could decline.

Risks RelatingRelated to Our Businessour Planned Operations in the Cannabis Industry

We currently have a SPA to acquire two cannabis licenses, and Financial Conditionthe closing of this transaction and the subsequent use thereof are subject to contractual and regulatory contingencies over which we have little to no control.

BecauseAs of March 10, 2022, the Company’s acquisition of a majority of the ownership interest of Treehouse has not closed. We will need to acquire ownership of Treehouse in order to commence our sole asset consistsinitial cannabis retail operations in California. Treehouse’s main assets consist of 1 million sharestwo cannabis licenses. The initial purchase agreement, which contemplates the acquisition of an 80% ownership interest in Treehouse, requires that we pay $200,000. We will also need to pay an additional $200,000 to obtain the remaining 20% Treehouse ownership under a subsequent purchase agreement if it is executed. Since we have sold the remaining Ecoark common stock which is tradedwe previously held, we will need to raise additional capital to complete these transactions. We have also committed to substantial financial obligations under our JVA with 7Seeds and Firebreak in order to capitalize on the OTCQB, an illiquidTreehouse acquisition through Elysian Stores using the Cannablue Marks, which will be dependent on the acquisition closing and receiving the regulatory approval. Also by virtue of the JVA, we will be highly dependent on 7Seeds to establish and expand our market presence and on Firebreak for branding, and the JVA precludes us from selling cannabis products online using the CannaBlue Marks. Further, the purchase of the licenses under the Treehouse SPA is conditioned upon Elysian and Treehouse obtaining the required regulatory approval for the transfer of the licenses from each of the California Department of Cannabis Control and the City of Oakland, which we may be unable to obtain. There can therefore be no assurance that the transaction will close or that we will be successful on capitalizing on the licenses if we do obtain them, in which case our planned cannabis operations and prospects will be materially adversely affected and you could lose all or part of your investment.

We lack an operating history in the commercial cannabis space, and our proposed business is subject to a number of significant risks and uncertainties which affect its future viability.

As of March 10, 2022, we have invested and agreed to invest amounts exceeding the current value of our assets towards the development of our future cannabis business. That business, Elysian, has been formed and we have entered into a SPA to acquire two cannabis licenses in California and a separate JVA to use those licenses, but has not realizecommenced material operations. If we are able to proceed, we must acquire a lease or purchase land for our first cannabis dispensary in California, as well as hire qualified personnel and implement information technology and infrastructure to track inventory and sales and develop online sales capabilities. We also expect to incur significant expenditures to obtain intellectual property rights and enter into other arrangements to develop our brand, stores and marketing. These plans will require additional capital that will have a dilutive effect on our shareholders and could have a depressive effect on our stock price. Among the expected benefits afterrisks and uncertainties are:

If any if these risks come to fruition, or if we beginare unable to overcome the challenges they may pose, our ability to generate revenue and as a result our financial condition would be materially adversely affected.

We require additional financing to commence and expand operations as intended, and we may face difficulties acquiring financing on terms acceptable to us or at all.

We will need additional capital to establish and grow our planned cannabis operations and will need to seek further financing to do so. To this end, as of March 1, 2022 we have sold the remaining Ecoark common stock we held with the intention of using some or all of the proceeds to complete the Treehouse SPA, which when combined with our commitments under the JVA and advisors’ compensation for Norr, necessitates us locating additional capital to fund our current and planned operations. If we fail to raise additional capital as and when needed, our ability to implement our business could be compromised. To date, our efforts to enter the cannabis industry have been limited to executing an agreement to acquire two cannabis licenses which if closed would enable us to sell cannabis products in California. However, we require additional capital to fund the shares.acquisition, which will be for a total purchase price of $400,000, and for working capital purposes, including operational expenses such as obtaining licenses, compensating employees and service providers to assist in sales, compliance and other matters, and capital expenditures and infrastructure including obtaining rights and inventory in cannabis products to sell. Management estimates needing at least $10 million to fund our planned expenditures and operations over the next 12 months.

WhileThe terms of securities we intendissue in future capital raising transactions may be more favorable to liquidate as promptly as possiblenew investors, and may include liquidation preferences, superior voting rights or the 1 millionissuance of other derivative securities, which could have a further dilutive effect on or subordinate the rights of our current investors. Any additional capital raised through the sale of equity securities will likely dilute the ownership percentage of our shareholders and could have a depressive effect on our stock price. Additionally, any debt securities we issue would likely create a liquidation preference superior that of our current investors and, if convertible into shares of common stock, would also pose the risk of Ecoark common stock that represents our sole material asset, we may not realize the benefits we expect due to a number of factors including:

We currently have no operations, and investors therefore have no basis on which to evaluate the Company’s future prospects.

We currently have no operations and will be reliant upon a merger with or acquisition of an operating business to commence operations and generate revenue. Because we have no operations or have not generated revenues since we divested our operating subsidiaries on March 27, 2020, investors have no basis upon which to evaluate our ability to achieve our business objective of locating and completing a business combination with a target business. We have no current arrangements or understandings with any prospective target business concerning a business combination and may be unable to complete a business combination in a reasonable timeframe, on reasonable terms or at all.dilution. If we fail to complete a business combination as planned, we will never generate any operating revenues.

Because we became an inadvertent investment companyobtain the necessary financing when we sold Banner Midstream on March 27, 2020, we have until March 27, 2021 to cease being an investment company under the 1940 Act or we will have to comply with the onerous provisions of the 1940 Act which as a practical matter we will not be able to do.

When we sold Banner Midstream on March 27, 2020 and our principal asset became Ecoark common stock, we became an investment company under the 1940 Act. Once Ecoark common stock becomes 40% or less of our total assets (exclusive of Government securities and cash items), we will no longer be an “investment company” under the 1940 Act. But the value of the stock fluctuates so we will need some cushion. Moreover, we will need to be very careful where we deposit and how we use our cash that we generate from the sale of Ecoark common stock. While bank deposits are not investment securities, money market accounts with a money market fund are securities and included in the test. If our management is not careful, we can trip the investment company test. If we acquire an operating business prior to March 27, 2021, that will solve our potential problem. Compliance with the 1940 Act is very expensive and as a practical matter we will not be able to comply.

We may face difficulties or delays in our search for a business combination, and we may not have access to sufficient capital to consummate a business combination.

We may face difficulty identifying a viable business opportunity or negotiating or paying for any resulting business combination. Economic factors that are beyond our control, including the COVID-19 pandemic and consequent economic downturn, as well as increased competition for acquisitions of operating entities that we expect to encounter as a result thereof, may hinder our efforts to locate and/or obtain a business that is suitable for our business goals at a price we can afford and on terms that will enable us to sufficiently grow our business to generate value to our shareholders. We have limited capital, and we may not be able to take advantage of any available business opportunitiesneeded, on favorable terms or at all, duewe may be forced to discontinue operations, and your investment could become worthless. Further, if the securities we issue are dilutive or otherwise negatively impact existing investors’ rights, our business and prospects, and/or your investment in us could be materially harmed.

We face intense competition in a rapidly developing industry by larger, vertically integrated competitors with more experience and financial resources than we have, as well as numerous smaller and/or unlicensed market participants.

We face intense competition from other cannabis companies, many of which have longer operating histories and more financial resources and marketing experience than us, and/or have vertically integrated seed-to-sale cannabis businesses. Increased competition by larger and better financed competitors could materially and adversely affect our business, financial condition and results of operations. Because we are a new entrant in the cannabis industry and our operations will initially be focused on retail cannabis sales, the competitive forces pose a greater risk to us. Additionally, because of the early stage of the industry, we face additional competition from new entrants. If the number of consumers of cannabis in the states in which we operate increases, the demand for products will increase and we expect that competition will become more intense, as current and future competitors begin to offer an increasing number of diversified products. To become and remain competitive, we will require a continued high level of investment in product acquisition, branding, marketing and sales efforts. We may not have sufficient resources to maintain these efforts in a competitive, cost-effective or timely manner, which could materially and adversely affect the business, financial condition and results of our operations.

We also face competition from illegal dispensaries and the black market that are unlicensed and unregulated, and that are selling cannabis and cannabis products, including products with higher concentrations of active ingredients, and using delivery methods that we are prohibited from offering to individuals as they are not currently permitted by U.S. state or federal law. Any inability or unwillingness of law enforcement authorities to enforce existing laws prohibiting the unlicensed cultivation and sale of cannabis and cannabis-based products could result in the perpetuation of the black market for cannabis and/or have a material adverse effect on the perception of cannabis use. Any or all these events could have a material adverse effect on our business, financial condition and results of operations.

Cannabis remains illegal under U.S. federal law, and enforcement of U.S. cannabis laws could change.

Cannabis is illegal under U.S. federal law. In those states in which the use of cannabis has been legalized, its use remains a violation of federal law pursuant to the Controlled Substances Act. The Controlled Substances Act classifies cannabis as a Schedule I controlled substance, and as such, medical and recreational cannabis use is illegal under U.S. federal law and federal authorities may enforce such federal laws. If that occurs, we may be deemed to be dispensing cannabis and drug paraphernalia in violation of federal law. Since federal law criminalizing the use of cannabis preempts state laws that legalize its use, enforcement of federal law regarding cannabis is a material risk and would greatly harm our business, prospects, revenue, results of operation and financial condition.

Our cannabis-related activities will be subject to evolving regulation by governmental authorities. We will be engaged in the cannabis industry in the United States where local and state law permits such activities, and cannabis remains illegal for some or all uses and circumstances in many states. The legality of the sale of cannabis differs among states in the United States. Due to the current regulatory environment in the United States, new risks may emerge, and management may not be able to predict all such risks.

Because our planned activities in the cannabis industry may be illegal under the applicable federal laws of the United States, there can be no assurances that the U.S. federal government will not seek to enforce the applicable laws against us. The consequences of such enforcement would be materially adverse to us and our business, including our reputation, profitability and the market price of our common stock, and could result in the forfeiture or seizure of all or substantially all of our assets.

Due to the conflicting views between state and federal governments regarding cannabis, cannabis businesses are subject to inconsistent laws and regulations. The prior U.S. administration attempted to address the inconsistent treatment of cannabis under state and federal law in the Cole Memorandum that Deputy Attorney General James Cole sent to all U.S. Attorneys in August 2013, which outlined certain priorities for the U.S. Department of Justice (“DOJ”) relating to the prosecution of cannabis offenses. The Cole Memorandum noted that, in jurisdictions that have enacted laws legalizing cannabis in some form and that have also implemented strong and effective regulatory and enforcement systems to control the cultivation, processing, distribution, sale and possession of cannabis, conduct in compliance with such laws and regulations was not a priority for the DOJ. However, the DOJ did not provide (and has not provided since) specific guidelines for what regulatory and enforcement systems would be deemed sufficient under the Cole Memorandum. During the Trump Administration, the Cole Memorandum was rescinded. However it is expected that the Biden Administration will either reinstate the Cole Memorandum or otherwise take a stance on cannabis that is more lenient than the Trump Administration’s stated policies. Nonetheless, the timing and scope that the Biden Administration’s policy changes, if any, remain unclear, including whether these policies will be more lenient on commercial cannabis operations such as ours as opposed to merely easing enforcement practices against individual cannabis users.

There can be no assurance that the federal government will not enforce federal laws relating to cannabis and seek to prosecute cases involving cannabis businesses that are otherwise compliant with state laws in the future. While most states that have legalized cannabis continue to craft their regulations pursuant to the Cole Memorandum and federal enforcement agencies have taken limited availabilityaction against state-compliant cannabis businesses, the DOJ may change its enforcement policies at any time, with or without advance notice.

The uncertainty of capital.U.S. federal enforcement practices going forward and the inconsistency between U.S. federal and state laws and regulations present material risks for us, and adverse developments in regulatory enforcement policies and efforts could have a material adverse effect on our business.

There is a substantial risk of regulatory or political change.

The success of our business strategy depends on the legality of the cannabis industry in the United States. The political environment surrounding the cannabis industry in the United States in general can be volatile and the regulatory framework in the United States remains in flux. Despite the currently implemented laws and regulations in the U.S. and its territories to legalize and regulate the cultivation, processing, sale, possession and use of cannabis, and additional states that have pending legislation regarding the same, the risk remains that a shift in the regulatory or political realm could occur and have a drastic impact on the industry as a whole, adversely impacting our ability to successfully invest and/or participate in the selected business opportunities.

