INDEX

STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Cautionary Note Regarding Forward Looking Statements

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

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

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

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

Forward-looking statements speak only as of the date they are made. You should not put undue reliance on any forward-looking statements. We assume no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Words such as, but not limited to, “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” “targets,” “likely,” “aim,” “will,” “would,” “could,” and similar expressions or phrases identify forward-looking statements. We have based thesequalify all of the information presented in this Report particularly our forward-looking statements, largely onby these cautionary statements.

Summary Risk Factors

Our business is subject to numerous risks and uncertainties that you should consider before investing in our current expectations and future events and financial trends thatcommon stock. Set forth below is a summary of the principal risks we believe may affect our financial condition, results of operation, business strategy and financial needs. Forward-looking statements include, but are not limited to, statements about risks associated with:face:

potential need for additional capital;

any loss of these customers or reduction in work orders from them would materially adversely affect us; and

outstanding convertible notes.

Most of these factors are difficult to predict accurately and are generally beyond our control. You should consider the areas of risk described in connection with any forward-looking statements that may be made herein. Readers are cautioned not to place undue reliance on these forward-looking statements and readers should carefully review this report in its entirety, Part I, Item 1A. - Risk Factors in our Annual Report on Form 10-K forincluding the fiscal year ended December 31, 2021 as filed with the Securities and Exchange Commission (the “SEC”) on April 15, 2022 (the “2021 10-K”) and our other filings with the SEC.“Risk Factors” contained herein. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.

OTHER PERTINENT INFORMATION

Unless specifically set forth to the contrary, when used in this report the terms “EVTN,“WOEN,” the “Company,” “we,” “our,” “us,” and similar terms refers to Wolf Energy Services Inc., formerly known as Enviro Technologies U.S., Inc., a Florida corporation, and our subsidiary, Florida Precision Aerospace, Inc., a Florida corporation which we refer to as “FPA.”subsidiaries. In addition, “second“first quarter of 2022”fiscal year 2024” refers to the three months ended June 30, 2022, “second2023 and “first quarter of 2021”fiscal year 2023” refers to the three months ended June 30, 2021, “2021” refers to the year ended December 31, 2021.2022. We maintain a corporate website at www.evtn.com.www.wolf-energy.com. Unless specifically set forth to the contrary, the information which appears on our website at www.evtn.comwww.wolf-energy.com is not part of this report.

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

ENVIRO TECHNOLOGIESWolf Energy is a holding company which operates primarily in the transportation and logistics services business serving hydraulic fracking companies and assisting in their operations through Banner. On February 1, 2023, we amended our articles of incorporation to change our corporate name from “Enviro Technologies U.S., INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETSInc.” to “Wolf Energy Services Inc.” to better reflect our business and operations.

The accompanying notes are an integral part

ENVIRO TECHNOLOGIES U.S., INC. AND SUBSIDIARY

Table of Contents

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)PART 1.  FINANCIAL INFORMATION

Item 1. Financial Statements

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

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

ENVIRO TECHNOLOGIES U.S., INC. AND SUBSIDIARY

’
EQUITY (DEFICIENCY)CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS

(Unaudited)

For the three months ended June 30, 2022 and 2021

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

For* On September 7, 2022, Banner Midstream Corp merged with Wolf Energy Services Inc. (formerly Enviro Technologies U.S., Inc.) in a reverse merger. Banner Midstream's parent, BitNile Metaverse, Inc., was issued 51,987,832 shares of Wolf Energy Services Inc. (formerly Enviro Technologies U.S., Inc.) common stock in exchange for all the six months ended June 30, 2022capital stock of Banner owned by BitNile Metaverse, Inc., which represents 100% of the issued and 2021

outstanding shares of Banner that were outstanding at the time of the reverse merger.  The Company has reflected this transaction retroactively in these interim financial statements along with amounts due to Ecoark Holdings that were exchanged for the capital stock.

