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Mount TAM Biotechnologies, Inc.Banner Energy Services Corp.

Condensed Consolidated Balance Sheets

March 31, 2020 (Unaudited) and December 31, 2019

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

Banner Energy Services Corp.

Condensed Consolidated Statements of Operations (Unaudited)

For the Three Months Ended March 31, 2020 and 2019

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

Banner Energy Services Corp.

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (Unaudited)

For the Three Months ended March 31, 2020 and 2019

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

Banner Energy Services Corp.

Condensed Consolidated Statements of Cash Flows (Unaudited)

For the Three Months Ended March 31, 2020 and 2019

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

Banner Energy Services Corp.

Notes to Unaudited Condensed Consolidated Financial Statements

For the three months ended March 31, 20192020

Note 1 – NatureNOTE 1: DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

The terms “we,” “us,” “our,” “registrant,” “Banner Energy”, and the Business“Company” refer to Banner Energy Services, Corp., a Nevada corporation. On November 18, 2019, the Company merged with Banner Midstream Corp., a Delaware corporation (“Banner Midstream”). Banner Midstream 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 November 18, 2019.

Entry into Merger Agreement; Creation of Merger Subsidiary; Closing Conditions for Merger

The terms "we," "us," "our," "registrant,"On September 26, 2019, the Company entered into an Agreement and Plan of Merger (the “Agreement”) by and among the "Company" refer to Mount Tam Biotechnologies, Inc., a Nevada corporation,Company, Banner Midstream and where applicable, Mount Tam Biotechnologies,MTB Merger Sub, Inc., a Delaware corporation and our wholly-owned subsidiary ("Mount Tam"of the Company (“Merger Sub”), relating to a merger (the “Merger”) between Banner Midstream and Merger Sub. The closing of the Merger was conditioned on the satisfaction of certain conditions by the various parties, as discussed in more detail below.

In anticipation of the Agreement, on September 23, 2019, the Company formed Merger Sub.

Pursuant to the Agreement, the Merger Sub was merged with and into Banner Midstream, with Banner Midstream being the surviving entity (the “Surviving Entity”). The outstanding shares of Banner Midstream prior to the Merger were converted into the right to receive shares of the Company, on a one-share-for-one-share basis. The shares of Merger Sub owned by the Company were converted into shares of the Surviving Entity, pursuant to which the Surviving Entity will be a wholly owned subsidiary of the Company. The directors and officers of Banner Midstream prior to the closing of the Merger remained the directors and officers of the Surviving Entity following the closing of the Merger. The Merger with Banner Midstream represents a reverse merger, and in accordance with the reverse merger, Banner Midstream is the accounting acquirer and the historical amounts presented prior to the Merger are those of Banner Midstream. The shareholders of Banner Midstream received shares equal to 90% of the outstanding stock of Banner Energy following the Merger.

The Company amended its Articles of Incorporation (the “Amendment”) to effectuate a 1-for-95 reverse stock split of its outstanding shares of common stock (the “Reverse Split”). The Reverse Split became effective November 14, 2019. As a result of the Reverse Split, all share and per share figures contained in the financial statements have been amended to reflect the Reverse Split for the periods presented.

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, Banner Midstream was acquired by Ecoark Holdings, Inc., (“Ecoark”) 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 8,945,205 shares of common stock of Ecoark valued at $0.544 per share and assumed approximately $11,774,000 in short-term and long-term debt of Banner Midstream and its subsidiaries.

As of March 27, 2020, Banner Midstream had four operating subsidiaries: Pinnacle Frac, Capstone, White River Holdings Corp., a Delaware corporation (“White River”); and Shamrock Upstream Energy LLC, a Texas limited liability company (“Shamrock”). White River and Shamrock were both acquired on March 27, 2020 by Banner Midstream for a total of $8,000,000, and were then acquired by Ecoark in this transaction, and are engaged in oil and gas exploration, production, and drilling operations on over 10,000 cumulative acres of active mineral leases in Texas, Louisiana, and Mississippi.

Banner Midstream entered into an agreement with Ozark Empire Capital Management (“Ozark”) on June 20, 2018 for 2,130,596 shares for Ozark to manage the executive function of Banner Midstream, raise capital for Banner Midstream, identify and complete acquisitions for Banner Midstream. Banner Midstream is operating as a holding company and acquisition vehicle for an ongoing roll-up of oilfield services companies focused on drilling rig, fracking, and oil and natural gas production services.

Banner Midstream acquired one hundred percent of the issued and outstanding membership interests of Pinnacle Frac for 3,195,894 shares on May 24, 2018. Pinnacle Frac was an Arkansas limited liability company established on January 15, 2018. Pinnacle Frac has three wholly owned subsidiaries, LAH Lease Service LLC (“LAH”), LSQL Truck & Trailer Sales LLC (“LSQL”), and Triumph Energy Services, LLC (“Triumph”) which are Texas limited liability companies. Pinnacle Frac acquired one hundred percent of the issued and outstanding membership interests of LAH and LSQL on April 30, 2018, and subsequently transferred selected operations, employees, equipment, and contracts into Pinnacle Frac. Neither LAH nor LSQL currently have active operations or any assets. Pinnacle Frac acquired one hundred percent of the issued and outstanding membership interests of Triumph on November 6, 2018, and subsequently transferred selected contracts into Pinnacle Frac. Pinnacle Frac commenced operations in May 2018 and is engaged in the business of providing transportation of frac sand and logistics services to major hydraulic fracturing and drilling operators in the domestic United States.

Banner Midstream established Pinnacle Vac Service LLC (“Pinnacle Vac”) a Texas limited liability company on May 8, 2018, with the Company having ownership of one hundred percent of the issued and outstanding membership interests of Pinnacle Vac. Pinnacle Vac is currently structured as a wholly owned subsidiary of the Company. Pinnacle Vac commenced operations in July 2018 and engaged in the business of providing water transportation (“vacuum services”) and roustabout work to major drilling operators and production wells in the United States. As of November 15, 2018, Pinnacle Vac no longer has any active operations or employees. See NOTE 8 – DISCONTINUED OPERATIONS.

Banner Midstream established Capstone as a Texas limited liability company on May 23, 2018, with the Company having ownership of one hundred percent of the issued and outstanding membership interests of Capstone. Capstone is currently structured as a wholly owned subsidiary of the Company. Capstone commenced operations in October 2018 and is engaged in the business of procuring and financing equipment to various oilfield transportation services contractors (“owner-operators”).

History

Prior to the Merger with Banner Midstream, the Company was an early-stage life sciences and technology company pursuing the development of bio-pharmaceuticals to treat autoimmune diseases. The Company intends to optimize and bring to market a portfolio of products focused on improving the health and wellbeing of individuals afflicted with autoimmune diseases. The Company is headquartered in the San Francisco Bay Area, and may go to market both vertically and horizontally by product/technology specialties and provide our customers with treatment options.

On August 13, 2015, Mount Tam entered into a Share Exchange and Conversion Agreement (the "Exchange Agreement") with the Company and certain other persons party thereto. Immediately following the effective time of the Exchange Agreement, Mount Tam's stockholders (as of immediately prior to the transactions contemplated by the Exchange Agreement (such transactions, the "Share Exchange")) owned approximately 57.14% of the Company's outstanding common stock and the Company's stockholders (as of immediately prior to the Share Exchange) owned approximately 42.86% of the Company's outstanding common stock. Additionally, following the Share Exchange, the business conducted by Mount Tam became the primary the business conducted by the Company.

As a result of the Share Exchange, Mount Tam became a wholly-owned subsidiary of the Company. However, the former stockholders of Mount Tam acquired a majority of the outstanding shares of the Company's common stock.  In connection with the Share Exchange, a former shareholder of the Company agreed to surrender all of his shares of the Company's common stock in exchange for $30,000, and all of the issued and outstanding shares of Epicurean Cigars, Inc.,diseases, which at the time was a wholly-owned subsidiary of the Company which had a nominal remaining net liability. The shares were returned to the Company, and the $30,000 due to the shareholder has been accruedknown as of December 31, 2015.

Effective on August 31, 2015, the Company changed its name from TabacaleraYsidron, Inc. to Mount TAM Biotechnologies, Inc.  The name change was effected through a parent/subsidiary short-form merger of Mount TAM Biotechnologies, Inc., our wholly-owned Nevada subsidiary which we formed solely for the purpose of the name change, with and into the Company, with the Company as the surviving corporation.  With the exception of the name change, there were no changes to the Company's Articles of Incorporation or Bylaws. There will be no mandatory exchange of stock certificates. The Company's trading symbol on the OTC Markets (OTC Pink) marketplace was changed to "MNTM" from "TQBY".

Mount Tam Biotechnologies, Inc., the Company's wholly-owned legal subsidiary, was the "accounting acquirer," and for accounting purposes, the TYI was deemed as having been "acquired" in the Merger.  The board of directors and officers that managed and operated Mount Tam immediately prior to the effective time of the Merger became the Company's board of directors and officers.

To meet its business objectives, Mount Tam formed a strategic partnership with the Buck Institute for Research on Aging ("Buck Institute"), an independent research facility focused on understanding the connection between aging and chronic disease. As part of the partnership, Mount Tam signed an exclusive worldwide licensing and collaboration agreement with the Buck Institute that includes many of the Buck Institute's intangible research and development assets in the area of autoimmune disorders. The initial focus of Mount Tam's research and development efforts will be a pre-clinical stage compound for the treatment and diagnosis of systemic lupus erythematosus, a common form of lupus. Mount Tam has not produced any revenues from the intangible research and development assets it acquired from Buck Institute and it has not commenced its planned principal operations.

The production and marketing of the Company's products and its ongoing research and development activities will be subject to extensive regulation by numerous governmental authorities in the United States. Prior to marketing in the United States, any drug developed by the Company must undergo rigorous preclinical (animal) and clinical (human) testing and an extensive regulatory approval process implemented by the Food and Drug Administration under the Food, Drug and Cosmetic Act. In addition, the Company's success will depend in part on its ability to obtain and maintain patents, exploit its product license rights, maintain trade secrets, and operate without infringing on the proprietary rights of others, both in the United States and other countries.

The following reflectsreflected the Company's current,Company’s post-merger corporate structure (State of Incorporation):

Mount Tam Biotechnologies, Inc., formerly TabacaleraYsidron, Inc. (Nevada)

Mount Tam Biotechnologies, Inc. (Delaware) - Sold October 2018.

Mount Tam Therapeutics, Inc. (Delaware) – Formed October 2018.

The Company is a publicly-traded biotechnology company dedicated to speeding the delivery of new treatment options to patients

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affected by autoimmune diseases through the development and application of highly specialized drug targeting platforms and formulation expertise. The Company focuses on underserved patient populations where it can have the greatest potential impact. Mount Tam's clinical division advances clinical-stage product candidates towards marketing approval and commercialization.

The Company is subject to a number of risks, including:including the need to raiseacquire and successfully operate a new business, the risk of selling its Ecoark common stock and raising capital through equity and/or debt financings; the uncertainty whether the Company's research and development efforts will result in successful commercial products; competition from larger organizations; reliance on licensing proprietary technology of others; dependence on key personnel; uncertain patent protection; and dependence on corporate partners and collaborators.financings. See the section titled "Risk Factors"Item 1A “Risk Factors” included elsewhere in thisits Annual Report on Form 10-K.

History

10-K for the year ended December 31, 2019.

The Company was established in November 2011 under the name TabacaleraYsidron. Mount Tam was incorporated on August 13, 2014 (date of inception). On August 13, 2014, Mount Tam issued 9,000,000 shares of common stock, $0.0001 par value, for $900.

On August 13, 2015, Mount Tam and the Company entered into the Exchange Agreement as described above.

The Share Exchange was treated as a reverse acquisition of the Company, a public shell company at the time, by Mount Tam for financial accounting and reporting purposes. As such, Mount Tam was treated as the acquirer for accounting and financial reporting purposes while the Company is treated as the acquired entity for accounting and financial reporting purposes. As a result of the Share Exchange, $50,048 account payable and $17,500 note payable of the Company was brought forward at their book values and no goodwill has been recognized. Prior to the Share Exchange, the Company was a non-operating public shell company with nominal operations and nominal assets.

On October 18, 2018, the “Company” and Mount Tam Biotechnologies, Inc. (“Mount Tam”), its wholly-owned subsidiary, entered into a stock purchase agreement (the “SPA”) with ARJ Consulting, LLC, a New York limited liability company (the “Buyer”), pursuant to which the Company sold 100% of the capital stock in and of Mount Tam Delaware subsidiary to the Buyer (the “Sale Transaction”). Prior to the Sale Transaction, the Company caused Mount Tam to transfer certain assets, including the Buck Institute License Agreement, that Mount Tam was holding to another wholly-owned subsidiary of the Company, Mount Tam Therapeutics, Inc., a newly formed Delaware corporation. At the time of the Sale Transaction Mount Tam possessed certain Net Operating Lossesnet operating losses and tax credits. Pursuant to the terms of the SPA, the Buyer purchased Mount Tam for a purchase price of $410,000.