Further, there is no guarantee that legislative bodies and/or voting constituents will not repeal, overturn or limit any such legislation legalizing the sale, disbursement and consumption of medical or recreational use of cannabis. It is also important to note that local and city ordinances may strictly limit and/or restrict disbursement of cannabis in a manner that will make it extremely difficult or impossible to transact business that is necessary for the continued operation of the cannabis industry even if state governments do not.

Cannabis remains illegal under U.S. federal law, and the U.S. federal government could bring criminal and civil charges against us or our subsidiaries or our investments at any time. Federal actions against any individual or entity engaged in the cannabis industry or a substantial repeal of cannabis-related legislation could have a material adverse effect on our business, financial condition or results of operations.

We may be subject to action by the U.S. federal government through various government agencies for participation in the cannabis industry.

Since the cultivation, processing, production, distribution and sale of cannabis for any purpose, medical or recreational use or otherwise, remain illegal under U.S. federal law, it is possible that we or third parties with which we do business and/or on which we rely may be forced to cease any such activities. The U.S. federal government, through, among others, the DOJ, its sub-agency the U.S. Drug Enforcement Agency (the “DEA”) and the U.S. Internal Revenue Service (the “IRS”), has the right to actively investigate, audit and shut down cannabis-related businesses such as us. The U.S. federal government may also attempt to seize our property. Any action taken by the DOJ, the DEA and/or the IRS to interfere with, seize or shut down our operations will have an adverse effect on our business, prospects, revenue, results of operation and financial condition.

Since federal law criminalizing the use of cannabis preempts state laws that legalize its use, the federal government can seek to enforce criminal violations of federal law despite state laws permitting the use of cannabis. Despite a relatively passive stance on cannabis activity by the federal law enforcement agencies in recent years, the stated position of the current federal Administration is hostile to legal cannabis. As the rescission of the Cole Memorandum and the implementation of the Sessions Memorandum demonstrate, the DOJ may at any time issue additional guidance that directs federal prosecutors to devote more resources to prosecuting cannabis-related businesses. In the event that the DOJ under the U.S. Attorney General aggressively pursues financiers or equity owners of cannabis-related businesses, and U.S. Attorneys follow the DOJ policies through pursuing prosecutions, then we could face:

Because the Cole Memorandum was rescinded by the Sessions Memorandum, the DOJ under the current administration or an aggressive federal prosecutor could allege that the Company, our board of directors and, potentially, our shareholders, “aided and abetted” violations of federal law by providing finances and services to our portfolio cannabis companies. Under these circumstances, federal prosecutors could seek to seize our assets, and to recover the “illicit profits” previously distributed to shareholders resulting from any of our financing or services.

Violations of any federal laws and regulations could result in significant fines, penalties, administrative sanctions, convictions or settlements arising from civil proceedings conducted by either the federal government or private citizens, or criminal charges, including, but not limited to, disgorgement of profits, cessation of business activities or divestiture. These results could have a material adverse effect on us, including our reputation and ability to conduct business, our holding (directly or indirectly) of cannabis licenses in the United States, the listing of our securities on stock markets or exchanges, our financial position, operating results, profitability or liquidity or the market price of our common stock.

State and local regulation of cannabis is uncertain and changing.

As described above, to date the cannabis industry has been primarily regulated at the state and local levels of government. While we intend to initially only operate in California and to comply with all applicable state and local laws in any jurisdiction in which we operate, there can be no assurance that state laws legalizing and regulating the sale and use of cannabis will not be repealed or overturned, or that local governmental authorities will not limit the applicability of state laws within their respective jurisdictions. Further, state and local cannabis laws and regulations are subject to preemption by related federal laws and regulations, such that if the federal government enforces its laws, compliance state and local laws will not protect us from criminal claims and liability. Therefore, if the federal government begins to enforce federal laws relating to cannabis in states where the sale and use of cannabis is currently legal, or if existing state laws are repealed or curtailed, our business or operations in those states or under those laws would be materially and adversely affected. Federal actions against any individual or entity engaged in the cannabis industry or a substantial repeal of favorable cannabis-related legislation could materially adversely affect us, our business and our assets or investments.

The rulemaking process at the state level that applies to cannabis operators in any state will be ongoing and result in frequent changes. As a result, an effective compliance program will be essential to manage regulatory risk. We intend to develop and implement operating policies and procedures that are compliance-based and derived from the state regulatory structure governing ancillary cannabis businesses and their relationships to state-licensed or permitted cannabis operators. However, notwithstanding our efforts and diligence, regulatory compliance and the process of obtaining regulatory approvals can be costly and time-consuming. No assurance can be given that we will receive the requisite licenses, permits or cards to continue operating our business or otherwise take action necessary to comply with all applicable laws and regulations.

State regulatory agencies may require us to post bonds or significant fees.

There is a risk that a greater number of state regulatory agencies will begin requiring entities engaged in certain aspects of the cannabis industry to post a bond or significant fees when applying, for example, for a dispensary license or renewal, as a guarantee of payment of sales and franchise taxes. We are not able to quantify at this time the potential scope of such bonds or fees in the states in which we currently operate or may in the future operate, but they may be materially negative to our results of operations, financial condition and ultimate business success, individually or in the aggregate.

We may face state limitations on ownership of cannabis licenses.

Jurisdictions in which we plan operate may limit the number of cannabis licenses and certain economic or commercial interests in the entity that holds the license that can be held by one entity within that state. For example, the two California licenses we are in the process of acquiring require a two-step approach wherein we purchase 80% of the entity holding the licenses in Step 1 and the remaining 20% in Step 2 following state and local regulatory approval. While we are still in the process of paying the purchase price for Step 1, this process, which is the product of California regulatory requirements, has delayed and may further delay our ability to obtain and operate these licenses and generate revenue. Similar delays or difficulties in the future with respect to other businesses or licenses we may undertake to acquire could materially adversely affect our growth strategy and prospects.

Further, as a result of the completion of certain acquisition transactions that we have entered into or may enter into in the future, we may potentially hold more than the prescribed number of licenses or economic interests in a licensed entity in certain states, and accordingly may be required to divest certain licenses or entities that hold such license in order to comply with applicable regulations. The divestiture of certain licenses or entities that hold such licenses may result in a material, adverse effect on our business, financial condition, or results of operations.

We may become subject to FDA or ATF regulation.

Cannabis remains a Schedule I controlled substance under U.S. federal law. If the federal government reclassifies cannabis to a Schedule II controlled substance, it is possible that the U.S. Food and Drug Administration (the “FDA”) would seek to regulate cannabis under the Food, Drug and Cosmetics Act of 1938 (the “FDCA”). The FDA is responsible for ensuring public health and safety through regulation of food, drugs, supplements and cosmetics, among other products, through its enforcement authority pursuant to the FDCA. FDA’s responsibilities include regulating the ingredients as well as the marketing and labeling of drugs sold in interstate commerce. Because cannabis is federally illegal to produce and sell, and because it has no federally recognized medical uses, the FDA has historically deferred enforcement related to cannabis to the DEA; however, the FDA has enforced the FDCA with regard to industrial hemp-derived products, especially cannabidiol, or CBD, derived from industrial hemp sold outside of state-regulated cannabis businesses. The FDA has recently affirmed its authority to regulate CBD derived from both cannabis and industrial hemp, and its intention to develop a framework for regulating the production and sale of CBD derived from industrial hemp. It is also possible that the federal government could seek to regulate cannabis under the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”). The ATF may issue rules and regulations related to the use, transporting, sale and advertising of cannabis or cannabis products. Any such developments could materially adversely affect us, either directly or by negatively impacting third parties on whom we rely to operate.

Cannabis businesses are subject to enhanced anti-money laundering laws and regulations and have restricted access to banking and other financial services.

The Company and its subsidiaries will be subject to a variety of laws and regulations in the U.S. that involve money laundering, financial record-keeping and proceeds of crime, including the Bank Secrecy Act and the rules and regulations thereunder, and any related or similar rules, regulations or guidelines, issued, administered or enforced by governmental authorities in the U.S. Further, under U.S. federal law, banks or other financial institutions that provide a cannabis business with a checking account, debit or credit card, small business loan, or any other service could be found guilty of money laundering, aiding and abetting, or conspiracy.

If our operations, the revenue we generate or the capital we raise in the future were found to be in violation of money laundering laws, such transactions may be viewed as proceeds from a crime (the sale of a Schedule I drug) under the Bank Secrecy Act’s money laundering provisions. This may restrict our ability to declare or pay dividends or effect other distributions.

As a result of the robust regulation on banking practices as they relate to the funding of cannabis companies, most banks and other financial institutions in the United States have developed that restrict or limit the provision of banking services to cannabis-related businesses. In addition to the foregoing, banks may refuse to process debit card payments and credit card companies may refuse to process credit card payments for cannabis-related businesses. As a result, we may have limited or no access to banking or other financial services in the United States. In addition, federal money laundering statutes and Bank Secrecy Act regulations discourage financial institutions from working with any organization that sells a controlled substance, regardless of whether the state it operates in permits cannabis sales. The inability or limitation of our ability to open or maintain bank accounts, obtain other banking services and/or accept credit card and debit card payments may make it difficult for us to operate and conduct our business as planned or to operate efficiently. Banks and other depository institutions are currently hindered by federal law from providing financial services to cannabis businesses, even in states where those businesses are regulated, which will limit our access to capital resources which we may need in the future to grow and maintain our operations.

Because our contracts will involve cannabis and related activities, which are not legal under U.S. federal law, we may face difficulties in enforcing our contracts.

Because our contracts will involve cannabis and other activities that are not legal under federal law and in some state jurisdictions, we may face difficulties in enforcing our contracts in federal courts and certain state courts. Therefore, there is uncertainty as to whether we will be able to legally enforce our agreements, which could have a material adverse effect on our business and results of operations.

We will be subject to restrictive and varying limitations on marketing our products.

Certain states have enacted strict regulations regarding marketing and sales activities on cannabis products. There may therefore be restrictions on sales and marketing activities imposed by government regulatory bodies that can hinder the development of the Company’s business and operating results. Restrictions can include regulations that specify the product, location and to end user for which our products can appear and/or be advertised. Marketing, advertising, packaging and labeling regulations also vary from state to state, potentially limiting the consistency and scale of consumer branding communication and product education efforts. The regulatory environment in the U.S. limits our ability to compete for market share in a manner similar to other industries, widening the gap between us and our competitors that have greater resources than we do and longer operating histories. If we are unable to effectively market our products and compete for market share, or if the costs of compliance with government legislation and regulation cannot be absorbed through increased selling prices for our products, our sales and operating results could be adversely affected.

The results of future clinical research of cannabis may be unfavorable to cannabis which may have a material adverse effect on the demand for our products.

Research regarding the medical benefits, viability, safety, efficacy and dosing of cannabis or isolated cannabinoids such as CBD and tetrahydrocannabinol, or THC remains in early stages. There have been relatively few clinical trials on the benefits of cannabis or isolated cannabinoids. Future research and clinical trials may prove positive assumptions regarding the use of cannabis to be incorrect, or could raise concerns regarding the safety or utility of cannabis use or of adverse health effects. Further, the cannabis industry is highly dependent upon consumer perception regarding the safety, efficacy and quality of the cannabis that is produced. Consumer sentiment can be significantly influenced by scientific research or findings regarding the consumption of cannabis products. If scientific research or findings contain negative conclusions or medical opinions regarding the benefits, viability, safety, efficacy, dosing, or other facts related to cannabis, it could therefore have a material adverse effect on the demand for our products, and in turn on our business, prospects, results of operation and financial condition.

Inconsistent public opinion of cannabis and the cannabis industry could hinder market growth and state adoption of permissive legislation and policies.

Public opinion surrounding cannabis use and the cannabis industry has traditionally been inconsistent and varies among markets and demographics. While public opinion and support appears to be rising generally for legalizing cannabis use, it remains a controversial issue subject to differing opinions surrounding the level of legalization (for example, medical cannabis as opposed to recreational use). Inconsistent public opinion and perception of cannabis may hinder growth and government adoption of permissive legislation and policies, which could have a material adverse effect on our business, financial condition or results of operations.

As a cannabis business, we will be subject to unfavorable tax treatment under the Internal Revenue Code.