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

ENVIRO TECHNOLOGIES U.S., INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Table of Contents

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

ENVIRO TECHNOLOGIES U.S., INC. AND SUBSIDIARY

WOLFENERGY SERVICES INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 

JUNE 30, 2023 AND 2022

(UNAUDITED) NOTE 1: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE A - ORGANIZATION AND OPERATIONS

Wolf Energy Services Inc., formerly known as Enviro Technologies U.S., Inc., a Florida corporation (the “Company”), isprior to September 7, 2022 was a manufacturer and provider of environmental and industrial separationoperation technology. The Company had developed, manufactured, and now manufactures and sellssold the V-Inline Separator, a technology that efficiently separates liquid/liquid, liquid/solid or liquid/liquid/solid fluid streams with distinct specific gravities. Current and potential commercial applications and markets includeincluded mining, utilities, manufacturing, waste-to-energy among other industries. We also, through a Grant Back License with Schlumberger Technology Corporation signed in June 2017, can utilize specific patents that were sold to Schlumberger under Technology Purchase Agreement for industries outside of oil and gas.

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

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

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

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

Banner Midstream has two active operating subsidiaries: Pinnacle Frac Transport LLC (“Pinnacle Frac”), and test the V-Inline Separator. On August 20, 2020, Capstone.

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

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

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

Forward Split and Corporate Name Change

On January 13, 2023, the Company completed a 4-for-1 forward stock split of its issued and outstanding shares of its common stock to shareholders of record as of the close of business on December 30, 2022. The Company filed articles of amendment to its articles of incorporation with the Secretary of State of the State of Florida effective January 17, 2023. Pursuant to a unanimous written consent of the Company’s board of directors, the only change reflected in the articles of amendment is an increase in the authorized number of shares of common stock of the Company from Idaho250,00,000 shares to Florida. 1,000,000,000 shares in connection with the Company’s 4-for-1 forward stock split. Throughout these financial statements, common stock share and per share information, including stock award units, options and the Company's convertible note conversion ratio in common stock shares have been revised for all periods presented to give effect to the forward stock split.

On December 28, 2020,30, 2022 the Company’s board of directors and majority shareholder approved a name change of the Company receivedto “Wolf Energy Services Inc.”, as the file stamped Certificatenew name will better reflect the Company’s business and operations. On January 30, 2023, the Company filed articles of Domestication and Articlesamendment to its articles of Incorporation fromincorporation with the Secretary of State of Florida which wasand after processing by FINRA, the Company formally changed its name to Wolf Energy Services Inc. effective on December 18, 2020, thereby completing the change in domicile from Idaho to Florida. In connection with the change in domicile from Idaho to Florida, the Company’s name changed to “Enviro Technologies U.S.,February 1, 2023. Additionally, effective February 1, 2023, Wolf Energy Services Inc.” began trading under its new ticker symbol, WOEN.

NOTE B – GOING CONCERN

Since entering into the Technology Purchase Agreement, Supply Agreement and Grant Back License in June 2017, we have generated limited revenues, significantly less than we anticipated, under the termsBasis of any of these agreements. The Supply Agreement expired in June 2020. The Grant Back License did not expire. There are no assurances that the Grant Back License will ever generate any material ongoing revenues. We intend to continue to seek opportunities for the V-Inline Separator. Although we experienced strong revenue growth prior to COVID-19 through the sales of V-Inline and Voraxial Separators, the pandemic created significant cash flow issues that we are trying to work through, including lack of capital for sales and marketing. This has limited our exposure to potential customers. Our ability to increase our revenues in future periods will depend on a number of factors, many of which are beyond our control, including our ability to generate sales of the V-Inline Separator, our ability to leverage the Grant Back License to generate additional revenues, the continuing impact of the Covid-19 pandemic on the economy in general and the Company in particular, competitive efforts and other general economic trends. There are no assurances we will return to the pre-Covid revenue and profitability levels of 2019 or report profitable operations in the future. Further, the lingering economic impact of the Covid-19 pandemic may have a continued negative effect on the potential for sales of V-inline Separators.Presentation

