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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§229.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of ~~November 14, 2022,~~August 9, 2023, the issuer had ~~8,400,000~~10,833,800 shares of common stock, $0.0001 par value per share, outstanding.

	SEPTEMBER 30,			MARCH 31,			JUNE 30,			MARCH 31,
	2022			2022			2023			2023
		(unaudited)					(UNAUDITED)
ASSETS

CURRENT ASSETS:

Cash (including $201,050 and $251,050 in restricted cash)	$	579,357		$	251,050
Accounts receivable		410,085			634,483
Secured promissory note receivable		200,000			-
Cash (including $252,213 and $251,778 in restricted cash)							$	252,631		$	827,790
Accounts receivable, net of allowance for doubtful accounts								79,388			54,854
Accounts receivable - related parties								1,136,418			957,641
Receivable - Participation Agreement, net of allowance for doubtful accounts								-			1,440,598
Inventories - Crude Oil		91,925			107,026			21,777			16,821
Prepaid expenses and other current assets		240,860			318,771			270,933			334,264

Total current assets		1,522,227			1,311,330			1,761,147			3,631,968

NON-CURRENT ASSETS:
Property and equipment, net		1,431,285			596,464			3,272,314			3,251,432
Right of use asset - operating lease		172,141			243,494			58,764			100,644
Right of use asset - financing lease								165,674			175,139
Oil and gas properties, full cost-method		5,426,976			6,626,793			1,227,366			1,285,177
Capitalized drilling costs, net of depletion		322,806			604,574
Unevaluated wells in progress								3,997,074			3,244,653
Other assets		13,465			14,760			592,012			630,531
Goodwill		-			2,100,374

Total non-current assets		7,366,673			10,186,459			9,313,204			8,687,576

TOTAL ASSETS	$	8,888,900		$	11,497,789		$	11,074,351		$	12,319,544

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

LIABILITIES
CURRENT LIABILITIES
Accounts payable	$	344,307		$	799,100		$	4,316,684		$	3,501,283
Accrued liabilities		289,730			119,600			378,930			406,669
Due to Ecoark Holdings		-			25,068,890
Cash overdraft		-			27,918
Derivative liabilities								15,254,287			10,483,371
Deferred drilling costs								-			317,350
Related party advances								4,027,012			1,182,250
Series C Preferred Stock								8,774,619			6,488,178
Convertible note payable, net of discount								762,379			972,831
Current portion of long-term debt		42,668			-			117,961			104,950
Current portion of lease liability - operating lease		157,260			155,263			70,763			108,117
Current portion of lease liability - financing lease								33,085			31,629

Total current liabilities		833,965			26,170,771			33,735,720			23,596,628

NON-CURRENT LIABILITIES
Lease liability - operating lease, net of current portion		31,236			110,235			-			2,119
Lease liability - financing lease, net of current portion								104,821			113,659
Long-term debt, net of current portion		92,704			-			250,519			208,046
Asset retirement obligations		668,151			1,303,751			1,494,944			1,463,931

Total non-current liabilities		792,091			1,413,986			1,850,284			1,787,755

Total Liabilities		1,626,056			27,584,757			35,586,004			25,384,383

COMMITMENTS AND CONTINGENCIES		-			-			-			-

STOCKHOLDERS’ EQUITY (DEFICIT)
Preferred stock, $0.0001 par value, 5,000,000 shares authorized and 1,200 and 0 shares issued and outstanding		1			-
Common stock, $0.0001 par value, 500,000,000 shares authorized and 8,400,000 shares issued and outstanding		840			840
Preferred stock, $0.0001 par value, 5,000,000 shares authorized
Series A - 1,200 shares issued and outstanding								1			1
Series B - no shares issued and outstanding								-			-
Series C - 251.5126308 and 205.8726308 shares issued and outstanding								-			-
Preferred stock
Common stock, $0.0001 par value, 500,000,000 shares authorized and 10,333,800 and 10,166,667 shares issued and outstanding								1,034			1,017
Additional paid in capital		37,076,394			591,167			47,173,132			43,453,095
Accumulated deficit		(29,814,391	)		(16,678,975	)		(74,935,820	)		(59,768,952	)

Total White River Energy Corp stockholder’s equity (deficit)								(27,761,653	)		(16,314,839	)
Non-controlling interest								3,250,000			3,250,000

Total stockholders’ equity (deficit)		7,262,844			(16,086,968	)		(24,511,653	)		(13,064,839	)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	8,888,900		$	11,497,789		$	11,074,351		$	12,319,544

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

FOR THE ~~SIX AND~~ THREE MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2022~~2023 AND ~~2021~~2022

	2022			2021			2022			2021
	SIX MONTHS ENDED						THREE MONTHS ENDED
	SEPTEMBER 30,						SEPTEMBER 30,
	2022			2021			2022			2021			2023			2022
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
REVENUES	$	2,208,760		$	2,303,071		$	594,485		$	728,667		$	195,937		$	116,461

COSTS AND EXPENSES
Cost of revenues (excludes items below)		811,977			694,258			381,216			432,546
Lease operating expenses														105,448			92,543
Salaries and salaries related costs		2,321,066			1,245,878			1,875,461			963,705			4,829,951			445,605
Professional and consulting fees		319,274			141,220			272,611			141,220			814,273			-
Oilfield costs, supplies and repairs		4,223,608			595,628			2,629,376			172,865
Selling, general and administrative costs		2,594,372			2,607,561			1,321,327			1,665,877			2,814,530			1,307,940
Depreciation, amortization, impairment, depletion, and accretion		6,202,396			1,234,262			6,033,712			467,607			317,564			168,864

Total costs and expenses		16,472,693			6,518,807			12,513,703			3,843,820			8,881,766			2,014,952

LOSS FROM OPERATIONS BEFORE OTHER INCOME (EXPENSE)		(14,263,933	)		(4,215,736	)		(11,919,218	)		(3,115,153	)		(8,685,829	)		(1,898,491	)

OTHER INCOME (EXPENSE)
Change in fair value of derivative liabilities		-			2,157,838			-			620,473			(2,343,320	)		-
Gain on sale of oil and gas property and ARO		391,533			721,365			31,157			122,505
Gain on sale of working interests on oil and gas properties		971,609			-			971,609			-
Derivative expense														(2,427,596	)		-
Amortization of debt discount - Convertible Note														(358,194	)		-
Amortization of discount - Series C Preferred Stock														(1,145,441	)		-
Amortization of original issue discount of convertible note														(56,354	)		-
Interest expense, net of interest income		(4,123	)		(278,170	)		(1,918	)		(260,294	)		(150,134	)		(2,205	)
Total other income		1,359,019			2,601,033			1,000,848			482,684
Total other income (expense)														(6,481,039	)		(2,205	)

LOSS FROM CONTINUING OPERATIONS BEFORE PROVISION FOR INCOME TAXES		(12,904,914	)		(1,614,703	)		(10,918,370	)		(2,632,469	)		(15,166,868	)		(1,900,696	)

DISCONTINUED OPERATIONS:
Loss from discontinued operations		(85,848	)		-			(85,848	)		-			-			(85,848	)
Loss on disposal of discontinued operations		(144,654	)		-			(144,654	)		-			-			-
Total discontinued operations		(230,502	)		-			(230,502	)		-			-			(85,848	)

LOSS FROM OPERATIONS BEFORE PROVISION FOR INCOME TAXES		(13,135,416	)		(1,614,703	)		(11,148,872	)		(2,632,469	)		(15,166,868	)		(1,986,544	)

PROVISION FOR INCOME TAXES		-			-			-			-			-			-

NET LOSS	$	(13,135,416	)	$	(1,614,703	)	$	(11,148,872	)	$	(2,632,469	)	$	(15,166,868	)	$	(1,986,544	)
NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST														-			-

NET LOSS PER SHARE - BASIC
NET LOSS ATTRIBUTABLE TO WHITE RIVER ENERGY CORP													$	(15,166,868	)	$	(1,986,544	)

NET (LOSS) EARNINGS PER SHARE - BASIC
Continuing operations	$	(1.54	)	$	(0.19	)	$	(1.30	)	$	(0.31	)	$	(1.49	)	$	-
Discontinued operations		(0.01	)		-			(0.01	)		-			-			-
NET LOSS PER SHARE	$	(1.55	)	$	(0.19	)	$	(1.31	)	$	(0.31	)
NET (LOSS) EARNINGS PER SHARE													$	(1.49	)	$	-

WEIGHTED AVERAGE SHARES OUTSTANDING		8,400,000			8,400,000			8,400,000			8,400,000
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC (*)														10,208,909			-

NET (LOSS) EARNINGS PER SHARE - DILUTED													$	(1.49	)	$	-

WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED (*)														10,208,909			-

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

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) (UNAUDITED)

FOR THE ~~SIX~~THREE MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2022~~2023 AND ~~2021~~ 2022

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

FOR THE ~~SIX~~THREE MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2022~~2023 AND ~~2021~~2022

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

NOTE 1: DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The terms “we,” “us,” “our,~~” “registrant,~~” and the “Company” refer to White River Energy Corp.

On September 19, 2022, the Company changed its name from Fortium Holdings Corp. to White River Energy Corp. On September 28, 2022, the Board of Directors and holders of the majority outstanding voting power approved the changing of the fiscal year of the Company from December 31 to March 31, and approved increasing the authorized capital to 505,000,000 shares consisting of 500,000,000 shares of common stock (from 200,000,000) and 5,000,000 shares of preferred stock. The Company filed a Certificate of Amendment to the Articles of Incorporation with the Nevada Secretary of State on September 29, 2022, and the changes became effective upon filing.

The Company executed a Share Exchange Agreement (the “Exchange Agreement”) on July 25, 2022 and pursuant to the Exchange Agreement that day acquired 100% of the outstanding shares of capital stock of White River Holdings Corp, a Delaware corporation (“~~White River”~~Holdings”) from BitNile Metaverse, Inc. (formerly Ecoark Holdings, Inc. (“Ecoark”)), ~~White River’s~~Holding’s sole stockholder. In exchange the Company issued Ecoark 1,200 shares of the newly designated non-voting Series A Convertible Preferred Stock (the “Series A”). The Series A will become convertible into approximately 42,253,521 shares of the Company’s common stock upon such time as (A) the Company has filed a Form S-1, ~~or Form 10, or other applicable form,~~ with the Securities and Exchange Commission (the “SEC”) and such Form S-1 ~~or other registration statement~~ has been declared effective, ~~or such Form 10 or other applicable form is no longer subject to comments from the Staff of the SEC,~~ and (B) Ecoark elects to distribute shares of the Company’s common stock to Ecoark’s stockholders. The Company filed the Form S-1 in December 2022 (File No. 333-268707) which is currently under review by the SEC Staff. The Series A has a stated value of $30 million and has a liquidation preference over the common stock and any subsequent series of junior preferred stock equal to the stated value, plus any accrued but unpaid dividends; the ~~preferred stock,~~Series A, however, does not have any of the voting rights of common stockholders. ~~White River~~The transaction was accounted for as a share exchange, whereby Holdings is considered the accounting acquirer. Since the share exchange occurred with a non-shell public company, the transaction included the purchase of the non-controlling interest of Fortium Holdings Corp. Except as expressly indicated in these footnotes to the contrary or where the context clearly dictates otherwise, references to “Fortium Holdings Corp.” refers to the predecessor of the Company before the Holdings share exchange was effected in July 2022.

Holdings has operations in oil and gas, including exploration, production and drilling operations on over 30,000 cumulative acres of active mineral leases Louisiana, and Mississippi.

Pursuant to the Exchange Agreement Mr. Randy May, Ecoark’s Chief Executive Officer, was appointed as Executive Chairman and as a director of the Company, and Mr. Jay Puchir, Ecoark’s Chief Financial Officer, was appointed as Chief Executive Officer and Principal Financial Officer of the Company. Effective July 28, 2022, the number of directors of the Company was fixed at five, and Danny Hames, James Cahill, Greg Landis, and Alisa Horgan were appointed as directors. Alisa Horgan is the daughter of Randy May, and wife of Richard Horgan, who was the Company’s Chief Executive Officer and sole director until after the closing of the ~~White River~~Holdings acquisition.

~~Ecoark has advised us that it plans~~ See Note 16. Subsequent Events for changes to ~~spin-off the common stock issuable upon conversion of the Series A issued in the Merger with White River, subject to regulatory approvals including the effectiveness of the Form S-1.~~our senior management.

On July 29, 2022, the Company filed a Certificate of Designation with the Nevada Secretary of State designating a new series of preferred stock as Series B Preferred Stock (the “Series B”). The single authorized share of Series B is entitled to vote with the Company’s common stock as a single class on any matter brought before the stockholders, and the Series B is entitled to a number of votes equal to the greater of (A) 100,000,000 votes, or (B) 50.1% of the Company’s voting power as of the applicable date of determination. Any outstanding Series B will be automatically cancelled upon the Company applying to have its common stock listed on a national securities exchange. As of the date of this Report, the Series B is unissued. The Board authorized the Series B because the Company is not subject to Section 13 of the Securities Exchange Act of 1934, so the protections and disclosure provided by Section 13(d) and the rules and regulations promulgated thereunder do not apply to the Company, and the Series B is intended to enable the Board of Directors to act quickly to react to any potential hostile takeover. The auto-cancellation provision was included because the super-voting rights contained in the Series B would violate the rules of a prospective national securities exchange.

On October 25, 2022, the Company filed a Certificate of Designation of the Rights, Preferences and Limitations (the “Series C Certificate of Designation”) of Series C Convertible Preferred Stock (the “Series C”) with the Nevada Secretary of State. The Series C Certificate of Designation provides for the issuance of up to 1,000 shares of Series C. From October 25, 2022 through March 31, 2023, the Company sold 205.8726308 Units for $5,146,816. In April 2023, the Company sold 45.64 Units for $1,141,000, with each Unit comprised of one share of Series C and one Warrant to purchase 200% of the shares of common stock underlying such share of Series C (the “Units”) at a purchase price of $25,000 per Unit. In addition, the Company sold another 11.6 units ($290,000) to investors, for which the deposit has not been made yet. The Warrants may be separately sold by the holders rather than exercised into shares of common stock, and the Company has submitted an application for the Warrants to be traded on the OTCQB under their own unique ticker symbol.

On March 18, 2021, the Company formed Norr LLC (“Norr”), a Nevada limited liability company and wholly-owned subsidiary of the Company, and commenced operations as a sports equipment and apparel manufacturer and retailer. Prior to the organization of Norr, the Company’s Chief Executive Officer had explored this business opportunity and commenced preparation of a business plan for the business. On March 23, 2021, the Company engaged the services of two consultants and entered into consulting agreements through Norr pursuant to which each consultant provides services to Norr in exchange for $~~1,000~~ ~~per month, payable in cash or, at Norr’s election for a given month or months, options to purchase shares of the Company’s common stock.~~

On September 9, 2021, the Company formed Elysian, a Colorado corporation and wholly-owned subsidiary, for the purpose of engaging in cannabis operations. On September 14, 2021, Elysian entered into a Stock Purchase Agreement (“SPA”) with Treehouse Company, Inc. (“Treehouse”), and its sole stockholder Alex Gosselin (the “Seller”) pursuant to which Elysian shall purchase 80~~% of the capital stock of Treehouse from the Seller for $200,000, subject to certain conditions including regulatory approval~~.

In September 2022, the Company ~~has~~ sold both Norr and Elysian pursuant to a Membership Interest Purchase Agreement (“MIPA”) for Norr, and a Stock Purchase Agreement for ~~Elysian on September 20 and 21, 2022.~~Elysian. These entities were sold to non-related third parties for ~~$1 each.~~$1 for Elysian and $3 for Norr. The purpose of the sale of these entities was for the Company to divest themselves of their non-core assets and focus exclusively on the oil and gas production business of ~~White River.~~Holdings.

On September 16, 2022, the Board of Directors and stockholders approved the name change of the Company from Fortium Holdings Corp. to White River Energy Corp. All paperwork ~~has been~~were submitted to both the State of Nevada and to the Financial Industry Regulatory Authority (“FINRA”) on September 20, ~~2022.~~2022 and subsequently approved.

The Company has reflected the operations of both Norr and Elysian ~~postcombination~~post-combination in discontinued operations and have reflected the loss on disposal of these companies in the Statements of Operations. All information related to the prior operations and corporate formation of these entities is included in the Company’s Annual Report on Form 10-K, filed March 15, 2022 and the Form 10-Q for the period ended June 30, 2022 filed August 12, 2022.

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

All adjustments considered necessary for a fair presentation have been included. These adjustments consist of normal and recurring accruals, as well as non-recurring charges.