Under Section 280E of the Internal Revenue Code of 1986, no deduction or credit is allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if the trade or business (or the activities which comprise the trade or business) consists of trafficking in controlled substances (within the meaning of Schedules I and II of the Controlled Substances Act) which is prohibited by federal law or the law of any state in which that trade or business is conducted. The IRS has applied this provision to cannabis operations, prohibiting them from deducting many expenses associated with cannabis businesses other than certain costs and expenses related to cannabis cultivation and manufacturing operations. Accordingly, Section 280E has a material impact on the operations of cannabis companies such as us. For example, what would otherwise be profitable operations could result in a loss after taking into account its U.S. income tax expenses.

Our subsidiaries may not be able to obtain necessary permits and authorizations.

We intend to operate cannabis dispensaries using subsidiaries to be formed for this purpose. Our subsidiaries may not be able to obtain or maintain the necessary licenses, permits, certificates, authorizations or accreditations to operate their respective businesses, or may only be able to do so at great cost. In addition, our subsidiaries may not be able to comply fully with the wide variety of laws and regulations applicable to the cannabis industry. Failure to comply with or to obtain the necessary licenses, permits, certificates, authorizations or accreditations could result in restrictions on a subsidiary’s ability to operate in the cannabis industry, which could have a material adverse effect on our business, financial condition or results of operations.

Disparate state-by-state regulatory landscapes may require us to structure and utilize complex operational and legal structures that could impose substantial costs on us or otherwise materially adversely affect our operations and financial condition.

If we acquire additional cannabis licenses in jurisdictions outside of California, we may need to obtain and operate such licenses pursuant to a number of different transactional or corporate structures, depending on the regulatory requirements from state-to-state, including potentially realizing the economic benefit of cannabis licenses through management agreements and other commercial arrangements. Such agreements are often required to comply with applicable laws and regulations or are in response to perceived risks that we determine warrant such arrangements.

To the extent necessary for our expansion into additional markets, the foregoing structures will present various risks to us and our subsidiaries, including the following:

In any or all of the above situations, it would be difficult and expensive for us to protect our rights through litigation, arbitration, or similar proceedings.

The success of our cannabis business will depend, in part, on our ability to execute on our acquisition strategy, to successfully integrate acquired businesses and to retain key employees of acquired businesses.

While we intend to initially operate through the two California licenses following the closing of the anticipated Treehouse acquisition, we continue to evaluate strategic acquisition opportunities that have the potential to support and strengthen our business, including acquisitions in the United States, as part of our ongoing growth strategy. We cannot predict the timing or size of any future acquisitions. To successfully acquire a significant target, we may need to raise additional equity and/or indebtedness, which could increase our debt. There can be no assurance that we will have sufficient capitalenter into definitive agreements with respect to provide us withany contemplated transaction or that any contemplated transaction will be completed. The investigation of acquisition candidates and the necessary fundsnegotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys, and others. If we fail to complete any acquisition for any reason, including events beyond our control, the costs incurred up to that point for the proposed acquisition would not be recoverable.

Acquisitions typically require integration of the acquired company’s assets, personnel, products and infrastructure. We may be unable to successfully developintegrate an acquired business into our existing business, and implementan acquired business may not be as beneficial or profitable as and when expected or at all. Our inability to successfully integrate new businesses in a timely and orderly manner could increase costs and losses and diminish our planability to become profitable. Factors affecting the successful integration of operationan acquired business include, but are not limited to, the following:

Acquisitions involve risks that the acquired business will not perform as expected and that business judgments concerning the value, strengths and weaknesses of the acquired business will prove incorrect. In addition, potential acquisition targets may be located in states in which we do not currently operate, which could result in unforeseen operating difficulties and difficulties in coordinating geographically dispersed operations, personnel, and facilities. In addition, if we enter new geographic markets, we may be subject to additional and unfamiliar legal and regulatory requirements.

There can be no assurance that we will achieve the perceived benefits such as cost savings in connection with future acquisitions in the timeframe anticipated or acquire aat all. Many prospective businesses for acquisition are small private companies with unsophisticated financial statements that have not been independently reviewed or audited. Our inability to effectively identify, evaluate, negotiate, close and manage the integration of acquisitions could prevent us from meeting our business we deem to be appropriate or necessary to accomplishand growth objectives and harm our objectives,prospects and financial condition, in which case we may be forced to terminate our business plan and your investment in us would be at risk.

We will face security risks related to our physical facilities and cash transfers.

The business premises of our operating locations, when opened, could be targets for theft. While we intend to implement security measures at each location, our cannabis dispensaries could be subject to break-ins, robberies and other security breaches. If we experience a security breach, the Companyloss of cannabis products or other assets could have a material adverse impact on our business. Further, we may utilize third parties to assist in our security efforts, such as the transportation of cash we receive from sales from dispensaries to banks. These third parties may not be effective, and we will lack control over them. For example, an employee of a security company we engage could steal our assets or assist others in such a theft. Any of the foregoing risks could materially adversely harm our results of operations and financial condition.

We face exposure to fraudulent or illegal activity by employees, contractors, consultants and agents which may subject us to investigations and actions.

We will be exposed to the risk that any of our employees our independent contractors may engage in fraudulent or other illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities or confidential information to us that violates government regulations, applicable business policies, practices or standards, laws that require the true, complete and accurate reporting of financial information or data, or other laws, regulations, rules or policies that are or may become worthless.

applicable to us as a result of our operations. It may not always be possible for us to identify and deter misconduct by our employees and other third parties, and the precautions taken by us to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. We cannot provide assurance that our internal controls and compliance systems will protect us from acts committed by our employees, agents or business partners in violation of federal, state or local laws. If any such actions are instituted against us, and we are not successful in acquiringdefending the Company or asserting our rights, those actions could have a material impact on our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could have a material adverse effect on our business, financial condition or results of operations.

We face risks related to the novelty of the cannabis industry, and the resulting lack of information regarding comparable businesses, and the offering of new products in a constantly evolving market.

As a relatively new and constantly evolving industry, there are a limited number of established businesses and stakeholders in the cannabis market with a business model we can attempt to replicate and build upon. Similarly, there is limited information about comparable businesses available for potential investors to review in making a decision on whether to invest in us.

Investors should evaluate the Company and our prospects in light of the risks and uncertainties encountered by businesses, like us, that are in their early stages. For example, unanticipated expenses, operational problems or technical difficulties may occur, which may result in material delays in the operation of our business. We may fail to successfully address these contingencies or successfully implement our operating strategies effectively or at all. If we fail to do so, it could materially harm our business to the point of having to cease operations and/or reduce the value of our common stock, and investors may lose some or all of their investment.

We have committed and expect to continue committing significant resources and capital to develop and begin to implement our business plan and operations. However, the cannabis products we intend to obtain or license and market for consumption will likely be relatively untested in the marketplace, and there can be no assurance that we will obtain the rights to commercialize targeted products on favorable terms or at all, or that if we do the products we attempt to sell will achieve market acceptance. Moreover, these prospective products may be subject to significant competition with offerings by new and existing competitors in the business with a more established market and a broader reach. The failure to successfully develop and market these new products could materially harm our business, prospects and financial condition.

We will be dependent on the popularity and market acceptance of our brand portfolio.

Our ability to generate revenue and be successful in the implementation of our business plan will be dependent on consumer acceptance of and demand for the products we sell. In the short-term, we intend to acquire the rights to use existing brands and products owned by third parties in order to commercialize our cannabis licenses in California. We may face difficulty obtaining these rights on favorable terms or at all. Further, if we do obtain the rights for the products as intended, acceptance of and demand for these products will depend on several factors, including availability, cost, ease of use, familiarity of use, convenience, effectiveness, safety and reliability. If these customers do not accept our products, or if such products fail to adequately meet customers’ needs and expectations, our ability to continue generating revenues could be reduced.

We believe that establishing and maintaining the brand identities of products will be a critical aspect of attracting and expanding a sufficient customer base to generate material revenue and expand our operations. Promotion and enhancement of brands will depend largely on the ability to offer high quality products. If customers and end users do not perceive the products we sell to be of high quality, or if we introduce new products or enter into new business ventures that are not favorably received or perceived by customers, end users or other stakeholders on which we will depend, we will risk diluting brand identities and decreasing their attractiveness to existing and potential customers. Moreover, in order to attract and retain customers and to promote and maintain brand equity in response to competitive pressures, we may have to increase our financial commitment to creating, obtaining, and maintaining a distinct brand loyalty among customers. If we incur significant expenses in an attempt to promote and maintain brands, this could be a material adverse effect on our business, financial condition or results of operations, particularly if these efforts are unsuccessful.

We will have a highly concentrated portfolio of assets and operate in a limited number of markets, and therefore face risks surrounding a lack of diversification.

With respect to the Elysian business, we intend to invest in and operate solely within the cannabis industry. Other than Elysian our only other operations are the production and sale of sporting goods and apparel through Norr. Thus, an investment in our Company will provide limited diversity as to asset type. Additionally, the assets to be held by us may be geographically concentrated from time to time. For example, our initial cannabis operations are expected to be limited to California, at least in the short-term. This lack of diversification could cause us to face difficulties in establishing material revenue, particularly if adverse external forces such as market or regulatory changes occur, and we may be unable to recover from these developments, in which case your investment would be at risk.

We will face risks related to our information technology systems, and potential cyber-attacks and security and privacy breaches.

We believe that the installment and use of technology will be a critical in our planned operations. As such, we will be susceptible to operational, financial and information security risks resulting from cyber-attacks and/or technological malfunctions. Successful cyber-attacks and/or technological malfunctions affecting us, or our service providers can result in, among other things, financial losses, the inability to process transactions, the unauthorized release of customer information or confidential information and reputational risk. There can be no assurance that we will not incur losses form such events in the future. As cybersecurity threats continue to evolve, we may be required to use additional resources to continue to modify or enhance protective measures or to investigate security vulnerabilities.

We may store and collect personal information about customers and would therefore be responsible for protecting that information from privacy breaches that may occur through procedural noncompliance or failures, information technology malfunction or deliberate unauthorized intrusions. To date, a growing number of states, including California where our initial cannabis operations will be centered, have implemented data privacy legislation aimed at ensuring data collectors and users comply with privacy and security standards, and penalizing those who fail to meet these standards. California has enacted the California Consumer Privacy Act of 2018 (the “CCPA”), which became operative in January 2020. The CCPA requires companies that process personal information on California residents to make new disclosures to consumers about such companies’ data collection, use, and sharing practices and inform consumers of their personal information rights such as deletion rights, allows consumers to opt out of certain data sharing with third parties, and provides a new businesscause of action for data breaches. In November 2020, California enacted the California Privacy Rights Act of 2020 (the “CPRA”), which amends and generating material revenues, itexpands the scope of the CCPA, while introducing new privacy protections that extend beyond those included in the CCPA and its implementing regulations. The CCPA, as amended and expanded by the CPRA, is one of the most prescriptive general privacy law in the United States and may lead to similar laws being enacted in other U.S. states or at the federal level. Other states, including Colorado, Nevada, and Virginia have also implemented similar legislation.

Any data security or privacy breach and/or violation of data privacy laws such as the CCPA would have a material adverse effect on our business.business, prospects, revenue, results of operation and financial condition. We will be subject to laws, rules and regulations in the United States and other jurisdictions in which we operate or in which our customers reside relating to the collection, processing, storage, transfer and use of personal data. Our ability to execute transactions and to possess and use personal information and data in conducting our business subjects us to legislative and regulatory burdens that may require us to notify regulators and customers, employees and other individuals of a data security breach. Evolving compliance and operational requirements under the privacy laws, rules and regulations of jurisdictions in which we operate impose significant costs that are likely to increase over time. In addition, non-compliance could result in proceedings against us by governmental entities and/or significant fines, could negatively impact our reputation and may otherwise adversely impact our business, financial condition and operating results.

We face risks related to our insurance coverage and uninsurable risks.

Our operations will be subject to a number of risks and hazards generally, including adverse weather conditions, accidents, fires, labor disputes and changes in the regulatory environment. Such occurrences could result in damage to assets, personal injury or death, property damage, operational delays or challenges, monetary losses and possible civil or criminal liability and resulting costs, damages, fines and other adverse consequences.

Although we intend to acquire and maintain insurance to protect against certain risks and comply with certain applicable laws and regulations if and when we purchase and secure ownership of the two cannabis licenses in California, our insurance may not cover all the potential risks associated with our operations. We may also be unable to maintain insurance to cover these risks on economically feasible terms. Further, insurance coverage may not continue to be available or may not be adequate to cover any resulting liability. Uninsured or underinsured losses may cause us to incur significant costs which would have a material adverse effect upon our financial performance and results of operations.