At June 30, 2022, we had a working capital deficit of $1,445,859, an accumulated deficit of $16,919,328. We do not have any external sources of liquidity. Our revenues have declined significantly from quarter ended and year ended December 31, 2019, our last full reporting period prior to the start of Covid-19 pandemic and has yet to recover. Covid-19 pandemic has created a very challenging economic condition for our company. In an effort to conserve our cash resources to sustain our operations until such time as the economy begins returning to pre-Covid-19 pandemic activity levels, we have reduced employee hours, continue to accrue management’s salary, and sold under-utilized equipment. We also have begun marketing our machining capabilities to local manufactures. There are no assurances, however, that these efforts will be sufficient to permit us to pay our operating expenses. In the event we cannot increase our revenues, we may be required to scale back or cease operations, sell or liquidate our assets and possibly seek bankruptcy protection.

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

ENVIRO TECHNOLOGIES U.S., INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

JUNE 30, 2022

(UNAUDITED) 

NOTE C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The condensed consolidated financial statements presented herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordanceconformity with accounting principles generally accepted in the United States (GAAP). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Update (ASU) of America have been condensed or omitted pursuantthe Financial Accounting Standards Board (FASB).

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

Principles of Consolidation

The condensedCompany prepares its consolidated financial statements should be read in conjunction withon the company’s annual consolidated financial statements, notes and accounting policies included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the SEC on April 15, 2022. In the opinionaccrual basis of management, all adjustments, which are necessary to provide a fair presentation of financial position as of June 30, 2022, and the related operating results and cash flows for the interim period presented, have been made.accounting. The results of operations, for the period presented are not necessarily indicative of the results to be expected for the year.

Principles of Consolidation

The unaudited condensedaccompanying consolidated financial statements include the accounts of the parent company, Enviro Technologies U.S., Inc.,Company and its wholly-owned subsidiary, Florida Precision Aerospace, Inc. wholly owned subsidiaries, all of which have a year end of March 31. All significant intercompany accounts, balances and transactions have been eliminated.eliminated in the consolidation.

Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of AmericaU.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosuresdisclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenuerevenues and expenses during the reporting period. SignificantThese estimates include, valuationbut are not limited to, management’s estimate of deferred taxprovisions required for uncollectible accounts receivable, impaired value of equipment and intangible assets, allowance for doubtful accountsliabilities to accrue, cost incurred in the satisfaction of performance obligations, permanent and allowance for inventory obsolescence. Actual results may differ.temporary differences related to income taxes, to present these consolidated financial statements on a standalone basis and determination of the fair value of stock awards.

Actual results could differ from those estimates.

Revenue Recognition

We account for our revenues in accordance with the Accounting Standard Codification Topic The Company recognizes revenue under ASC 606, “Revenue from Contracts with Customers” and allCustomers. The core principle of the related amendments. This standards core principalrevenue standard is that a company should recognize revenue when it transfersto depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to receive.

The Company derives its revenue from the sale of the V-Inline Separators and some high precision manufacturing projects.

Revenues that are generated from high precision manufacturing projects are recognized when we satisfy a performance obligation by transferring control of the promised goods or services to our customers at a point in time, in an amount specified in the contract with our customer and that reflects the consideration we expect to be entitled to in exchange for those goods or services. The Company also assesses our customer’s abilityfollowing five steps are applied to achieve that core principle:

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

RevenuesIf a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that are generated from sales of V-Inline separators, auxiliary equipment and parts are typically recognized upon shipment. Our standard agreements generally do not include customer acceptance or post shipment installation provisions. However, if such provisions have been included or there is an uncertainty about customer order, revenue is deferred until we have evidence of customer order and all terms of the agreement have been complied with. As of June 30, 2022, and December 31, 2021, respectively, there was $0 of deposits from customers.distinct.