Note 2 – SummaryBasis of Significant Accounting PoliciesPresentation

The significant accounting policies applied in the annual consolidated financial statements of the Company as of December 31, 2018 are applied consistently in these interim condensed consolidated condensed financial statements.

Basis of Presentation

The Financial Statements have been prepared using the accrual basis of accounting in accordance with Generally Accepted Accounting Principles ("GAAP") of the United States. All intercompany accounts have been eliminated.

The accompanying unauditedCompany’s condensed consolidated financial statements as of March 31, 2019 have been prepared in accordanceconformity with the U.S.accounting principles generally accepted accounting principles (“U.S. GAAP”in the United States (GAAP) pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, they do not include allreporting. Any reference in these notes to applicable guidance is meant to refer to the informationauthoritative GAAP as found in the Accounting Standards Codification (ASC) and footnotes required by U.S. GAAP for complete financial statements. InAccounting Standards Update (ASU) of the opinion of management, the unaudited interim financial statements include allFinancial Accounting Standards Board (FASB). All adjustments of a normal recurring natureconsidered necessary for a fair presentation have been included. These adjustments consist of normal and recurring accruals, as well as non-recurring charges. The condensed consolidated financial statements, and the accompanying notes, are prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and do not contain certain information included in the Company’s financial position as of March 31, 2019, the Company’s results of operation, stockholders’ deficit and the cash flowsAnnual Report on Form 10-K for the three monthsyear ended MarchDecember 31, 2019. TheseTherefore, the interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company'sthat Annual Report on Form 10-K filed on April 15, 2019. The December 31, 2018 condensed consolidated balance sheet data was derived from the audited financial statements included in the Form 10-K filed on April 15, 2019. The financial statements and notes are representations of the Company's management ("Management") and its board of directors (the "Board of Directors"), who are responsible for their integrity and objectivity.

Results10-K. Operating results for the three months ended March 31, 2019periods presented are not necessarily indicative of the results that may be expected for the year ended December 31, 2019 or any other future period.due to various factors.

Principles of Consolidation

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

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates include, but are not limited to, management’s estimate of provisions required for uncollectible accounts receivable, fair value of assets held for sale and assets and liabilities acquired, impaired value of equipment and intangible assets, including goodwill, estimates of discount rates in lease, liabilities to accrue, cost incurred in the satisfaction of performance obligations, permanent and temporary differences related to income taxes and determination of the fair value of stock awards. Actual results could differ from those estimates.

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Management makes estimates that affect certain accounts including deferred income taxThe Company’s acquisitions are accounted for under the acquisition method of accounting whereby purchase price is allocated to tangible and intangible assets accrued expenses,acquired and liabilities assumed based on fair value. The excess of the fair value of equity instrumentsthe consideration conveyed over the fair value of the net assets acquired is recorded as goodwill. The excess of the fair value of the net assets acquired over the fair value of the consideration conveyed is recorded as a nonoperating gain on acquisition. The statements of operations for the periods presented include the results of operations for each of the acquisitions from the date of acquisition. See NOTE 7 –ACQUISITION.

Property and reserves for any other commitments or contingencies. Any adjustments applied to estimates are recognized in the period in which such adjustments are determined.Equipment and Long-Lived Assets

CashProperty and Cash Equivalentsequipment is stated at cost. Depreciation on property and equipment is computed using the straight-line method over the estimated useful lives of the assets, of ten years for all property and equipment, except leasehold improvements which are depreciated over the term f the lease, which is shorter than the estimated useful life of the improvements.

ASC 360 requires that long-lived assets and certain identifiable intangibles held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

The Company considers all highly liquid investments purchased with an original maturityreviews recoverability of three months or lesslong-lived assets on a periodic basis whenever events and changes in circumstances have occurred which may indicate a possible impairment. The assessment for potential impairment is based primarily on the Company’s ability to be cash equivalents. Therecover the carrying value of those investments approximates theirits long-lived assets from expected future cash flows from its operations on an undiscounted basis. If such assets are determined to be impaired, the impairment recognized is the amount by which the carrying value of the assets exceeds the fair market value due to their short maturity and liquidity. Cash and cash equivalents include cash on hand and amount on deposit with financial institutions, which amounts may at times exceed federally insured limits. The Company has not experienced any losses on such accounts and it does not believe it is exposed to any significant credit risk. As of March 31, 2019 and December 31, 2018 the Company had cash and cash equivalents of $34,024 and $57,641, respectively.  Cash balances held in financial institution are below the federally insured limits.assets.

Research and DevelopmentASC 360-10 addresses criteria to be considered for long-lived assets expected to be disposed of by sale. Six criteria are listed in ASC 360-10-45-9 that must be met in order for assets to be classified as held for sale. Once the criteria are met, long-lived assets classified as held for sale are to be measured at the lower of carrying amount or fair value less costs to sell.

The Company follows Accounting Standards Codification Subtopic (“ASC”) 730-10, “Researchassesses the impairment of identifiable intangibles whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors the Company considers to be important which could trigger an impairment review include the following:

When the Company determines that the carrying value of intangibles may not be recoverable based upon the existence of one or more of the above indicators of impairment and Development,”the carrying value of the asset cannot be recovered from projected undiscounted cash flows, the Company records an impairment charge. The Company measures any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in which researchthe current business model. Significant management judgment is required in determining whether an indicator of impairment exists and development costs are charged toin projecting cash flows. The Company tested the statementcarrying value of operations as incurred. Duringits long-lived assets for recoverability during the three monthsyear ended MarchDecember 31, 2019 and period April 2, 2018 (Inception) through December 31, 2018, and there was impairment recorded in the Company incurred $46,912 and $162,008, respectivelyamount of expenses related to research and development costs.

Net Earnings (Loss) Per Common Share$525,693 for the year ended December 31, 2019.

The Company computes earnings per share under ASC 260-10, “Earnings Per Share”. Basic earnings (loss) per share is computed by dividing the net income (loss) attributable to the common stockholders (the numerator) by the weighted average number of shares of common stock outstanding (the denominator) during the reporting periods. Diluted loss per share is computed by increasing the denominator by the weighted average number of additional shares that could have been outstanding from securities convertible into common stock (using the “treasury stock” method), unless their effect on net loss per share is anti-dilutive.Accrued ExpensesThe Company had potentially dilutive securities totaling approximately 6,354,616 as of March 31, 2019. 

Accounts PayableTo prepare its financial statements, the Company estimates accrued expenses. The accrual process involves reviewing open contracts, communicating with personnel to identify services that have been performed on behalf of the Company and Accrued Liabilitiesestimating the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced or otherwise notified of the actual cost. The Company makes estimates of accrued expenses as of each balance sheet date based on the facts and circumstances known to the Company at that time. Although the Company does not expect the estimates to be materially different from amounts actually incurred, if the estimates of the status and timing of services performed differs from the actual status and timing of services performed, the Company may report amounts that are too high or too low in any particular period. Historically, the estimated accrued liabilities have approximated actual expenses incurred. Subsequent changes in estimates may result in a material change in the accruals.

Accounts payable and accrued liabilities include the following as of March 31, 2019 and December 31, 2018:

Fair Value Measurements

The Company measures and discloses the fair value of assets and liabilities required to be carried at fair value in accordance with ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”). ASC 820accounting guidance defines fair value, establishes a consistent framework for measuring fair value and enhancesexpands disclosure for each major asset and liability category measured at fair value measurement disclosure.

ASC 825 defines fairon either a recurring or non-recurring basis. Fair value is defined as an exit price, representing the priceamount that would be received from sellingto sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining theparticipants. As such, fair value measurements for assets and liabilities required or permitted tois a market-based measurement that should be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considersdetermined based on assumptions that market participants would use whenin pricing thean asset or liability,liability. As a basis for considering such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825assumptions, the accounting guidance establishes a three-tier fair value hierarchy, that requires an entity to maximizewhich prioritizes the use of observable inputs and minimize the use of unobservable inputs whenused in measuring fair value. ASC 825 establishes three levels of inputs that may be used to measure fair value:value as follows:

Level 1 - Quoted1: Observable inputs such as quoted prices for identical assets or liabilitiesin active markets.

Level 2: Inputs, other than the quoted prices in active markets to which we have access at the measurement date.

Level 2 - Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 -3: Unobservable inputs forin which there is little or no market data, which require the asset or liability.reporting entity to develop its own assumptions.

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The determinationcarrying values of where assetsthe Company’s financial instruments such as cash, investments, accounts payable, and liabilities fall within this hierarchyaccrued expenses approximate their respective fair values because of the short-term nature of those financial instruments.

Investments

The Company measures their investments at fair value with changes in fair value recognized in net income (loss) pursuant to ASU 2016-01, “Financial Instruments-Overall”.

Revenue Recognition

The Company accounts for revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers.

The Company accounts for a contract when it has been approved and committed to, each party’s rights regarding the goods or services to be transferred have been identified, the payment terms have been identified, the contract has commercial substance, and collectability is based upon the lowest levelprobable. Revenue is generally recognized net of input that is significantallowances for returns and any taxes collected from customers and subsequently remitted to governmental authorities. Revenue recognition for multiple-element arrangements requires judgment to determine if multiple elements exist, whether elements can be accounted for as separate units of accounting, and if so, the fair value measurement.for each of the elements.

ForRevenue under master service agreements is recorded upon the three months ended March 31, 2019performance obligation being satisfied. Typically, the satisfaction of the performance obligation occurs upon the frac sand load being delivered to the customer site and this load being successfully invoiced and accepted by the Company’s factoring agent.

The Company accounts for contract costs in accordance with ASC Topic 340-40, Contracts with Customers. The Company recognizes the cost of sales of a contract as expense when incurred or at the time a performance obligation is satisfied. The Company recognizes an asset from the costs to fulfil a contract only if the costs relate directly to a contract, the costs generate or enhance resources that will be used in satisfying a performance obligation in the future and the costs are expected to be recovered. The incremental costs of obtaining a contract are capitalized unless the costs would have been incurred regardless of whether the contract was obtained.

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

Share-Based Payment Arrangements

The Company has determinedaccounted for stock-based compensation arrangements in accordance with Accounting Standards Codification subtopic 718-10, Compensation (“ASC 718”). This guidance addresses all forms of share-based payment awards including shares issued under employee stock purchase plans, stock options, restricted stock and stock appreciation rights, as well as share grants and other awards issued to employees and non-employees under free-standing arrangements. These awards are recorded at costs that there we no assets or liabilitiesare measured at fair value on a recurring basis.the awards’ grant dates, based on the estimated number of awards that are expected to vest and will result in charges to operations.

Leases

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 leases office and production facilities for terms typically ranging from three to five years. Rent escalations over the term of a lease are considered at the inception of the lease such that the monthly average for all payments is recorded as straight-line rent expense with any differences recorded in accrued liabilities.

Earnings (Loss) Per Share of Common Stock

Basic net income (loss) per common share is computed using the weighted average number of common shares outstanding. Diluted earnings per share (“EPS”) include additional dilution from common stock equivalents, such as convertible notes, preferred stock, stock issuable pursuant to the exercise of stock options and warrants. Common stock equivalents are not included in the computation of diluted earnings per share when the Company reports a loss because to do so would be anti-dilutive for periods presented, so only basic weighted average number of common shares are used in the computations.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

Going Concern

The Company believesconcluded that its negative cash flows from operations raise substantial doubt about the carrying amounts of cash and cash equivalents, other current assets, accounts payable, accrued expenses salaries, wages and payroll taxes, and other accrued expenses areCompany’s ability to continue as a reasonable approximation ofgoing concern for one year from the fair value of those financial instruments because ofdate the nature of the underlying transactions and the short-term maturities involved.

Going Concern

The Company’s unaudited condensed consolidated financial statements are prepared using U.S. GAAP applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has no significant operating history and had a cumulative net loss from inception (August 13, 2014) to March 31, 2019 of $9,384,436. The Company has a working capital deficit of $2,329,379 as of March 31, 2019. Since inception, the Company has been funded through debt and equity financings. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and to allow it to continue as a going concern. The Company believes its cash resources are insufficient to meet its anticipated needs during the next twelve months. The Company will require additional financing to fund its future planned operations, including research and development and clinical trials and commercialization of its product candidates. In addition, the Company will require additional financing in order to seek to license or acquire new assets, research and develop any potential patents and the related compounds, and obtain any further intellectual property that the Company may seek to acquire.issued.