If

Our reputation and ability to operate could be negatively impacted by our suppliers’ ability to produce and transport products.

We will depend on third-party suppliers to produce, provide for and timely deliver orders for the products we aresell. Products manufactured or purchased from our suppliers will be resold to our customers. These suppliers could fail to produce products to our specifications or quality standards and may not deliver units on a timely basis. Any changes in our suppliers’ ability to resolve production issues, which could be caused by a variety of factors such as supply shortages which have recently arisen by COVID-19, could impact our ability to fulfill orders and could also disrupt our business due to delays in finding new suppliers.

We may face business disruption and related risks arising from the COVID-19 pandemic, which could have a material adverse effect on our business.

The sale of cannabis products by us could be materially adversely affected by the COVID-19 pandemic. We expect to be reliant upon cannabis sales at retail locations, and may not be successful in developing a viablematerial online sales presence. Retail sales declined in many industries and at various times throughout the pandemic, due in part to decreased demand caused by economic hardship and uncertainty and production challenges caused by supply shortages and the lockdowns. While vaccinations beginning in 2021 allowed for the partial reopening of the economy, the recent “Omicron” variant of the virus, potential new variants of the virus, as well as reduced efficacy of vaccines over time and the possibility that a large number of people decline to get vaccinated or receive booster shots, creates inherent uncertainty as to the future of our business, planour industry and acquiringthe economy in general in light of the pandemic.

We are still assessing our business plans and the impact COVID-19 may have on our ability to commercialize cannabis licenses and products, but there can be no assurance that this analysis will enable us to avoid or mitigate part or all of any impact from the spread of COVID-19 or its consequences, including macroeconomic downturns. The extent to which the COVID-19 pandemic and global efforts to contain its spread will impact our operations will depend on future developments, which for a new business throughvariety of reasons including those described above are highly uncertain and cannot be predicted at this time. If we or third parties on which we rely are unable to implement it,navigate the pervasive and evolving challenges posed by the pandemic, our investors’ entire investmentprospects and results of operations could be materially adversely affected.

Because of the Russian invasion of Ukraine, the effect on the capital markets and the economy is uncertain, and as a result we may have to deal with a recessionary economy and economic uncertainty including possible adverse effects upon our ability to raise capital as and when needed.

As a result of the Russian invasion of Ukraine, certain events are beginning to effect the global and U.S. economy including increased inflation, substantial increases in the Companyprices of oil and gas, large Western companies ceasing to do business in Russia and uncertain capital markets with declines in leading market indexes. The duration of this war and its impact are at best uncertain. Ultimately the economy may turn into a recession with uncertain and potentially severe impacts upon public companies and us, including our ability to raise capital. We cannot predict how this will affect our operations or the industries in which we operate, however any such impact may be material and adverse.

We face an inherent risk of product liability claims as a manufacturer, processor and producer of products that are meant to be consumed by humans.

As a seller of products designed to be ingested or otherwise consumed by humans, we will face an inherent risk of exposure to product liability claims, regulatory action and litigation if our products are alleged to have caused significant loss or injury. In addition, the sale of these products involves the risk of injury to consumers including due to tampering by unauthorized third parties or product contamination. Previously unknown adverse reactions resulting from human consumption of our products alone or in combination with other medications or substances could become worthless. Even ifoccur. We may be subject to various product liability claims, including, among others, that the products sold by us, which will be purchased by us from third party licensed producers, caused injury, illness or death, include inadequate instructions for use or include inadequate warnings concerning possible side effects or interactions with other substances. Because of our business model, we are successfulexpect to have limited control over the production process of the products we sell to the public. Despite our lack of manufacturing operations, we could be held liable under a product liability claim which generally imposes strict liability across all parties in combiningthe production, supply and marketing processes. A product liability claim or regulatory action against us could result in increased costs, could adversely affect our reputation with or acquiring the assetsour customers and consumers generally and could have a material adverse effect on our business, results of an operating entity, weoperations and financial condition. There can providebe no assurances that the Companywe will be able to generate significant revenue therefromobtain or maintain product liability insurance on acceptable terms or with adequate coverage against potential liabilities. Such insurance is expensive and may not be available in the short-termfuture on acceptable terms, or at allall. The inability to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against potential product liability claims could prevent or inhibit the commercialization of our potential products.

Intellectual property on which we will rely may be difficult or impossible to protect.

We intend to rely upon certain proprietary intellectual property, including but not limited to trademarks, trade names, copyrights and trade secrets, which may be developed internally and/or licensed from third parties. Our success will depend, in part, on our ability to maintain and enhance protection for such intellectual property and proprietary information. We generally enter into confidentiality or non-disclosure agreements with our employees, consultants, and collaborators. These agreements may be breached, may not effectively assign rights to proprietary information and intellectual property to us, and may fail to adequately protect us or our intellectual property rights or proprietary information in scope or duration. In addition, our proprietary information could be independently discovered by competitors, in which case we may not be able to prevent the use of such proprietary information by our competitors. The enforcement of a claim alleging that investorsa party illegally obtained and was using our proprietary information could be difficult, expensive, and time consuming and the outcome would be unpredictable. In addition, courts outside the United States may be less willing to protect such proprietary information. The failure to obtain or maintain meaningful intellectual property protection could adversely affect our competitive position.

In addition, effective future copyright and trade secret protection may be unavailable or limited and may be unenforceable. As long as cannabis remains illegal under U.S. federal law as a Schedule I controlled substance pursuant to the Controlled Substances Act, the benefit of certain federal laws and protections which may be available to most businesses, such as federal trademark protection regarding the intellectual property of a business, may not be available to us. While many states do offer the ability to protect trademarks independent of the federal government, state-registered trademarks provide a lower degree of protection than would federally registered marks. As a result, our intellectual property may never be adequately or sufficiently protected against the use or misappropriation by third parties.

Further, if intellectual property that we license from third parties is infringed, the licensor may allege that we caused the infringement and assert a claim for monetary damages, under contractual indemnification provisions or otherwise. The defense against such a claim, regardless of merit, could be costly and divert management’s attention away from operations, and an adverse outcome could materially harm our financial condition.

Our failure or inability to adequately protect proprietary information and intellectual property on which we rely, including intellectual property that we may license from third parties or otherwise obtain under contractual arrangements, could have a material adverse effect on our business, financial condition or results of operations.

We may be exposed to infringement or misappropriation claims by third parties, which, if determined adversely to us, could subject us to significant liabilities and other costs.

Our success will derivedepend on our ability to use products and branding without infringing the intellectual property rights of third parties. We cannot assure that third parties will not assert intellectual property claims against us. We are subject to additional risks if entities licensing intellectual property to us do not have adequate rights to the licensed materials. If third parties assert copyright or patent infringement or violation of other intellectual property rights against us or our third party product licensors or suppliers, we may be required to defend our self in litigation or administrative proceedings, which can be both costly and time consuming and may significantly divert the efforts and resources of management personnel. Further, we may be forced to discontinue allegedly infringing product lines, processes or other operational components, which could materially adversely affect our results of operations. An adverse determination in any such litigation or proceedings to which we may become a profitparty could subject us to significant liability to third parties, require us to seek licenses from their investment. Whilethird parties, require us to pay ongoing royalties or subject us to injunctions that may prohibit the development and operation of our applications.

The products we believemarket may be subject to product recalls, which may result in expense, legal proceedings, regulatory action, loss of sales and reputation, and management attention.

Despite quality control procedures, products designed for human consumption are sometimes subject to the proceedsrecall or return for a variety of reasons, including product defects, such as contamination, unintended harmful side effects or interactions with other substances, packaging safety and inadequate or inaccurate labeling disclosure. If any of the products we market, which will likely be purchased by us from a third party licensed producers in most cases, are recalled due to an alleged product defect or for any other reason, we could be required to incur the unexpected expense of the recall and any legal proceedings that might arise in connection with the recall. We may lose a significant amount of sales and may not be able to replace those sales at an acceptable margin, if at all. In addition, a product recall may require significant attention from management. Particularly given our anticipated reliance on third party licensors and manufacturers to provide us with the products we will sell, there can be no assurance that any quality, potency or contamination problems will be detected in time to avoid unforeseen product recalls, regulatory action or lawsuits. Additionally, if one of the brands we use becomes subject to recall, the image of that brand and the Company could be harmed. A recall for any of the foregoing reasons could lead to decreased demand for our products and could have a material adverse effect on our results of operations and financial condition. Additionally, product recalls may lead to increased scrutiny of our operations by the FDA, or other regulatory agencies, requiring further management attention and potential legal fees and other expenses.

Synthetic products from the pharmaceutical industry may compete with cannabis use and products.

The pharmaceutical industry may attempt to dominate the cannabis industry, and in particular, legal cannabis, through the development and distribution of synthetic products which emulate the effects and treatment of organic cannabis. If they are successful, the widespread popularity of such synthetic products could change the demand, volume and profitability of the cannabis industry. This could adversely affect our ability to generate material revenue or secure long-term profitability and success through the operation of cannabis licenses and the sale of cannabis products, which could have a material adverse effect on our Ecoark common stockanticipated business, financial condition and results of operations.

Risks Relating to be necessaryOur Company and Financial Condition

Our ability to continue as a going concern is in doubt unless we obtain adequate new debt or equity financing and achieve sufficient sales levels.

As discussed in Note 1 to the consolidated financial statements, the Company has an accumulated deficit, recurring losses, and negative cash flows that raise substantial doubt about the Company’s ability to continue as a going concern. Our continued existence is dependent upon generating sufficient working capital and obtaining adequate new debt or equity financing. These factors raise substantial doubt about our ability to continue as a going concern for us to acquire a business and commence operations, weperiod of 12 months. Management cannot guaranteeprovide assurance that we will be successful in consummating such saleultimately achieve or that proceeds from a sale will be sufficient for us to acquire an attractive target candidate, establish material revenuemaintain profitable operations or become profitable.cash flow positive or raise debt and/or equity capital to continue and grow our operations. Because of our continuing losses, without improvements in our cash flow from operations or new financing, we may have to continue to restrict our expenditures. Management estimates needing at least $10 million to fund our planned expenditures and operations over the next 12 months. Working capital limitations may impinge on our day-to-day operations, which may contribute to continued operating losses. If we are not successful,any of the foregoing should happen, our investors mayshareholders could lose some or all of their entire investment.

If we cannot manage our growth effectively, we may not become profitable.

Businesses, including development stage companies such as ours and/or any operating business or businesses we may acquire, often grow rapidly and tend to have difficulty managing their growth. If we are able to acquire an operating business, we will likely need to expand our management team and other key personnel by recruiting and employing experienced executives and key employees and/or consultants capable of providing the necessary support.

We cannot assure you that our management will be able to manage our growth effectively or successfully. Our failure to meet these challenges could cause us to lose money, and your investment could be lost.

Because we have limited capital, we may need to raise additional capital in the future by issuing debt or equity securities, the terms of which may dilute our current investors and/or reduce or limit their liquidation or other rights.

Even if we can sell a material quantityWe have now sold all of the shares of Ecoark common stock previously held by us, at favorable prices, we mayand will require additional capital to acquire a business.implement our business plan, including opening Elysian Stores as planned as well as growing our Norr operations. We may not be able to obtain additional capital when required. Future business development activities, as well as administrative expenses such as salaries, insurance, general overhead, legal and compliance expenses and accounting expenses will require a substantial amount of additional capital.

The terms of securities we issue in future capital transactions may be more favorable to new investors, and may include liquidation preferences, superior voting rights or the issuance of other derivative securities, which could have a further dilutive effect on or subordinate the rights of our current investors. Any additional capital raised through the sale of equity securities will likely dilute the ownership percentage of our shareholders. Additionally, any debt securities we issue would likely create a liquidation preference superior that of our current investors and, if convertible into shares of common stock, would also pose the risk of dilution.

We may be unable to obtain necessary financing if and when required.