ENVIRO TECHNOLOGIES U.S., INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

JUNE 30, 2022

(UNAUDITED) 

ACCOUNTS RECEIVABLE

Accounts receivable are presented net of an allowance for doubtful accounts. The company maintains allowances for doubtful accounts for estimated losses. The company reviews the accounts receivable on a periodic basis and makes general and specific allowance when there is a doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, customer’s historical payment history, and its current credit-worthiness and current economic trends. Accounts are written off after exhaustive efforts at collections. At June 30, 2022 and December 31, 2021, the Company has $7,044 and $7,044 in the allowance for doubtful accounts, respectively.

Fair Value of Instruments

The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, inventory, accounts payable and accrued expenses at June 30, 2022 and December 31, 2021, approximate their fair value because of their relatively short-term nature.

ASC 820 “Disclosures about Fair Value of Financial Instruments,” requires disclosures of information regarding the fair value of certain financial instruments for which it is practicable to estimate the value. For purpose of this disclosure, the fair value of a financial instrumenttransaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all the following:

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

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

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

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

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

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

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

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

Accounts Receivable and Concentration of Credit Risk

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

For the Company, accounts receivable is comprised of unsecured amounts due from customers that have been conveyed to a factoring agent for both with and without recourse. Prior to June 2023, The Company receives an advance from the factoring agent of 98% of the amount invoiced to the customer within one business day. The Company recognizes revenue for 100% of the gross amount invoiced, records an expense for the 2% finance charge by the factoring agent, and realizes cash for the 98% net proceeds received.   During June 2023, The Company entered into an agreement whereby the company does not factor or receive an advance on amounts invoiced to customers.   The Company now receives 92.5% of the amount invoiced within one business day.   The Company recognizes revenue for 100% of the gross amount invoiced, records an expense for the 7.5% fee charged by the agent, and realizes cash for the 92.5% net proceeds received.

Reclassifications

The Company has reclassified certain amounts in the June 30, 2022 condensed consolidated financial statements to be consistent with the June 30, 2023 presentation. These changes had no impact on the Company’s financial position or result of operations for the periods presented.

Fair Value Measurements

ASC 820Fair Value Measurements defines fair value, based on the extent to which inputs used inestablishes a framework for measuring fair value is observable in the market. We categorize each of ouraccordance with GAAP, and expands disclosure about fair value measurements in one ofmeasurements. ASC 820 classifies these three levels based oninputs into the lowest level input that is significant to the fair value measurement in its entirety. These levels are:following hierarchy:

Level 1—inputs are based upon unadjusted quoted1 inputs: Quoted prices for identical instruments traded in active markets. We have no Level 1 instruments as of June 30, 2022 and December 31, 2021.

Level 2— inputs are based upon quoted2 inputs: Quoted prices for similar instruments in active markets,markets; quoted prices for identical or similar instruments in markets that are not active, active; and model-based valuation techniques (e.g. the Black-Scholes model) for which all significantmodel-derived valuations whose inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a presentwhose significant value using market-based observable inputs including interest rate curves, foreign exchange rates, and forward and spot prices for currencies and commodities. We have no Level 2 instruments as of June 30, 2022 and December 31, 2021.drivers are observable.

Level 3— inputs are generally3 inputs: Instruments with primarily unobservable value drivers.

The carrying values of the Company’s financial instruments such as cash, accounts payable, and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. Theaccrued expenses approximate their respective fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models. We have no Level 3 instruments asbecause of June 30, 2022 and December 31, 2021.the short-term nature of those financial instruments.