As the acquisition of ~~White River~~Holdings resulted in the ~~owners~~owner of ~~White River~~Holdings gaining control over the combined entity after the transaction, and the stockholders of ~~White River Energy Corp~~the Company continuing only as passive investors, the transaction was not considered a business combination under the ASC. Instead, this transaction was considered to be a capital transaction of the legal acquiree ~~(White River)~~(Holdings) and was equivalent to the issuance of shares by ~~White River~~Holdings for the net monetary assets of ~~White River Energy Corp accompanied by a recapitalization.~~the Company, except for the purchase of the 8,400,000 shares of issued and outstanding common shares of Fortium Holdings Corp., which were considered as purchase consideration resulting in $5,917,843 of goodwill that was impaired immediately. As a result, the historical balances represent ~~White River.~~Holdings. See the Annual Report on Form 10-K filed with the SEC on June 29, 2023 and Note 2 ~~“Reverse Merger”.~~for further details on this transaction.

The condensed consolidated financial statements, and the accompanying notes, are prepared in accordance with GAAP and do not contain certain information included in the Company’s Annual Report on Form 10-K for the year ended ~~December~~March 31, ~~2021, as well as the White River audited financial statements that are reflected in Form 8-K/A filed by the Company on October 28, 2022.~~2023. Therefore, the interim condensed consolidated financial statements should be read in conjunction with those reports. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the year due to various factors.

All adjustments considered necessary for a fair presentation have been included. These adjustments consist of normal and recurring accruals, as well as non-recurring charges.

The Company prepares its consolidated financial statements on the accrual basis of accounting. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned ~~subsidiary, White River.~~subsidiaries. All intercompany accounts, balances and transactions have been eliminated in the consolidation.

The Company applies the guidance of Topic 810 Consolidation of the FASB ASC to determine whether and how to consolidate another entity. Pursuant to ASC Paragraph 810-10-15-10 all majority-owned subsidiaries—all entities in which a parent has a controlling financial interest—are consolidated except when control does not rest with the parent.

Pursuant to ASC Paragraph 810-10-15-8, the usual condition for a controlling financial interest is ownership of a majority voting interest, and, therefore, as a general rule ownership by one reporting entity, directly or indirectly, of more than 50 percent of the outstanding voting shares of another entity is a condition pointing toward consolidation. The power to control may also exist with a lesser percentage of ownership, for example, by contract, lease, agreement with other stockholders, or by court decree.

The Company’s wholly-owned subsidiary, White River Energy Partners Management I, LLC (formerly White River E&P Management 1, LLC) is the general partner and the only managing partner of the White River Energy Partners I, LP (formerly White River E&P 1, LP) (“WR Fund”) has control over the WR Fund, and has the power to deploy the investments from WR Fund into the Company for the various drilling projects they undertake. The name changes became effective May 30, 2023. The original Limited Partnership Agreement dated August 29, 2022 was amended by the Amended and Restated Limited Partnership Agreement dated July 12, 2023. The Company’s subsidiary is the managing partner of the WR Fund pursuant to the Amended and Restated Limited Partnership Agreement. The Company’s subsidiary, the managing general partner contributed $100 as a capital contribution, and the remaining ownership held by the limited partners are reflected as non-controlling interest in the consolidated financial statements.

All distributions from the WR Fund should be made only from revenues of the WR Fund and not from capital contributions or borrowed funds, unless otherwise determined by the Company’s subsidiary, the managing general partner. The managing general partner shall have the discretion to determine on a monthly basis whether any additional distribution shall be made and the amount, if any, of such distribution. The distributions shall be paid: (a) first, to each partner (other than the managing partner which is our subsidiary), as defined in the Amended and Restated Limited Partnership Agreement, in accordance with partner’s capital contribution percentage, until the distributions paid to each partner are equal to their total capital contributions; and (b) (i) if the distributions paid to each partner during the term of the WR Fund (the “Term”) were equal to or greater than such member’s total capital contribution, then ninety percent (90%) of the return of capital amount will be paid to each partner (other than the managing partner) and ten percent (10%) of the return of capital amount will be paid to the managing partner, (ii) if the distributions paid to each partner during the Term were less than such partner’s total capital contribution, then one hundred percent (100%) of the return of capital amount will be paid to the partners until the sum of the partners’s distributions during the Term and return of capital equal the unit holder’s total capital contribution, and (iii) if there are any return of capital amounts in excess of the partners’ total capital contribution, then ninety percent (90%) of the return of capital amount will be paid to partners and ten percent (10%) of the return of capital amount will be paid to the managing partner.

Any profit or loss in the WR Fund shall be allocated to the partners in such amounts as may be necessary or appropriate to cause the capital balance of each partner to equal, (a) the amounts such partners would receive if all assets on hand at the end of such year were sold for the gross asset value reflected for such assets on the books of the WR Fund, any partner that was obligated to contribute any amount to the WR Fund, or otherwise contributed such amount to the WR Fund, all liabilities of the WR Fund were satisfied in cash in accordance with their terms, and any remaining cash was distributed to the partners in accordance with the provisions for distributions; minus (b) an amount equal to such partner’s allocable share of the partnership minimum gain and nonrecourse debt minimum gain as computed on the last day of such fiscal year or other period in accordance with the applicable regulations, subject to allocations for organization and offering expenses, lease acquisition costs, depletion deductions with respect to oil and gas properties, all intangible drilling costs deductible under Section 263(c) of the Internal Revenue Code, and profits resulting from operations as determined by the managing general partner. Losses allocated to any unit holder for any taxable year shall not exceed the maximum amount of losses that may be allocated to such unit holder without causing such partner to have an adjusted capital account deficit at the end of such taxable year. All losses in excess of the limitation shall be allocated solely to the other partners. If no other partners may receive an additional allocation of losses, such additional losses shall be allocated solely to the general partners as determined by the managing partner. The managing partner shall have the discretion to allocate and reallocate profit and loss so as to conform each partner’s capital account to such unit holder’s rights to distributions, insofar as reasonably possible.

The consolidated financial statements include the results of the WR Fund and the Company has eliminated all intercompany transactions. The WR Fund will incur direct expenses related to both the annual management fee and oil production from the working interests it owns in oil and gas wells; the managing partner, however, does not plan to charge any indirect costs such as audit, tax, legal, or fund administration to the WR Fund. These costs will be offset by the annual management fee, and if excess costs are incurred by the WR Fund over the proceeds from the annual management fee, then the Company will subsidize these expenses to enable the WR Fund to make greater distributions to partners.

The Company has reclassified certain amounts in the ~~September~~June 30, ~~2021~~2022 condensed consolidated financial statements to be consistent with the ~~September~~June 30, ~~2022~~2023 presentation. These changes had no impact on the Company’s financial position or result of operations for the periods presented.

Cash equivalents include demand deposits with banks and all highly liquid investments with original maturities of three months or less. The Company has in the past maintained balances in financial institutions where deposits may exceed the federally insured deposit limit of $250,000. The Company has not experienced any losses from such accounts and does not believe it is exposed to any significant credit risk on cash.

The Company’s restricted cash is in the form of certificates of deposit that secure our oil and gas properties.

The preparation of consolidated 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 consolidated financial statements and reported amounts of revenues and expenses during the reporting period. These estimates include, but are not limited to, management’s estimate of provisions required for uncollectible accounts receivable, ~~fair value of assets held for sale and assets and liabilities acquired,~~cost allocation percentages, impaired value of equipment and intangible assets, including goodwill, asset retirement obligations, estimates of discount rates in lease, liabilities to accrue, fair value of derivative liabilities associated with warrants and conversion options, 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.

The estimates of proved, probable and possible oil and gas reserves are used as significant inputs in determining the depletion of oil and gas properties and the impairment of proved and unproved oil and gas properties. There are numerous uncertainties inherent in the estimation of quantities of proven, probable and possible reserves and in the projection of future rates of production and the timing of development expenditures. Similarly, evaluations for impairment of proved and unproved oil and gas properties are subject to numerous uncertainties including, among others, estimates of future recoverable reserves and commodity price outlooks. Actual results could differ from the estimates and assumptions utilized.

The Company uses the full cost method of accounting for its investment in oil and natural gas properties. Under the full cost method of accounting, all costs associated with acquisition, exploration and development of oil and gas reserves, including directly related overhead costs are capitalized. General and administrative costs related to production and general overhead are expensed as incurred.

All capitalized costs of oil and gas properties, including the estimated future costs to develop proved reserves, are amortized on the unit of production method using estimates of proved reserves. Disposition of oil and gas properties are accounted for as a reduction of capitalized costs, with no gain or loss recognized unless such adjustment would significantly alter the relationship between capitalized costs and proved reserves of oil and gas, in which case the gain or loss is recognized in operations. ~~Unproved properties and development projects are not amortized until proved reserves~~Costs associated with ~~the projects can be determined or until impairment occurs. If the results of an assessment indicate that the~~unevaluated properties are ~~impaired,~~excluded from the ~~amount~~full-cost pool until the Company has made a determination as to the existence of proved reserves. The Company reviews its unevaluated properties at the ~~loss from operations before income taxes~~end of each quarter to determine whether the costs incurred should be transferred to the full-cost pool and thereby subject to amortization. Additionally, the Company assesses all properties classified as unevaluated properties on a quarterly basis for possible impairment. During any period in which these factors indicate impairment, the cumulative drilling costs incurred to date for such properties are transferred to the full-cost pool and are then subject to depletion and the ~~adjusted carrying amount of the unproved properties is amortized on the unit-of-production method.~~full-cost ceiling test limitation.

There was $~~201,957~~57,811 and $~~1,140,154~~102,223 in depletion expense of reserves for the Company’s oil and gas properties for the ~~six~~three months ended ~~September~~June 30, 2023 and 2022, ~~and 2021, and~~respectively. In addition, the Company impaired $~~71,469~~141,965 and $~~422,750~~28,265 ~~for~~during the three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively.

The Ceiling is defined as the sum of: (a) the present value, discounted at 10% and assuming continuation of existing economic conditions, of (1) estimated future gross revenues from proved reserves, which is computed using oil and gas prices determined as the unweighted arithmetic average of the first-day-of-the-month price for each month within the 12-month hedging arrangements pursuant to Staff Accounting Bulletin (“SAB”) 103, less (2) estimated future expenditures (based on current costs) to be incurred in developing and producing the proved reserves; plus, (b) the cost of properties being amortized; plus, (c) the lower of cost or estimated fair value of unproven properties included in the costs being amortized; net of (d) the related tax effects related to the difference between the book and tax basis of our oil and natural gas properties. A ceiling test was performed as of ~~September~~June 30, 2023. The Company recognized impairment of $141,965 and $28,265 for the three months ended June 30, 2023 and 2022, ~~and there were no indications of impairment noted.~~respectively.

Reserve engineering is a subjective process that is dependent upon the quality of available data and interpretation thereof, including evaluations and extrapolations of well flow rates and reservoir pressure. Estimates by different engineers often vary sometimes significantly. In addition, physical factors such as results of drilling, testing and production subsequent to the date of an estimate, as well as economic factors such as changes in product prices, may justify revision of such estimates. Because proved reserves are required to be estimated using recent prices of the evaluation, estimated reserve quantities can be significantly impacted by changes in product prices.

Certain of our exploration, development and production activities are conducted jointly with other entities and, accordingly, the consolidated financial statements reflect only our proportionate interest in such activities.

Crude oil ~~are~~is carried at the lower of cost (last-in-first-out (LIFO)) or net realizable value. Inventory costs include expenditures and other charges directly and indirectly incurred in bringing the inventory to its existing condition and location.

~~Asset~~The Company follows the provisions of ASC Topic 410, “Asset Retirement and Environmental Obligations” which addresses financial accounting and reporting for obligations associated with the retirement ~~obligations~~of tangible long-lived assets and the associated asset retirement costs. The standard requires that the Company recognize the fair value of a liability for an asset retirement obligation (“ARO”) ~~primarily represent~~in the ~~estimated present~~period in which it is incurred. The ARO is capitalized as part of the carrying value of the ~~amount~~assets to which it is associated and depreciated over the ~~Company will incur~~useful life of the asset. The ARO and the related asset retirement cost are recorded when an asset is first drilled, constructed or purchased. The asset retirement cost is determined and discounted to plug, abandon and remediate its producing properties at the projected end of their productive lives, in accordance with applicable federal, state and local laws. The Company determined its ARO by calculating the present value using a credit-adjusted risk-free rate over the estimated economic life of the oil and gas properties. After initial recording, the liability is periodically adjusted to reflect (1) new liabilities incurred, (2) liabilities settled during the period, (3) accretion expense, and (4) revisions to estimated future cash ~~flows related to~~flow requirements resulting from changes in the ~~obligation. The retirement obligation is recorded as a liability at its~~ estimated ~~present value as~~future costs or the estimated economic useful lives of the ~~obligation’s inception, with an offsetting increase~~oil and gas properties. Subsequent adjustments in the cost estimate are reflected in the ARO liability and the amounts continue to ~~proved properties or to exploration costs in cost~~be amortized over the useful life of ~~revenue.~~the related long-lived assets.

~~The~~When the Company ~~considers accounts receivable, net of~~records an allowance for doubtful accounts ~~to be fully collectible. The allowance~~it 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.~~uncollateralized. Past-due status is based on contractual terms. Substantially all of the Company’s accounts receivable result from joint interest billings to its working interest partners. As of June 30, 2023 and March 31, 2023, the Company had established $1,325,678 and $650,562 in allowances for doubtful accounts. The Company has also established a reserve in the amount of $1,380,627 during the three months ended June 30, 2023, related to a receivable due under participation agreements entered into during the year ended March 31, 2023.

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

~~Property and equipment 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 of the lease, which is shorter than the estimated useful life of the improvements. Computer equipment has an estimated useful life of ~~three years~~.

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 has adopted Accounting Standard Update (“ASU”) 2017-04 Intangibles – Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment.

The Company reviews recoverability of long-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 recover the carrying value of its 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 value of the assets.

~~ASC 360-10 addresses criteria to be considered for long-lived~~Fixed assets ~~expected to be disposed of by sale. Six criteria~~and intangible assets with finite useful lives 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~~stated at ~~the lower of carrying amount or fair value~~cost less ~~costs to sell.~~accumulated amortization and impairment.

The Company assesses 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:

1. Significant underperformance relative to expected historical or projected future operating results;

2. Significant changes in the manner of use of the acquired assets or the strategy for the overall business; and

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 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 the current business model. Significant management judgment is required in determining whether an indicator of impairment exists and in projecting cash flows. The Company impaired all of their goodwill in the year ended March 31, 2023.

Property and equipment is stated at cost. Depreciation on property and equipment is computed using the straight-line method over the estimated useful lives of the assets.

The accounting guidance defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or non-recurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the accounting guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

Level 2: Inputs, other than the quoted prices in active markets that are observable either directly or indirectly.

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

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

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

The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle:

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

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

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

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

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

Variable consideration 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 transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate.

The Company 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.

In continuing operations, the Company only recognizes revenue from one source, oil and gas production and services.

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

The Company may, from time to time, do contract drilling of oil wells for other energy companies and that services revenue would be categorized as Other Revenue within continuing operations. The Company may, from time to time, sell off working interests in drilling projects on its own oil and gas mineral leases, and that revenue would be categorized within “Other Income (Expense)”.

The Company has accounted 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 are measured at fair value on the awards’ grant dates, based on the estimated number of awards that are expected to vest and will result in charges to operations.

The Company ~~follows~~does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. Management evaluates all of the ~~provisions~~Company’s financial instruments, including warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The Company generally uses a Black-Scholes model, as applicable, to value the derivative instruments at inception and subsequent valuation dates when needed. The classification of ~~ASC 280-10~~ ~~Segment Reporting.~~ ~~This standard requires that companies disclose operating segments based on~~derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-measured at the ~~manner in which management disaggregates~~end of each reporting period. The Black-Scholes model is used to estimate the ~~Company in making internal operating decisions. Prior to July 25, 2022,~~fair value of the Company classified their reporting segments in two segments: (i) Norr, which was their products segment specializing in skateboards and accessories; and (ii) Elysian, specializing in cannabis related operations. Effective with the acquisition of White River, the Company added a third segment for oil and gas production, following which the Company had three distinct segments up until the sale of Norr and Elysian. As a result, no segment reporting is provided as the only continuing operation is that of White River, and the Company only operates in one segment – oil and gas production.derivative liabilities.

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 stock issuable pursuant to the exercise of stock options and ~~warrants.~~warrants and conversions of preferred stock into common stock. 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.

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40), Accounting for Convertible Instruments and Contract’s in an Entity’s Own Equity. The ASU simplifies accounting for convertible instruments by removing major separation models required under current GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The ASU removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. The ASU simplifies the diluted net income per share calculation in certain areas.