Our ability to obtain financing, if and when necessary, may be impaired by such factors as the capital markets (both in general and in the particular industry or industries in which we may choose to operate), our limited operating history and current lack of operations, the national and global economies and the condition of the market for microcap securities. Further, economic downturns such as the current global depression caused by the COVID-19 pandemic may increase our requirements for capital, particularly if such economic downturn persists for an extended period of time or after we have acquired an operating entity, and may limit or hinder our ability to obtain the funding we require. If the amount of capital we are able to raise from financing activities, together with any revenues we may generate from future operations, is not sufficient to satisfy our capital needs, we may be required to discontinue our development or implementation of a business plan, cancel our search for business opportunities, cease our operations, divest our assets at unattractive prices or obtain financing on unattractive terms. If any of the foregoing should happen, our shareholders could lose some or all of their investment.

Because we are still developing our business plan, we do not have any agreement for a business combination.

We have no current arrangement, agreement or understanding with respect to engaging in a business combination with any specific entity. We may not be successful in identifying and evaluating a suitable acquisition candidate or in consummating a business combination. We have not selected a particular industry or specific business within an industry for a target company. We have not established specific metrics and criteria we will look for in a target company, and if and when we do we may face difficulty reaching a mutual agreement with any such entity, including in light of market trends and forces beyond our control. Given our early-stage status, there is considerable uncertainty and therefore inherent risk to investors that we will not succeed in developing and implementing a viable business plan.

The COVID-19 pandemic could materially adversely affect our financial condition, future plans and results of operations.

This COVID-19 pandemic has had a significant adverse effect on the economy in the United States and on most businesses. The Company is not able to predict the ultimate impact that COVID -19 will have on its business; however, if the pandemic and government action in response thereto impose limitations on our operations or result in a prolonged economic recession or depression, the Company’s development and implementation of its business plan and our ability to commence and grow our operations, as well as our ability to generate material revenue therefrom, will be hindered, which would have a material negative impact on the Company’s financial condition and results of operations.

Because we are dependent upon Richard Horgan, our Chief Executive Officer and sole director to manage and oversee our Company, the loss of him or any difficulty hiring or retaining other key personnel could adversely affect our plan and results of operations.

We currently have a sole director and officer, Richard Horgan, who manages the Company and is presently evaluating a viable plan for our future operations. We will rely solely on his judgment in connection with selecting a target company and the terms and structure of any resulting business combination. In order to be successful, we will need to obtain key personnel to assist Mr. Horgan in his efforts to develop and implement the Company’s business plan. We may be unable to obtain such personnel prior to acquiring a business or at all. Competition in the market for the human resources that we expect we will need is intense, and we may have difficulty procuring adequate employees and/or consultants without investing significant financial resources on their salaries, fees, or other compensation. Further, given our current search for a business opportunity, we may have to delay hiring additional personnel until such time as we have sufficient capital to meet both the required amounts to make attractive offers to operating entities and to fund our future operations. The loss of our Chief Executive Officer, or any difficulty or inability to procure other qualified personnel, could delay or prevent the achievement of our business objectives, which could have a material adverse effect upon our results of operations and financial position.

Because we lack a controlling shareholder, if Mr. Horgan were unavailable we may be unable to cause the Company to elect a replacement director. In that event we would cease operations.

In addition, the officers and directors of an acquisition candidate may resign upon completion of a combination with their business. The departure of a target’s key personnel could negatively impact the operations and prospects of our post-combination business. The role of a target’s key personnel upon the completion of the transaction cannot be ascertained at this time. Although we contemplate that certain or all members of a target’s management team may remain associated with the target following a change of control thereof, there can be no assurance that all of such target’s management team will decide to remain in place. The loss of key personnel, either before or after a business combination and including management of either us or a combined entity could negatively impact the operations and profitability of our business.

Risks Related to a Potential Business Acquisition

We may encounter difficulty locating and consummating a business combination, including as a result of the competitive disadvantages we have.

We expect to face intense competition in our search for a revenue-producing business to combine with or acquire. Given the current economic climate, venture capital firms, larger companies, blank check companies such as special purpose acquisition companies and other investors are purchasing operating entities or the assets thereof in high volumes and at relatively discounted prices. These parties may have greater capital or human resources than we do and/or more experience in a particular industry within which we choose to search. Most of these competitors have a certain amount of liquid cash available to take advantage of favorable market conditions for prospective business purchaser such as those caused by the recent pandemic. Any delay or inability to locate, negotiate and enter into a business combination as a result of the relative illiquidity of our current asset or other disadvantages we have relative to our competitors could cause us to lose valuable business opportunities to our competitors, which would have a material adverse effect on our business.

We may expend significant time and capital on a prospective business combination that is not ultimately consummated.

The investigation of each specific target business and any subsequent negotiation and drafting of related agreements, SEC disclosure and other documents will require substantial amounts of management’s time and attention and material additional costs in connection with outsourced services from accountants, attorneys and other professionals. We will likely expend significant time and resources searching for, conducting due diligence on, and negotiating transaction terms in connection with a proposed business combination that may not ultimately come to fruition. In such event, all of the time and capital resources expended by the Company in such a pursuit may be lost and unrecoverable by the Company or its shareholders. Unanticipated issues which may be beyond our control or that of the seller of the applicable business may arise that force us to terminate discussions with a target company, such as the target’s failure or inability to provide adequate documentation to assist in our investigation, a party’s failure to obtain required waivers or consents to consummate the transaction as required by the inability to obtain the required audits, applicable laws, charter documents and agreements, the appearance of a competitive bid from another prospective purchaser, or the seller’s inability to maintain its operations for a sufficient time to allow the transaction to close. Such risks are inherent in any search for a new business and investors should be aware of them before investing in an enterprise such as ours.

Conflicts of interest may arise between us and our shareholders, directors, or management, which may have a negative impact on our ability to consummate a business combination or favorable terms or generate revenue.

Our Chief Executive Officer, Mr. Horgan, is not required to commit his full time to our affairs, which may result in a conflict of interest in allocating his time between managing the Company and other businesses in which he is or may be involved. We do not intend to have any full-time employees prior to the consummation of a business combination. Mr. Horgan is not obligated to contribute any specific number of hours to our affairs, and he may engage in other business endeavors during his employment with the Company. If any of his other business affairs require him to devote substantial amounts of time to such matters, it could materially limit his ability to devote his time and attention to our business which could have a negative impact on our ability to consummate a business combination or generate revenue.

Although no determination has been made as to the industry in which we intend to search or the operating business that we may obtain, it is possible that we obtain an operating company in which a director or officer of the Company has an ownership interest in or that he or she is an officer, director or employee of. If we do obtain any business affiliated with an officer or director, such business combination may be on terms other than what would be arrived at in an arms-length transaction. If any conflict of interest arises, it could adversely affect a business combination or subsequent operations of the Company, in which case our shareholders may see diminished value relative to what would have been available through a transaction with an independent third party.

We may engage in a business combination that causes tax consequences to us and our shareholders.

Federal and state tax consequences will, in all likelihood, be a significant factor in considering any business combination that we may undertake. Under current federal law, such transactions may be subject to significant taxation to the buyer and its shareholders under applicable federal and state tax laws. While we intend to structure any business combination so as to minimize the federal and state tax consequences to the extent practicable in accordance with our business objectives, there can be no assurance that any business combination we undertake will meet the statutory or regulatory requirements of a tax-free reorganization or similar favorable treatment or that the parties to such a transaction will obtain the tax treatment intended or expected upon a transfer of equity interests or assets. A non-qualifying reorganization, combination or similar transaction could result in the imposition of significant taxation, both at the federal and state levels, which may have an adverse effect on both parties to the transaction, including our shareholders.

It is unlikely that our shareholders will be afforded any opportunity to evaluate or approve a business combination.

It is unlikely that our shareholders will be afforded the opportunity to evaluate and approve a proposed business combination. In most cases, business combinations do not require shareholder approval under applicable law, and our Articles of Incorporation and bylaws do not afford our shareholders with the right to approve such a transaction. Accordingly, our shareholders will be relying almost exclusively on the judgement of our Board and Chief Executive Officer and any persons on whom they may rely with respect to a potential business combination. In order to develop and implement our business plan, may in the future hire lawyers, accountants, technical experts, appraisers, or other consultants to assist with determining the Company’s direction and consummating any transactions contemplated thereby. We may rely on such persons in making difficult decisions in connection with the Company’s future business and prospects. The selection of any such persons will be made by our Board, and any expenses incurred or decisions made based on any of the foregoing could prove to be adverse to the Company in hindsight, the result of which could be diminished value to our shareholders.

Because our search for a business combination is not presently limited to a particular industry, sector or any specific target businesses, prospective investors will be unable to evaluate the merits or risks of any particular target business’ operations until such time as they are identified and disclosed.

We are still determining the Company’s business plan, and we may seek to complete a business combination with an operating entity in any number of industries or sectors. Because we have not yet selected or approached any specific target business, prospective investors currently have no basis to evaluate the possible merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial condition, prospects or other metrics or qualities they deem appropriate in considering to invest in the Company. Further, if we complete a business combination, we may be affected by numerous risks inherent in the operations of the business we acquire. For example, if we acquire a financially unstable business or an entity lacking an established operating history, we may be affected by the risks inherent in the business and operations of a new business or a development stage entity. Although our management intends to evaluate and weigh the merits and risks inherent in a particular target business and make a decision based on the Company and its shareholders’ interests, there can be no assurance that we will properly ascertain or assess all the significant risks inherent in a target business, that we will have adequate time to complete due diligence or that we will ultimately acquire a viable business and generate material revenue therefrom. Furthermore, some of these risks may be outside of our control and leave us with no ability to reduce the likelihood that those risks will adversely impact a target business or mitigate any harm to the Company caused thereby. Should we select a course of action, or fail to select a course of action, that ultimately exposes us to unknown or unidentified risks, our business will be harmed and you could lose some or all of your investment.

Past performance by our management and their affiliates may not be indicative of future performance of an investment in us.

While our Chief Executive Officer has experience in advising public and private companies, his past performance, the performance of other entities or persons with which he is involved, or the performance of any other personnel we may retain in the future will not necessarily be an indication of either (i) that we will be able to locate a suitable candidate for our initial business combination or (ii) the future operating results of the Company including with respect to any business combination we may consummate. You should not rely on the historical record of him or any other of our personnel or their affiliates’ performance as indicative of our future performance or that an investment in us will be profitable. In addition, an investment in the Company is not an investment in any entities affiliated with our management or other personnel. While management intends to endeavor to locate a viable business opportunity and generate shareholder value, there can be no assurance that we will succeed in this endeavor.

We may seek business combination opportunities in industries or sectors that are outside of our management’s area of expertise.

We will consider a business combination outside of our management’s area of expertise if a business combination candidate is presented to us and we determine that such candidate offers an attractive opportunity for the Company. Although management intends to endeavor to evaluate the risks inherent in any particular business combination candidate, we cannot assure you that we will adequately ascertain or assess all the significant risks, or that we will accurately determine the actual value of a prospective operating entity to acquire. In the event we elect to pursue an acquisition outside of the areas of our management’s expertise, our management’s ability to evaluate and make decisions on behalf of the Company may be limited, or we may make material expenditures on additional personnel or consultants to assist management in the Company’s operations. Investors should be aware that the information contained herein regarding the areas of our management’s expertise will not necessarily be relevant to an understanding of the business that we ultimately elect to acquire. As a result, our management may not be able to adequately ascertain or assess all the significant risks or strategic opportunities that may arise. Accordingly, any shareholders in the Company following a business combination could suffer a reduction in the value of their shares, and any resulting loss will likely not be recoverable.

We may attempt to complete a business combination with a private target company about which little information is available, and such target entity may not generate revenue as expected or otherwise by compatible with us as expected.

In pursuing our search for a business to acquire, we may seek to complete a business combination with a privately held company. Very little public information generally exists about private companies, and the only information available to us prior to making a decision may be from documents and information provided directly to us by the target company in connection with the transaction. Such documents or information or the conclusions we draw therefrom could prove to be inaccurate or misleading. As such, we may be required to make our decision on whether to pursue a potential business combination based on limited, incomplete or faulty information, which may result in our subsequent operations generating less revenue than expected, which could materially harm our financial condition and results of operations.

Our ability to assess the management of a prospective target business may be limited and, as a result, we may acquire a target business whose management does not have the skills, qualifications or abilities to enable a seamless transition, which could, in turn, negatively impact our results of operations.