Cash and Cash Equivalents

The Company considers all highly liquid investments with a maturityEarnings (Loss) Per Share of three months or less at the date of purchase to be cash equivalents. The Company maintains its cash balances with various financial institutions. Balances at these institutions may at times exceed the Federal Deposit Insurance Corporate (“FDIC”) limits. As of June 30, 2022 and December 31, 2021, the Company has 0 cash concentration in excess of FDIC limits.Common Stock

Inventory

Inventory primarily consists of components, including raw material and finished parts for the V-Inline Separator and face shields and is priced at lower of cost orBasic net realizable value. Net realizable value is defined as sales price less cost of completion and disposable and transportation. Inventory may include units being rented on a short term basis or components held by third parties in connection with pilot programs as part of the continuing evaluation by such third parties as to the effectiveness and usefulness of the service to be incorporated into their respective operations. The third parties do not have a contractual obligation to purchase the equipment. The Company maintains the title and risk of loss. Therefore, these units are included in the inventory of the Company. As of June 30, 2022 and December 31, 2021:

ENVIRO TECHNOLOGIES U.S., INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

JUNE 30, 2022

(UNAUDITED) 

Schedule of inventory

Inventory amounts are presented net of allowance for inventory reserves of $75,785 and $75,785 as of June 30, 2022 and December 31, 2021, respectively.

Fixed Assets

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

Net Loss Per Share

In accordance with the accounting guidance now codified as FASB ASC Topic 260, “Earningsincome (loss) per Share” basic earnings (loss) percommon share is computed by dividing net income (loss) byusing the weighted average number of common shares of common stock outstanding during each period.outstanding. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock,(“EPS”) include additional dilution from common stock equivalents, such as convertible notes. The Company as of and potentially dilutive securities outstanding duringfor the period.three months ended June 30, 2023 and 2022 had no common stock equivalents.

As

Recently Issued Accounting Standards

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

Liquidity

For the three months ended June 30, 20222023 and 2021, there were 10,000 and 10,000 shares issuable upon2022, the exercise of options, respectively. The Company had a net loss from continuing operations (not including the provisions for threeincome taxes) of ($1,111,779) and six months ended ($1,636,771) respectively, has a working capital deficit of $2,207,135 and $1,654,456 as of June 30, 20222023 and 2021; therefore, common stock equivalent shares are excluded fromMarch 31, 2023 respectively, and has an accumulated deficit as of June 30, 2023  of ($17,176,283). As of June 30, 2023, the computation of net loss per share if their effect is anti-dilutive. Company has $166,644 in cash and cash equivalents.

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

The financial statements of the Company have been prepared assuming that the Company will continue as a going concern, which contemplates, among other things, the realization of assets and the satisfaction of liabilities in the normal course of business over a reasonable period. The financial statements of the Company do not include any adjustments that may result from the outcome of the uncertainties.

The Company accounts for income taxes under ASC 740-10-25. Under ASC 740-10-25, deferred tax assets and liabilitiesplans include the raising of capital through a private placement of its securities, although there are recognizedno assurances the Company will be successful at raising any capital.

Impact of COVID-19

COVID-19 did not have a material effect on the Statements of Operations or the Balance Sheets for the future tax consequences attributablethree months ended June 30, 2023 and 2022 or as of June 30, 2023 and March 31, 2023, respectively. While COVID-19 has contributed to differences betweenglobal supply chain disruptions, such disruptions have not had a material effect for the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expectedCompany. The Company will continue to apply to taxable income inmonitor the years in which those temporary differences are expected to be recovered or settled. Under ASC 740-10-25,supply chain shortages affecting the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.world.

NOTE 2: REVERSE MERGER

BUSINESS SEGMENTS

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

LEASES

The Company accounts for leases in accordance with Accounting Standard Codification Topic 842.

Advertising Costs

Advertising costs are expensed as incurred and are included in general and administrative expenses. There was $0 and $320 in advertising costs during the three months ended June 30, 2022 and June 30, 2021, respectively. There was $0 and $484 in advertising costs during the six months ended June 30, 2022 and June 30, 2021, respectively.