The ASU is effective for annual and interim periods beginning after December 31, 2021, and early adoption is permitted for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. The Company does not believe this new guidance will have a material impact on its consolidated financial statements.

In May 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-04 “Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation— Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815- 40) Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options” which clarifies and reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. An entity should measure the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange as follows: i) for a modification or an exchange that is a part of or directly related to a modification or an exchange of an existing debt instrument or line-of-credit or revolving-debt arrangements (hereinafter, referred to as a “debt” or “debt instrument”), as the difference between the fair value of the modified or exchanged written call option and the fair value of that written call option immediately before it is modified or exchanged; ii) for all other modifications or exchanges, as the excess, if any, of the fair value of the modified or exchanged written call option over the fair value of that written call option immediately before it is modified or exchanged.

The amendments in this Update are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the amendments prospectively to modifications or exchanges occurring on or after the effective date of the amendments. The Company ~~does not believe~~has determined this new guidance will not have a material impact on its consolidated financial statements.

In August 2020, the FASB issued ASU No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for convertible instruments by removing the separation models for (1) convertible debt with a cash conversion feature and (2) convertible instruments with a beneficial conversion feature. ASU 2020-06 also requires the application of the if-converted method for calculating diluted earnings per share and the treasury stock method will be no longer available. This standard will be effective for smaller reporting companies in fiscal years beginning after December 15, 2023, with early adoption permitted. The Company early adopted the new standard beginning April 1, 2023 and the adoption did not have a material impact on our consolidated financial statements.

In June 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments (ASU 2016-13), which requires an entity to utilize a new impairment model known as the current expected credit loss (CECL) model to estimate its lifetime “expected credit loss” for financial assets held. ASU 2016-13 requires a cumulative effect adjustment to the balance sheet as of the beginning of the first reporting period in which the guidance is effective. In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842): Effective Dates, which defers the effective date of ASU 2016-13 to fiscal years beginning after December 15, 2022 for all entities except SEC reporting companies that are not smaller reporting companies. The Company adopted this new accounting guidance effective April 1, 2023 and the adoption did not have a material impact on our consolidated financial statements.

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.

~~With the acquisition of White River, their former parent, Ecoark contributed $3,000,000~~ ~~into the~~The Company ~~as part of the purchase. In addition, the Company has commenced the raising of~~raised capital through a private investment in a public equity (PIPE) and ~~has~~ raised approximately $~~4,500,000~~ 6,288,000as through the end of ~~November 8, 2022~~April 2023 from this PIPE ~~offering.~~offering, together with approximately $2,811,609 received from Participation Agreements to provide the funds necessary for the Company’s drilling program. The Company also began receiving drilling capital from the limited partners of the WR Fund during the year ended March 31, 2023. The Company has ~~determined~~incurred a net loss from operations and has a net capital deficiency that ~~there is no longer~~raises substantial doubt about ~~their~~its ability to continue as a going ~~concern as they~~concern.

The accompanying financial statements for the three months ended June 30, 2023 have been ~~able to generate sufficient cash flow from operations and those cash flows together with~~prepared assuming the ~~capital raised in~~Company will continue as a going concern, but the ~~recent financing are believed by Management to be sufficient for~~ability of the Company to continue ~~its operations over the next 12 months.~~

~~The Company has divested the Norr and Elysian businesses effective with the sale of those entities on September 20 and 21, 2022, respectively.~~

~~COVID-19 has had~~as a ~~profound effect~~going concern is dependent on the ~~U.S.~~Company obtaining adequate capital to fund operating losses until it establishes a revenue stream and ~~global economy~~becomes profitable. Management’s plans to continue as a going concern include raising additional capital through sales of equity securities and ~~may continue to affect~~borrowing. However, management cannot provide any assurances that the ~~economy and the industries in which we operate, depending on the vaccine and booster rollouts and the emergence of virus mutations.~~

~~COVID-19 did not have a material effect on the Consolidated Statements of Operations or the Consolidated Balance Sheets for the six months ended September 30, 2022 or prior fiscal year.~~

~~COVID-19 has also contributed to the supply chain disruptions which have not yet had a material effect for the Company. The~~ Company will ~~continue~~be successful in accomplishing any of its plans. If the Company is not able to ~~monitor~~obtain the ~~supply chain shortages affecting its business.~~

~~The extent~~necessary additional financing on a timely basis, the Company will be required to ~~which COVID-19 may impact~~delay, and reduce the scope of the Company’s ~~results will depend on future developments~~development and operations. Continuing as a going concern is dependent upon its ability to successfully secure other sources of financing and attain profitable operations. The accompanying consolidated financial statements do not include any adjustments that ~~are highly uncertain and cannot~~might be ~~predicted, including new information that may emerge concerning~~necessary if the ~~severity of the virus and the actions~~Company is unable to ~~contain its impact.~~continue as a going concern.

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

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

~~The Company acquired White River~~Fortium Holdings ~~Corp for~~Corp. issued Ecoark 1,200 shares of Series A ~~Preferred Stock~~ valued at $30,000,000. in the share exchange transaction. On an as converted basis, the1,200Series A shares convert to 42,253,521 shares of common ~~stock.~~stock which represents approximately 80% of the total issued and outstanding shares on a fully diluted basis at the time of the merger.

On July 25, 2022, the Company completed ~~its acquisition of White River.~~the share exchange transaction with Holdings. As a result of this transaction, which is accounted for as a ~~reverse merger, White River~~share exchange, Holdings is a wholly owned subsidiary of the Company (the “Merger”). In accordance with the terms of the Merger, at the effective time of the Merger, ~~each~~the outstanding ~~share~~shares of the common stock of ~~White River was~~Holdings were exchanged for the 1,200 shares of Series A ~~Preferred Stock~~ of the Company. This exchange of shares and the resulting controlling ownership of ~~White River Energy Corp~~the Company constitutes a reverse acquisition ~~resulting in a recapitalization of White River~~ and purchase accounting being applied to ~~White River Energy Corp~~the net assets acquired from Fortium Holdings Corp. under ASC 805 due to ~~White River~~Holdings being the accounting acquirer and ~~White River Energy Corp,~~Fortium Holdings Corp., being deemed an acquired ~~business.~~business as they were not a shell corporation. This requires financial reporting from the Merger close date forward to reflect only the historic consolidated results of ~~White River~~Holdings and to include the consolidated results for ~~White River Energy Corp~~the Company and subsidiaries from July 25, 2022 forward.

The primary reasons White River consummated the merger with White River Energy Corp were the opportunity to immediately become a public company without the process of doing its own initial public offering, thereby affording it the opportunity to more quickly raise capital and provide liquidity options to its stockholders, and at the same time acquiring the infrastructure required of a public company run by people experienced in investor relations and the public company regulatory compliance issues and filings required by virtue of appointing certain of Ecoark’s executive officers as executive officers of the Company.

The previously existing businesses of ~~White River Energy Corp~~the Company at the time of the Merger, consisting of Norr and Elysian, were sold within 60 days of the Merger taking place.

The estimated allocation of the purchase price of the assets acquired and liabilities assumed for the acquisition by ~~White River~~Holdings of ~~White River Energy Corp~~Fortium Holdings Corp. via the reverse acquisition are set forth ~~below:~~below in accordance with the guidance under ASC 805:

Purchase Price Allocation of White River Energy Corp
Purchase Price Allocation of Fortium Holdings Corp.

Current assets – inventory and deposits	$	113,472		$	113,472
Accounts payable and accrued expenses		(67,315	)		(67,315	)
Goodwill		5,917,843			5,917,843

Purchase price	$	5,964,000		$	5,964,000

This allocation is based on management’s estimated fair value of the ~~White River Energy~~Fortium Holdings Corp assets and liabilities atas of July 25, ~~2022. White River Energy Corp~~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 and the fact that the value was driven off of a business no longer included in the Company’s current operations. Fortium Holdings Corp. assets were derived from a total value of $5,964,000, based on 8,400,000 shares of common stock outstanding on July 25, 2022 and the closing price that day of $0.71 per share. The Company impaired the goodwill effective with the Merger on July 25, 2022, as they had decided at that time to sell the Norr and Elysian businesses, although the sales were effected later in September 2022.

The ~~following pro forma balance sheet reflects~~Company sold these two entities for a total of $4 in September 2022. The loss on the ~~details of the March 31, 2022 consolidated balance sheet~~sale is reflected as ~~presented~~a loss on disposal in the ~~Company’s financial~~consolidated statements ~~as a result~~ of ~~the reverse merger.~~

The following table shows the unaudited pro-forma results for the three months ended June 30, 2022, as if the acquisitions had occurred on April 1, 2022.

The condensed consolidated statements of operations and cash flows represent the operations of ~~White River~~Holdings for the ~~six~~three months ended ~~September~~June 30, 2022 ~~and 2021~~ include cost allocations from ~~White River’s~~Holding’s former parent Ecoark as discussed below.

The consolidated financial statements of ~~White River~~ Holdings ~~Corp~~ have been prepared in connection with the expected separation and have been derived from the consolidated financial statements and accounting records of Ecoark operated on a standalone basis during the periods presented and were prepared in accordance with ~~accounting principles generally accepted in the United States of America.~~GAAP.

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

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

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

~~The Company accounts for revenue in accordance with ASC Topic 606,~~ ~~Revenue from Contracts with Custo~~mers, which the Company adopted effective January 1, 2019. No cumulative adjustment to members equity was required, and the adoption did not have a material impact on our financial statements, as no material arrangements prior to the adoption were impacted by the new pronouncement.

In continuing operations, the Company only recognizes revenue from one source, oil and gas production. No disaggregation is required for the six and the three months ended September 30, 2022 and 2021, respectively.

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 (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for services performed.

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

~~White River’s inventory as of September 30, 2022 and March 31, 2022 of $91,925~~ ~~and $107,026, respectively, consisted of crude oil of approximately~~ ~~5,299~~ ~~and~~ ~~4,935~~ ~~barrels of unsold crude oil, respectively, using the lower of cost (LIFO) or net realizable value.~~

Property and equipment consisted of the following as of ~~September~~June 30, ~~2022~~2023 (unaudited) and March 31, ~~2022:~~2023:

~~As of September 30, 2022, the Company performed an evaluation of the recoverability of these long-lived assets.~~

Depreciation expense for the ~~six~~three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022 was $~~54,531~~86,775 and $~~16,394~~20,030, respectively. Depreciation does not include items in fixed assets that are not in ~~service, including the $180,000~~ ~~deposit made on two rigs.~~service.

~~Capitalized Drilling Costs~~Activity in the year ended March 31, 2023 consist of the following:

~~In January 2021,~~For the ~~Company commenced a drilling program on their Deshotel 24H well included in their proved reserves. The Company acquired $1,797,695~~ ~~along with accumulated depletion of $1,459,252~~ ~~related to the Deshotel 24H well that are recorded as capitalized drilling costs. Depletion expense for the six~~three months ended ~~September 30, 2022 and 2021 for the capitalized drilling costs was $80,244~~ ~~and $417,810, respectively. As of September~~June 30, 2022, the ~~capitalized drilling costs~~Company received proceeds of $999,999 from a related party for the sale of wells which were $~~322,806~~.

The ~~Company acquired $2,905,947~~ ~~in proved reserves, $4,908,087~~ ~~in undeveloped reserves, and $2,293,449~~ ~~in accumulated depletion on these reserves~~WR Fund received limited partnership interests during the year ended March 31, 2023 in the ~~acquisition of White River on July 25, 2022. Since the acquisition was a reverse merger transaction, the historical balances are those of White River. On August 1, 2022, the Company sold net reserves~~amount of $~~63,969~~3,244,653 for two drilling projects in Louisiana and Mississippi which funds were spent by the ~~assumption~~Company. There were no amounts collected during the three months ended June 30, 2023. The amounts received in the year ended March 31, 2023 are reflected in our unevaluated wells in progress as of ~~plugging liabilities of $95,125, for a net gain of $31,156~~.June 30, 2023. These projects were not completed during the three months ended June 30, 2023.

The following table summarizes the Company’s oil and gas activities by classification ~~for the periods ended September~~as of June 30, ~~2022~~2023 (unaudited) and ~~2021.~~March 31, 2023.

There was $57,811 and $102,223 in depletion expense of reserves for the Company’s oil and gas properties for the three months ended June 30, 2023 and 2022, respectively. In addition, the Company impaired $141,965 and $28,265 during the three months ended June 30, 2023 and 2022, respectively.

The following table summarizes the Company’s unevaluated wells in progress for the periods ended June 30, 2023 and 2022.

During the three months ended June 30, 2023, the Company conducted two drilling projects (a) Peabody AMI 12 #18, and (b) Denmiss #1. The Company anticipates completion of these projects in their second fiscal quarter ending September 30, 2023. The exploration costs above represent the costs incurred for the three months ended June 30, 2023 on those two projects. The Company reviews its unevaluated properties at the end of each quarter to determine whether the costs incurred should be transferred to the full-cost pool and thereby subject to amortization.

In conjunction with the approval permitting the Company to resume drilling in the existing fields, the Company has recorded an asset retirement obligation (“ARO”) based upon the plan submitted in connection with the permit. The ARO results from the Company’s responsibility to abandon and reclaim their net share of all working interest properties and facilities. ~~On July 25, 2022, $751,075~~ ~~of ARO was acquired in the acquisition of White River. The Company disposed of $671,162~~ ~~in ARO for sales of leases during the six months ended September 30, 2022, and $383,450~~ in the year ended March 31, 2022. Amounts reflected in the statements of operations are net of any oil and gas reserves being sold with the plugging liabilities. The Company recognized a net gain from dispositions of $~~391,533~~ ~~in dispositions of ARO and oil and gas reserves in the nine months ended September 30, 2022.~~

The following table summarizes activity in the Company’s ARO for the ~~six~~three months ended ~~September~~June 30, 2023 and 2022 ~~and the year ended March 31, 2022:~~(unaudited):

	September 30, 2022			March 31, 2022			June 30, 2023		June 30, 2022
		(unaudited)					(unaudited)		(unaudited)
Balance, beginning of period	$	1,303,751		$	1,531,589		$	1,463,931	$	1,303,751
Accretion expense		35,562			155,612			31,013		18,346
Reclamation obligations settled		-			-			-		-
Disposition due to sale of property		(671,162	)		(383,450	)		-		(576,036	)
Additions		-			-			-		-
Changes in estimates		-			-			-		-
Balance, end of period	$	668,151		$	1,303,751		$	1,494,944	$	746,061

Total ARO at ~~September~~June 30, ~~2022~~2023 and ~~March 31,~~ 2022 shown in the table above consists of amounts for future plugging and abandonment liabilities on our wellbores and facilities based on third-party estimates of such costs, adjusted for inflation for the ~~periods~~three months ended ~~September~~June 30, ~~2022~~2023 and ~~March 31,~~ 2022, respectively. These values are discounted to present value at ~~10%~~8% per annum for the ~~periods~~three months ended ~~September~~June 30, ~~2022~~2023 and ~~March 31,~~ 2022.

The Company borrowed funds from Atikin Investments LLC (“Atikin”), an entity managed by our current Chief Executive Officer, to pay for operating expenses. The Company formalized the arrangement on August 1, 2020 when it issued to Atikin a Junior Secured Revolving Promissory Note for a principal amount up to $~~200,000~~.

~~Through December 31, 2020, the Company borrowed a total $57,500~~ ~~and repaid $35,000~~ ~~leaving a balance of $22,500. This note had a maturity date of~~ ~~December 15, 2020, which was extended to~~ ~~January 15, 2021. The remaining $22,500~~ ~~and accrued interest of $1,524~~ ~~was repaid on January 11, 2021.~~

Long-term debt consisted of the following as of ~~September~~June 30, ~~2022~~2023 (unaudited) and March 31, ~~2022. The long-term debt below was acquired in the July 25, 2022 acquisition of White River was $143,801~~ ~~at the date of acquisition.~~2023.

Interest expense on long-term debt during the ~~six~~three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022 are $~~6,168~~10,042 and $02,421, respectively.

On December 20, 2022, the Company entered into a Securities Purchase Agreement (“SPA”) with an accredited investor (the “Purchaser”) whereby the Purchaser lent the Company an aggregate of $1,500,000 in gross proceeds and the Company issued the Purchaser a 10% Original Issue Discount Senior Secured Convertible Promissory Note in the principal amount of $1,666,666.67 (the “Note”). The proceeds are being used for working capital and growth capital.