TheManagement intends to explore and identify business opportunities within the U.S., including a potential acquisition of an operating entity through a reverse merger, asset purchase or similar transaction. 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 may be hindered by risks and uncertainties which are beyond our control, including without limitation, the continued negative effects of the coronavirus pandemic on the U.S. and global economies. Even though management believes this plan will allow the Company to continue as a going concern, is dependent onthere are no guarantees to the successful execution of this plan.

These unaudited condensed consolidated financial statements of the Company obtaining adequate capital to fund operating losses until it establishes a revenue stream and becomes profitable. Management’s plans tohave been prepared assuming that the Company will continue as a going concern, include raising additional capital through borrowingwhich contemplates, among other things, the realization of assets and salesthe satisfaction of liabilities in the normal course of business over a reasonable period of time.

On March 27, 2020, Banner Midstream was acquired by Ecoark for 8,945,205 shares of common stock. However, management cannot provide any assurances thatstock, and Ecoark assumed all of the debt of the Company. As of September 2020, the Company will be successful in accomplishing anyretained the 1,000,000 shares of its plans. If the Company is not able to obtain the necessary additional financing on a timely basis, the Company will be forced to delay or scale down some or all of its development activities or perhaps even cease the operation of its business.  Since its inception, the Company has funded its operations primarily through debt financings and equity financings, and it expects that it will continue to fund its operations through a mix of equity and debt financings.  If the Company secures additional financing by issuing equity securities, its existing stockholders’ ownership will be diluted.  The Company also expects to pursue non-dilutive financing sources. However, obtaining such financing would require significant efforts by the Company’s management team, and such financing may not be available, and if available, could take a long period of time to obtain. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Collaborative Arrangements

The Company and its collaborative partners are active participants in the collaborative arrangements and both parties are exposed to significant risks and rewards depending on the commercial success of the activity. The Company records all expenses related to collaborative arrangements as research and development expense in the consolidated statements of operations as incurred.

Recent Accounting PronouncementsEcoark common stock.

In March 2019,Impact of COVID-19

Since the FASB issued ASU 2019-01,Leases (Topic 842) Codification Improvements, which provides clarification on implementation issues associated with adopting ASU 2016-02. The implementation issues noted in ASU 2019-01 include determiningsale of Banner Midstream, the fair value of the underlying asset by lessors that areCOVID-19 pandemic has not manufacturers or dealers, presentationhad a material impact on the statementCompany, particularly due to our current lack of cash flows for sales-type and direct financing leases, and transition disclosures related to Topic 250, Accounting Changes and Error Corrections. Refer to the discussion of ASU 2016-02 below for theoperations. The pandemic may, however, have an impact on our financial position, results of operations, cash flows,ability to evaluate and acquire an operating entity through a reverse merger or presentation thereof. In February 2016, FASB issued an update 2016-02 and created Topic 842, Leases. Topic 842 effects any entity that enters into a lease arrangement with another person. The guidanceotherwise. See “Risk Factors” contained in this update supersedes Topic 840. The main difference between previous GAAP and Topic 842 is the recognition of accounting policies for leases classified as operating leases under previous GAAP. The amendments in this update for public business entities that file with the Securities and Exchange Commission are effective for fiscal years beginning after Dec. 15, 2018 and the interim periods within that year with early application permitted for all entities. The Company is adopting the lease accounting model as described in Topic 842our annual report on Form10-K for the fiscal year begins onended December 31, 2019 for more information.

NOTE 2: REVENUE

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 has no long-term operating leasesNo cumulative adjustment to members equity was required, and thus the adoption of ASC 842 had no impact on the condensed consolidated financial statements.

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Recent Accounting Pronouncements Issued But Not Adopted as of March 31, 2019

In March 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-08, “Receivables—Nonrefundable Fees and Other Costs”. The Board is issuing this update to amend the amortization period for certain purchased callable debt securities held at a premium, the Board is shortening the amortization period for the premium to the earliest call date. For public business entities, the amendments in this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020.The Company doesdid not anticipate the adoption of ASU 2017-04 will have a material impact on its consolidatedour financial statements.statements, as no material arrangements prior to the adoption were impacted by the new pronouncement.

In January 2017, the FASB issued Accounting Standards Update No. 2017-04, Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). ASU 2017-04 simplifies the accounting for goodwill impairment by removing Step 2All of the goodwill impairment test, which requires a hypothetical purchase price allocation. ASU 2017-04 is effectiveCompany’s revenue for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, and should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates afterthe period January 1, 2017. The Company does not anticipate the adoption of ASU 2017-04 will have a material impact on its consolidated financial statements.

In January 2017, the FASB issued Accounting Standards Update No. 2017-01, Clarifying the Definition of a Business ("ASU 2017-01"). The standard clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions of assets or businesses. ASU 2017-01 is effective for fiscal years beginning after December 15, 2017,2020 through March 27, 2020 and interim periods within those fiscal years. Under ASU 2017-01, to be considered a business, the assets in the transaction need to include an input and a substantive process that together significantly contribute to the ability to create outputs. Prior to the adoption of the new guidance, an acquisition or disposition would be considered a business if there were inputs, as well as processes that when applied to those inputs had the ability to create outputs. Early adoption is permitted for certain transactions. Adoption of ASU 2017-01 may have a material impact on the Company's consolidated financial statements if it enters into future business combinations.

In November 2016, the FASB issued Accounting Standards Update No. 2016-18, Restricted Cash (a consensus of the FASB Emerging Issue Task Force) ("ASU 2016-18"). This new standard addresses the diversity that exists in the classification and presentation of changes in restricted cash on the statement of cash flows. The amendments in ASU 2016-18 require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within the year of adoption, with early adoption permitted. Adoption of ASU 2016-18 won’t have a material impact on the Company's consolidated financial statements

In August, 2016, the FASB issued Accounting Standards Update No. 2016-15, Classification of Certain Cash Receipts and Cash Payments (a consensus of the Emerging Issues Task Force) ("ASU 2016-15"). The amendments in ASU 2016-15 address eight specific cash flow issues and apply to all entities that are required to present a statement of cash flows under ASC Topic 230, Statement of Cash Flows. The amendments in ASU 2016-15 are effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption during an interim period.  Adoption of ASU 2016-15 won’t have a material impact on the Company's consolidated financial statements.

In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). ASU 2016-09 simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Some of the areas of simplification apply only to nonpublic entities. For public business entities, the amendments in ASU 2016-09 are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Adoption of ASU 2016-09 won’t have a material impact on the Company's consolidated financial statements.

In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) ("ASU 2016-02"). ASU 2016-02 addresses the financial reporting of leasing transactions. Under current guidance for lessees, leases are only included on the balance sheet if certain criteria, classifying the agreement as a capital lease, are met. This update will require the recognition of a right-of-use asset and a corresponding lease liability, discounted to the present value, for all leases that extend beyond 12 months. For operating leases, the asset and liability will be expensed over the lease term on a straight-line basis, with all cash flows included in the operating section of the statement of cash flows. For finance leases, interest on the lease liability will be recognized separately from the amortization of the right-of-use asset in the statement of operations and the repayment of the principal portion of the lease liability will be classified as a financing activity while the interest component will be included in the operating section of the statement of cash flows. This guidance is effective for annual and interim reporting periods beginning after December 15, 2018. Early adoption is permitted.  Adoption of ASU 2016-02 won’t have a material impact on the Company's consolidated financial statements.

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In January 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update (ASU) 2016-01, which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income.  Adoption of ASU 2016-01 may have a material impact on the Company's consolidated financial statements.

In August 2014, the FASB issued ASU 2014-15, "Presentation of Financial Statements – Going Concern (Subtopic 205-40), effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. This standard provides guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. The guidance is effective for annual reporting periods ending after December 15, 2016, and early adoption is permitted. The Company adopted this guidance on January 1, 2019. The Company had no impact, by the adoption of ASU 2014-15

In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)," on revenue recognition. This guidance provides that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance also requires more detailed disclosures to enable users of financial statements to understand the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The original effective date of this guidance was for interim and annual reporting periods beginning after December 15, 2016, early adoption is not permitted, and the guidance must be applied retrospectively or modified retrospectively. In July 2015, the FASB approved an optional one-year deferral of the effective date. As a result, we expect to adopt this guidance on January 1, 2018. The Company has not yet determined its approach to adoption or the impact the adoption of this guidance will have on its financial position, results of operations or cash flows, if any.  Adoption of ASU 2014-09 won’t have a material impact on the Company's consolidated financial statements.

In the second quarter of 2014, the FASB issued guidance applicable to revenue recognition that will be effective for the Company for the year ending December 31, 2018. The new guidance must be adopted using either a full retrospective approach for all periods presented or a modified retrospective approach. Earlier application is permitted only as of annual reporting periods beginning after December 15, 2016, including interim reporting periods within that reporting period. The new guidance applies a more principles-based approach to recognizing revenue. The Company expects to adopt this new guidance in the first quarter of 2018 using the modified retrospective method. The adoption didn’t have a material effect on the Company's financial statements. The Company hasn’t recorded/earned revenue since inception. The Company's potential future revenues could be derived primarily from license and collaboration agreements. The consideration the Company is eligible to receive under these agreements could include upfront payments, research and development funding, milestone payments, and royalties. Each collaboration agreement is unique and will need to be assessed separately under the five-step process under the new standard. The new guidance differs from the current accounting standard in many respects, such as in the accounting for variable consideration, including milestone payments. Under the current accounting policy, the Company recognizes milestone revenue using the milestone method specified in ASC 605-28, which generally results in the recognition of the milestone payment as revenue in the period that the milestone is achieved. However, under the new accounting standard, it is possible to start to recognize milestone revenue before the milestone is achieved, subject to management's assessment of whether it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

There were various other updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company's financial position, results of operations or cash flows.

Note 3 – Loans

In 2014, the Company executed an agreement with a third-party investor whereby the Company issued $53,209 in a convertible promissory note. This convertible note bears an interest rate of 8% per year and was set to mature on November 26, 2015. The Company subsequently received an advance of $50,000 from the same party. The proceeds from these loans were used for working capital purposes. During the year ended December 31, 2015, both of these loans were consolidated into a new convertible note (see Note 4).

As a result of the Share Exchange, the Company assumed an obligation to a former note holder in the amount of $17,500. The unsecured promissory note in the amount of $15,000 is to an unrelated party. Pursuant to the terms of the note, the note is interest bearing at 3.5% and is due on demand. As of March 31, 2019, the Company has accrued interest of $2,898. Another unsecured promissory note is of $2,500 to an unrelated party. Pursuant to the terms of the note, the note is non-interest$ bearing and is due on demand. The Company is currently assessing how to revise the terms of this note.

On February 22, 2019, the Company borrowed $21,038 from INS Group (the "Lender") through a note bearing 8.3% interest with a

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maturity date of December 22, 2019 for the director and officer’s insurance. Balance payable as of March 31, 2019 is $18,935.

Note 4 – Convertible Notes

0851229 BC Ltd.

During the year ended December 31, 2018 and 2017, the Company borrowed $35,000 and $75,000, respectively, from 0851229 BC Ltd. (the "Lender") through a convertible note bearing 3% interest with a maturity date of March 18, 2018.  The maturity date of the note has been extended to June 30, 2019. The Lender is deemed a related party as a result of owning more than 10% of the Company's common stock.

The initial fair value of the beneficial conversion feature of the note on the date of issuance was determined to be $8,750 and $18,750 for the year ended December 31, 2018 and 2017. The value of beneficial conversion feature is being amortized over the life of the loan. The unamortized debt discount as of December 31, 2018 and 2017 is $0 and $16,595 respectively. For the three months ended March 31, 2019 are included in discontinued operations:

There were no significant contract asset or contract liability balances for all periods presented. The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and 2018(ii) contracts for which we recognize revenue at the Company amortizedamount to which we have the debt discount of $0 and $25,345 respectivelyright to invoice for services performed.

Pursuant to the termsCollections of the amended note dated June 14, 2016, if the Company issues capital stock or any security convertible into or exercisable for its capital stock in a transaction, the primary purpose of which is to raise capital (a “Financing”), lender may convert all or any portion of the outstanding principal amount and accrued and unpaid interest into the same securities issued by the Company in the Financing (the “Financing Securities”) at a conversion price equal to eighty percent (80%) of the price per Financing Securitiesamounts billed are typically paid by the other investors incustomers within 30 to 60 days.