ENVIRO TECHNOLOGIES U.S., INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

JUNE 30, 2022

(UNAUDITED) 

Stock-Based Compensation

The Company accounts for stock-based instruments issued for services inIn accordance with ASC 718 “Compensation – Stock Compensation.” ASC 718 requires companies to recognize805-40-45-1, the consolidated financial statements prepared following a reverse acquisition are issued under the name of the legal parent (Wolf Energy Services Inc.) but described in the statement of operationsnotes to the grant-date fair value of stock options and other equity based compensation issued. The valuefinancial statements as a continuation of the portionfinancial statements of a stock award thatthe legal subsidiary (Banner), with one adjustment, which is ultimately expected to vestretroactively adjust the accounting acquirer’s legal capital to reflect the legal capital of the accounting acquiree. That adjustment is recognized as an expense overrequired to reflect the requisite service periods usingcapital of the straight-line attribution method.legal parent. Comparative information presented in the consolidated financial statements also is retroactively adjusted to reflect the legal capital of the legal parent.

Recent Accounting Pronouncements

All newly issued accounting pronouncements, but not yet effective, have been deemed either immaterial or not applicable.Under ASC 805-40-45-2, the consolidated financial statements represent the continuation of the legal subsidiary except for the capital structure, as follows:

NOTE D - RELATED PARTY TRANSACTIONS

For the three months ended June 30, 2022 and 2021, the Company incurred salary expenses for the Chief Executive Officer of the Company of $52,500 and $52,500 respectively, of which a total of $0 of salary and accrued salary have been paid. The total unpaid balance as of June 30, 2022 and June 30, 2021 are $828,065 and $743,065, respectively, which are included in accrued expenses – related party. During the six months ended June 30, 2022 and 2021, the Company incurred salary expenses for the Chief Executive Officer of the Company of $105,000 and $105,000 respectively, of which a total of $0 and $26,250 of salary and accrued salary have been paid.

Effective July 1, 2017, our non-employee directors receive a monthly fee of $1,000 for serving on the board of directors. During the three and six months ended June 30, 2022 and 2021, Raynard Veldman, received compensation for being a member of the Company’s board of directors of $3,000 and $6,000, respectively. Mr. John DiBella does not receive compensation for being a member of the Company’s board of Directors.

Effective July 1, 2017, Raynard Veldman, a member of the Company’s board of directors, receives a fee of $2,500 per month for consulting services. During the three and six months ended June 30, 2022 and 2021, Mr. Veldman received consulting fees of $7,500 and $15,000, respectively. The unpaid balance has been included in accrued expenses- related party. As of June 30, 2022 and December 31, 2021 the total accrued board compensation and consulting fees are $75,500 and 54,500, respectively.

On January 5, 2022, John A. DiBella, the Company’s chief executive officer, advanced the Company $30,000 pursuant to the terms of a 4% unsecured promissory note. The note is payable on December 31, 2022 and accrues interest at a rate of 4% per annum. In addition, from February 15, 2022 through March 31, 2022, Mr. DiBella advanced the Company an additional $23,000 under the same terms as the note. From April 1, 2022 through June 30, 2022 Mr. DiBella advanced the Company an additional $31,500 under the same terms as the note (see Note G).

NOTE E – FIXED ASSETS

Fixed assets as of June 30, 2022 and December 31, 2021 consist of:

Schedule of fixed assets

Depreciation expense was $206 and $3,827 for the three months ended June 30, 2022 and 2021, respectively.

Depreciation expense was $412 and $15,298 for the six months ended June 30, 2022 and 2021, respectively.

ENVIRO TECHNOLOGIES U.S., INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

JUNE 30, 2022

(UNAUDITED) 

In April, 2021 the Company sold its CNC machining equipment for a sales price

Wolf Energy Services Inc., issued BitNile Metaverse, Inc. 51,987,832 shares of $15,011 from the sale of equipment.

note F – shareholders’ equity

Options

Information with respect to options outstanding and exercisablecommon stock valued at June 30, 2022 is as follows:

Schedule of options outstanding

Schedule of stock options outstanding and exercisable

The aggregate intrinsic value represents the excess amount over the exercise price optionees would have received if all the options have been exercised on the last business day of the period indicated based on the Company’s closing stock price of for such day. The aggregate intrinsic value as of June 30, 2022 is $0 as the stock price is higher than the exercise price.