Pursuant to the SPA, the Company, its direct and indirect subsidiaries, and Jay Puchir and Randy May, executive officers of the Company, entered into Guarantee Agreements (the “Guarantee”) with the Purchaser pursuant to which each subsidiary and Messrs. Puchir and May personally guaranteed to the Purchaser the payment of the Note. In addition, Messrs. Puchir and May pledged the shares of the Company’s common stock they hold or have the right to acquire in the anticipated distribution of the Company’s common stock by Ecoark as collateral to secure the Company’s obligations under the Note, and each individual also executed affidavits of confession to that effect. The affidavits of confession signed by Messrs. Puchir and May in connection with their Guarantees will permit the Purchaser to obtain a judgment against them personally upon the occurrence of an event of default without having to file a lawsuit.

The Note was due September 16, 2023. The Note bears interest at a rate of 12% per annum, payable monthly, subject to an increase to 18% per annum in case of an event of default as provided for therein. In addition, all overdue accrued and unpaid principal and interest is subject to a late fee at an interest rate equal to the lesser of 18% per annum or the maximum rate permitted by applicable law which if applicable accrues daily from the date such principal and interest is due.

The Note is convertible into shares of the Company’s common stock at any time following the issuance date at the Purchaser’s option at a conversion price equal to the lesser of (i) $1.00 per share and (ii) the average of the five-closing prices of the common stock immediately prior to the date of conversion, subject to certain adjustments (including based on the issuance of lower priced securities) and beneficial ownership limitations. Upon an event of default, the Purchaser may convert the Note at a reduced conversion price equal to 70% of the lowest closing price of the common stock for the 10 prior trading days.

Under the Note, beginning on April 16, 2023 the Company was required to pay monthly installments equal to one-fourth of the original principal amount at 120% of such principal amount, plus accrued but unpaid interest and any other amounts outstanding under the Note, with each payment resulting in a reduction in the principal of the Note at 100% (as compared to 120%). Furthermore, at any time after the issuance date of the Note, the Company may, after written notice to the Purchaser, prepay the Note in an amount equal to 120% of the then outstanding principal amount, plus accrued but unpaid interest and any other amounts outstanding under the Note. The Company will also be required to offer to pay the Note at 120% of the principal amount plus any unpaid accrued interest, upon the occurrence of certain events including (i) a change of control or sale of assets, (ii) a sale by the Company of equity or debt securities for gross proceeds to the Company of at least $5 million, and (iii) upon the maturity of the Note. The Company paid $625,000 in April through June 2023, and the Note is currently in good standing.

The Note is secured by the assets of the Company and its subsidiaries. The Note provides for certain events of default, including failure to pay amounts owing on the Note when due, failure to observe other covenants or obligations under the Note, default under any other indebtedness or material contract, a bankruptcy event with respect to the Company or a significant subsidiary, failure to maintain listing or quotation of the common stock on a trading market, failure to maintain the current public information requirement under Rule 144, and a judgment or similar process against the Company or any of its subsidiaries or assets in excess of $100,000. Upon an event of default, the Purchaser may cause the Note to become immediately due and payable and require the Company to pay 125% of the then outstanding principal amount, plus accrued but unpaid interest and any other amounts outstanding under the Note.

Further, pursuant to the Note the Company is subject to certain restrictive covenants, including covenants against incurring new indebtedness or liens on its assets, paying cash dividends or distributions on any equity securities, or entering into transactions with affiliates, subject to certain exceptions. In addition, under the Note the Company agreed to at all times reserve three times the number of shares of common stock into which the Note is convertible. The Company is in compliance with the covenants as of June 30, 2023.

In addition, pursuant to the SPA, the Company entered into a Registration Rights Agreement with each Purchaser in which the Purchasers are entitled to “piggyback” registration rights, pursuant to which the Company has agreed to include the underlying shares of common stock from the conversion of the Note in a registration statement, if the Company files a registration statement for another purpose, subject to certain terms and conditions.

On May 10, 2023, the Company entered into an amendment with the holder of the 10% Original Issue Discount Secured Convertible Note dated December 16, 2022 (see Note 7), and the designated counterparty under that certain Letter Agreement dated December 16, 2022 pursuant to which the Note and Consulting Agreement were amended as follows: (A) with respect to the Note, (i) the monthly redemption payment obligation was eliminated, (ii) the mandatory prepayment amount with respect to principal was increased from 120% to 127.5%, or $2,125,000, (iii) the mandatory default amount with respect to principal was increased from 125% to 132.5%, or $2,208,333.34; and (iv) the optional redemption amount with respect to principal was increased from 120% to 127.5%, or $2,125,000; and (B) with respect to the Consulting Agreement, an additional clause was added providing that the consultant shall receive on the date ending 180 days after the date a registration statement filed by the company registering the sale of the shares issuable thereunder is declared effective by the SEC, an additional number of shares of common stock if necessary such that the consultant shall have received a number of shares equal to $1,666,666.67 divided by the price per share of the common stock as of such date.

The conversion terms of the Note required the Company to bifurcate the conversion option from the host and classify the conversion option as a derivative liability under ASC 815. The value of the derivative liability at inception was $923,956.

During the three months ended June 30, 2023, the Company incurred interest expense of $39,584, amortization of original issue discount on the convertible note of $56,354, and amortization of debt discount of $358,194. The Company repaid $625,000 of the convertible note payable. The value of the derivative liability related to the convertible note at June 30, 2023 is $305,073. The convertible note is valued at $762,379, net of discounts. See Note 16. - Subsequent Events for information on certain amendments and a subsequent loan to the Company.

On December 20, 2022, the Company entered into a Consulting Agreement with an affiliate of the Purchaser described above (the “Consultant”), pursuant to which the Company agreed to issue shares 1,666,667 shares of common stock, subject to upward adjustment to the extent the closing price per share of the Company’s common stock is below $1.00 as of (i) the date a registration statement registering the resale by the Consultant of its shares of common stock is declared effective by the SEC (the “Effective Date”), and/or (ii) 90 days after the Effective Date. In such event, the number of shares will be increased to the quotient obtained by dividing $1,666,666.67 by the closing price of the common stock. The value of $1,666,667 was expensed as stock-based compensation under this agreement. The Company also agreed to indemnify the Consultant pursuant to indemnification provisions attached to the Consulting Agreement.

The Company issued Units consisting of Series C Preferred Stock and Warrants in a PIPE financing (see Note 9) and a Note payable (see Note 7) in two transactions (“Derivative Instruments”). The Series C Warrants as well as the conversion option on the Note payable contained characteristics that required the Company to classify them as derivative liabilities. The Derivative Instruments have been accounted for utilizing ASC 815 “Derivatives and Hedging.”

The Company identified embedded features in some of the agreements which were classified as liabilities. These embedded features included a variable conversion price that would convert those instruments into a variable number of common shares. The accounting treatment of derivative financial instruments requires that the Company treat the instrument as liability and record the fair value of the instrument as derivatives as of the inception date of the instrument and to adjust the fair value of the instrument as of each subsequent balance sheet date.

The Company determined the derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value. The Black-Scholes model requires six basic data inputs: the exercise or strike price, expected term, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate.

Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each derivative instrument is estimated using the Black-Scholes valuation model. The following assumptions were used during the three months ended June 30, 2023 and 2022:

Derivative liabilities as of June 30, 2023 (unaudited) and March 31, 2023 are as follows.

Activity related to the derivative liabilities for the three months ended June 30, 2023 is as follows:

The change in fair value of the derivative liability for the three months ended June 30, 2023 was $2,343,320.

On September 28, 2022, the ~~Company’s Board of Directors approved the increasing of the~~Company increased its authorized capital to 505,000,000 shares consisting of 500,000,000 shares of common stock (from 200,000,000) and 5,000,000 shares of preferred stock. ~~The Company filed a Certificate of Amendment to the Articles of Incorporation with the Nevada Secretary of State on September 29, 2022, and the changes became effective upon filing.~~

~~As of September 30, 2022 and March 31, 2022, there were~~ ~~8,400,000~~ ~~shares of the Company’s common stock issued and outstanding, respectively.~~See Note 1.

The Company executed the Exchange Agreement on July 25, 2022 and pursuant to the Exchange Agreement that day acquired ~~100~~%100% of the outstanding shares of capital stock of ~~White River~~Holdings from Ecoark, ~~White River’s~~Holding’s sole stockholder. In exchange the Company issued Ecoark 1,200 shares of the newly designated Series A. ~~The~~See Note 1 under “Description of Business” for more details on the Series ~~A will become convertible into approximately~~ ~~42,253,521~~ shares of the Company’s common stock upon such time as (A) the Company has filed a Form S-1, or other applicable form, with the SEC and such Form S-1 or other registration statement has been declared effective, or such Form 10 or other applicable form is no longer subject to comments from the Staff of the SEC, and (B) Ecoark elects to distribute shares of the Company’s common stock to Ecoark’s stockholders.A.

The Series A has a stated value of $30 million and has a liquidation preference over the common stock and any subsequent series of junior preferred stock equal to the stated value, plus any accrued but unpaid dividends.

Pursuant to the Exchange Agreement Mr. Randy May, Ecoark’s Chief Executive Officer, was appointed as Executive Chairman and as a director of the Company, and Mr. Jay Puchir, Ecoark’s Chief Financial Officer, was appointed as Fortium’s Chief Executive Officer and Principal Financial Officer of the Company. Effective July 28, 2022, the number of directors of the Company was fixed at five, and Danny Hames, James Cahill, Greg Landis, and Alisa Horgan were appointed as directors. Alisa Horgan is the daughter of Randy May, and wife of Richard Horgan, who was the Company’s Chief Executive Officer and sole director until after the closing of the White River acquisition.

~~Ecoark has advised us that it plans to spin-off the common stock issuable upon conversion of the Series A this fall, subject to regulatory approvals including the effectiveness of the Form S-1.~~

On July 29, 2022, the Company filed a Certificate of Designation with the Nevada Secretary of State designating a new series of preferred stock, the Series B. ~~The single authorized share~~See Note 1 under “Description of ~~Series B is entitled to vote with the Company’s common stock as a single class~~Business” for more details on ~~any matter brought before the stockholders, and~~ the Series B is entitled to a number of votes equal to the greater of (A) 100,000,000 votes, or (B) 50.1% of the Company’s voting power as of the applicable date of determination. Any outstanding Series B will be automatically cancelled upon the Company applying to have its common stock listed on a national securities exchange. As of the date of this Report, the Series B is unissued. The Board authorized the Series B because the Company is not subject to Section 13 of the Securities Exchange Act of 1934, so the protections and disclosure provided by Section 13(d) and the rules and regulations promulgated thereunder do not apply to the Company, and the Series B is intended to enable the Board to act quickly to react to any potential hostile takeover. The auto-cancellation provision was included because the super-voting rights contained in the Series B would violate the rules of a prospective national securities exchange.B.

On October 25, 2022, the Company filed a Certificate of Designation of the Rights, Preferences and Limitations of Series C Convertible Preferred Stock (the “Series C Certificate of Designation”) with the Nevada Secretary of State. The Series C Certificate of Designation provides for the issuance of up to 1,000 shares of Series C. See Note 1 under “Description of Business” and the below section in Note 9 “Series C Convertible Preferred Stock” for more details on the Series C.

From October 19, 2022 through June 30, 2023, the Company entered into a Securities Purchase Agreement (“SPA”) pursuant to which the Company sold 251.5126308 Units to accredited investors, with each Unit consisting of one share of Series C and five-year Warrants to purchase up to 200% of the shares of common stock issuable upon conversion of the Series C, at a purchase price of $25,000 per Unit for a total purchase price of $6,287,816 in the PIPE Offering. In addition, the Company sold another 11.6 units ($290,000) to investors, for which the deposit has not been made yet. The Warrants may be separately sold by the holders rather than exercised into shares of common stock, and the Company has submitted an application for the Warrants to be traded on the OTCQB under their own unique ticker symbol.

The net proceeds from the PIPE Offering, after offering expenses and related costs, have been used for working capital and general corporate purposes including oil and gas drilling on the Company’s working interests in Louisiana and Mississippi. The shares of the Series C are expected to be converted upon the effective registration of the Registration Statement filed by the Company.

In June 2023, the Company issued 167,133 shares to its three non-employee directors that were earned through March 31, 2023.

From July 25, 2022 through August 1,15, 2022, the Company entered into advisor agreements with directors, management and consultants pursuant to which ~~among other things,~~ the Company agreed to issue a total of 17,450,000 restricted shares of common stock at prices ranging from $0.71 to $~~0.75~~1.25 per share (combined value of $12,604,500). These issuances ~~represent~~represented 11,950,000 shares that are service-based grants ($8,699,500 value) and 5,500,000 shares that are performance-based grants ($3,905,000 value). The performance criteria isare based on the average number of gross barrels of oil produced per day (BOPD) ranging from 1,000 to 5,000 BOPD. The ~~service- based~~service-based grants vest through July 31, 2032. None of the 17,450,000 restricted shares of common stock have been issued by the transfer agent as of ~~September~~November 30, 2022, and on November 15, 2022, 25,000 of these service-based shares were cancelled as ~~none~~the employee terminated their employment prior to any issuance or vesting of those shares. None of the shares have ~~vested~~vested. On December 1, 2022, the remaining 17,425,000 restricted stock grants were cancelled. The Company then entered into new restricted stock unit “RSU” agreements on December 1, 2022 with these individuals, that represented 5,500,000 performance-based RSUs valued at $5,005,000, and 11,925,000 service-based RSUs valued at $10,851,750. The performance-based grants are based on the average number of gross barrels of oil produced per day (BOPD) ranging from 1,000 to 5,000 BOPD; and the service-based grants vest through November 30, 2032.

In the three months ended June 30, 2023, the Company granted 6,150,000 RSUs to advisors and management that are service-based grants that expire at various times through March 31, 2033.

The Company has expensed $~~657,935~~3,720,054 (including $75,000 to non-employee directors) in stock-based compensation infor the ~~period~~three months ended ~~September~~June 30, ~~2022~~2023 related to ~~these~~all of the Company’s grants. ~~This amount is reflected in additional paid in capital.~~ ~~In addition, as more particularly set forth in “Item 5. – Other Information”, the~~The Company has ~~agreed~~unrecognized stock-based compensation of $18,181,337 as of June 30, 2023 that will be expensed through March 31, 2033.

The Company on October 25, 2022, filed the Series C Certificate of Designation. The Company provides for the issuance of up to ~~pay~~1,000 shares of Series C.

The Company evaluated ASC 480-10-25-14 and determined that the Series C is a financial instrument that embodies an unconditional obligation that the issuer must or may settle by issuing a variable number of its ~~non-employee directors’ compensation~~equity shares and shall be classified as ~~follows: $100,000 in restricted~~a liability.

The Company evaluated ASC 480-10-55-22 and determined the Series C offering is considered a “share settled debt” and is measured at amortized cost and has been expensed immediately.

Conversion: Upon the earlier to occur of (i) the effectiveness of a registration statement on Form S-1 registering the sale by the Holders of the shares of common stock into which ~~will vest on the final business day of each quarter ($25,000) per quarter,~~such Series C is convertible and ~~$50,000 per year ($12,500 per quarter)~~(ii) December 31, 2023 (“Conversion Date”).

~~On September 14, 2021,~~Conversion Price: The lower of (i) $1.00 and (ii) an amount equal to 80% of the 30-day VWAP of the common stock as reported on the Principal Market as of the 10^th Trading Day immediately preceding the Conversion Date as such price may be adjusted from time-to-time pursuant to the terms hereof, including, without limitation, Section 8 of the agreement.

Negative Covenants: Certain restrictions are imposed if more than 25% of the Series C is outstanding at any given point of time.

If, at any time while any share of Series C is outstanding, the Company ~~issued~~shall issue any Common Stock, except for the Exempt Issuances, for a consideration per share or issues Common Stock Equivalents with an exercise, conversion or ~~1,400,000~~exchange price that is less than $0.80, then and thereafter successively upon each such issuance, the Conversion Price shall be reduced to such other lower price. ~~shares~~

Fundamental Transaction Clause: Present, without the distribution of ~~common stock~~cash.

The Company recognized amortization of the discount on the issuance of the Series C in the ~~exercise~~amount of ~~warrants~~$1,145,441 for the three months ended June 30, 2023. The value of the Series C liability as of June 30, 2023 is $~~14,000~~8,774,619.

The Company’s Board of Directors approved the adoption of the 2016 Stock-Based Compensation Plan (the “2016 Plan”) on May 12, 2016.

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 former 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 ~~September~~June 30, ~~2022, and March 31, 2022~~2023 and changes during the periods then ended are presented below:

As discussed herein, the Company issued 12,575,632 Warrants in the Series C Offering as of June 30, 2023. These Warrants have a five-year term and $1.00 exercise price. There were no warrants issued in the three months ended June 30, 2022.