NOTE 3: PROPERTY AND EQUIPMENT

All of the Financing. Ifproperty and equipment of the Company consummates a Qualified Financing (as hereinafter defined) then the outstanding principal amountwas related to Banner Midstream Corp. and all accrued and unpaid interest shall automatically convert into the same securities issuedwas sold to investors in the Qualified Financing (the “Qualified Financing Securities”) at a conversion price equal to eighty percent (80%) of the price per Qualified Financing Securities paid by the other investors in the Qualified Financing. A “Qualified Financing” means a Financing which results in gross proceeds to the Company, in one or a series of related transactions, of at least $2,000,000 (including the aggregate amount of indebtedness converted into equity securities in such Financing), in which either (i) the investor leading negotiations with the Company is a bona fide institutional investor or (ii) the investor leading negotiations with the Company is not a bona fide institutional investor but the Financing includes commercially reasonable customary terms and conditions for an equity financing of an early-stage biopharmaceutical company.Ecoark on March 27, 2020.

The Lender maybe deemed to be a related party as a resultDepreciation expense of owning more than 10% of$103,451 and $125,069 is included in discontinued operations for the Company's common stock. The Lenderperiod January 1, 2020 through March 27, 2020 and the Company agreed that the aggregate principal amount of all outstanding loans made under the Secured Note shall not exceed $5,000,000 at any time. The maturity date for all the above note were extended till June 30, 2019.

As of December 31, 2018, the Company had principal outstanding on this Secured Note of $728,004 and accrued interest of $57,754.

As of March 31, 2019, the Company had principal outstanding on this Secured Note of $728,004 and accrued interest of $63,020. Total interest expenses for the three months ended March 31, 2019 and 2018 was $5,266 and $5,197, respectively.2019.

Fromar Investments, LPNOTE 4: LONG-TERM DEBT

On April 6, 2018, the Company, and Fromar Investments, LP (“Fromar”) entered into an arrangement whereby Fromar would lend the Company $500,000 pursuant to the terms of a convertible promissory note (the “Fromar Note”).  The Fromar Note bears interest at a rate of 8.0% per annum and has a maturity date of September 30, 2018 which was extended to June 30, 2019.

By agreementAll of the parties, the effective date of the Fromar Note is March 5, 2018, and funds are disbursed under the Fromar Note pursuant to a schedule thereto.  As of May 9, 2018, the Company had received the additional $250,000, and had Company had principal outstanding on the Fromar Note of $500,000. Pursuant to the terms and conditions of this note, specifically upon receipt of $500,000, the Company is required to issue Fromar 1,000,000 shares of its common stock. On April 27, 2018 the Company issued Fromar 1,000,000 shares of its common stock. On July 27, 2018 the Company issued Fromar an additional 1,000,000 shares of its common stock pursuant to the terms and conditions of the Fromar Note. With respect to the Convertible Notes, Mount Tam applied ASC 470, “Debt with Conversion and Other Options”, pursuant to which Mount Tam recognized and measured the Beneficial Conversion Feature (“BCF”) in the Convertible Notes at the commitment date by allocating a portion of the proceeds equal to the intrinsic value of the feature to additional paid-in-capital. The intrinsic value of the feature is calculated on the commitment date using the effective conversion price. The discount resulting from the BCF is amortized over the life of the Convertible Notes and is contained in financial expenses (income), net in the Company’s statements of consolidated comprehensive loss unless converted earlier.

The Company and Fromar also entered into a Security Agreement (the “Fromar Security Agreement”) pursuant to which the Company and Fromar agreed that all amounts, liabilities and obligations owed by the Company to Fromar (including, but not limited to, all amounts owed under the Fromar Note) are secured by a second priority security interest in all assetslong-term debt of the Company was related to Banner Midstream Corp. and was assumed by Ecoark on March 27, 2020 as part of the terms and conditions set forth in the Fromar Security Agreement.merger with Ecoark. As of March 27, 2020, there is no long-term debt recorded.

Pursuant to the termsNOTE 5: NOTES PAYABLE - RELATED PARTIES

All of the Fromar Note, if the Company issues capital stock or any security convertible into or exercisable for its capital stock in a transaction, the primary purpose of which is to raise capital (a “Financing”), Fromar may convert all or any portion of the

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outstanding principal amount and accrued and unpaid interest into the same securities issued by the Company in the Financing (the “Financing Securities”) at a conversion price equal to eighty percent (80%) of the price per Financing Securities paid by the other investors in the Financing. If the Company consummates a Qualified Financing (as hereinafter defined) then the outstanding principal amount and all accrued and unpaid interest shall automatically convert into the same securities issued to investors in the Qualified Financing (the “Qualified Financing Securities”) at a conversion price equal to eighty percent (80%) of the price per Qualified Financing Securities paid by the other investors in the Qualified Financing. A “Qualified Financing” means a Financing which results in gross proceeds to the Company, in one or a series ofnotes payable – related transactions, of at least $2,000,000 (including the aggregate amount of indebtedness converted into equity securities in such Financing), in which either (i) the investor leading negotiations with the Company is a bona fide institutional investor or (ii) the investor leading negotiations with the Company is not a bona fide institutional investor but the Financing includes commercially reasonable customary terms and conditions for an equity financing of an early-stage biopharmaceutical company.

Effective upon a complete funding of the entire principal amount of $500,000, the Company agreed to issue to Fromar 1,000,000 shares of its common stock.  The Company agreed to issue to Fromar an additional 1,000,000 shares of its common stock in the event that the Company has not either (i) closed a Financing resulting in funding of at least $1,000,000 to the Company after the date of the Fromar Note, but on or before July 1, 2018, or (ii) received a binding term sheet or other similar binding agreement pertaining to a licensing transaction with a company that operates in the pharmaceutical and/or biotech industries that will provide for at least $500,000 in upfront payments to the Company on or before July 1, 2018, as well as milestones and royalties for TAM-01, TAM-03, or for any follow-on compoundsparties of the Company (a “Licensing Transaction”)was related to Banner Midstream Corp. and was assumed by Ecoark on or before July 1, 2018.  The Company agreed to issue to Fromar an additional 3,000,000 shares of its common stock in the event that the Company has not either (i) closed a Financing resulting in funding of at least $1,000,000 to the Company after the dateMarch 27, 2020 as part of the Fromar Note, but on or before September 30, 2018, or (ii) received a binding term sheet or other similar binding agreement for a Licensing Transaction on or before September 30, 2018.merger with Ecoark. As of December 31, 2018, the binding term clause requiring issuance of additional shares was waived by the note holder. The CompanyMarch 27, 2020, there is not under obligation to issue any additional shares under this clause. On April 27, 2018 the Company issued 1,000,000 shares to the note holders as discussed above which were valued at $90,000 and was expensed out during the year ended December 31, 2018 as an amortization expense.  On July 27, 2018 the Company issued an additional 1,000,000 shares to the note holders as discussed above which were valued at $31,400 and was expensed out during the year ended December 31, 2018 as an amortization expense. In total, the debt discount on the convertible note is $246,400.  

The foregoing descriptions of the Fromar Note and the Fromar Security Agreement do not purport to be complete and are qualified in their entirety by the terms and conditions of the agreements themselves. Copies of the Fromar Note and the Fromar Security Agreement  are attached as Exhibits 10.1 and 10.2, respectively, to a Current Report on Form 8-K, filed with the Commission on April 12, 2018.

The Fromar Note and the securities of the Company into which the Fromar Note is convertible were offered and sold without registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder, and in reliance on similar exemptions under applicable state laws. Fromar has represented to the Company that it is an accredited investor. No person received any underwriting discount or commission in connection with the issuance of the securities described herein.no notes payable – related parties recorded.

Amendments to Existing Notes, New Promissory Note

On March 31, 2019, the Company entered into an amendment (the “First Note Amendment”) to that certain Convertible Promissory Note with Fromar Investments, LP originally dated March 5, 2018 and subsequently amended on September 24, 2018, on November 14, 2018, and again on December 31, 2018 (the “March 2018 Note”), whereby the maturity date of the March 2018 Note was extended to June 30, 2019. All other provisions of the March 2018 Note, as amended and as disclosed on the Company’s Current Report on Form 8-K filed with the Commission on April 12, 2018, remain in full force and effect.  

Also on March 31, 2019, the Company entered into an amendment (the “Second Note Amendment”) to that certain Amended and Restated Convertible Promissory Note with 0851229 BC, Ltd. originally dated June 13, 2016 and subsequently amended on March 5, 2018, and on September 24, 2018, and on November 14, 2018, and again on December 31, 2018 (the “June 2016 Note”), whereby the maturity date of the June 2016 Note was extended to June 30, 2019. All other provisions of the June 2016 Note, as amended and as disclosed on the Company’s Current Report on Form 8-K filed with the Commission on June 15, 2016, remain in full force and effect. 

Effective March 8, 2019, The Company entered into a promissory note with Fromar Investments, LP., for $80,000, with a maturity date of September 30, 2019, at an interest rate of 8%.   The Company received $40,000 on March 8, 2019, and an additional $40,000 on March 14, 2019.  This note is unsecured.

As of December 31, 2018, the Company had principal outstanding on the Fromar Note of $500,000 and accrued interest of $30,055.

As of March 31, 2019, the Company had principal outstanding on this Secured Note of $500,000 and accrued interest of $39,699. Total interest expenses for the three months ended March 31, 2019 and 2018 was $9,644 and $1,079, respectively.

As of March 31, 2019, the Company had principal outstanding on the March 2019 Promissory Note of $80,000 and accrued interest of $351. Total interest expenses for the $80,000 Note for the three months ended March 31, 2019 and 2018 was $351 and $0, respectively.

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Climate Change Investigation, Innovation and Investment Company, LLC (“CC3I”).

On September 20, 2018, the Company and CC3I entered into an arrangement whereby CC3I agreed to lend the Company $100,000 pursuant to the terms of a convertible promissory note (the “CC3I Note”).  The CC3I Note bears interest at a rate of 8.0% per annum and has a maturity date of May 18, 2019.  By agreement of the parties, the CC3I Note has an effective date of September 18, 2018 and bears interest from such date. The Manager of CC3I, James Farrell, is a director and shareholder of the Company.  Pursuant to the requirements of the Nevada Revised Statutes, the disinterested members of the Company’s board of directors approved the transaction with CC3I.  

The Company and CC3I also entered into a Security Agreement (the “CC3I Security Agreement”) pursuant to which the Company and CC3I agreed that all amounts, liabilities and obligations owed by the Company to CC3I (including, but not limited to, all amounts owed under the CC3I Note) are secured by security interest in all assets of the Company on the terms and conditions set forth in the CC3I Security Agreement.   The security interest granted to CC3I is subject to certain permitted security interests, specifically those interests previously granted to (i) 0851229 BC Ltd. pursuant to an amended and restated security agreement dated as of June 14, 2016 (included as Exhibit 99.3 to the Company’s Current Report on Form 8-K filed on June 15, 2016) (the “BC Security Interest”) and (ii) Fromar Investments, LP pursuant to a security agreement dated as of March 5, 2018 (included as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 12, 2018) (the “Fromar Security Interest”).

Pursuant to the terms of the CC3I Note, if the Company issues capital stock or any security convertible into or exercisable for its capital stock in a transaction, the primary purpose of which is to raise capital (a “Financing”), CC3I may convert all or any portion of the outstanding principal amount and accrued and unpaid interest into the same securities issued by the Company in the Financing (the “Financing Securities”) at a conversion price equal to eighty percent (80%) of the price per Financing Securities paid by the other investors in the Financing. If the Company consummates a Qualified Financing (as hereinafter defined) then the outstanding principal amount and all accrued and unpaid interest shall automatically convert into the same securities issued to investors in the Qualified Financing (the “Qualified Financing Securities”) at a conversion price equal to eighty percent (80%) of the price per Qualified Financing Securities paid by the other investors in the Qualified Financing. A “Qualified Financing” means a Financing which results in gross proceeds to the Company, in one or a series of related transactions, of at least $2,000,000 (including the aggregate amount of indebtedness converted into equity securities in such Financing), in which either (i) the investor leading negotiations with the Company is a bona fide institutional investor or (ii) the investor leading negotiations with the Company is not a bona fide institutional investor but the Financing includes commercially reasonable customary terms and conditions for an equity financing of an early-stage biopharmaceutical company. 