When evaluating the desirability of a potential business combination, our ability to assess the target business’s management may be limited due to a lack of time, resources or information. Our management’s assessment of the capabilities of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities expected. Further, in most cases the target’s management may be expected to want to manage us and replace our Chief Executive Officer. Should the target’s management not possess the skills, qualifications or abilities necessary to manage a public company or assist with their former entity’s merger or combination into ours, the operations and profitability of the post-acquisition business may be negatively impacted and our shareholders could suffer a reduction in the value of their shares.

Any business we acquire will likely lack diversity of operations or geographical reach, and in such case we will be subject to risks associated with dependence on a single industry or region.

Our search for a business will likely be focused on entities with a single or limited business activity and/or that operate in a limited geographic area. While larger companies have the ability to manage their risk by diversifying their operations among different industries and regions, smaller companies such as ours and the entities we anticipate reviewing for a potential business combination generally lack diversification, in terms of both the nature and geographic scope of their business. As a result, we will likely be impacted more acutely by risks affecting the industry or the region in which we operate than we would if our business were more diversified. In addition to general economic risks, we could be exposed to natural disasters, civil unrest, technological advances, and other uncontrollable developments that will threaten our viability if and to the extent our future operations are limited to a single industry or region. If we do not diversify our operations, our financial condition and results of operations will be at risk.

Changes in laws or regulations, or a failure to comply with the laws and regulations applicable to us, may adversely affect our business, ability to negotiate and complete a business combination, and results of operations.

We are subject to laws and regulations enacted by federal, state and local governments. In addition to the SEC regulations to which we are subject, any business we acquire in the future may be subject to substantial legal or regulatory oversight and restrictions, which could hinder our growth and expend material amounts on compliance. Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly. Those laws and regulations and their interpretation and application by courts and administrative judges may also change from time to time, and any such changes could be unfavorable to us and could have a material adverse effect on our business, investments and results of operations. In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could result in material defense or remedial costs and/or damages have a material adverse effect on our financial condition.

Risks Related to Our Common Stock

Due to factors beyond our control, our stock price may be volatile.

There is currently a limited market for our common stock, and there can be no guarantee that an active market for our common stock will develop, even if we are successful in consummating a business combination. Further, even if an active market for our common stock develops, it will likely be subject to by significant price volatility when compared to more seasoned issuers. We expect that the price of our common stock will continue to be more volatile than more seasoned issuers for the foreseeable future. Fluctuations in the price of our common stock can be based on various factors in addition to those otherwise described in this Report, including:

Many of these factors are beyond our control and may decrease the market price of our common stock, regardless of whether we can consummate a business combination and of our current or subsequent operating performance and financial condition. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been instituted. A securities class action suit against us could result in substantial costs and divert our management’s time and attention, which would otherwise be used to benefit our business.

Because trading in our common stock is so limited, investors who purchase our common stock may depress the market if they sell common stock.

Our common stock trades on the OTC Pink Market, the successor to the pink sheets. The OTC Pink Market generally is illiquid and most stocks traded there are of companies that are not required to file reports with the SEC under the Securities Exchange Act of 1934. While we voluntarily file Forms 10-Q and 10-K with the SEC, we are a voluntary filer and not required to file reports with the SEC. Our common stock itself infrequently trades. For example, on September 21, 2020, it traded 53 shares andDecember 31, 2021, our common stock price closed at $0.51.$1.00 with 33 shares traded. Yahoo Finance reported that the average daily volume was 172 shares.1,841 shares as of February 28, 2022. Accordingly, any sales may depress the trading price.

The market price of our common stock may decline if a substantial number of shares of our common stock are sold at once or in large blocks.

Presently the market for our common stock is limited. If an active market for our shares develops in the future, some or all of our shareholders may sell their shares of our common stock which may depress the market price. Further, Rule 144 will not be available if we are deemed to be a “shell” company, unless an exemption from the definition applies. Any sale of a substantial number of these shares in the public market, or the perception that such a sale could occur, could cause the market price of our common stock to decline, which could reduce the value of the shares held by our other shareholders.

Future issuance of our common stock could dilute the interests of our existing shareholders, particularly in connection with an acquisition and any resulting financing.

We may issue additional shares of our common stock in the future. The issuance of a substantial amount of our common stock could substantially dilute the interests of our shareholders. In addition, the sale of a substantial amount of common stock in the public market, either in the initial issuance or in a subsequent resale by the target company in a business combination which received our common stock as consideration or by investors who has previously acquired such common stock could have an adverse effect on the market price of our common stock.

Because our common stock is subject to the “penny stock” rules, brokers cannot generally solicit the purchase of our common stock, which adversely affects its liquidity and market price.

The SEC has adopted regulations which generally define “penny stock” to be an equity security that has a market price of less than $5.00 per share, subject to specific exemptions. The market price of our common stock on the OTC Pink Market is presently less than $5.00 per share and therefore we are considered a “penny stock” company according to SEC rules. Further, we do not expect our stock price to rise above $5.00 in the foreseeable future. The “penny stock” designation requires any broker-dealer selling our securities to disclose certain information concerning the transaction, obtain a written agreement from the purchaser and determine that the purchaser is reasonably suitable to purchase the securities. These rules limit the ability of broker-dealers to solicit purchases of our common stock and therefore reduce the liquidity of the public market for our shares.

Moreover, as a result of apparent regulatory pressure from the SEC and the Financial Industry Regulatory Authority (“FINRA”), a growing number of broker-dealers decline to permit investors to purchase and sell or otherwise make it difficult to sell shares of penny stocks. The “penny stock” designation may have a depressive effect upon our common stock price.

Because of FINRA sales practice requirements which affect broker-dealers, the market price for our common stock will be adversely affected.

FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy shares of our common stock, which may limit our shareholders’ ability to buy and sell our common stock and have an adverse effect on the market for our shares. Further, due to FINRA regulation, there are a limited number of broker dealers which will handle penny stocks, which impairs the market and reduces the market price.

Due to recent changes to Rule 15c2-11 under the Exchange Act, our common stock may become subject to limitations or reductions on stock price, liquidity or volume.

On September 16, 2020, the SEC adopted amendments to Rule 15c2-11 under the Exchange Act. This Rule applies to broker-dealers who quote securities listed on over-the-counter markets such as our common stock. The Rule as amended prohibits broker-dealers from publishing quotations on OTC markets for an issuer’s securities unless they are based on current publicly available information about the issuer. When it becomes effective, the amended Rule will also limit the Rule’s “piggyback” exception, which allows broker-dealers to publish quotations for a security in reliance on the quotations of a broker-dealer that initially performed the information review required by the Rule, to issuers with current publicly available information or issuers that are up-to-date in their Exchange Act reports. As of this date, we are uncertain as what actual effect the Rule may have on us.

The Rule changes could harm the liquidity and/or market price of our common stock by either preventing our shares from being quoted or driving up our costs of compliance. There is currently a “stop” sign on OTC Pink for our common stock, which is issued when current material information about an issuer is not made publicly available. Because we are a voluntary filer under Section 15(d) of the Exchange Act and not a public reporting company, the practical impact of these changes is to require us to maintain a level of periodic disclosure we are not presently required to maintain, which would cause us to incur material additional expenses. Further, if we cannot or do not provide or maintain current public information about our company, our stockholdersshareholders may face difficulties in selling their shares of our common stock at desired prices, quantities or times, or at all, as a result of the amendments to the Rule.

Our shareholders do not have dissenters’ rights with respect to an acquisition of a controlling interest in the Company.

Section 78.378 of the Nevada Revised Statutes allows a corporation to limit the application of the statutory provisions with respect to dissenters’ rights applicable to the acquisition of a controlling interest in a corporation. On August 19, 2015 we amended our bylaws to provide that Section 78.3793 of the Nevada Revised Statutes, Nevada’s dissenters’ rights statute, does not apply to the shareholders of the Company. As a result, any of our shareholders who do not approve a transaction that results in the issuance or transfer of a controlling interest in the Company will not have the rights generally afforded under that provision with respect to such a transaction, including the right to receive payment of the fair value of their shares as provided therein. Therefore, if the acquisition of a controlling interest in the Company were to occur, any of our dissenting shareholders may be left without recourse and may be unable to subsequently sell their shares at the prices they desire or at all.

Because we may issue preferred stock without the approval of our shareholders and have other anti-takeover defenses, it may be more difficult for a third-party to acquire us and could depress our stock price.

Our Board may issue, without a vote of our shareholders, one or more series of preferred stock that have voting rights, liquidation preferences, dividend rights and other rights that are superior to those of our common stock. Any issuance of preferred stock could adversely affect the rights of holders of our common stock in that such preferred stock could have priority over the common stock with respect to voting, dividend or liquidation rights. Further, because we can issue preferred stock having voting rights per share that are greater than the equivalent of one share of our common stock, our Board could issue preferred stock to investors who support us and our management and give effective control of our business to our management. Additionally, issuance of preferred stock could block an acquisition resulting in both a drop in our stock price and a decline in interest of our common stock. This could make it more difficult for shareholders to sell their common stock and/or cause the market price of our common stock shares to drop significantly, even if our business is performing well.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

Not applicable.

ITEM 2. PROPERTIES

None.

ITEM 3. LEGAL PROCEEDINGS.

From time-to-time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of the date of this Report, we are not aware of any other pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our operations and there are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or has a material interest adverse to our interest.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Our common stock is not listed on any securities exchange, and is quoted on the OTC Pink Market under the symbol “BANM.“FRTM.” Because our common stock is not listed on a securities exchange and its quotations on OTC Pink are limited and sporadic, there is currently no established public trading market for our common stock.

The following table reflects the high and low closing sales information for our common stock for each fiscal quarter during the fiscal years ended December 31, 20192021 and 2018.2020. This information was obtained from OTC Pink and reflects inter-dealer prices without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

Holders

As of October 1, 2020,March 10, 2022, there were approximately 136133 shareholders of record of the Company’s common stock based upon the records of the shareholders provided by the Company’s transfer agent. The Company’s transfer agent is VStock Transfer, LLC, whose address is 18 Lafayette Place, Woodmere, New York 11598, and whose telephone number is (212) 828-8436.

Dividend Policy

The Company has never paid cash dividends on its common stock. The Company may declarestock, and currently intends to retain all our cash and any earnings for use in our business and, therefore, do not anticipate paying any cash dividends in the foreseeable future. Any future including potential distributions of proceeds from the sale of shares of Ecoarkdetermination to pay cash dividends on our common stock thatwill be at the Company currently holds, or a direct distribution of such Ecoark shares to the Company’s shareholders. The Company’s management is currently evaluating a possible sale of these shares and/or distribution of a portiondiscretion of the proceeds therefrom to its shareholders. Our ability to make dividend payment Board and will be dependent upon our consolidated financial condition, results of operations, capital requirements and/or such other distributions to shareholders will depend onfactors as the legal requirements and market conditions which may be beyond our control.Board deems relevant.

Unregistered Sales of Equity Securities

The following information reflects unregistered securities sold during the period covered by this Report which were not previously disclosed by the Company:None.

On December 30, 2019, the Company issued 50,000 shares of common stock to Eprodigy LLC for services rendered to the Company valued at $65,000. The transaction was exempt from registration under Section 4(a)(2) of the Securities Act of 1933.

ITEM 6. SELECTED FINANCIAL DATA.

Not applicable.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

Company Overview

On March 18, 2021, prior to the expiration of its exemption from the Investment Company Act of 1940, the Company formed Norr as its wholly owned subsidiary through which the Company commenced its operations as an early-stage manufacturer and retailer of sporting goods and apparel. Norr’s present focus is on online sales but may seek to expand to physical locations in the future, either directly or as a wholesale distributor. On May 18, 2021, the Company changed its name to “Fortium Holdings Corp.”

In September 2021, the Company formed Elysian Premium Corp., a Colorado corporation (“Elysian”) in order to enter into the cannabis industry. On September 14, 2021, the Company and Elysian entered into a Stock Purchase Agreement (“SPA”) with Treehouse Company, Inc. (“Treehouse”), and its sole shareholder Alex Gosselin (the “Seller”) pursuant to which Elysian agreed to purchase 80% of the capital stock of Treehouse from the Seller for $200,000. Treehouse’s key assets consist of two licenses for commercial cannabis distribution in the State of California. The acquisition of Treehouse will close upon the delivery of the $200,000 purchase price into escrow to be held until release upon receipt of the requisite regulatory approvals. As of March 10, 2022, the acquisition has not closed. The anticipated Treehouse acquisition is currently pending application for regulatory approval, the receipt of which is a post-closing condition, and should we and the Seller fail to obtain the requisite approval from state and local authorities to the transfer of the two Treehouse licenses to Elysian, the SPA will terminate, the transaction will be reversed, Elysian will return the Treehouse capital stock to the Seller and the Seller will return the $200,000 purchase price to Elysian.