~~On August 10, 2017, the Company entered into a Securities Purchase Agreement with two investors to purchase from the Company~~ ~~42,510~~ ~~shares of the Company’s common stock for an aggregate purchase price of $525,000. The investors received a warrant to purchase an additional~~ ~~5,314~~ ~~shares at an exercise price of $14.25~~ ~~per share, and a warrant to purchase an additional~~ ~~5,314~~ ~~shares at an exercise price of $19.00~~ ~~per share. Both warrants have a call provision when the Company’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 of these warrant agreements expired~~ ~~August 10, 2022~~.

On July 21, 2021, the Company entered into a Consulting Agreement with Atikin for a period of one year, expiring July 20, 2022 and issued Atikin, a company controlled by our current Chief Executive Officer, ~~1,400,000~~ ~~warrants that have a term of~~ ~~five years~~ ~~and an exercise price of $0.01~~, which were issued to Atikin effective upon the execution of a definitive written agreement with a cannabis company, which occurred on September 14, 2021, the effective date of the Treehouse SPA. On September 14, 2021, ~~700,000~~ ~~of these warrants were assigned to a third party and all~~ ~~1,400,000~~ ~~warrants were exercised for $14,000~~ ~~immediately thereafter.~~

~~The following assumptions were used for the nine months ended September 30, 2022 and former year ended December 31, 2021:~~

The Company has adopted ASU No. 2016-02, Leases (Topic 842)~~, as of July 25, 2022 when they acquired White River,~~ and as such ~~will account~~accounted for ~~their~~our leases in terms of the right of use assets and offsetting lease liability obligations under this pronouncement. The Company had had only short-term leases up through this acquisition. The Company recorded these amounts at present value, in accordance with the standard, using discount rates ranging between 0% and ~~11.36~~18.13%. 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 36 and 3948 months. Upon the election by the Company to extend the lease for additional years, that election will be treated as a lease modification and the lease will be reviewed for re-measurement.

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

The Company’s portfolio of leases contains ~~only~~ operating and financing leases. As of ~~September~~June 30, ~~2022,~~2023, the value of the unamortized lease right of use asset iswas $~~172,141~~224,438 ($165,674 in financing leases and $58,764 in operating leases) (through maturity at ~~June 30, 2024~~)November 2026). As of ~~September~~June 30, ~~2022,~~2023, the Company’s lease liability was $~~188,496~~208,669 ($137,906 in financing leases and $70,763 in operating leases) (through maturity at November 2026).

Maturity of lease liability for the operating leases for the period ended September 30,
2023	$	158,430
Maturity of lease liability for the operating leases for the period ended June 30,
2024	$	31,532		$	71,272

Imputed interest	$	(1,466	)	$	(509	)
Total lease liability	$	188,496		$	70,763

Disclosed as:
Current portion	$	157,260	$	70,763
Non-current portion	$	31,236	$	-

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

During the period ended June 30, 2020, the Company borrowed from Atikin, an entity managed by our then and now again our Chief Executive Officer, to pay for operating expenses. The Company formalized the arrangement on August 1, 2020 when it issued to Atikin a Junior Secured Revolving Promissory Note for a principal amount up to $~~200,000. Through December 31, 2020, the Company had borrowed a total $57,500~~ ~~and repaid $35,000~~ ~~leaving a balance of $22,500~~ ~~as of December 31, 2020. This note had a maturity date of~~ ~~December 15, 2020, which was extended through January 15, 2021, and has been repaid as of January 11, 2021. Interest expense for the period August 1, 2020 through December 31, 2020 was $1,479, and this was repaid as of January 11, 2021.~~

On July 21, 2021, the Company entered into a Consulting Agreement with Atikin for a period of one year, expiring July 20, 2022. Pursuant to the Consulting Agreement, as amended in September 2021, in exchange for Atikin’s provision of consulting services with respect to mergers and acquisitions and general business and operational assistance, the Company granted Atikin ~~1,400,000~~ ~~warrants that have a term of~~ ~~five years~~ ~~and an exercise price of $0.01~~, which were issued to Atikin effective upon the execution of a definitive written agreement with a cannabis company, which occurred on September 14, 2021, the effective date of the Treehouse SPA. The Company recognized a charge to the Consolidated Statement of Operations of $~~905,771~~ ~~for the fair value of these warrants. On September 14, 2021,~~ ~~700,000~~ ~~of these warrants were assigned to a third party and all~~ ~~1,400,000~~ ~~warrants were exercised for $14,000~~ ~~immediately thereafter. The Company also paid Atikin a $5,000~~ ~~consulting fee monthly. The Consulting Agreement was terminated June 30, 2022.~~

On September 1, 2022, the Company assigned 10% working interests in a well to two related parties that are controlled by officers ~~and directors~~ of the Company (Sky3D, LLC and ~~Atikin)~~Atikin Investments LLC) pursuant to the vesting of various performance conditions in the employment contracts of ~~Mr.~~Randy May and ~~Mr.~~Jay Puchir. In addition, two entities related to directors are working interest owners in wells the Company operates. As of June 30, 2023 and March 31, 2023, the Company is owed $791,011 and $683,043, respectively from these entities for their portion of the production expenses over the revenues received. These amounts are monitored closely and fluctuate each month. In addition at June 30, 2023 and March 31, 2023, the Company is owed $345,407 and $274,598 from another related party. Total related parties accounts receivable at June 30, 2023 and March 31, 2023 is $1,136,418 and $957,641.

The May Family Foundation controls ~~18.89%~~15.36% of the outstanding common stock of the Company as of ~~September~~June 30, ~~2022.~~2023. Additionally, Atikin, an entity which is controlled by Jay Puchir, our Chief Executive Officer, controls ~~8.2%~~6.65% of the outstanding common ~~stock and Richard~~stock. Alisa Horgan, the ~~former Chief Executive Officer and a former director~~daughter of ~~the Company, is a director of the Foundation. Mr. Horgan resigned following the White River transaction.~~ Randy May, our new Executive Chairman, ~~is the father-in-law of Mr. Horgan. In addition, Mr. May’s daughter and Mr. Horgan’s wife, Alisa Horgan,~~ became a director and officer of the Company following the ~~White River~~Holdings acquisition. Her husband Richard Horgan was the Company’s former Chief Executive Officer and director. Mr. May is the Chief Executive Officer of Ecoark. Each of Messrs. May, Horgan and Puchir disclaim beneficial ownership of the securities held by The May Family Foundation except to the extent of any pecuniary interest therein.

All amounts due to Ecoark were exchanged for the 1,200 shares of Series A and classified as a capital transaction with the adjustment to additional paid in capital as they were from a related party. The historical cost basis as of the date of the merger with White River Holdings that have been reclassified to additional paid in capital was $28,953,510 which were deemed to be permanently contributed by Ecoark effective with the issuance of the 1,200 Series A. The Series A shares are reflected in the Company’s historical financial statements in place of the equity instruments held by Ecoark on a historical cost basis. There was no impact on the consolidated statements of operations.

Ecoark had previously entered into a written Participation Agreement with Ault Energy, LLC (“Ault Energy”), a subsidiary of Ault Alliance, Inc. (“Ault”). After we acquired Ecoark’s oil and gas exploration and drilling business, we orally agreed to provide Ault Energy with similar rights. In furtherance of this understanding, we entered into written Participation Agreements with Ault Energy. As a result of delays in Ault Energy meeting its payment obligations, on April 4, 2023 we entered into an agreement with Ecoark and with Ault (dated March 29, 2023) under which the parties agreed we were owed $3.25 million for the participation rights, and Ecoark agreed to pay us up to $3.25 million in exchange for Ault Energy agreeing to the redemption of shares of its preferred stock of Ecoark. As of August 8, 2023, the balance due the Company from Ecoark was $1,380,627 from under this agreement. The sums received were credited to the project on the Company’s mineral lease located in Concordia Parish, Louisiana. In addition, Ault Energy has a payable to the Company of $364,942 relating to other drilling obligations. The Company has reserved both the $1,380,627 and the $364,942 due from Ault Energy as of June 30, 2023.

Based upon Ecoark’s public filings with the SEC, Ecoark has no cash resources and we are uncertain if it will make any further payments although Ault’s Executive Chairman has assured us Ecoark will pay us. While we understand from public filings that Ault has recently raised capital, given their liquidity issues, we cannot predict with certainty if and when we will receive the remaining balance due or any portion thereof from Ault for these participation rights.

Due to Ault Energy’s failure to make timely payments of the full amounts, the Company has concluded that Ault Energy’s participation rights are no longer enforceable except for amounts previously paid and for which all other obligations of Ault Energy have been satisfied. The Company is under no obligation to offer Ault Energy participation rights in the future, although it may do so voluntarily. We are seeking a replacement source of capital for one or more investors to acquire Ault Energy’s interests in the affected wells. As another option, if we are unable to collect payment, we may seek to exercise creditors’ remedies for the unpaid amounts.

The April 4^th agreement was approved by the independent directors of the Company and Ecoark with Mr. May and his daughter abstaining as White River Energy Corp directors, and Mr. May also abstained as an Ecoark Holdings director.

On April 30, 2023, the Company purchased supplies to be used in the current drilling projects for $183,000 from Sky3D, LLC, an entity controlled by Randy May, our Chief Executive Officer. In lieu of payment to this entity, the Company issued a credit against an account receivable from the entity.

The Company from time to time will borrow amounts from related parties, principally Mr. May and to a lesser extent, its Chief Financial Officer. During the three months ended June 30, 2023 the Company borrowed $2,730,326 from related parties in non-interest bearing advances of which $115,199 was repaid, and incurred $229,635 in accrued salaries and expenses that the related parties paid on behalf of the Company that are due to these related parties. These are considered short-term advances. As of June 30, 2023, the Company owed $4,027,012 to the related parties.

The Company measures and discloses the estimated fair value of financial assets and liabilities using the fair 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 defined as follows:

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 parties. The fair value of cash is determined based on Level 1 inputs. There were no transfers into or out of “Level 3” during the ~~six~~three months ended ~~September~~June 30, ~~2022, the months ended March 31, 2022~~2023 and ~~the year ended December 31, 2021.~~2022. The recorded values of all other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial 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 estimates.

The table in Note 8 shows a reconciliation of the beginning and ending liabilities measured at fair value using significant unobservable inputs (Level 3) for the three months ended June 30, 2023.

~~On October 9, 2020, White River SPV 3 LLC, entered into a~~ Participation Agreement (the “Participation Agreement”) by and among White River SPV 3 LLC, BlackBrush Oil & Gas, L.P. (“BlackBrush”) and GeoTerre, LLC, an unrelated privately-held limited liability company (the “Assignor”), to conduct drilling of wells in the Austin Chalk formation.Agreements

~~Pursuant~~The Company had entered into a number of Participation Agreements with third parties. We refer you to the ~~Participation Agreement, White River SPV 3 LLC funded 100% of~~Annual Report on Form 10-K for the ~~cost, $5,746,941, associated~~year ended March 31, 2023 filed with the ~~drilling and completion~~SEC on June 29, 2023 for all Participation Agreements entered into as of ~~an initial deep horizontal well in~~March 31, 2023. The Company has not executed any Participation Agreements during the Austin Chalk formation. The Participation Agreement required the drilling costs that were paid into a designated escrow account at the commencement of the drilling in January 2021, which it was. BlackBrush agreed to assign to the other parties to the Participation Agreement, subject to certain exceptions and limitations specified therein, specified portions of its leasehold working interest in certain Austin Chalk formation units. The Participation Agreement provides for an initial allocation of the working interests and net revenue interests among the assignor, BlackBrush and White River SPV 3 LLC and then a re-allocation upon payout or payment of drilling and completion costs for each well drilled. Prior to payout, White River will own ~~90%~~ ~~of the working interest and~~ ~~67.5%~~ ~~of the net revenue interest in each well. Following payout, White River will own~~ ~~70%~~ ~~of working interest and~~ ~~52.5%~~ ~~net revenue interest in each well.~~three months ended June 30, 2023.

The WR Fund which is consolidated by the Company as the Company’s subsidiary is the general partner and managing partner of the WR Fund as discussed in Note 1 under “Principles of Consolidation” is a closed-end private fund where general partners and limited partners invest into WR Fund and the WR Fund then purchases direct working interests in various oil and gas drilling projects of the Company. Subject to available cash, the Company will offer to purchase all outstanding WR Fund partnership interests (other than its subsidiary) The Company has formally committed to purchasing these working interests at a PV20 valuation by an independent firm. The PV20 valuation would be the present value of the remaining net cash flows from the WR Fund’s pro rata share of each oil well it has invested in during the term, discounted by 20%. The managing partner of the WR Fund, which is a wholly-owned subsidiary of the Company, shall receive a ten percent (10%) carried interest, payable starting after all investor partners have received a return of capital. In addition to the offer to purchase, each partner will have the option to remain a partner or exchange the partnership unit for a new partnership in a new fund the Company is offering. The Company plans to make the offer within 90 days of 42 months after the termination of the offering, but no later than March 30, 2027.

The WR Fund invested in two drilling projects in the Company during the year ended March 31, 2023. The first drilling project, the Peabody AMI 12 No 18, hit oil in January 2023 and the second oil project, the Denmiss No 1 well is expected to be spudded in August 2023. The Company is still evaluating the economic viability of the Peabody AMI 12 No. 18 well.

On January 23, 2023 the Company entered into a Membership Interest Purchase Agreement (the “MIPA”) with an entity (the “Seller”), which Seller is the sole member of another entity (the “Commenda” or the “Broker”), pursuant to which the Company agreed to purchase from the Seller all membership interests in the Broker in exchange for (i) payment of $70,000 in cash, (ii) prepaid expenses incurred or to be incurred by the Broker not to exceed $30,000, and (iii) up to $20,000 in transaction expenses incurred by the Seller in connection with the MIPA. In connection with the execution of the MIPA, the Company paid a $10,000 non-refundable deposit, which will be applied against the cash portion of the purchase consideration at closing. In February 2023, we filed a change of control application, referred to as a Continuing Membership Application or CMA, with FINRA in February 2023. In April 2023, we incurred a conflict with our proposed principal assigned as a control person of the broker-dealer post-acquisition and engaged new principals as control persons of the broker-dealer acquisition post-acquisition as well as engaged an outside advisory firm experienced in filing CMA applications. Upon re-filing the CMA application with the new principals, FINRA extended the CMA application start date to April 25, 2023 which provided the Company with 180 additional days to complete the acquisition from that date. The Company paid the sellers an additional $20,000 non-refundable payment in late May 2023 towards the acquisition price to further reiterate that the Company is committed to consummating this broker-dealer acquisition.

On August 10, 2023 we entered into an Amendment with the Seller to modify the MIPA and extend our time to close as follows:

The Company entered into the MIPA to acquire the Broker for the purpose of enabling the Company to create and sell interests in oil and gas funds to assist the Company in continuing its oil and gas exploration and drilling activities.

The Company’s Board of Directors approved Executive Employment Agreements pursuant to which our executive officers are entitled to the following compensation and other rights:

Randy May, our Chief Executive Officer, is receiving an annual base salary of $400,000, which has increased to $420,000 for the cost of living adjustment and was granted 5,000,000 shares of restricted common stock (since cancelled on December 1, 2022 and replaced with 5,000,000 RSUs with half of the RSUs vesting annually over a five-year period and the remainder vesting based on performance metrics set forth in the Agreement. Under his Agreement, Mr. May was also granted the following rights related to the Company’s oil and gas operations:

(A) an overriding royalty interest or carried working interest to be held in perpetuity from either the Company or its subsidiaries equal to 5% in any and all successfully drilled and completed oil and/or gas wells (an “ORRI”) during the term of his employment.

(B) a 15% participation right in the funding and ownership interest in any drilling or participation by the Company or any subsidiary in the drilling by the Company or a third party of an oil and gas well other than the WR Fund (a “Participation Right”).

~~The Parties~~Jay Puchir, our Chief Financial Officer, is receiving an annual base salary of $350,000, which has increased to $367,500 for the cost of living adjustment and was granted 5,000,000 shares of restricted common stock (since cancelled on December 1, 2022 and was granted 5,000,000 RSU) with half of the RSUs vesting annually over a five-year period and the remainder vesting based on performance metrics set forth in the agreement. Under his Agreement, Mr. Puchir was also granted the following rights related to the Participation Agreement, had previously entered into a Joint Operating Agreement, dated September 4, 2020 (the “Operating Agreement”) establishing an area of mutual interest, including the Austin Chalk formation,Company’s oil and governing the parties’ rights and obligations with respect to drilling, completion and operation of wells therein. The Participation Agreement and the Operating Agreement require, among other things, that White River SPV 3 LLC drill and complete at least one horizontal Austin Chalk well with a certain minimum lateral each calendar year and/or maintain leasehold by paying its proportionate share of any rental payments.gas operations:

~~On July 27,~~(A) a 5% overriding royalty interest or carried working interest during the term of his employment.