Effective upon a complete funding of the entire principal amount of $100,000, the Company agreed to issue to CC3I 200,000 shares of its common stock, which were valued at the time of the Note at a fair market value of $5,400.  The Company agreed to issue to CC3I an additional 200,000 shares of its common stock in the event that the Company has not either (i) closed a Financing resulting in funding of at least $1,000,000 to the Company after the date of the Note, but on or before January 1, 2019, or (ii) received a binding term sheet or other similar binding agreement pertaining to a licensing transaction with a company that operates in the pharmaceutical and/or biotech industries that will provide for at least $500,000 in upfront payments to the Company on or before January 1, 2019, as well as milestones and royalties for TAM-01, TAM-3, or for any follow-on compounds of the Company (a “Licensing Transaction”) on or before January 1, 2019.  The Company agreed to issue to CC3I an additional 600,000 shares of its common stock in the event that the Company has not either (i) closed a Financing resulting in funding of at least $1,000,000 to the Company after the date of the Note, but on or before April 30, 2019, or (ii) received a binding term sheet or other similar binding agreement for a Licensing Transaction on or before April 30, 2019. As of December 31, 2018, the binding term clause requiring to issue additional shares was waived by the note holder. The Company is not under obligation to issue any additional shares under this clause.

On March 4, 2019, the Company and CC3I entered into an arrangement whereby CC3I will lend the Company $40,000 pursuant to the terms of a convertible promissory note (the “Note”).  The Note bears interest at a rate of 8.0% per annum and has a maturity date of August 31, 2019.  The Manager of CC3I, James Farrell, is a director and shareholder of the Company.  Pursuant to the requirements of the Nevada Revised Statutes, the disinterested members of the Company’s board of directors approved the transaction with CC3I.  

The Note is secured by that certain Security Agreement dated September 20, 2018 between the Company and the CC3I (included as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on September 26, 2018) (the “Security Agreement”) pursuant to which the Company and CC3I agreed that all amounts, liabilities and obligations owed by the Company to CC3I are secured by a security interest in all assets of the Company on the terms and conditions set forth in the Security Agreement.  The security interest granted to CC3I is subject to certain permitted security interests, specifically those interests previously granted to (i) 0851229 BC, Ltd. (“BC”) pursuant to an amended and restated security agreement dated as of June 14, 2016 (included as Exhibit 99.2 to the Company’s Current Report on Form 8-K filed on June 15, 2016) (the “BC Security Interest”) and (ii) Fromar Investments, LP (“Fromar”) pursuant to a security agreement dated as of March 5, 2018 (included as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 12, 2018) (the “Fromar Security Interest”).

Pursuant to the terms of the Note, if the Company issues capital stock or any security convertible into or exercisable for its capital stock in a transaction, the primary purpose of which is to raise capital (a “Financing”), CC3I may convert all or any portion of the outstanding principal amount and accrued and unpaid interest into the same securities issued by the Company in the Financing (the “Financing Securities”) at a conversion price equal to eighty percent (80%) of the price per Financing Securities paid by the other investors in the Financing. If the

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Company consummates a Qualified Financing (as hereinafter defined) then the outstanding principal amount and all accrued and unpaid interest shall automatically convert into the same securities issued to investors in the Qualified Financing (the “Qualified Financing Securities”) at a conversion price equal to eighty percent (80%) of the price per Qualified Financing Securities paid by the other investors in the Qualified Financing. A “Qualified Financing” means a Financing which results in gross proceeds to the Company, in one or a series of related transactions, of at least $2,000,000 (including the aggregate amount of indebtedness converted into equity securities in such Financing), in which either (i) the investor leading negotiations with the Company is a bona fide institutional investor or (ii) the investor leading negotiations with the Company is not a bona fide institutional investor but the Financing includes commercially reasonable customary terms and conditions for an equity financing of an early-stage biopharmaceutical company. In April 2019, CC3I waived the conversion rights on this note.

Effective upon a complete funding of the entire principal amount of $40,000, the Company agreed to issue to CC3I 80,000 shares of its common stock, which were issued in March 2019, which were valued at a fair market value of $1,520 which was recorded as beneficial conversion feature. The Company agreed to issue to CC3I an additional 80,000 shares of its common stock in the event that the Company has not either (i) closed a Financing resulting in funding of at least $1,000,000 to the Company after the date of the Note, but on or before August 31, 2019, or (ii) received a binding term sheet or other similar binding agreement pertaining to a licensing transaction with a company that operates in the pharmaceutical and/or biotech industries that will provide for at least $40,000 in upfront payments to the Company on or before August 31, 2019, as well as milestones and royalties for TAM-01, TAM-3, or for any follow-on compounds of the Company (a “Licensing Transaction”) on or before August 31, 2019.  The Company agreed to issue to CC3I an additional 60,000 shares of its common stock in the event that the Company has not either (i) closed a Financing resulting in funding of at least $1,000,000 to the Company after the date of the Note, but on or before September 30, 2019, or (ii) received a binding term sheet or other similar binding agreement for a Licensing Transaction on or before September 30, 2019. As of March 31, 2019, the binding term clause requiring to issue additional shares was waived by the note holder. The Company is not under obligation to issue any additional shares under this clause.

As of December 31, 2018, the Company had principal outstanding on the CC3I Note of $100,000 and accrued interest of $2,236.

As of March 31, 2019, the Company had principal outstanding on this Secured Note of $100,000 and accrued interest of $4,164. Total interest expenses for the three months ended March 31, 2019 and 2018 was $1,928 and $0, respectively.

As of March 31, 2019, the Company had principal outstanding on this Secured Note of $40,000 and accrued interest of $237. Total interest expenses for the three months ended March 31, 2019 and 2018 was $237 and $0, respectively.

For the three months ended March 31, 2019 and 2018, the Company amortized the debt discount of $10,818 and $25,345, respectively. The unamortized debt discount as of March 31, 2019 and December 31, 2018 is $3,719 and $13,017 respectively.

Note 5 – Capital StockNOTE 6: STOCKHOLDERS’ EQUITY (DEFICIT)

Common Stock

The Company has authority to issue up to 200,000,000 shares, par value $0.0001 per share. The Majority ofOur shareholders approved an increase in the authorized number of shares from 100,000,000 to 200,000,000 in May 2018, and from 200,000,000 to 500,000,000 in December 2018. As of March 31, 2020 and December 31, 2019, there were 55,710,7026,915,853 and 6,865,853 shares of the Company'sCompany’s common stock issued and outstanding.

Mount Tam has an agreement with The Buck Institute as further detailed in Note 7 to maintain a certain common stock equity interest in the Company. As of March 31, 2019 and December 31, 2018 the Company owed to the Buck Institute 4,000 and 0 shares respectively, as a result of the Share Exchange and subsequent issuances of common stock. For the three months ended March 31,outstanding, respectively. On November 14, 2019, the Company needscompleted a 1 for 95 reverse stock split. All shares and per share figures have been retroactively adjusted to issue 4,000account for this reverse split and reverse acquisition.

The Company issued an additional 197,260 shares which were treatedof common stock in January through April 2019 for proceeds totaling $355,541 to various high net worth accredited investors as issuablea part of an equity financing round.

On February 1, 2019 and on April 1, 2019, the Company issued 63,918 total to an advisor representing the Company for services andbusiness development valued at $76.$180,000.

During the year ended December 31, 2018,2019, the Company issued 110,000586,429 shares for the acquisition of Banner Midstream; 300,000 shares for the entering into a secured note payable valued at $588,000 and 50,000 shares issued for services rendered valued at $65,000.

On February 27, 2020, the Company issued 50,000 shares of common stock to The Buck Institutefor services rendered valued at $6,120.

During the year ended December 31, 2018, the Company issued 2,200,000 shares of common stock to the convertible note holders (Fromar Investments, LP and and Climate Change Investigation, Innovation and Investment Company, LLC)valued at $126,800 as beneficial conversion feature.

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Note 6 – Stock Options and Warrants$55,000.

Stock Options

The Company'sCompany’s Board of Directors approved the adoption of the Mount Tam 2016 Stock-Based Compensation Plan (the "2016 Plan"“2016 Plan”) on May 12, 2016. AStockholders owning a majority of the stockholdersCompany’s voting power approved the 2016 Plan by written consent on June 27, 2016. A copy of the 2016 Plan is included as Exhibit A to the Company'sCompany’s Information Statement filed with the SEC on July 11, 2016.

AOn May 2, 2016, the Company granted options to purchase up to 2,737 shares of Common Stock under the Plan in the aggregate, with an exercise price of $56.05 per share. On December 28, 2018, the Company granted options to purchase up to 51,683 shares of Common Stock under the Plan in the aggregate, with an exercise price of $1.90 per share. Options will vest as per below tables:

On October 2, 2016, the Company granted options to purchase up to 1,421 shares of Common Stock under the Plan in the aggregate, with an exercise price of $38.00 per share. On December 28, 2018, the Company granted options to purchase up to 4,579 shares of Common Stock under the Plan in the aggregate, an exercise price of $1.90 per share. Options will vest as per below tables:

The Company determined the value of share-based compensation using the Black-Scholes fair value option-pricing model using the following weighted average assumptions for options granted during the year ended December 31, 2018. All options stand completely vested on the date of the reverse merger November 18, 2019.

As summary of option activity under the 2016 Plan as of March 31, 2019,2020 and changes during the period then ended is presented below:

As of March 31, 2019, there was $888,456 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Plan. That cost is expected to be recognized over a weighted-average period of 2.43 years. Stock-based compensation expense related to vested options was $195,616 and $242,106 for the three months ended March 31, 2019 and 2018, respectively. The Company did not issue any stock option during the three months ended March 31, 2018, and the three months ended March 31, 2019.

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Warrants

On August 10, 2017, the Company entered into a Securities Purchase Agreement with two investors to purchase from the Company 4,038,46242,510 shares of the Company'sCompany’s common stock for an aggregate purchase price of $525,000. The investors received a warrant to purchase an additional 504,8085,314 shares at an exercise price of $0.15$14.25 per share, and a warrant to purchase an additional 504,8085,314 shares at an exercise price of $0.20$19.00 per share. Both warrants have a call provision when the Company'sCompany’s common stock trades for five consecutive days at a price equal or greater than 500% of the exercise price of each warrant agreement. Both warrant agreements expire August 10, 2022.

Note 7NOTE 7: ACQUISITIONS – Commitments & ContingenciesBANNER MIDSTREAM

From time to time Mount Tam may become a party to litigation in the normal course of business. Management believes that there are no current legal matters that would have a material effect on the Company's financial position or results of operations.Reverse Merger with Banner Midstream

On August 17, 2014,September 26, 2019, the Company executed a reverse merger agreement with Banner Midstream. The merger closed on November 18, 2019, with Banner Midstream becoming a wholly owned subsidiary of the Company. Under terms of the agreement, Banner Midstream as the surviving entity and became a subsidiary of the Company. Upon closure of the transaction, the Company executed a successful reverse split of its common stock at a ratio of one new share for each 95 existing shares. The reverse split and name change to MTB Corp. then Banner Energy took effect November 14, 2019. At the time of closing, shareholders of the Company had a combined ownership position of approximately 10%, and the former Banner Midstream shareholders collectively owned approximately 90% of the outstanding stock. The Company’s shares traded under the temporary ticker symbol “MNTMD” and following a 20-day trading period, the Company’s symbol transitioned to the permanent ticker symbol “BANM.” On February 12, 2020, the name from MTB Corp. was changed to Banner Energy Services Corp.

NOTE 8: DISCONTINUED OPERATIONS

The Company entered into an agreement with Buck InstituteEcoark and sold Banner Midstream on March 27, 2020. All of the operations for licensesthe respective periods for Banner Midstream, who was acquired as of certain patents held by Buck Institute (the "License Agreement"). In connection with this agreement, Mount Tam agreed to pay Buck Institute for research and development activities.November 18, 2019 in a reverse merger are reflected as discontinued operations.

In addition, the Company issued to Buck Institute that number of shares equal to 5% of the Company's total outstanding shares. Buck Institute's equity interest in the Company will not be reduced below 5% of the total aggregate shares of Common Stock until such time that the Company has raised and received a total of $5,000,000 of investment in equity, debt, grants, contributions, or donations. As of March 31, 2019, the Company has issued 2,754,272 shares of the Company's Common Stock to Buck Institute and committed to issue 4,000 shares of the Company Common stock as additional shares.

As of March 31, 2019 none of the milestone events had yet been achieved.

Mount Tam also agreed to pay Buck Institute non-refundable and non-creditable royalties in the amount of 2% of the annual aggregate net sales. For each licensed product for which Mount Tam grants worldwide sublicense rights to a third party, Mount Tam agreed to pay Buck Institute 20% of all sub-license revenues. Please see discussion in Item 1, Business, Intellectual Property and Licenses, for further discussion of recent communication with the Buck Institute regarding our agreement with them.

The Company reimburses reimburse The Buck  Institute for 100% of the patent expenses for the Product Patents and 50% of the patent expenses for the Program Patents, incurred by Buck Institute as defined in the Licensing Agreement..

Since 2016, The Company has a Research Collaboration and License Agreement between the Company and The Buck Institute.