Elysian and the Seller also entered into a Memorandum of Understanding with Treehouse pursuant to which the parties agreed that Elysian will purchase the remaining 20% of the capital stock of Treehouse for an additional $200,000 and enter into a second SPA on substantially similar terms to the SPA in connection therewith, subject to state and local regulatory clearance of the transfer of ownership of the two cannabis licenses owned by Treehouse.

In December 2021, Elysian, the Company, 7Seeds, and Firebreak entered into the JVA pursuant to which the parties agreed to cooperate in the opening and operation of cannabis distribution facilities with (i) 7Seeds agreeing to provide consulting services to Elysian for an initial term of 36 months in connection with the Elysian Stores, and (ii) Firebreak agreeing to grant Elysian an exclusive license to use the CannaBlue Marks with respect to such Elysian Stores, subject to certain exceptions and limitations for an initial term of five years. In exchange for the license Elysian has agreed to pay Firebreak a $5,000 annual license fee, and a quarterly royalty fee equal to the greater of 6% of gross sales or $5,000 for each Cannablue-branded Elysian Store that did not directly result from the consulting services of 7Seeds. In exchange for the consulting services, Elysian has agreed to pay 7Seeds a monthly fee beginning at $5,000 to incrementally increase to up to $15,000 during the initial term of the services. Further, for each Elysian Store for which 7Seeds directly assists in obtaining a cannabis license (exclusive of California license numbers C11-0000999 and C9-0000379), Elysian has agreed to pay 7Seeds a one-time issuance of $50,000 of shares of Fortium common stock and a quarterly royalty fee of 6% of gross sales.

In December 2021, Norr entered into five-year Advisory Agreements with three independent contractors pursuant to which Norr agreed to pay each advisor $1,000 per month for the first eighteen months immediately following execution of the Advisory Agreement. In addition to the cash compensation, the Company agreed to pay equity compensation in the form of equity in Norr and Fortium if certain thresholds are met during the term.

Cautionary Note Regarding Forward Looking Statements

This report contains forward-looking statements withinDuring the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our ability to sell the shares of Ecoark common stock held by us, any subsequent distribution of a portion of the proceeds of such sale to our shareholders and the sufficiency and use of any remaining amounts thereafter, our ability to locate and acquire an operating business and the resources and effortsfiscal year ended December 31, 2021, we intend to dedicate to such an endeavor, our development of a viable business plan and commencement of operations, our ability to terminate our status as an “investment company” within a reasonable timeframe or at all, and our ability to locate sources of capital necessary to commence operations or otherwise meet our business needs and objectives. All statements other than statements of historical facts contained in this report, 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 summarized in Item 1A. – Risk Factors. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise.

Company Overview

As of about March 31, 2020, we began seeking new business opportunities in the United States after the March 27, 2020 merger with Ecoark. Among other things, we are currently considering selling ouralso sold shares of common stock in Ecoark distributing all or a portion ofand intend to use the proceeds to pay the purchase price for the Treehouse acquisition, and may use the remaining proceeds, if any, to fund our shareholdersoperations or using the proceeds to attractidentify an acquisition target.target and negotiate and consummate a subsequent transaction. Other than Treehouse, we have not identified an acquisition target as of the date of this Report and intend to further develop our cannabis operations through the transactions contemplated under the Treehouse SPA and 7Seeds and Firebreak JVA, and our Norr operations through the Advisory Agreements.

We have no revenue, have incurred losses since inception and our only asset is cash received from the sale of shares of common stock of Ecoark which we acquired in March 27, 2020 in exchange for the sale of our operating subsidiaries. Prior to that transaction, we were engaged in providing equipment and services to businesses in the oil and gas industry, but in connection with the transaction, the Company has terminated its operations.operations in the oil and gas industry.

Our principal business objective for the next 12 months is to grow our operations and beyond willgenerate revenue following our entry into the cannabis industry through the anticipated Treehouse acquisition. We also intend to continue our efforts to monetize Norr and may seek a reverse merger target to acquire which if management determines to pursue such a transaction would be to achieve long-term growth potential through a combination with a business, rather than immediate, short-term earnings. Our search for a business opportunity is not currently limited to any particular geographical area or industry, except that we are focusing our search tofocused on businesses located within the United States.States and/or Canada.

Plan of OperationOperations

The Company commenced operations in the online sporting goods and apparel industry in March 2021, and has nonot generated revenue from continuing operations or revenue as of the date of this Report. We have terminated our operationsOn September 14, 2021, we entered into the SPA to acquire Treehouse, a commercial cannabis distribution company that owns two cannabis distribution licenses in the oil and gas industry, andState of California. This transaction has not closed yet as we have not deposited the $200,000 purchase price into escrow. We are currentlyin process of working with the Seller to obtain the requisite regulatory approval to transfer ownership of the Treehouse licenses to Elysian. Should we fail to obtain approval for the transfer of these licenses, the transaction will be reversed.

All results related to Banner Midstream are reflected in discontinued operations. We are in the process of further developing a business plan, including with respect to our planned operations in the dispositioncannabis industry through the anticipated Treehouse acquisition and the JVA with 7Seeds and Firebreak, and other transactions we may undertake if management deems appropriate. We also intend to expand our Norr operations, and entered into Advisory Agreements with three independent contractors for that purpose. We may also resume our search for potential business acquisitions or other opportunities, and use the proceeds from our sales of Ecoark common stock or from one or more financings we may conduct in the future to continue to establish, develop and grow our business, depending on the results of our remaining asset,current and planned operations in the usecannabis and sporting apparel industries, as well as available capital.

Norr

In March 2021 we procured the services of two consultants who assist with our sporting goods and apparel operations through Norr. Specifically, under the respective consulting agreements one of our consultants provides creative design, photography and sporting goods and apparel industry, in overseeing the development, manufacture, advertising and sale of our products. In December 2021, we terminated the prior consulting agreements and entered into new consulting agreements replacing the compensatory terms with these contractors, and procured the services of a third contractor to assist in marketing and sales efforts, including for Norr’s online and social media presence and brand strategy. Management believes that having an online focus, at least in the short term, will allow us to leverage existing online platforms and current market conditions, including an increased demand for contactless transactions as a result of the proceeds therefrom to distribute to shareholders and locate a business opportunity in the U.S.

coronavirus pandemic. Management intends to exploremonitor the evolving market conditions, including the highly competitive nature of the industries in which we operate and identifythe anticipated reopening of retail stores at greater capacities, and may make adjustments to our current business opportunities withinmodel as an online-only seller as it deems appropriate.

Elysian

Subject to completing the U.S., including a potential acquisition of Treehouse, including both under the initial SPA and the anticipated subsequent SPA, our planned cannabis operations will initially be focused on physical stores located in California. While we may use the Cannablue Marks, our license to do so is limited to retail locations for Elysian Stores. Under the JVA, we will be highly reliant on the services and expertise of 7Seeds to establish an operating entity throughinitial presence for our cannabis business, and on the Cannablue brand name. If we are successful and generate sufficient revenue and/or raise the required capital in a reverse merger, asset purchase or similar transaction. financing transaction, we may attempt to expand into other areas to the extent permitted under the JVA.

General

Our Chief Executive Officer has experience in consulting both private and public companies in operational processes, although no assurances can be given that he can identify and implement a viable business strategy or that any such strategy will result in profits. Our ability to effectively identify, develop and implement a viable plan for our business plan may be hindered by risks and uncertainties which are beyond our control, including without limitation, the continued negative effects of the coronavirusCOVID-19 pandemic, geopolitical turmoil, inflation or other adverse developments on the U.S. and global economies. For more information about the risk of coronavirus onSee “Risk Factors” contained in this Report concerning risks involved in our current and planned operations and business see Item 1A “Risk Factors.”plan.

We do not currently engage in any business activities that provide revenue or cash flow. During the next 12 month12-month period we anticipate incurring costs in connection with sellingcontinuing our operations and developing our business through Norr and Elysian upon the sharescompletion of Ecoark common stock held by us, investigating, evaluatingthe acquisition of Treehouse and negotiating potential business combinations,the JVA, as well as filing SEC reports, evaluating and consummating an acquisition of an operating business.adopting our business plan and search for additional business opportunities. We anticipate using a portion of the proceeds from the sale of Ecoark common stock to fund these costs and to compensate our Chief Executive Officer.

Given our limitedOfficer, and anticipate requiring additional capital, resources,which we may consider a business combination with an entity which has recently commenced operations, is a developing companyraise from one or is otherwise in need ofmore future financings, to compensate our independent contractors, to search for, procure and compensate additional funds forexecutive officers or other personnel, and to meet our financial obligations including under the development of new products or services or expansion into new markets, or is an established business experiencing financial or operating difficultiesSPA and is in need of additional capital. Alternatively, a business combination may involve the acquisition of, or merger with, an entity which desires access to the U.S. capital markets.

As of the date of this Report, our management has not had any discussions with any representative of any other entity regarding a potential business combination. Any target business that is selected may be financially unstable or in the early stages of development. In such event, we expect to be subject to numerous risks inherent in the business and operations of a financially unstable or early stage entity. In addition, we may effect a business combination with an entity in an industry characterized by a high level of risk or in which our management has limited experience, and, although our management will endeavor to evaluate the risks inherent in a particular target business, there can be no assurance that we will properly ascertain or assess all significant risks.JVA.

Our management anticipates that we will likely onlymay not be able to effectaffect the Treehouse acquisition or may be unable to enter into other business combinations or strategic transactions we may identify, unless we can raise sufficient additional capital through one business combinationor more financing transactions due to our limited capital. This lack of capital and business diversification will likely pose a substantial risk in investing in the Company for the indefinite future, because it will not permit us to implement and adjust our business plan quickly in the short-term, or offset potential losses from one venture or operating territory against gains from another. The risks we face will likely be heightened to the extent we acquireare unable to obtain funding on favorable terms and/or our operations are limited to a business operating in a single industrysmall number of industries or geographical region.regions due to lack of sufficient capital, contractual or regulatory restrictions or other reasons.

We anticipateexpect that the selectionanticipated acquisition of a business combinationTreehouse and establishment of cannabis stores through the JVA, and our resulting operations in the cannabis industry will be a complex and risk-prone process. Becauseprocess, including due to the complex and comprehensive regulatory environment we will face as well as our reliance on third parties in that and other respects. For example, to operate the Treehouse licenses as intended, we will need regulatory approval from the California Department of general economic conditions, including unfavorable conditions caused by the coronavirus pandemic, rapid technological advances being made in some industriesCannabis Control and shortages of available capital, management believes that there are a number of firms seeking business opportunities at this time at discounted rates withsimilar local authorities on which we will compete. We expectbe highly dependent on the action or inaction of Treehouse. The completion of the acquisition and regulatory transfer of the commercial cannabis licenses are in process, and there is a risk that any potentially availablethe acquisition will not be completed and the regulatory transfer of the licenses will not be approved. If the acquisition is completed and the transfer is not approved, we will reverse this transaction, and we will be forced to begin anew in our search for a new business combinations may appearto acquire, which would have a material adverse effect on our business and results of operations. Similarly, with respect to the JVA, we will be reliant on 7Seeds’ services and expertise and Firebreak’s intellectual property rights and branding with respect to the Elysian Stores and Cannablue Marks, as well as maintaining relationships with these parties.

Further, cannabis remains illegal at the federal level although to date the federal government has elected not to enforce these regulations and instead to allow state governments to regulate the cannabis industry. See the Risk Factors under “Risks Related to our Planned Operations in a variety of different industries or regions and at various stages of development, all of whichthe Cannabis Industry” beginning on page 8 for more information on the regulatory environment we will likely renderface if the task of comparative investigation and analysis of such business opportunities extremely difficult and complicated.Treehouse acquisition closes.

Results of Operations For the Year endedEnded December 31, 20192021 compared with the Year Ended December 31, 2020

With our Norr operations commencing in March 2021 and our Elysian business still in the development stage as of the date of this Report, we expect that our operating revenues, cost of revenues, and operating expenses will increase in 2022 and beyond from what they have been in the past two years ended December 31, 2018

2021 and 2020, particularly if we are able to raise the required capital, close the acquisition of cannabis licenses and open one or more cannabis retail stores in California as planned. The following overview ofcomparison in our results of operations should be read in light of the fact that we recently divested our operating subsidiaries and assets, and have since ceased our operations pending management’s determination of the future direction ofwere for the Company be it by reverse mergerin the very preliminary stages of operations of these respective businesses.