Alisa Horgan, our Chief Administrative Officer and a member of our Board of Directors and Mr. May’s daughter, is receiving an annual base salary of $180,000, which has increased to $189,000 for the cost of living adjustment and was granted 2,000,000 shares of restricted common stock (since cancelled on December 1, 2022 and was granted 2,000,000 RSUs) with the RSUs vesting annually over a 10-year period.

Mrs. Horgan’s husband, Richard Horgan, Senior Vice President of M&A and our former Chief Executive Officer, is receiving an annual base salary of $200,000, which has increased to $210,000 for the cost of living adjustment and was granted 2,000,000 shares of restricted common stock (since cancelled on December 1, 2022 and was granted 2,000,000 RSUs) with the RSUs vesting annually over a 10-year period.

Each of the above Agreements are also subject to the following severance provisions:

In the event of termination by the Company without “cause” or resignation by the officer for “good reason,” each officer is entitled to receive 2.99 years’ base salary, immediate vesting of unvested equity awards and continued benefits for six months.

In case of termination or adverse change in title upon a change of control, each officer is entitled to receive 2.99 years’ base salary, immediate vesting of unvested equity awards, continued benefits for 18 months and 100% of the existing target bonus, if any, for that fiscal year when the change of control occurs.

Further, upon the officer’s death or disability, as defined, during the officer’s term of employment, the officer’s estate or the officer, as applicable, becomes entitled to, among other things, a $500,000 lump-sum payment and full vesting of all outstanding equity grants made to the officer.

In the event an officer’s employment is terminated at the end of the term upon the notice of non-renewal and the officer remains employed until the end of the term, the officer will be entitled to receive six months’ base salary and continued benefits for six months.

In addition, the Company agreed to the following compensation for each non-employee director:

(A) an annual grant of $100,000 in RSUs which will vest on the final business day of each quarter equal to one-fourth of the total stipend, or $25,000 per quarter, with the number of shares to be determined based on the volume weighted average price of the Company’s common stock as of each quarterly vesting (the “RSU Grant”).

(B) an annual cash fee of $50,000 which will vest on the final business day of each quarter equal to one-fourth of the total fee, or $12,500 per quarter (the “Cash Fees”).

The director compensation set forth above is subject to upward adjustment upon the successful uplisting of the Company to a national securities exchange, whereupon the RSU Grant will be increased to $200,000 per year and the Cash Fees will be increased to $100,000 per year.

In addition, the Company entered into indemnification agreements with each of its officers and directors.

The Company entered into five-year Employment Agreements effective May 2023 with Colin Cosgrove and Zackery Holley.

Mr. Cosgrove, as Chief Executive Officer of the WR Fund Manager, receives a monthly base salary of $85,000 which for the first two years operates as a draw against commissions. This means that if commissions for a given month are less than the draw, Mr. Cosgrove receives no commissions; if the commissions are higher than the draw in a given month, Mr. Cosgrove will receive the difference within five business days. After the first two years he will receive both his monthly base salary and monthly commissions, regardless of whether the commissions are more or less than the salary. The commissions will be 10% of capital raised by the WR Fund and will be paid by the Company’s broker-dealer subsidiary if it receives FINRA approval. Mr. Cosgrove has the power to allocate the 10% between himself, Mr. Holley and any other persons associated with the broker-dealer. Because it is possible FINRA will not approve the broker-dealer acquisition, and the commissions by a registered broker-dealer, there is a risk that Mr. Cosgrove may not be paid the commissions.

Mr. Holley, as Executive Vice President of the WR Fund Manager, receives a monthly base salary of $65,000 which for the first two years operates as a draw against commissions. This means that if commissions for a given month are less than the draw, Mr. Holley receives no commissions; if the commissions are higher than the draw in a given month, Mr. Holley will receive the difference within five business days. After the first two years he will receive both his monthly base salary and monthly commissions, regardless of whether the commissions are more or less than the salary. The commissions will be 10% of capital raised by the WR Fund (or any entities they raise money for) and will be paid by the Company’s broker-dealer subsidiary if it receives FINRA approval. Mr. Holley has the power to allocate the 10% between himself, Mr. Holley and any other persons associated with the broker-dealer. Because it is possible FINRA will not approve the broker-dealer acquisition, and the commissions by a registered broker-dealer, there is a risk that Mr. Holley may not be paid the commissions.

Each of Messrs. Cosgrove and Holley are eligible for quarterly bonuses as determined by Mr. Puchir with the approval of Mr. May. Each of Messrs. Cosgrove and Holley received a grant of 2,500,000 RSUs with 850,000 vested, 200,000 vesting each May for four years and the balance of 850,000 RSUs vesting on May 2028, subject in all cases to continued employment on each applicable vesting date. Messrs. Cosgrove and Holly each have 10% participation rights in future wells drilled by the Company except for the WR Fund, which rights apply to future investment partnerships the Company sponsors.

The Company is a party to two separate actions in the United States District Court, Western District of Louisiana (Alexandria Division) filed on December 30, 2021. In each complaint the plaintiffs namely, in one case Steve H. Crooks and Era Lea Crooks (Case No. 1:21-CV-04457) (“Louisiana Case 1”) and in the other case Ricky Shirley and Dana Shirley (Case No. 1:21-CV-04458) (“Louisiana Case 2”), as plaintiffs who own property in Louisiana filed complaint against multiple defendants, who are involved in oil and gas drilling and production, including White River ~~entered into a Participation Agreement with Ault~~Operating, LLC (the “Operator”). The other defendants in Louisiana Case 1 are Sanchez Oil & Gas Corporation and Day Town Operating LLC. The other defendants in Louisiana Case 2 are Sanchez Oil & Gas Corporation, Day Town Operating LLC, Pryme Energy, LLC, Belle Exploration, Inc. and Kepco Operating, Inc. The complaints allege that the Operator and the other defendants acted in bad faith in removing minerals from the plaintiffs’ property, and the plaintiffs seek to ~~sell a~~ recover all proceeds from the Operator on the sale of production without deducting any costs. The two cases combined total $~~40%~~299,032 ~~working interest and~~ ~~28.8%~~ ~~net revenue interest~~in estimated production. These cases are still in the ~~Harry O’Neal 20-9~~early stages and management has concluded that there is a remote possibility of the plaintiff securing a favorable outcome and has not accrued for these amounts. The Operator maintains that their costs on the leases in question exceed the proceeds received from the sale of production.

The Company is the operator of leases that relate to a lawsuit filed in the 7^th Judicial District Court, Concordia Parish, Louisiana filed by Ravenwood Lands of Louisiana, L.L.C. et. al. v. Chevron U.S. Inc., et. al (Docket No. 154134; Div. “A,” 7th JDC; Parish of Concordia; State of Louisiana). The Company received a verbal demand to plug wells that have no future utility in Concordia Parish to avoid being named in a lawsuit. In August 2022, the plaintiff filed the lawsuit alleging an environmental tort for contamination of groundwater and soil on plaintiffs’ lands, which lawsuit did not name the Company as a defendant although the Company had performed certain work, including the plugging and abandonment of a well, ~~for $971,609~~.removal of certain equipment and upgrades at one of its tank battery facilities on the property. Moreover, the Company executed a tolling agreement that suspended the statute of limitations, which has been amended twice and currently expires in October 2023.

Customer Concentration. ~~Three~~Four and ~~three~~four customers accounted for more than 10% of the accounts receivable balance at ~~September~~June 30, ~~2022~~2023 and March 31, ~~2022~~2023 for a total of ~~74%~~96% and ~~87%~~97% of accounts receivable, of which two of the customers in each of the periods have been reserved in the allowance for doubtful accounts, respectively. In addition, ~~two~~one and ~~three~~two customers represent approximately ~~48%~~96% and ~~96%~~95% of total revenues for the Company for the ~~six~~three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021,~~2022, respectively.

Supplier Concentration. Certain of the raw materials, components and equipment used by the Company in the manufacture of its products are available from single-sourced vendors. Shortages could occur in these essential materials and components due to an interruption of supply or increased demand in the industry. If the Company were unable to procure certain materials, components or equipment at acceptable prices, it would be required to reduce its manufacturing operations, which could have a material adverse effect on its results of operations. In addition, the Company may make prepayments to certain suppliers or enter into minimum volume commitment agreements. Should these suppliers be unable to deliver on their obligations or experience financial difficulty, the Company may not be able to recover these prepayments.

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

We are exposed to fluctuations in commodity prices for oil and natural gas. Commodity prices are affected by many factors, including but not limited to, supply and demand.

~~On September 2, 2022, the Company issued a $200,000~~ ~~Secured Promissory Note (“Promissory Note”) to an unrelated third party. The term of the Promissory Note is one-year (September 2, 2023) and the Promissory Note bears interest at the rate of~~ ~~12%~~ ~~per annum. Interest payments in the amount of $6,000~~ ~~are to be paid quarterly on~~ ~~November 30, 2022, February 28, 2023, May 31, 2023 and August 31, 2023~~. The Promissory Note is secured by the full title and ownership of the current and future intellectual property and results associated with the Millbrook 3D Seismic project in Wilkinson County, MS which is currently being performed by ClearRock Geophysics LLC. The Company has accrued interest of $~~2,000~~ ~~on the Promissory Note as of September 30, 2022.~~

In September 2022, the Company sold both Norr and ~~Elysian pursuant to a Membership Interest Purchase Agreement (“MIPA”)~~Elysian. See Note 1 under “Description of Business” for ~~Norr~~more details on ~~September 20, 2022, and a Stock Purchase Agreement for Elysian on September 21, 2022. These entities were sold to unrelated third parties for $~~1 ~~each. The purpose of~~ the sale of ~~these entities was for the Company to divest themselves of their non-core assets~~Norr and ~~focus exclusively on the oil and gas production business of White River.~~Elysian.

The Company accounted for these sales as a disposal of the business under ASC 205-20-50-1(a) on September 20, 2022 and September 21, 2022 respectively at which time a loss was recognized. As a result of the ~~reverse merger~~Merger with ~~White River,~~Holdings, the current assets of $68,360 at March 31, 2022 for the ~~precombination~~pre-combination reporting entity is not reflected on the condensed consolidated balance sheet.

The Company reclassified the following operations to discontinued operations for the ~~six~~three months ended ~~September~~June 30, ~~2022 and 2021, respectively.~~2022.

~~The Company reclassified the following operations to discontinued operations for the three months ended September 30, 2022 and 2021, respectively.~~

~~The following represents the calculation of the loss on disposal of Norr at September 20, 2022:~~

~~The following represents the calculation of the loss on disposal of Elysian at September 21, 2022:~~

The following events occurred from ~~October~~July 1, ~~2022~~2023 up through the date of filing:

Effective July 1, 2023, Randy May was appointed Chief Executive Officer of the Company ~~assigned~~ ~~10%~~and Jay Puchir was appointed Chief Financial Officer of ~~their working interest in~~ the ~~Harry O’Neal 20-9 well to two related parties, pursuant to the vesting of various performance conditions in the employment contracts of Mr. May and Mr. Puchir.~~Company.

On ~~October 10, 2022,~~July 13, 2023, White River Private Capital Management (the “Manager”) and WR Fund, consolidated subsidiaries of the Company, entered into a ~~settlement agreement~~Managing Broker-Dealer Agreement (the “Agreement”) with Emerson Equity LLC (the “Broker”), pursuant to which the Broker agreed to serve as the managing broker-dealer to assist in selling partnership units of the WR Fund in a private placement offering for gross proceeds of up to $50,000,000 on a “best efforts” basis. Under the Agreement, the Broker may enlist other broker-dealers which are members of the Financial Industry Regulatory Authority to assist in the selling efforts as part of the selling group for the offering. As compensation for its services, the Broker will be entitled to receive the following compensation: (i) a selling commission of up to 6% of the gross proceeds from units sold by the Broker in the offering (“Total Sales”), which may be allocated to other selling group members, (ii) a placement fee equal to 1.5% of Total Sales, and (iii) a wholesaler fee equal to up to 1.25% of the Total Sales, which may be allocated to other wholesalers in the offering (including potentially to affiliates of the Broker), and (iv) a marketing diligence allowance equal to up to 1% of the Total Sales, which may be allocated to other selling group members. Under the Agreement, the WR Fund reserves the right to accept or reject any investments in the offering, and to terminate the offering, in its discretion.

On July 27, 2023, the Company granted 500,000 shares of common stock to a business development advisor for services rendered. The shares were valued at $1.24 per share ($620,000).

On July 27, 2023, the Company purchased supplies to be used in the current drilling projects for $389,174 from Sky3D, LLC, an entity controlled by Randy May, our Chief Executive Officer. The related party agreed to payment for these items to be in the form of a credit to the related party payable the Company has with the related party.

See Note 7 related to the Company’s senior convertible debt. On August 10, 2023, the Company entered into a second amendment to the SPA and Note pursuant to which the maturity date of the Note was extended to December 16, 2023. In connection with this amendment, the Company also entered into a new SPA with the same lender and borrowed an additional $1 million and issued the lender, a private family trust, an additional Original Issue Discount Convertible Note of $1,111,111 (“Note 2”) and with identical terms as the December 2022 Note. The Company’s Chief Executive Officer and Chief Financial Officer personally guaranteed Note 2 similar to their guarantees of the Note. In addition, the Company agreed to provide the lender with a ~~Harry O’Neal working interest owner whereby they granted them a~~ ~~50%~~carried working interest in one or more productive oil wells in an amount to be mutually agreed by the ~~Harry O’Neal 20-9 well~~parties, and that if such interest does not result in ~~exchange for a full release~~revenue to the lender of ~~claims~~at least $1,111,111 within 24 months from ~~all prior investments.~~

~~On October 13, 2022, White River Operating LLC, an indirect subsidiary~~the date of the amendment, to pay the lender the difference between such amount and the amount actually received by the lender pursuant to the carried working interest. Finally, the Company issued ~~a secured promissory note payable for $1,500,000, which was used for the two workover rigs purchased (total value of $1,800,000, where the Company paid a total of $300,000). The note bears interest at the lesser of (i) the prime rate published in the “Bonds, Rates and Yields” section of The Wall Street Journal plus~~ ~~7.50%; and (ii) the maximum rate permitted by applicable law, and payments consist of interest and principal in the amount of $25,000~~ ~~per month through~~ ~~October 13, 2025~~ ~~when the remaining balance of principal and interest is due. Randy May and Jay Puchir executed and delivered personal guarantees in favor of~~ the lender participation rights equal to ~~secure this note.~~15% of any future wells drilled.

~~On October 14, 2022, the Company entered into a financial planning consulting agreement in the total amount of $500,000. The payment is due upon completion of the services in the agreement, which have not yet been satisfied.~~

~~On October 24, 2022, the Company entered into a $25,000~~ ~~letter of credit with Generations Bank as a condition to begin preparations for future drilling operations on its Pisgah field lease.~~

Beginning October 19, 2022 up through November 8, 2022, the Company entered into a Securities Purchase Agreement (“SPA”) with accredited investors (the “Purchasers”) whereby the Purchasers agreed to purchase a total of 182.6419972 Units from the Company, with each Unit consisting of one share of a newly-designated Series C Convertible Preferred Stock (the “Series C”) and ~~five-year~~ ~~Warrants to purchase up to 200% of the shares of Common Stock issuable upon conversion of the Series C (the “Warrants”), at a purchase price of $25,000~~ ~~per Unit for a total purchase price of $4,566,050, of which the Company has received $4,531,050~~ as of November 8, 2022 (the “Offering”).The net proceeds from the Offering, after Offering expenses and related costs, will be used for working capital and general corporate purposes including oil and gas drilling on the Company’s working interests in Louisiana and Mississippi.

~~Each share of Series C has a stated value of $25,000~~ (the “Stated Value”), and will automatically convert into shares of the Company’s Common Stock upon the earlier to occur of (i) the effectiveness of a registration statement on Form S-1 registering the sale by the holder of the shares of Common Stock issuable upon conversion of the Series C (a “Registration Statement”) and (ii) December 31, 2023, with the number of shares of Common Stock to be determined by dividing the Stated Value by the lower of (A) $~~1.00~~ ~~and (B) 80% of the 30-day volume-weighted average price for the period commencing on the 10th trading day immediately preceding such date, subject to adjustment.~~

~~The Warrants are exercisable into 200% of the shares of Common Stock underlying the Series C contained in the Units purchased by the holder, at an initial exercise price of $1.00~~ per share (subject to adjustment as provided in the Warrant), beginning at the earlier to occur of (i) the effectiveness of a Registration Statement registering the sale by the holder of the shares of Common Stock underlying the Warrant, and (ii) December 31, 2023, and ending on the five-year anniversary of the SPA, or October 19, 2027.