The Company accounts for stock-based instruments issued for services in accordance with ASC 718 “Compensation – Stock Compensation.” ASC 718 requires companies to recognize$5,328,753 in the statement of operations the grant-date fair value of stock options and other equity based compensation issued. The value of the portion of a share award that is ultimately expected to vest is recognized as an expense over the requisite service periods using the straight-line attribution method. The Company estimates the fair value of stock options by using the Black-Scholes option-pricing model.

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

NOTE G – COMMITMENTS AND CONTINGENCIES

SBA AND PPP LOANSreverse merger transaction.

On May 4, 2020, FPA receivedSeptember 7, 2022, the Company completed the reverse merger transaction of Banner Midstream. As a loan (the “PPP Loan”) from Bankresult of America, N.A. in the aggregate amountthis transaction, which is accounted for as a reverse merger, Banner is a wholly owned subsidiary of $111,971, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The PPP Loan,

ENVIRO TECHNOLOGIES U.S., INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 

JUNE 30, 2022

(UNAUDITED) 

which was in the form of a Note dated May 4, 2020 issued by FPA, matures on May 4, 2022 and bears interest at a rate of 1% per annum, payable monthly commencing on November 6, 2020. The Note may be prepaid by FPA at any time prior to maturity with no prepayment penalties. Funds from the PPP Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities and interest on other debt obligations incurred before February 15, 2020. FPA believes it used the entire PPP Loan amount for qualifying expenses. Under the terms of the PPP Loan, certain amounts of the PPP Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. We applied for forgiveness of the PPP Loan inWolf Energy Services Inc. In accordance with the terms of the CARES Act. We are waiting forMerger, at the effective time of the Merger, each outstanding share of the common stock of Banner was acquired by the Company in consideration of 51,987,832 shares of Common Stock of the Company. This exchange of shares and the resulting controlling ownership of Banner constitutes a reverse acquisition resulting in a recapitalization of Banner and purchase accounting being applied to Wolf Energy Services Inc. under ASC 805 due to Banner being the accounting acquirer and Wolf Energy Services, Inc. being deemed an approvalacquired business as they were not a shell corporation. This requires financial reporting from the bank but there are no assurances thatMerger close date forward to reflect only the full amount will be forgiven.

historic consolidated results of Banner and to include the consolidated results for Wolf Energy Services from September 7, 2022, forward. There has been no change in basis from the standpoint of Banner.

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

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

Purchase Price Allocation of Wolf Energy Services, Inc.

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

NOTE 3: REVENUE

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

The following table disaggregates the Company’s revenue by major source for the three months ended June 30, 2023  and 2022:

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

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

NOTE 4: PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of June 30, 2023 and March 31, 2023:

As of  June 30, 2023, the Company performed an evaluation of the recoverability of these long-lived assets. The analysis resulted in no impairment as of related to these assets.

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

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

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

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

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

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

In May 2023, the Company sold $118,266 of fixed assets for $75,000 and incurred a loss of $43,266

In June 23, 2020, FPA executed 2023, the standard loan documents requiredCompany sold $400,688 of fixed assets for securing$145,000 and incurred a loan (the “EIDL Loan”) fromloss of $255,688

Depreciation expense for the SBA under its Economic Injury Disaster Loan (“EIDL”) assistance program in lightthree months ended June 30, 2023 and 2022:

NOTE 5: ACCRUED LIABILITIES

Accrued liabilities consisted of the impactfollowing as of June 30, 2023 and March 31, 2023:

NOTE 6: NOTES PAYABLE

The following is a summary of our notes payable as of June 30, 2023 and March 31, 2023, respectively.