Pursuant to this the Research Collaboration Term of the License Agreement is tolled until the Company can achieve a Qualified Financing (defined as any financing occurring after the date of the Amendment which results in gross proceeds to the Company of at least $2,000,000). Once a Qualified Financing has been achieved, the research collaboration efforts will resume, and will continue for a period of twenty-one months. The Company and The Buck Institute agreed to work together to determine a new research plan, specifying the research and development activities of both parties during the Extended Research Collaboration Term.

Moreover, the parties agreed that the field of use covered by the License Agreement would be expanded, with the new definition being

F-NOTE 9: LEASES16

"the treatment, diagnosis or prevention of any and all conditions or diseases including, without limitation, systemic lupus erythematous and multiple sclerosis for human and/or veterinary use." (Under the original License Agreement, the Company's field of use had been restricted to autoimmune disorders.)

On March 29, 2016, theThe Company and Dr. Richard Marshakhas adopted ASU No. 2016-02, Leases (Topic 842), as of January 2019 when they entered into an Amendedtheir first operating lease and Restated Employment Agreement (the "Marshak Employment Agreement"), which amends and restates thewill account for their leases in terms of the Employment Agreement dated asright of March 22, 2016 byuse assets and offsetting lease liability obligations under this pronouncement and the first finance lease was created when the equipment was financed. The Company records their leases at present value, in accordance with the standard, using discount rates ranging between 2.5% and 6.8%. The right of use asset is composed of the sum of all lease payments, at present value, and is amortized straight line over the life of the expected lease term. For the expected term of the lease the Company used the initial terms ranging between 42 and Dr. Marshak, and pursuant to which Dr. Marshak (i) continued his position as the Chief Executive Officer of the Company and (ii) is entitled to be appointed to the Company's Board of Directors promptly thereafter. The initial term of Dr. Marshak's employment expires on March 22, 2019 and thereafter, the Marshak Employment Agreement may be renewed for additional one year terms upon the mutual agreement of the parties, subject in each case to the termination provisions described therein. The Company and Dr. Marshak are negotiating an extension of the employment agreement.

The Company will pay Dr. Marshak an aggregate base annual salary of $300,000, payable on a bi-weekly or semi-monthly basis. In addition, Dr. Marshak shall (i) be entitled to three (3) weeks of paid time off, (ii) have the right to participate in the Company's general employee benefit plan(s), (iii) have the right to participate in an executive bonus plan and receive other bonus payments as determined by the Company's Board of Directors and (iv) be entitled to be reimbursed for reasonable business expenses. Subject to the approval of the Board of Directors and the approval of certain other actions, Dr. Marshak received an option to purchase 4,200,000 shares of Common Stock which shall vest and be governed by the terms of the Plan and an award agreement to be entered into by and between the Company and Dr. Marshak.60 months. Upon the occurrence of a change of control transaction or the termination of Dr. Marshak's employmentelection by the Company without cause or by Dr. Marshakto extend the lease for good reason, all unvested options or shares of restricted Common Stock shall immediately vestadditional years, that election will be treated as a lease modification and eitherthe lease will be exercisable or no longer subject to any restrictions,reviewed for remeasurement. This lease will be treated as applicable. In addition to other standard and customary payments receivable in connection withan operating lease under the termination of Dr. Marshak's employment, he shall be entitled to receive a severance payment equal to his base salary per month for the lesser of the number of months remaining in the current term of his employment or 18 months.

The Marshak Employment Agreement also prohibits Dr. Marshak from competing with the Company during the term of the Marshak Employment Agreement (with certain limited exceptions) and from soliciting or making known employees of the Company for a period of two (2) years following termination of the Marshak Employment Agreement. 

On May 2, 2016, the Company entered into an employment agreement with its current Chief Financial Officer, James Stapleton (the "Stapleton Employment Agreement"). The Stapleton Employment Agreement requires annual base salary payments of $175,000 per year. Further, Mr. Stapleton is entitled to a one-time bonus of $40,000 payable upon the Company's achievement of certain financial targets.  In addition, the Company granted Mr. Stapleton an option to purchase up to 750,000 shares of Common Stock. new standard.

The Company has engaged Young America Capital, LLC asalso elected to utilize the Placement Agenttransition related practical expedients permitted by the new standard. The modified retrospective approach provides a method for recording existing leases at adoption and in comparative periods that approximates the results of a current private placement transaction and is entitled to a fee of between 2.0% and 8.0%modified retrospective approach. Adoption of the offering pricenew standard did not result in an adjustment to retained earnings for the Company.

The leased property at the Preston Rd Office was assigned by Razor to Capstone for and in consideration of $10.00 on January 1, 2019. The Company’s co-tenancy agreement with Razor was subsequently terminated on January 1, 2019.

All of the common shares soldright of use assets and lease liabilities related to investors they source.  In addition, the Placement Agent will be issued a warrant granting the Placement Agent the right to purchase shares of common stock equal to 8.0% of the number of shares of common stock issuedBanner Midstream and were sold/assumed by the CompanyEcoark in the aforementioned offering, which is still ongoingmerger with Ecoark on March 27, 2020. No right of use assets or lease liabilities exist as of the date of this report. As of March 31, 2019, no transactions have taken place2020.

Prior to December 1, 2018, Mount Tam rented office space at 7250 Redwood Blvd, Suite 300, Novato, CA 94945. The rental agreement expired November 30, 2018.

Effective December 1, 2018, Mount Tam rents office space at 106 Main Street, Suite 4E, Burlington, VT 05401. The rental agreement expires November 30, 2019.  The Company believes that its facilities are sufficient to meet its current needs and the Company will look for suitable additional space as and when needed.

Note 8 – Sale of Subsidiary

On October 18, 2018, the Company and Mount Tam Biotechnologies, Inc., a Delaware corporation, its wholly-owned subsidiary (“Mount Tam Delaware”), entered into a stock purchase agreement (the “SPA”) with ARJ Consulting, LLC, a New York limited liability company (the “Buyer”), pursuant to which the Company sold 100% of the capital stock in and of Mount Tam Delaware to the Buyer (the “Sale Transaction”). Prior to the Sale Transaction, the Company caused Mount Tam Delaware to transfer certain assets, including the Buck Institute License Agreement, that Mount Tam Delaware was holding to another wholly-owned subsidiary of the Company, Mount Tam Therapeutics, Inc., a newly formed Delaware corporation. At the time of the Sale Transaction Mount Tam Delaware possessed certain Net Operating Losses and tax credits. Pursuant to the terms of the SPA, the Buyer purchased Mount Tam for a purchase price of $410,000, the Company recorded $332,801 as other income after netting of expenses for the year ended December 31, 2018.

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Note 9 – Related Party TransactionsNOTE 10: RELATED PARTY TRANSACTIONS

Pursuant to our agreements withUntil the Buck InstituteBanner Midstream sale, the Company and with our Chairmanits subsidiaries Pinnacle Frac Transport, Pinnacle Vac Service, and Capstone were tenants at 5899 Preston Road #505, Frisco, TX 75034 (“Preston Rd Office”) since inception. In addition, the principal operations of the Board Brian Kennedy (ProfessorCompany and Principal InvestigatorCapstone were managed out of the aforementioned Preston Road location. The Company previously had entered into a co-tenancy agreement with Razor Medical Science LLC (“Razor”) where the Company would pay $1,600 per month which is equal to one half of the total lease payment owed by Razor to the lessor; the agreement was for 36 months beginning in April 2018, the original usage date by the Company. Razor discontinued operations on January 1, 2019 and an assignment was executed to transfer the lease into the name of Capstone for full-time usage by the Company at a rental rate of $3,300 per month.

NOTE 11: FAIR VALUE MEASUREMENTS

The Company measures and discloses the Buck Institute),estimated fair value of financial assets and liabilities using the Buck Institutefair value hierarchy prescribed by U.S. generally accepted accounting principles. The fair value hierarchy has three levels, which are based on reliable available inputs of observable data. The hierarchy requires the use of observable market data when available. The three-level hierarchy is deemed adefined as follows:

Level 1 – quoted prices for identical instruments in active markets;

Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which significant inputs and significant value drivers are observable in active markets; and

Level 3 – fair value measurements derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Financial instruments consist principally of cash, investments, accounts receivable and other receivables, accounts payable and accrued liabilities, notes payable, and amounts due to related party. Please see Note 7, Commitments and Contingencies, for discussionparties. The fair value of our liabilities and obligations with the Buck Institute. Duringcash is determined based on Level 1 inputs. There were no transfers into or out of “Level 3” during the three months ended March 31, 20192020 and 2018, the Company expensed $0and $1,341, respectively, for the services provided by Buck Institute, respectively. As2019. The recorded values of March 31, 2018 the Company owed to the Buck Institute 0 shares, as a resultall other financial instruments approximate their current fair values because of the Share Exchange transactiontheir nature and subsequent issuances of common stock. As of March 31, 2019 the Company owed to the Buck Institute 4,000 shares, as a result of the $40,000 Note with CC3I.  For the three months ended March 31, 2018, the Company committed to issue 0 shares. For the three months ended March 31, 2019, the Company committed to issue 4,000 shares, which were treated as issued for service and valued at $76.   For both March 31, 2019 and December 31, 2018, our accounts payable balance to Buck Institute was $609.respective relatively short maturity dates or durations.

InFair value estimates are made at a specific point in time, based on relevant market information and information about the year 2016, Buck Institute billedfinancial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the Company for office space and administration services (Note 7).estimates.

See Notes 4The following table presents assets and 10 for descriptions of the loans the Company received from 0851229 BC Ltdliabilities that are measured and Fromar, each of which may be deemedrecognized at fair value on a related partyrecurring basis as a result of owning more than 10% of the Company's common stock.  Also see Notes 4 and 10 for descriptions of the loans from Climate Change Investigation, Innovation and Investment Company, LLC, an entity controlled by James Farrell, a director of the Company.of:

Note 10 – Subsequent EventsNOTE 12: SUBSEQUENT EVENTS

LineOn July 28, 2020, the Company issued 83,807 shares of Credit Agreementcommon stock as part of a separation agreement with Fromar Investments, LPan employee.

On May 10, 2019 the Company and Fromar Investments, LP (“Fromar”July 31, 2020, Mr. Jay Puchir notified our Board of Directors (the “Board”) entered into an arrangement whereby Fromar will lend the Company up to a maximum of $1,750,000 pursuant to the terms of a Line of Credit Agreement (the “Fromar LOC”) and a promissory note (the “Fromar Note”). The arrangement evidenced by the Fromar LOC and the Fromar Note is referred to hereinthat he was resigning as the “Fromar Loan”. By agreementChairman of the parties, the Fromar Loan is effective as of May 1, 2019. The Fromar Loan is a non-revolving line of creditBoard and amounts borrowed and then repaid may not be re-borrowed. The principal amounts advanced to the Company under the Fromar Loan bear interest at a fixed annual rate of eight percent (8.00%). The Fromar Loan has a maturity date of August 30, 2019, at which time all amounts advanced under the Fromar Loan, together with all accrued but unpaid interest thereon, are due and payable.

The Fromar Loan is securedby that certain Security Agreement dated effective May 1, 2019 between the Company and Fromar (the “Fromar Security Agreement”) pursuant to which the Company and Fromar agreed that all amounts, liabilities and obligations owed by the Company to Fromar are secured by a security interest in all assets of the Company on the terms and conditions set forth in the Fromar Security Agreement (the “Fromar Security Interest”).  The Fromar Security Interest is subject to certain permitted security interests, specifically including the CC3I Security Interest (as defined below).

By way of background, on or about June 14, 2016, the Company and 0851229 BC Ltd. (“BC”), an affiliate of Fromar, entered into that certain Amended and Restated Secured Convertible Promissory Note, which has been amended or otherwise modified on several different occasions (the “BC Note”) and a related security agreement securing the Company’s obligations under the BC Note, as previously disclosed on the Company’s Current Report on Form 8-K filed with the Commission on June 15, 2016. Further, on or about April 6, 2018, the Company and Fromar entered into that certain Convertible Promissory Note which has been amended or modified on several different occasions (the “2018 Fromar Note”) and a related security agreement securing the Company’s obligations under the 2018 Fromar Note, as previously disclosed on the Company’s Current Report on Form 8-K filed with the Commission on April 12, 2018. Further, on or about March 4, 2019, the Company and Fromar entered into that certain Promissory Note in the principal amount of $80,000 (the “2019 Fromar Note”). The BC Note, the 2018 Fromar Note and the 2019 Fromar Note shall be referred to collectively herein as the “Prior Fromar Notes”. The Company is required to use the amounts advanced under the Fromar Loan to pay off the Prior Fromar Notes, as well as for general business purposes.  By virtue of the payment in full of the Prior Fromar Notes with funds advanced under the Fromar Loan, the Prior Fromar Notes and their related security agreements have been terminated effective as of May 1, 2019 with no early termination penalties incurred by the Company as a result.