The offer and sale of the Units and the Series C and Warrants contained therein pursuant to the SPA was not registered under the Securities Act of 1933 and was exempt from registration pursuant to Section 4(a)(2) thereof and Rule 506(b) promulgated thereunder.

Pursuant to a Registration Rights Agreement with the Purchasers, the Company has agreed to register the sale by the Purchasers of the shares of Common Stock issuable upon conversion of the Series C and exercise of the Warrants by filing a Registration Statement on Form S-1 within 30 days after the final closing of the Offering.

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

The following discussion and analysis should be read in conjunction with our unaudited consolidated financial statements and notes thereto presented in this Report as well as the audited consolidated financial statements and notes thereto of Ecoark Holdings, Inc.’s (“Ecoark”) (whose subsidiary, White River Holdings Corp, is the accounting acquirer) included in Ecoark’s Annual Report on Form 10-K for the year ended March 31, 2022 filed July 7, 2022.

This Quarterly Report on Form 10-Q (this “Report”) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the planned spin-off by BitNile Metaverse, Inc., formerly known as Ecoark Holdings, Inc. (“Ecoark”) of our common stock issuable upon conversion of its preferred stock, ~~our entrance into the oil and gas drilling industry through our acquisition of White River Holdings Corp,~~ the expected results from and trends and developments in our oil drilling and related activities, future plans for and anticipated transactions and relationships with respect to our oil and gas portfolio and operations, our expectations with respect to the WR Fund, as defined below, our working capital needs and liquidity issues, expectations with respect to Ault Energy and the resale of working interests, 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~~planned acquisition of a broker-dealer to ~~locate sources of capital necessary to meet~~assist us in our ~~business needs and objectives.~~fund raising efforts. All statements other than statements of historical facts contained in this Report, including statements regarding our future financial position, liquidity, business strategy and plans and objectives of management for future operations, are forward-looking statements. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.

The results anticipated by any or all of these forward-looking statements might not occur. Important factors, uncertainties and risks that may cause actual results to differ materially from these forward-looking statements include oil and gas price volatility and the continuation of high oil prices, the impact of ~~(i)~~ the Securities and Exchange Commission’s (“SEC”) ~~propose~~proposed climate change rules on us including enhanced regulatory compliance costs, ~~(ii) future strains of COVID-19, (iii)~~ the Russian invasion of the Ukraine, ~~(iv)~~ inflation and Federal Reserve interest rate increases in response thereto on the economy including ~~any resulting~~a possible recession ~~(v)~~which could result, supply chain shortages, ~~(vi)~~ the future prices of, and demand for, oil and gas, our ability to efficiently develop our current oil reserves and economically find or acquire additional recoverable reserves, and ~~(vii)~~ general risks related to drilling operations, together with those ~~described~~risk factors contained in ~~this Report under Item~~our Form 10-K for the year ended March 31, 2023, our Registration Statement filed with the SEC, as amended, and the risk factor contained in item 1A of ~~Part II – Risk Factors.~~this Report. We may also encounter regulatory delays in causing the ~~registration statement~~Registration Statement to go effective with the SEC in connection with Ecoark’s planned spin-off of shares of our common stock and the PIPE ~~offering described elsewhere in this Report.~~offering. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise.

White River Energy Corp ~~(formerly known as Fortium Holdings Corp.)~~ (“~~WREC”~~White River” or the “Company”) ~~is a holding company which, beginning~~operates in ~~late July 2022, operates in~~the oil and gas industry, with a focus on exploration, production and drilling operations on approximately 30,000 cumulative acres of active mineral leases in Louisiana and Mississippi through White River Holdings Corp. (“White ~~River”~~River Holdings”). ~~The~~Prior to the White River Holdings acquisition, the Company ~~previously~~ was formerly in the early stages of operations in the online sporting goods space, ~~through Norr LLC,~~ and was planning to operate as a retail distributor of cannabis products in ~~California through Elysian Premium Corp. The Norr and Elysian businesses were both sold during~~California. In September 2022, ~~to allow~~ the Company sold each of these entities to focus exclusively on its core business in the energy sector through its oil and gas operations.

White River also manages White River Energy Partners I LP (the “WR Fund”), which is consolidated for accounting purposes by the Company as White River Energy Partners Management I LLC, the Company’s subsidiary (the “Manager”), is the only managing general partner of the WR Fund and has the power to deploy the investments from the WR Fund into the Company for the various drilling projects they undertake. A subsidiary of the Company is the managing partner of the WR Fund. The Company’s subsidiary, the managing general partner contributed $100 as a capital contribution, and the ~~divested businesses are therefore not discussed in this section. All operations of~~remaining ownership held by the ~~divested entities~~limited partners are reflected as ~~discontinued operations in our condensed consolidated financial statements. For more details on these businesses, see our Annual Report on Form 10-K for~~non-controlling interest. The WR Fund was formed to provide the ~~year ended December 31, 2021.~~

Company with a non-dilutive source of capital to fund its oil and gas drilling ventures.

~~On September 28, 2022, we changed our fiscal year end~~As of White River Energy Corp from December 31 to March 31 to coincide with White River’s fiscal year end. On October 28, 2022, we filed an Amendment to our Current Report on Form 8-K/A disclosing the White River acquisition which filed as exhibits the historical financial statements for White River for the years ended March 31, 2022 and 2021 and the three months ended June 30, ~~2022 and June 2021.~~

On July 25, 2022, the Company entered into a Share Exchange Agreement with Ecoark and White River pursuant to which the Company acquired White River from Ecoark and in exchange issued Ecoark 1,200 shares of a new series of Series A Convertible Preferred Stock of the Company (the “Series A”). The transaction was treated as a business combination. Ecoark funded White River with $3 million in cash which was held by White River at the time of the business combination to ensure there was no lapse in White River’s ongoing business operations.

The Series A is non-voting, has a stated value of $30 million, and is convertible into 42,253,521 shares of the Company’s common stock, provided that the Series A will only become convertible if and when a Registration Statement on Form S-1 filed by the Company for the purpose of effecting a spin-off of the Company’s common stock to Ecoark’s stockholders has been filed and declared effective by the SEC, and Ecoark elects to effect said spin-off. The Company has been informed that Ecoark intends to effect the spin-off as soon as practicable following the closing of the business combination and the closing of its PIPE offering. Ecoark’s two senior management members were appointed to be the initial executive management team of the Company following the White River acquisition. Our Executive Chairman, Randy May, is one of five directors, his daughter Alisa Horgan is a new director and he recommended the other three new directors. Our previous sole officer and director, Richard Horgan, is Mr. May’s son-in-law.

~~Following the business combination,~~2023, our ~~principal operations consist of generating revenue through~~ oil and gas ~~exploration, production and drilling. Through White River the Company is now engaged in oil and gas exploration, production, and drilling operations on over~~acreage was comprised of approximately 30,000 cumulative acres of active mineral leases in Louisiana and Mississippi. ~~These subsidiaries are each engaged~~During the three months ended June 30, 2023 (“FQ 2023”) period and continuing presently, we continue to focus on expanding our exploration and production footprint and capabilities by acquiring real property and working interests in oil and ~~natural~~ gas ~~development, production, acquisition,~~mineral leases and exploration activities principally in the above-referenced states. We may also expand our energy asset portfolio or engage in other energy-related strategic transactions as they arise, provided we have sufficient capital and market and regulatory conditions otherwise enable us and/or are favorable to such transactions. Such transactions may serve a number of business objectives, including by seeking to expand our product and service offerings and/or to increase our geographic footprint.drilling exploratory wells.

~~Series B Preferred Stock~~The Company has received an analysis from an independent petroleum consulting company as of March 31, 2023 and 2022. We have impaired certain reserves on our oil and gas properties when necessary pursuant to our full cost ceiling test calculations.

~~Immediately~~The following ~~the White River acquisition, the Company designated a new Series B Preferred Stock with the purpose~~is an overview of allowing the Company’s Board of Directors to potentially ward off any potential hostile takeover attempts on the Company at a valuation that is deemed sub-optimal to stockholders by the Company’s Board of Directors. See Note 1 to the condensed consolidated financial statements for additional information.our oil and gas properties portfolio in Louisiana and Mississippi:

Through White River and its subsidiaries listed below, we are engaged in oil and gas exploration, production, and drilling operations on over 30,000 cumulative acres of active mineral leases in Louisiana, and Mississippi. White River owns the following subsidiaries in the following sub-categories:

~~Passive entities holding working interests in successfully completed oil and gas wells:~~

White River has recently formed an affiliated entity called White River E&P 1 LP (“WR Fund #1”) which will consist of private external general and limited partners consisting of retail accredited and institutional investors who have or will advance proceeds to the fund in exchange for partnership interests therein. WR Fund #1 Manager is the managing General Partner of WR Fund #1. WR Fund #1 is currently offering up to 4,000 units of partnership interest at a price per unit of $50,000 with a minimum investment of 1 unit or $50,000 through a 5-year closed-end fund structure. The fund is expected to close to new investors at the earlier of June 30, 2023 or the sale of all 4,000 units. Mr. May, our Executive Chairman and Mr. Puchir, our Chief Executive Officer are also serving in the roles as Co-Fund Managers of WR Fund #1 Manager. Proceeds of the fund will be intended to be used in drilling White River drilling projects whereby White River will receive a 25% promoted working interest and WR Fund #1 Manager will receive a 10% carried working interest at the successful closure of the fund and 1% annual management fee. White River has made a commitment to acquire the partnership interest of all investor partners in WR Fund #1 at the end of the fund’s 5-year term at the PV20 valuation generated by an independent valuation firm subject to the cash availability of White River.

While the Company anticipates collaborating with WR Fund #1 in pursuing oil and gas ventures that are mutually beneficial to both entities, conflicts of interest may arise. See “Risk Factors” below for more information. The Company has no equity ownership of WR Fund #1 but expect to provide drilling services for a fee and receive management fees.

In 2022, data indicates a sharp rise in inflation in the U.S. and globally. In the U.S., inflation has been triggered by constrained supplies and increasing demand of certain goods and services as recovery from the COVID-19 pandemic continues. The Company’s revenues, capital and operating costs are influenced to a larger extent by specific price changes in the oil and natural gas industry, and allied industries rather than by changes in general inflation. Crude oil prices generally reflect the balance between supply and demand, with crude oil prices being particularly sensitive to OPEC production levels, the Biden Administration’s efforts to reduce drilling and hydraulic fracturing and transition away from fossil fuels and/or attitudes of traders concerning supply and demand in the future. Prices for oil and gas related services are also affected by the worldwide prices for crude oil. As a result of increasing prices for oil and natural gas in 2021 and 2022 and general inflation, higher costs for goods and services in the oil and gas industry are being observed.

In response to recent inflationary pressures in the U.S., the Federal Reserve commenced interest rate hikes in calendar year 2022 in an effort to combat inflation. Because of these and other developments, a recession is expected in the coming months by many economic analysts, which may, among other things, reduce demand for the oil we drill as well as increase operating costs to the extent we are unable to procure required resources to continue our operations.

~~As a result of the overall volatility of oil prices, it is not possible to predict the Company’s future cost of oil it produces or services it uses or provides.~~

COVID-19 may continue to affect the economy and the industry in which we operate, depending on the vaccine rollouts and the emergence of virus mutations as well as the impact of supply chain disruptions.

COVID-19 did not have a material effect on the Consolidated Statements of Operations or the Consolidated Balance Sheets for the six and three months ended September 30, 2022 or 2021 included in this Report.

Because of the possibility of new variants of the virus and any governmental or economic reactions that may result, there is inherent uncertainty on whether any such developments could disrupt the operation of the Company’s business and have an adverse effect on the Company. Additionally, COVID-19 has been a contributing factor in supply shortages which have been pervasive in many industries. The extent to which the COVID-19 outbreak and other adverse developments may impact the Company’s results will depend on future developments that are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of the virus and the actions to contain its impact.

In early March 2020, oil prices dropped sharply and continued to decline, with oil futures briefly reaching negative levels as a result of multiple factors affecting the supply and demand in global oil and natural gas markets, including (i) actions taken by OPEC members and other exporting nations impacting commodity price and production levels and (ii) a significant decrease in demand due to the ongoing COVID-19 pandemic. However, certain restrictions on conducting business that were implemented in response to the COVID-19 pandemic have been lifted as improved treatments and vaccinations for COVID-19 have been rolled-out globally since late 2020. As a result, oil and natural gas market prices have improved in response to the increase in demand and global and United States reductions in drilling. However, in recent periods oil and natural gas prices have experienced increased volatility due to the uncertainty arising from prior variants of the virus and other factors.Business Update

During ~~2020~~the period covered by this Report, the Company has continued its efforts to grow its oil and ~~2021,~~gas exploration and drilling business. As of August 3, 2023, the posted NYMEX WTI price for crude oil ranged from $(37.63) to $84.65 per Bbl. On September 30, 2022, the NYMEX WTI price for crude oil was $79.49 per Bbl. Commodity prices have historically been volatile and we cannot predict events which may lead to future fluctuationsCompany has 11 productive wells in ~~these prices.~~operation.

In connection with the management of our businesses, we identify, measure and assess a variety of operating metrics. ~~In the Commodities segment, the~~The principal metrics we use in managing our ~~businesses~~business are set forth below:

“Bbl” – Bbl means barrel of crude oil. Metric used by management to specify the unit of measure (“in barrels”) from which the Company’s midstream customers use to incrementally purchase oil from the Company. Barrels are used as a unit of measure universally across the oil industry so the Company’s adoption of barrels to measure units of oil is a standard practice.

“Mbbl” – Mbbl means a thousand barrels of oil. See comments on “Bbl” metric. “Mbbl” is a standard for measuring larger quantities of barrels of oil in thousands of units.

“Production (Gross)” – Production (Gross) is defined as barrels of oil produced before accounting for working interests from non-mineral owning parties. Metric used by management to specify the total number of barrels of oil produced from a given oil well. Gross production includes both the barrels owned by the oil and gas mineral owners as well as the drilling and investing group who funded and drilled the well which are considered the working interest owners. Gross production is a standard term used universally across the oil industry, so the Company’s adoption of this term is a standard practice.

“Production (Net)” – Production (Net) is defined as the net barrels of oil produced after deducting the ownership portion owned by the mineral owning parties. Unless otherwise specified, management assumes that the mineral ownership portion of a well is 25%, so a 100% working interest would result in a 75% Net Production or Net Revenue interest after accounting for the ownership portion of oil production owned by the mineral owners.

~~Critical Accounting Policies, Estimates~~Oil and ~~Assumptions~~Natural Gas Reserves

As of June 30, 2023 all of our proved oil and natural gas reserves were located in the United States, specifically in Mississippi and Louisiana.

For more information on our oil and natural gas reserves, we refer you to our Annual Report on Form 10-K filed with the SEC on June 29, 2023.

During the three months ended June 30, 2023 (“FQ 2023”) , we undertook three drilling programs in Holmes County, MS, Concordia Parish, LA and Rankin County. MS.

The ~~critical accounting policies listed below are those~~Company is assessing all of its properties at the ~~Company deems most important~~present time to ~~their operations.~~determine any future drilling activities to commence.

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. These estimates include, but are not limited to, management’s estimate of provisions required for uncollectible accounts receivable, fair value of assets held for sale and assets and liabilities acquired, impaired value of equipment and intangible assets, including goodwill, asset retirement obligations, estimates of discount rates in lease, liabilities to accrue, fair value of derivative liabilities associated with warrants, 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.

Under the full-cost method of accounting, we are required, at the end of each reporting period, to perform a test to determine the limit on the book value of our oil and gas properties (the “Ceiling” test). If the capitalized costs of our oil and natural gas properties, net of accumulated amortization and related deferred income taxes, exceed the Ceiling, the excess or impairment is charged to expense. The expense may not be reversed in future periods, even though higher oil and gas prices may subsequently increase the Ceiling. The Ceiling is defined as the sum of: (a) the present value, discounted at 10% and assuming continuation of existing economic conditions, of (1) estimated future gross revenues from proved reserves, which is computed using oil and gas prices determined as the unweighted arithmetic average of the first-day-of-the-month price for each month within the 12-month hedging arrangements pursuant to Staff Accounting Bulletin (“SAB”) 103, less (2) estimated future expenditures (based on current costs) to be incurred in developing and producing the proved reserves; plus, (b) the cost of properties being amortized; plus, (c) the lower of cost or estimated fair value of unproven properties included in the costs being amortized; net of (d) the related tax effects related to the difference between the book and tax basis of our oil and natural gas properties.