Revenue, Cost of Revenue and Gross Profit

The Company did not generate any revenues or similar business combination or otherwise. This comparison relatesgross profits, nor did we incur any cost of revenues for the years ended December 31, 2021 and 2020 as a result of our discontinued operations of Banner Midstream.

Operating Expenses

Included in continuing operations, we incurred operating expenses of $1,361,466 and $482,712 during the years ended December 31, 2021 and 2020, respectively. The operating expenses in 2021 and 2020 were mainly due to our former business but is includedthe professional fees related to meet SEC disclosure requirements. Under generally accepted accounting principles we are required$905,771 and $205,000 in stock-based compensation in 2021 and 2020 respectively, and the Company’s Exchange Act filings and general operating expenditures of running the Company after the divestiture of Banner Midstream. All operating expenses related to include Banner Midstream as if we owned it on January 1, 2018.

Revenue

We had revenues of $14,715,217 and $8,614,989 forare included in discontinued operations in the year ended December 31, 20192020.

Other Income (Expense)

Other income (expense) included in continuing operations were ($918,542) and 2018,$1,448,100 during the years ended December 31, 2021 and 2020, respectively. This increase was dueThe Company has included ($1,283,502) and $1,276,150 in unrealized gains, respectively related to our acquisition of Banner Midstreamthe investment in November 2019, which was subsequently sold tothe Ecoark on March 27, 2020. We do not expect to generate material revenuecommon stock received in 2020 following the sale of Banner Midstream.

Operating Expenses

We incurred operating expensesMidstream to Ecoark, and $365,005 and $173,429 in realized gains on the sale of $5,521,640 and $4,318,003 duringEcoark common stock in the year ended December 31, 20192021 and 2018,2020, respectively. The increaseIn addition, we incurred ($45) and ($1,479) in general and administrative expenses was mainly dueinterest expense related to the acquisition of additional operating subsidiaries. Because we subsequently sold our operating subsidiaries, we do not expect this trend to be reflective of this line item in the short-term.Junior Secured Promissory Note.

Other Expense

Other expense was $4,253,109 and $644,612 during the year ended December 31, 2019 and 2018, respectively. Because we subsequently sold our operating subsidiaries, we do not expect this trend to be reflective of this line item in the short term.

Net LossIncome (Loss)

During the years ended December 31, 20192021 and 2018,2020, we recorded a net lossincome (loss) of $5,292,936($2,280,008) and $3,708,360,$7,317,761, respectively. Of these amounts $0 and $6,352,373 relate to the income (loss) from discontinued operations.

Liquidity and Capital Resources

Historically, our principal sources of cash have been proceeds from private placements of common stock and incurrence of debt. As of December 31, 2019,2021, the Company had an accumulated deficit of $9,001,296.$3,963,543. As of February 24, 2022, the Company has sold all of the shares of Ecoark and received $1,079,730 in gross proceeds therefrom.

We anticipate that among the most critical challenges we will need to overcome in order to establish our planned operations for our new focus in the cannabis industry will be to raise sufficient capital to establish our initial Elysian Store or Stores. While for the past 12 months we have used the proceeds from sales of Ecoark common stock we held to fund our operations, which were more limited than those currently planned, as of March 1, 2022, we have sold the remaining shares of Ecoark common stock we held, and any additional capital will therefore need to be raised from the sale and issuance of our common stock or other securities, which may include the incurrence of indebtedness by us. 

In the future, we will need to consummate one or more capital raising transactions, including potential debt or equity issuances, and/or generate material revenue from Norr, Elysian or another operating business or businesses we may form or acquire to continue to fund our operations. We may also issue shares of common stock, stock options or other derivative securities to compensate our employees or independent contractors, including pursuant to the consulting agreements for our Norr and Elysian operations. We will need additional capital to fund our anticipated acquisition of Treehouse, including both for the second Treehouse SPA which has not been executed, working capital, and to meet our operational obligations in our planned cannabis business such as compensatory arrangements and royalty fee payments.

We expect to utilize any capital raising to run our operations for Norr and Elysian. We expect our cash balanceoutlays to temporarily increase ifbe much greater than the past two years ended December 31, 2021 and 2020, and to invest heavily in these businesses. The only known future commitments that we can successfully sellhave as of March 10, 2022 relate to the JVA and the Advisory Agreements we entered into in December 2021 and the Treehouse SPA entered into in September 2021 as fully described in the Management’s Discussion and Analysis herein as well as our shares of Ecoark common stock.Consolidated Financial Statements.

Net Cash used by Operating Activities:

We reported negative cash flow from operations related to our continuing operations for the years ended December 31, 20192021 and 20182020 in the amount of $(2,091,610)$(543,394) and $(1,493,866).$(199,974), respectively. It is anticipated that we will continue to report negative operating cash flow in future periods, as to date we have ceased operationsformed two new subsidiaries during the fiscal year ending December 31, 2021 and are considering the Company’s next steps. However, given that there arehave incurred and will continue to be lower expenses until we determineincur start-up costs to develop these entities and commence our future operations, the significance of negative cash flows will likely be diminished during that time.their respective businesses.

Cash Flows from Investing Activities:

In 2019, net cash provided by investing activities was $6,724 in contrast to using $(2,260,856) of cash in investing activities in 2018.

Cash Flows from Financing Activities:

For the year ended December 31, 2019,We had net cash provided from financinginvesting activities was $2,118,076 comparedfrom continuing operations related to $4,283,152 during the year ended December 31, 2018. We expect this decline to continue in fiscal year 2021 until we commence operations, however we may require additional capital to consummate a business combination.

Once we have developed and begun to implement our business plan, management intends to fund our working capital requirements through a combination of proceeds received from the sale of Ecoark common stock, if not distributed as a dividend, and future issuances of debt or equity securities as needed. Our working capital requirements are expected to be stable in the short-term and increase in line with completion of an acquisition.

Based upon our current operations, if we are successful in selling the shares of Ecoark common stock we believehold in 2021 in the amount of $800,994 and had $240,625 in 2020. We also purchased fixed assets of $2,513 in 2021.

Cash Flows from Financing Activities:

For the years ended December 31, 2021 and 2020, the only cash flows from financing activities related to the payments of the Junior Secured Promissory Note in connection with our continuing operations, and cash provided by financing activities from proceeds received from our Chief Executive Officer for working capital purposes. During the years ended December 31, 2021, we repaid $22,500 of the Junior Secured Promissory Note and had received and repaid $10,000 from the Chief Executive Officer and received $14,000 from the exercise of warrants. We expect that should the proceeds from the sale of shares in Ecoark be insufficient to provide the necessary capital to us, we will have sufficientincur additional debt or issue common stock or securities convertible or exercisable into common stock to fund continuing operations.

Based upon our current operations, we will need additional working capital to fund our operations over more than the next 12 months. Ifmonths, which we may seek to obtain from one or more financings. Further, if we are able to close a reverse merger, asset purchase or similar transaction to acquire an operating business, it is likely we will need additional capital, including potentially as a condition of closing the acquisition. Because of the inherent uncertainties of the Company at this stage, we cannot be certain as to how much capital we need, if and how we can raise capital will be raised or the type or quantity of securities we will be required to issue to do so. In connection with a business combination, we may issue a significant number our shares of our common stock or securities convertible or exercisable into our common stock to the target’s shareholders which will be dilutive to our shareholders.

We anticipate that we will incur operating losses during the next 12 months. Our ability to develop and implement our business plan will be subject to a number of risks, expenses and difficulties frequently encountered by companies in their early stage of development. Such risks for us include, but are not limited to, an evolving and unpredictable business model; recognition of revenue sources; and the management of growth.

2020 Developments

On March 27, 2020, the Company divested all of its operating subsidiaries in exchange for shares of Ecoark common stock. The Company used a majority of these shares to repay its creditors and as of the date of this Report has 1,000,000 shares of Ecoark common stock as its only asset. In connection with the transaction, the Company has ceased operations and is currently seeking new business opportunities in the U.S., including by means of a reverse merger or asset purchase.

On July 31, 2020 Mr. Richard Horgan became the Company’s sole officer and director and is responsible for managing the Company and determining its future business plan.

COVID-19 Update

To date, theThe COVID-19 pandemic has not had a material impact on the Company, particularly due to our current lack of operations.operations until the formation of Norr LLC in March 2021. The pandemic may, however, have an impact on our ability to evaluatedevelop the Norr and acquire an operating entity throughElysian businesses. For example, we expect that if the Treehouse acquisition closes and we are able to commence operations as a reverse mergercannabis distribution business, our efforts will be threatened by government shutdowns, supply and labor issues and resulting economic downturns which the pandemic has historically caused. While vaccinations beginning in 2021 allowed for the gradual reopening of the economy, the recent “Omicron” variant of the virus, any future variants, as well as reduced efficacy of vaccines over time and the possibility that a large number of people decline to get vaccinated or otherwise. receive booster shots, creates inherent uncertainty as to the future of our business, the industries in which we operate and plan to operate and the economy in general in light of the pandemic. See Item 1A”Risk Factors”Factors in this Report for more information.

Off Balance Sheet Arrangements

As of the date of this Report, we do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Going Concern

The independent registered public accounting firm auditors’ report accompanying our December 31, 20192021 financial statements contained an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The financial statements have been prepared “assuming that we will continue as a going concern,” which contemplates that we will realize our assets and satisfy our liabilities and commitments in the ordinary course of business.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The financial statements and the other information required by this Item can be found beginning on page F-1.

805 Third Avenue New York, NY 10022 Tel. 212.838.5100212t.838.5100 Fax 212.838.2676 www.rbsmllp.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Audit CommitteeBoard of Directors

Fortium Holdings Corp. (formerly Banner Energy Services Corp.)

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Fortium Holdings Corp. (formerly Banner Energy Services Corp. (The “Company”) hereinafter referred to as “the Company” as of December 31, 20192021 and for the period from inception April 2, 2018 through December 31, 2018,2020, and the related consolidated statements of operations, consolidated stockholders’ deficitequity (deficit), and consolidated cash flows for each of the years in the two-year period ended December 31, 2019,2021, and the related consolidated notes and schedules (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 20192021 and 2018,2020, and the results of its operations and its cash flows for each of the yearyears in the two-year period ended December 31, 2019 and for the period from inception April 2, 2018 through December 31, 2018,2021, in conformity with accounting principles generally accepted in the United States of America.

Change in Accounting Principles

The Company followed ASC 840 Leases in accounting for leased properties until 2019 when it adopted ASC 842 for its accounting for finance and operating leases in 2019. The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers, which the Company adopted effective January 1, 2019.

The Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has an accumulated deficit, recurring losses, and negative cash flows that raise substantial doubt about the Company’s ability to continue as a going concern. Management’s evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

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

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

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

Critical Audit Matters

Subsequent Event

As discussed in Note 13The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on March 27, 2020, the Company soldfinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

We did not identify any critical audit matters during the course of its major subsidiary Banner Midstream and substantially all of its operations. That division represents a significant portion ofour audit for the Company’s total assets and operations. Our opinion is not modified with respect to that matter. year ended December 31, 2021.

Banner Energy Services Corp.

Consolidated Balance Sheets

December 31, 2019 and 2018

FORTIUM HOLDINGS CORP.

(FORMERLY BANNER ENERGY SERVICES CORP.) 

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2021 AND 2020

FORTIUM HOLDINGS CORP.

(FORMERLY BANNER ENERGY SERVICES CORP.)

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

Banner Energy Services Corp.

Consolidated Statements of Operations

For the Year Ended December 31, 2019 and Period April 2, 2018 (Inception) through December 31, 2018

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

Banner Energy Services Corp.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIT

For the Year ended December 31, 2019 and Period April 2, 2018 (Inception) through December 31, 2018

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

Banner Energy Services Corp.FORTIUM HOLDINGS CORP.

Consolidated Statements of Cash Flows(FORMERLY BANNER ENERGY SERVICES CORP.)

For the Year Ended DecemberCONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2019 and Period April 2, 2018 (Inception) through December 31, 20182021 AND 2020