Line of Credit Agreement with Climate Change Investigation, Innovation and Investment Company, LLC

Also on May 10, 2019, the Company and Climate Change Investigation, Innovation and Investment Company, LLC, a California limited liability company (“CC3I”) entered into an arrangement whereby CC3I will lend the Company up to a maximum of $350,000 pursuant to the terms of a Line of Credit Agreement (the “CC3I LOC”) and a promissory note (the “CC3I Note”). The arrangement evidenced by the CC3I LOC and the CC3I Note is referred to herein as the “CC3I Loan”. By agreement of the parties, the CC3I Loan is effective as of May 1, 2019. The CC3I Loan is a non-revolving line of credit and amounts borrowed and then repaid may not be re-borrowed. The principal amounts advanced to the Company under the CC3I Loan bear interest at a fixed annual rate of eight percent (8.00%). The CC3I Loan has a maturity date of August 30, 2019, at which time all amounts advanced under the CC3I Loan, together with all accrued but unpaid interest thereon, are due and payable.The Manager of CC3I, James Farrell, is a director and shareholderChief Executive Officer of the Company. Pursuant toOn July 31, 2020, the requirementsBoard appointed Mr. Richard Horgan, 36, as the Chief Executive Officer, and as our sole director and Chairman of the Nevada Revised Statutes, the disinterested membersBoard, effective August 1, 2020. Mr. Puchir was appointed Chief Accounting Officer of the Company’s boardEcoark as of directors approved the transaction with CC3I.March 27, 2020.

F-18

The CC3I Loan is securedby that certain Security Agreement dated effective May 1, 2019 betweenCommencing in October 2020, the Company and CC3I (the “CC3I Security Agreement”) pursuant to whichhas begun selling shares of its investment in Ecoark. The sales through the Company and CC3I agreed that all amounts, liabilities and obligations owed by the Company to CC3I are secured by a security interest in all assets of the Company on the terms and conditions set forth in the CC3I Security Agreement (the “CC3I Security Interest”).  The CC3I Security Interest is subject to certain permitted security interests, specifically including the Fromar Security Interest.

By way of background, on or about September 20, 2018, the Company and CC3I entered into that certain Convertible Promissory Note (the “2018 CC3I Note”) and a related security agreement securing the Company’s obligations under the 2018 CC3I Note, as previously disclosed on the Company’s Current Report on Form 8-K filed with the Commission on September 26, 2018. Further, on or about March 4, 2019, the Company and CC3I entered into that certain Convertible Promissory Note (the “2019 CC3I Note”) and a related security agreement securing the Company’s obligations under the 2019 CC3I Note, as previously disclosed on the Company’s Current Report on Form 8-K filed with the Commission on March 7, 2019. The 2018 CC3I Note and the 2019 CC3I Note shall be referred to collectively herein as the “Prior CC3I Notes”. The Company is required to use the amounts advanced under the CC3I Loan to pay off the Prior CC3I Notes, as well as for general business purposes.  By virtue of the payment in full of the Prior CC3I Notes with funds advanced under the CC3I Loan, the Prior CC3I Notes and their related security agreements have been terminated effective May 1, 2019 with no early termination penalties incurred by the Company as a result.

Intercreditor Agreement

In addition to the foregoing, on May 10, 2019 the Company entered into an Intercreditor Agreement with Fromar and CC3I (collectively, the “Creditors”), with an effective date of May 1, 2019 (the “2019 Intercreditor Agreement”), whereby the Fromar Security Interest and the CC3I Security Interest shall each rankpari passuwith each other. Further, the Creditors each agreed to jointly exercise their respective rights under their respective security interests, and to jointly share in the amount realized from exercising such rights under their respective security interests in proportion to the amount of their respective debt with respect to which a default has occurred to the total debt of each of the Creditors with respect to which a default has occurred.this report have not been significant.

By way of background, the Company previously entered into an intercreditor agreement with Fromar, BC and CC3I with an effective date of September 18, 2018, as previously disclosed on the Company’s Current Report on Form 8-K filed with the Commission on September 26, 2018 (the “2018 Intercreditor Agreement”) which was subsequently amended to account for the addition of the 2019 CC3I Note. Effective May 1, 2019, the 2018 Intercreditor Agreement was terminated by agreement of the parties theretowith no early termination penalties incurred by the Company as a result.

F-19

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

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 ability to sell the shares of Ecoark Holdings, Inc. (“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 efforts 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 following discussionresults anticipated by any or all of these forward-looking statements might not occur. Important factors, uncertainties and analysisrisks that may cause actual results to differ materially from these forward-looking statements include the ongoing impact of the resultscoronavirus pandemic and its negative effect on the U.S. and global economies and our lack of operationsan operating history and financial condition of Mount Tam Biotechnologies, Inc.revenue. Further information on the risk factors affecting our business is contained in our annual report on Form 10-K for the three monthsfiscal year ended December 31, 2019. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise. 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, 2019, should be read2020, we began seeking new business opportunities in conjunctionthe United States after the March 27, 2020 merger with Ecoark. Among other things, we recently commenced selling our shares of common stock in Ecoark, distributing all or a portion of the proceeds to our shareholders or using the proceeds to attract an acquisition target.

We have no revenue, have incurred losses since inception and our only asset is 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 financial statementstransaction, the Company has terminated its operations.

Our principal business objective for the next 12 months and beyond will 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 to businesses located within the United States.

Plan of Mount Tam Biotechnologies, Inc.,Operation

The Company has no operations or revenue from continuing operations as of the date of this Report. We have terminated our operations in the oil and gas industry, and are currently in the process of developing a business plan, including with respect to the disposition of our remaining asset, and the notesuse of the proceeds therefrom to those financial statementsdistribute to shareholders and locate a business opportunity in the U.S.

Management intends to explore and identify business opportunities within the U.S., including a potential acquisition of an operating entity through a reverse merger, asset purchase or similar transaction. Our Chief Executive Officer has experience in consulting both private and public companies in operational processes, although no assurances can be given that are included elsewherehe can identify and implement a viable business strategy or that any such strategy will result in this Form 10-Q. This discussion includes forward-looking statements based upon current expectations that involveprofits. Our ability to effectively identify, develop and implement a viable plan for our business may be hindered by risks and uncertainties such as Mount Tam Biotechnologies plans, objectives, expectationswhich are beyond our control, including without limitation, the continued negative effects of the coronavirus pandemic on the U.S. and intentions. Actual resultsglobal economies. For more information about the risk of coronavirus on our business, see “Risk Factors” contained in our annual report on Form 10-K for the fiscal year ended December 31, 2019.

We do not currently engage in any business activities that provide revenue or cash flow. During the next 12 month period we anticipate incurring costs in investigating, evaluating and negotiating potential business combinations, filing SEC reports, and consummating an acquisition of an operating business. We anticipate using a portion of the timingproceeds from the sale of events could differ materially from those anticipatedEcoark common stock to fund these costs and compensate our Chief Executive Officer.

Given our limited capital resources, we may consider a business combination with an entity which has recently commenced operations, is a developing company or is otherwise in these forward-looking statements asneed of additional funds for the development of new products or services or expansion into new markets, or is an established business experiencing financial or operating difficulties and is in need of additional capital. Alternatively, a resultbusiness 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 number of factors, including those set forth under the Risk Factors and Business sectionspotential business combination. Any target business that is selected may be financially unstable or in the form 10-K filed on April 15, 2019. Wordsearly stages of development. In such as “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,” “will,” “should,” “could,” and similar expressions are usedevent, we expect to identify forward-looking statements.

We believe that our assumptions are based upon reasonable data derived from and known about our business and operations andbe 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 Company. No assurances are maderisks inherent in a particular target business, there can be no assurance that actual resultswe will properly ascertain or assess all significant risks.

Our management anticipates that we will likely only be able to effect one business combination due to our limited capital. This lack of operations ordiversification will likely pose a substantial risk in investing in the results of ourCompany for the indefinite future, activitiesbecause it will not differ materiallypermit us to offset potential losses from its assumptions. Factorsone venture or operating territory against gains from another. The risks we face will likely be heightened to the extent we acquire a business operating in a single industry or geographical region.

We anticipate that could cause differences include, but are not limited to, expected market demand for the Company's products and services and competition. 

The Share Exchange was treated asselection of a reverse acquisition for financial accounting and reporting purposes.  As such, Mount Tam is treated as the acquirer for accounting and financial reporting purposes while the Company was treated as the acquired entity for accounting and financial reporting purposes.  Further, as a result, the historical financial statements thatbusiness combination will be reflecteda complex and risk-prone process. Because of general economic conditions, including unfavorable conditions caused by the coronavirus pandemic, rapid technological advances being made in some industries and shortages of available capital, management believes that there are a number of firms seeking business opportunities at this time at discounted rates with which we will compete. We expect that any potentially available business combinations may appear in a variety of different industries or regions and at various stages of development, all of which will likely render the Company’s future financial statements filed with the SECtask of comparative investigation and analysis of such business opportunities extremely difficult and complicated. There can be no assurance that we will be those of Mount Tam,successful in addressing such risks, and the Company’s assets, liabilitiesfailure to do so could have a material adverse effect on our business prospects, financial condition and results of operations will be consolidated with the assets, liabilities and results of operations of Mount. Tam.  Accordingly, for clarity and continuity, we are presenting the historical financial statements for Mount Tam for the periods presented.

Overview

We are an early stage company primarily engaged in the development of bio-pharmaceuticals to treat a range of disease areas with high unmet need. Our lead program is focused on SLE, and we intend to optimize and bring to market a portfolio of leading products focused on improving the health and well-being of millions of people who have been affected by a range of serious disease conditions. To that end, we have formed a strategic partnership with the Buck Institute, an independent research facility focused on understanding the connection between aging and chronic disease. As part of the partnership, we have signed the License Agreement that includes many of the Buck Institute's intangible research and development assets. The initial focus of our research and development efforts will be a preclinical stage compound for the treatment of SLE, a serious form of lupus.

Plan of Operations

As shown in the accompanying condensed consolidated financial statements, the Company incurred net losses of $406,841 for the three months ended March 31, 2019 and has an accumulated deficit of $9,384,436 as of March 31, 2019.

operations.

Liquidity and Capital Resources

OurHistorically, our principal sources of cash have been proceeds from private placements of common stock and incurrence of debt. As of March 31, 2019,2020, the Company had working capitalan accumulated deficit of $2,329,379 with$2,662,921. We expect our cash balance of $34,024. Our cash decreased by $23,617 during the three months ended March 31, 2019. 

During the second quarter of 2016 the Company entered into negotiations with the Buck Institute to resolve certain outstanding financial concerns, and to broaden the Research Collaboration and License Agreement beyond the area of autoimmune disease.  On July 18, 2016, Mount Tam Biotechnologies, Inc. (the "Company"), entered into an amendment (the "Amendment") to the Research Collaboration and License Agreement (the "License Agreement") between the Company and The Buck Institute for Research on Aging ("The Buck Institute").

Pursuant to this Amendment, the Research Collaboration Term of the License Agreement is tolled until the Company can achieve a Qualified Financing (definedtemporarily increase as any financing occurring after the date of the Amendment which results in gross proceeds to the Company of at least $2,000,000). Once a Qualified Financing has been achieved, the research collaboration efforts will resume, and will continue for a period of twenty-one months (the "Extended Research Collaboration Term"). The Company and The Buck Institute agreed to work together to determine a new research plan, specifying the research and development activities of both parties during the Extended Research Collaboration Term.

Additionally, pursuant to the Amendment, the parties agreed to settle past research funding amounts owed by the Company to The Buck Institute. The Company agreed to pay $40,000 within ten days of the execution of the Amendment, and The Buck Institute agreed that once this amount is paid, the Company will be deemed to be in full compliance with the terms of the License Agreement, including its payment obligations. On July 19, 2016, the Company made the $40,000 payment to The Buck Institute.  In addition to the $40,000 payment, on June 13, 2016, the Company paid to The Buck Institute $11,706 in connection with costs incurred to further the Company's intellectual property position under the License Agreement. Pursuant to the above amendment The Buck Institute waived $274,247 of payable by the Company. In addition, the Company issued to Buck Institute 1,009,016we sell our shares of Ecoark common stock, which was the number of shares required to equal to 5% of the Company's total outstanding shares. Pursuant to the original License Agreement, and the Amendment, The Buck Institute's equity interest in the Company will not be reduced below 5% of the total aggregate shares of common stock until such time that the Company has raised and received a total of $5,000,000 of investment in equity, debt, grants, contributions, or donations. As of March 31, 2019, the Company has issued 2,644,272 shares of the Company's common stock to The Buck Institute and committed to issue 4,000 shares of the Company's common stock as additional shares.

Moreover, the parties agreed that the field of use covered by the License Agreement would be expanded, with the new definition being "the treatment, diagnosis or prevention of any and all conditions or diseases including, without limitation, systemic lupus erythematous and multiple sclerosis for human and/or veterinary use." (Under the original License Agreement, the Company's field of use had been restricted to autoimmune disorders). The foregoing is qualified in its entirety to the terms of the Amendment, a copy of which was filed as Exhibit 99.1 to our Form 8-K filed on July 21, 2016.stock.

NegativeNet Cash used by Operating Cash FlowActivities:

We reported negativeno net cash flow from operations for the three months ended March 31, 20192020 and 2018.2019. It is anticipated that we will continue to report negative operating cash flow in future periods, as we have ceased operations and are considering the Company’s next steps. However, given that there are and will continue to be lower expenses until we determine and commence our future operations, the significance of negative cash flows will likely until one or more of our products are placed into production and released to our customers.

Our cash balance of $34,024 may not be sufficient to fund our operations for at least the next 12 months. Additionally, if we are unable to generate sufficient revenues to pay our expenses, we will need to raise additional funds to continue our operations. We have historically financed our operations through private equity and debt financings. Recent economic turmoil and lack of liquidity in the debt capital markets together with high volatility in prices in the equity capital markets have severely and adversely affected capital raising opportunities. We do not have any commitments for financing at this time, and financing may not be available to us on favorable terms, if at all. If we are unable to obtain debt or equity financing in amounts sufficient to fund our operations, if necessary, we will be forced to suspend or curtail our operations. Indiminished during that event, current stockholders would likely experience a loss of most or all of their investment. Additional funding that we do obtain may be dilutive to the interests of existing stockholders.

time.

Results of OperationsCash Flows from Financing Activities:

For the three months ended March 31, 2019 compared with the three months ended March 31, 2018

Revenue

We had no revenues for the three months ended March 31, 2019 and 2018. We are in the research and development stage.

Operating Expenses

We incurred operating expenses of $378,565 and $580,625 during the three months ended March 31, 2019 and 2018, respectively. Our operating expenses included research and development expenses in the amount of $46,912 and $162,008, and general and administrative expenses in the amount of $331,653 and $418,617 for three months ended March 31, 2019 and 2018, respectively.  The decrease in expenses was due lower business activity (consulting, legal, research and development, etc.)

Other Expense

Other expense totaled $28,276 and $37,847 during the three months ended March 31, 2019, and 2018, respectively. The decrease is due to a decrease in the amortization of debt discount offset by increase in the interest expense due to increase in the loans. Other expenses included interest expense in the amount of $17,632 and $6,464, and amortization of debt discount in the amount of $10,818 and $31,383 for three months ended March 31, 2019 and 2018, respectively.

Net Loss

As a result of the foregoing, during the three months ended March 31, 2019 and 2018, we recorded a net loss of $406,841 and $618,472, respectively.

Liquidity and Capital Resources

We had cash and equivalents of $34,024 at March 31, 2019.

Operating Activities

During the three months ended March 31, 2019, we used $161,110 of cash in operating activities, compared to $258,515 for the three months ended March 31, 2018. Non-cash adjustments included $195,692 and $242,106 related to options and stock based compensation, $5,631 and $5,293 in amortization of prepaid expenses and net change in accounts payable and accrued liabilities of $53,833 and $84,774 during the three months ended March 31, 2019 and 2018, respectively.

For the three months ended March 31, 2020 and 2019, we did not report any financing activities from continuing operations We expect to see a decline in fiscal year 2021 until we commence operations, however we may require additional capital to consummate a business combination.

Once we have developed and 2018,begun to implement our business plan, management intends to fund our working capital requirements through a combination of proceeds from the Company amortizedsale of Ecoark common stock, if not distributed as a dividend, and future issuances of debt discount of $10,818 and $31,383, respectively. Stock-based compensation expense for the three months ended March 31, 2019 was $76,or equity securities as 4,000 sharesneeded. Our working capital requirements are requiredexpected to be issued to The Buck. No Stock-based compensation expense were incurred, as no shares were required to be issued to Buck forstable in the three months ended March 31, 2018.short-term and increase in line with completion of an acquisition.

Financing Activities

Financing activities provided $137,493 to us duringBased upon our current operations, if we are successful in selling the three months ended March 31, 2019 compared to $283,244 for the three months ended March 31, 2018. We received $139,306 in net proceeds from loans for the three months ended March 31, 2019 compared to $285,000 received during the three months ended March 31, 2018.

Sourcesshares of Liquidity and Capital

During the three months ended March 31, 2019,Ecoark common stock, we received net proceeds from loans in the amount of $139,306.  During the three months ended March 31, 2018, we received net proceeds loans in the amount of $285,000

We reported negative cash flow from operations for the period ended March 31, 2019 and 2018. It is anticipated thatbelieve we will continue to report negative operating cash flow in future periods, likely until one or more of our products are placed into production and released to our customers.

Our cash balance of $34,024 may not behave sufficient working capital to fund our operations for at leastover more than the next 12 months. Additionally, ifIf we are unableable to generate sufficient revenuesclose a reverse merger, asset purchase or similar transaction to pay our expenses,acquire an operating business, it is likely we will need to raise additional funds to continue our operations. We have historically financed our operations through private equity and debt financings. Recent economic turmoil and lackcapital, including potentially as a condition of liquidity inclosing the debt capital markets together with volatility inacquisition. Because of the equity capital markets have severely and adversely affected capital raising opportunities. We do not have any commitments for financinginherent uncertainties of the Company at this time,stage, we cannot be certain as to how much capital we need, if and financing may nothow capital will be available to us on favorable terms, if at all. If we are unable to obtain debtraised or equity financing in amounts sufficient to fund our operations, if necessary,the type or quantity of securities we will be forcedrequired to suspendissue to do so. In connection with a business combination, we may issue a significant number our shares of our common stock or curtailsecurities convertible or exercisable into our operations. In that event, current stockholders would likely experience a loss of most or all of their investment. Additional funding that we do obtain maycommon stock to the target’s shareholders which will be dilutive to our shareholders.

We anticipate that we will incur operating losses during the interests of existing stockholders.

To the extent we raise additional capital by issuing equity securities or obtaining borrowings convertible into equity, ownership dilution to existing stockholders will result and future investors may be granted rights superior to those of existing stockholders. The incurrence of indebtedness or debt financing would result in increased fixed obligations and could also result in covenants that would restrict our operations.next 12 months. Our ability to obtain additional capitaldevelop 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.

COVID-19 Update

Since the sale of Banner Midstream, the COVID-19 pandemic has not had a material impact on the Company, particularly due to our current lack of operations. The pandemic may, dependhowever, have an impact on prevailing economic conditions and financial, business and other factors beyond our control. Economic crisis and disruptions in the U.S. and global financial markets may adversely impact the availability and cost of credit, as well as our ability to raise moneyevaluate and acquire an operating entity through a reverse merger or otherwise. See “Risk Factors” contained in our annual report on Form10-K for the capital markets. Instability in these market conditions may limit our ability to access the capital necessary to fund and grow our business. The Company cannot provide any assurances that it will be able to raise the additional capital needed to fund its operations, or if the Company is able to raise such additional capital, that any such financing will be on terms which are beneficial to the existing shareholders.fiscal year ended December 31, 2019 for more information.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations is based upon the Company’s financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires it to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. On an on-going basis, the Company evaluates its critical accounting policies and estimates. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The Company’s critical accounting policies and estimates are discussed on the footnote Note 2.

Off-BalanceOff Balance Sheet Arrangements

WeAs 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, 2019 financial statements contained an explanatory paragraph expressing substantial doubt about our ability to continue as defineda 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 Item 303(a)(4)the ordinary course of Regulation S-K.business.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, the Company is not required to provide this disclosure.Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures.

We are required to maintain “disclosure controls and procedures” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934. Based on their evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, Mr. Richard Horgan, who is presently serving as our Chief Executive Officer and our Chief Financial Officer havehas concluded that our disclosure controls and procedures were not effective to ensure that the information relating to our company, required to be disclosed in our Securities and Exchange CommissionSEC reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer, to allow timely decisions regarding required disclosure as a result of material weaknesses in our internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting.

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

Because of theits inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management assessed the effectiveness of our internal control over financial reporting as of March 31, 2019. In making this assessment, management usedbased on the criteriaparameters set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework. Management’s assessment included an evaluation of the design of our internal control over financial reportingabove and testing of the operational effectiveness of these controls. Based on this assessment, our management has concluded that as of March 31, 2019,2020, our internal control over financial reporting was not effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles as a result of material weaknesses.

We have identified the following factors that have led management to determine that material weaknesses exist in our internal control over financial reporting as of March 31, 2019:weaknesses:

These factors represent materialWe plan to rectify these weaknesses inby implementing an independent board of directors, establishing written policies and procedures for our internal controls overcontrol of financial reporting. Although we believe the possibility of errors in our financial statements is remote, untilreporting, and hiring additional accounting personnel at such time as we expand our staff with additional qualified personnel, we expect to continue to report material weaknesses in our internal control over financial reporting.complete a reverse merger.

Changes in Internal Control over Financial Reporting.

There have been no changes in our internal control over financial reporting during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II: OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

ThereFrom 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 not beena 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 updatesinterest adverse to our legal proceedings, as disclosed in our Annual Report on Form 10-K, as filed with the SEC on April 15, 2019.interest.

ITEM 1A – RISK FACTORS

As of the date of this filing, there have been no material changes to the Risk Factors included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, filed with the SEC on April 15, 2019 (the “2016 Form 10-K”).  The Risk Factors set forth in the 2018 Form 10-K should be read carefully in connection with evaluating our business and in connection with the forward-looking statements contained in this Quarterly Report on Form 10-Q.  Any of the risks described in the 2018 Form 10-K could materially adversely affect our business, financial condition or future results and the actual outcome of matters as to which forward-looking statements are made.  These are not the only risks we face.  Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.Not applicable.

Item 2. Unregistered sales of equity securities and use of proceeds

As previously disclosed in the Company’s Form 8-K filed on April 12, 2018, upon full funding of the amount underlying a convertible promissory note, the Company issued one million (1,000,000) shares of its common stock to Fromar Investments, LP. The Company did not receive proceeds from such issuance other than pursuant to the convertible note, a copy of which is included as Exhibit 10.1 to the Company’s Form 8-K filed on April 12, 2018.  Also as previously disclosed in the Company’s filings,due to the fact that the Company did not achieve certain milestones in a timely manner, on or about July 19, 2018, the Company issued an additional one million (1,000,000) shares of common stock to Fromar Investments, LP.  The Company did not receive proceeds from such issuance other than pursuant to the convertible note, a copy of which is included as Exhibit 10.1 to the Company’s Form 8-K filed on April 12, 2018.  Such securities were issued to the lender in reliance upon an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).None.

Also, as previously disclosed in the Company’s Form 8-K filed on September 26, 2018, upon full funding of the amount underlying a convertible promissory note, the Company issued 200,000 shares of its common stock to Climate Change Investigation, Innovation and Investment Company, LLC. The Company did not receive proceeds from such issuance other than pursuant to the convertible note, a copy of which is included as Exhibit 10.1 to the Company’s Form 8-K filed on September 26, 2018.  Such securities were issued to the lender in reliance upon an exemption from registration under Section 4(a)(2) of the Securities Act.

As previously disclosed in the Company’s Form 8-K filed on March 7, 2019, upon full funding of the amount underlying a convertible promissory note, the Company issued eighty thousand (80,000) shares of its common stock to Climate Change Investigation, Innovation and Investment Company, LLC. The Company did not receive proceeds from such issuance other than pursuant to the convertible note, a copy of which is included as Exhibit 10.1 to the Company’s Form 8-K filed on March 7, 2019. Such securities were issued to the lender in reliance upon an exemption from registration under Section 4(a)(2) of the Securities Act.

Our reliance upon Section 4(a)(2) of the Securities Act of 1933 was based in part upon the following factors: (a) the issuance of the securities was in connection with isolated private transactions which did not involve any public offering; (b) there were a limited number of offerees; (c) there were no subsequent or contemporaneous public offerings of the securities by us; (d) the securities were not broken down into smaller denominations; and (e) the negotiations for the sale of the securities took place directly between the offeree and the Company.

Item 3. Defaults upon senior securities

None.

Item 4. Mine safety disclosures

Not applicable.

ITEM 5 - OTHER INFORMATION

None.

ITEM 6 -– EXHIBITS