Crude oil, products and merchandise inventories are carried at the lower of cost (last-in-first-out (LIFO)) or net realizable value. Inventory costs include expenditures and other charges directly and indirectly incurred in bringing the inventory to its existing condition and location.

Asset retirement obligations (“ARO”) primarily represent the estimated present value of the amount the Company will incur to plug, abandon and remediate its producing properties at the projected end of their productive lives, in accordance with applicable federal, state and local laws. The Company determined its ARO by calculating the present value of the estimated cash flows related to the obligation. The retirement obligation is recorded as a liability at its estimated present value as of the obligation’s inception, with an offsetting increase to proved properties or to exploration costs in cost of revenues.

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

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

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

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

~~The 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.

The Company ~~recognizes revenue for their proportionate share of revenue when: (i) the Company receives notification of the successful sale of a load of crude oil~~is not currently committed to ~~a buyer; (ii) the buyer will~~ provide a ~~price based on the average monthly price~~fixed and determinable quantity of ~~crude~~ oil and gas in the ~~most recent month; and (iii) cash is received the following month from the crude oil buyer.~~near future under existing contracts or agreements.

~~Level 2: Inputs, other than the quoted prices in active markets that are observable either directly or indirectly.~~

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

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

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

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. Management evaluates all of the Company’s financial instruments, including warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The Company generally uses a Black-Scholes model, as applicable, to value the derivative instruments at inception and subsequent valuation dates when needed. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-measured at the end of each reporting period. The Black-Scholes model is used to estimate the fair value of the derivative liabilities.

The amendments in this Update are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the amendments prospectively to modifications or exchanges occurring on or after the effective date of the amendments. The Company does not believe this new guidance will have a material impact on its consolidated financial statements.

~~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.~~

~~Production Data – Six and Three Months Ended September 30, 2022 and 2021~~

~~The following tables set forth our production data for the six months ended September 30, 2022 and 2021:~~

~~The following tables set forth our production data for the three months ended September 30, 2022 and 2021:~~

Results of Operations ~~For Continuing Operations For~~for FQ 2023 compared to the ~~Six Months Ended September~~three months ended June 30, 2022 ~~and 2021~~(“FQ 2022”)

White River Holdings has included in their historical consolidated financial statements certain operating expenses and other income (expense) from Ecoark that have been allocated to them in the FQ 2022 which are part of the Condensed Consolidated Statements of Operations. The allocations represented charges incurred by Ecoark for certain corporate, infrastructure and shared services expenses, including legal, human resources, payroll, finance and accounting, employee benefits, insurance, information technology, telecommunications, treasury, and other expenses. Where possible, these charges were allocated based on direct usage, with the remainder allocated on a pro rata basis of headcount, asset, or other allocation methodologies that are considered to be a reasonable reflection of the utilization of services provided or the benefit received by the Company during the periods presented pursuant to SAB Topic 1.B.1. The allocations may not, however, reflect the expense White River Holdings would have incurred as a standalone company for the periods presented. These costs also may not be indicative of the expenses that White River Holdings will incur in the future or would have incurred if White River Holdings had obtained these services from a third party. There were no allocations in FQ 2023.

Revenues for ~~the six months ended September 30,~~FQ 2023 of $195,937 compared to FQ 2022 of ~~$2,208,760~~$116,461, with the increase primarily related the higher average oil prices compared to FQ 2022. Production was comparable FQ 2023 to FQ 2022 for the six months ended September 30, 2021 of $2,303,071, reflected a slight decrease of $94,311. The decrease is primarily related to a decline in the average barrel price of oil period over period, and less production out of some of our wells ~~as we completed some repairs intended to enable greater production.~~that were online.

We expect our revenues to continue to increase in this fiscal year as a result of the drilling projects we expect to complete in the remainder of this fiscal year ending March 31, 2024 as we complete the projects currently being drilled.

The following table shows costs and expenses for ~~the six months ended September 30, 2022~~FQ 2023 and ~~2021:~~FQ 2022:

	Six Months Ended September 30,
	2022		2021		FQ 2023		FQ 2022
Costs and Expenses
Cost of revenues (excludes items below)	$	811,977	$	694,258
Lease operating expenses					$	105,448	$	92,543
Salaries and salaries related costs		2,321,066		1,245,878		4,829,951		445,605
Professional and consulting fees		319,274		141,220		814,273		-
Oilfield cists, supplies and repairs		4,223,608		595,628
Selling, general and administrative costs		2,594,372		2,607,561		2,814,530		1,307,940
Depreciation, amortization, depletion, accretion and impairment		6,202,396		1,234,262
Depreciation, amortization, depletion, accretion and impairment (a)						317,564		168,864
	$	16,472,693	$	6,518,807	$	8,881,766	$	2,014,952

Costs and expenses in ~~the six months ended September 30, 2022 increased by $9,953,886 when~~FQ 2023 totaled $8,881,766 compared to $2,014,952 for FQ 2022. The significant increases from FQ 2022 to FQ 2023 were the ~~six months ended September 30, 2021, primarily from the increase~~result of ~~$3,627,980 in oilfield costs as we repaired some wells in an effort to increase production. In addition, we increased labor in the fields contributing to the $1,109,066 increase~~stock-based compensation of $3,720,054 (included in salaries and salaries related ~~costs. Our general~~costs), bad debt expense related to joint interest billing receivables and ~~administrative~~receivables under participation agreements, additional management salaries, and professional fees incurred in FQ 2023 related to our regulatory filings, including our registration statement on Form S-1 for Ecoark’s spin-off of our common stock and the PIPE offering.

The impairment charges were the result of the ceiling test calculations we perform every quarter. The depletion changes are the result of less wells producing from 2022 to 2023. The depreciation increase in 2023 is the result of the purchase of our own drilling and workover rigs that are being depreciated in 2023 that we did not have in 2022.

We expect our costs ~~were consistent period~~and expenses to continue increase in our current fiscal year ending March 31, 2024 as a result of increased drilling projects as well as anticipated increases in stock-based compensation related to the granted RSUs on December 2, 2022 as well more recent equity grants including those in FQ 2023 and the recent grant referred to in Note 16. Subsequent Events. The Company is currently incurring material start-up costs related to the roll-out of both its Fund and the acquisition of its broker-dealer which are expected to cost approximately $4,000,000 over ~~period,~~the next 12 months on a cash basis and also include equity grants which could cost approximately $7,500,000 in non-cash equity compensation over the next five years due to stock grant vesting terms. The Company, however, expects to realize significantly more than that in allowable commission revenue over the next 12 months as these functions are expected to raise up to $50,000,000 in drilling capital for the Company prior to December 31, 2023 based on the offering of the WR Fund. The significant cost relates to salaries, benefits and equity grants to two new key securities salesmen the Company recently hired to spearhead capital raising for the WR Fund. The salaries and related share-based compensation to the two individuals are expected to add approximately $4,000,000 in the ~~periods ended 2022 and 2021 we recognized impairment, thus~~remainder of the ~~depreciation, amortization, depletion, accretion and impairment costs increased $4,968,134 in the 2022 period from the same period in 2021.~~year ending March 31, 2024.

The following table shows other income (expense) for ~~the six months ended September 30, 2022~~FQ 2023 and ~~2021:~~FQ 2022:

	Six Months Ended September 30,
	2022			2021			FQ 2023			FQ 2022
Change in fair value of derivative liabilities	$	-		$	2,157,838		$	(2,343,320	)	$	-
Gain (loss) on disposal of fixed assets/oil and gas		1,363,142			721,365
Derivative expense								(2,427,596	)		-
Amortization of original issue discount								(56,354	)		-
Amortization of debt discount on convertible note								(358,194	)		-
Amortization of discount on Series C Preferred Stock								(1,145,441	)		-
Interest expense, net of interest income		(4,123	)		(278,170	)		(150,134	)		(2,205	)
Other income	$	1,359,019		$	2,601,033
							$	(6,481,039	)	$	(2,205	)

Total other ~~income decreased $1,242,014~~expense was ($6,481,039) in ~~2022 from~~FQ 2023 compared to other expense of ($2,205) in FQ 2022. The increase was primarily the ~~same period~~derivative expense related to the warrants issued in ~~2021. The 2021~~connection with the PIPE offering for ($2,427,596), the change in the fair value of the derivative liability of ($2,343,320), and the ~~interest expense was~~amortization of debt discount, non-cash original issue discount on the ~~result~~convertible note and amortization of ~~a cost allocation from Ecoark~~discount related to ~~White River~~the Series C preferred stock increased our other expenses in ~~accordance with SAB Topic 1.B.1. In both 2022 and 2021 we recognized gains on sales of oil and gas reserves.~~FQ 2023.

Net loss from continuing operations for ~~2022~~FQ 2023 was ~~$(13,135,416)~~$15,166,868 as compared to net loss from continuing operations of ~~$(1,614,703)~~$1,900,696 for ~~2021.~~FQ 2022. The increase in net loss was primarily due to the items discussed above. Approximately 83% of loss from operations was from non-cash charges ~~of almost $5 million,~~including bad debt, depreciation, amortization, impairment, depletion and ~~the oilfield repair work completed~~accretion in 2022. While the work performed is intended and expected to increase production on the applicable wells, no assurances can be given that the increased production will offset the expenses incurred in the short-term or at all, including due to fluctuations in oil prices over time and other factors beyond our control. See “Risk Factors” for more information.

~~Results of Operations For Continuing Operations For the Three Months Ended September 30, 2022 and 2021~~

~~Revenues for the three months ended September 30, 2022 of $594,485~~FQ 2023, compared to ~~the three months ended September 30, 2021 of $728,667, reflected a decrease of $134,182. The decrease is primarily related to a decrease~~approximately 9% in ~~the average barrel price of oil period over period, and less production out of some of our wells as we completed some repairs intended to enable greater production.~~

~~The following table shows costs and expenses for the three months ended September 30, 2022 and 2021:~~

Costs and expenses in 2022 increased $8,669,883, primarily from the increase of $2,456,511 in oilfield costs as we repaired some wells to increase production. In addition, we increased labor in the fields contributing to the $945,634 increase in salaries and salaries related costs. Our general and administrative costs were very consistent period over period showing a decrease in these expenses of $340,005 in 2022 compared to 2021, and in 2022 we reflected greater depletion and impairment which lead to an increase in these expenses of $5,566,105 period over period.

~~The following table shows other income (expense) for the three months ended September 30, 2022 and 2021:~~

Total other income increased $518,164 in 2022 form the same period in 2021. The 2021 change in the derivative liability and the interest expense was the result of a cost allocation from Ecoark to White River in accordance with SAB Topic 1.B.1. In both 2022 and 2021 we recognized gains on sales of oil and gas reserves.

Net loss from continuing operations for 2022 was $(11,148,872) as compared to net loss from continuing operations of $(2,632,469) for 2021. The increase was primarily due to the oilfield repair work completed in 2022 and the impairment on the reverse merger.FQ 2022.

Liquidity is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate on an ongoing basis. Significant factors in the management of liquidity are revenue generated from operations, levels of accounts receivable and accounts payable and capital expenditures.

Net cash (used in) ~~provided by~~ operating activities was $(2,774,637) for ~~continuing operations was $(2,689,794) for the six months ended September 30, 2022,~~FQ 2023, as compared to ~~$327,795~~net cash (used in) operating activities of ($699,938) for ~~the same period in 2021.~~FQ 2022. Cash used in operating activities for ~~the six months ended September 30,~~FQ 2022 was primarily caused by ~~the $13,135,416~~White River Holdings net loss ~~from continuing operations including~~partially offset by adjustments including depreciation, amortization, depletion and accretion, share-based compensation, bad debt expenses and losses on the sale of fixed assets and disposal or abandonment of oil and gas properties as well as amounts allocated from Ecoark and changes in ~~current~~amounts due to Ecoark. In FQ 2023, the net cash used in operating activities was caused by the net loss offset by non-cash items such as depreciation, depletion, impairment, stock-based compensation, derivative expense and the change in fair value of the derivative liability as well as the net changes in our assets and liabilities ~~and the stock-based compensation of $657,935 and impairment of $5,917,843. In the 2021 period, the changes in operating activities related~~that yielded an offset to the ~~net~~ loss ~~from continuing operations~~ of ~~$1,614,703 offset by the changes in accounts payable and the amounts that were due to Ecoark.~~approximately $12.4 million.

Net cash ~~used in~~(used in) investing activities for FQ 2023 was ~~$89,353 for the six months ended September 30, 2022,~~$(898,986) compared to ~~$301,000~~net cash provided for investing activities of $394,399 for FQ 2022. In FQ 2023, the ~~six months ended September 30, 2021. Net~~ cash used in investing activities in the six months ended September 30, 2022 were comprised of proceeds received from the sale of equipment, net of purchases, and advances of $200,000 in notes receivable. In the 2021 period, the cash used in investing activitiesprimarily related to purchases of oil and gas properties, ~~offset slightly by sales~~net of asset retirement obligations, and purchases of fixed assets. Net cash provided by investing activities in FQ 2022 were comprised of proceeds from the sale of oil and gas properties as we sold various leases that had large plugging liabilities, partially offset by purchases of oil and gas properties, net of asset retirement obligations.

In FQ 2023, net cash provided by financing activities was $3,098,464 related to proceeds received from related party advances and our Series C Preferred Stock offset by repayment of long-term debt. Net cash provided by ~~(used in)~~ financing activities for ~~the six months ended September 30,~~FQ 2022 was ~~$3,107,454 which comprised of $3,000,000~~$255,539 arising from an increase in cash ~~transferred to White River~~overdraft and from ~~Ecoark which was a condition of such acquisition, $145,266 in~~ proceeds received from long-term debt, offset by repayments of long-term debt and a decrease in a cash overdraft. In 2021, we used $26,387 in cash flows from financing activities related to the decrease in a cash overdraft. Subsequent to September 30, 2022, we closed on a private investment in public equity (“PIPE”) for approximately $4,000,000 with accredited investors. Investors in the PIPE received units of Series C preferred stock and 200% warrant coverage on their investments. See Subsequent Events in the condensed consolidated financial statements for additional information.debt.

As of ~~November~~August 10, ~~2022,~~2023, the Company has approximately ~~$2,750,000~~$1,312,280 in cash and cash equivalents. ~~The Company believes this cash is sufficient to meet our cash needs for the 12 months following the filing of this Report.~~

The Company has continuous drilling requirements to drill or re-complete a well on its 9,615 Peabody Blackhawk lease every 270 days to keep the lease active. The Company drilled and completed a well in February 2022 on this oil and gas mineral lease and extended the lease to at least November 2022. Depending on the formation drilled, the costs could be as high as approximately $2,000,000. In this event, we would likely seek significant partners to share the cost. We have already orally agreed to afford the Ault Energy, LLC a 25% participation right in future wells we drill. Ault Energy, LLC is a subsidiary of BitNile Holdings, Inc. which invested $12 million in Ecoark in June 2022.

~~The Company has undertaken the following financing transactions to raise capital needed to continue its operations and execute its business plan.~~

~~On October 13, 2022,~~ ~~White River Operating LLC, an indirect subsidiary of~~ the Company, issued a $1,500,000 secured promissory note, which was used for the two workover rigs purchased (total value of $1,800,000, where the Company paid a total of $300,000). The note bears interest at the lesser of (i) the prime rate ~~published in the “Bonds, Rates and Yields” section of The Wall Street Journal~~ plus 7.50%; and (ii) the maximum rate permitted by applicable law, and payments consist of interest and principal in the amount of $25,000 per month through October 13, 2025 when the remaining balance of principal and interest is due. Randy May and Jay Puchir executed and delivered guarantees in favor of the lender to secure this note.

From October 19, 2022 through November 8, 2022, the Company entered into a Securities Purchase Agreement (“SPA”) with accredited investors (the “Purchasers”) whereby the Purchasers agreed to purchase a total of 182.6419972 Units from the Company, with each Unit consisting of one share of a newly-designated Series C Convertible Preferred Stock (the “Series C”) and five-year Warrants to purchase up to 200% of the shares of Common Stock issuable upon conversion of the Series C (the “Warrants”), at a purchase price of $25,000 per Unit for a total purchase price of $4,566,050, of which the Company has received $4,531,050 as of November 8, 2022 (the “PIPE Offering”). The net proceeds from the PIPE Offering, after offering expenses and related costs, will be used for working capital and general corporate purposes including oil and gas drilling on the Company’s working interests in Louisiana and Mississippi. The terms of the securities sold in the PIPE Offering are outlined under “Note 18 – Subsequent Events.”

~~Go-Forward Business Strategy~~The Company does not have available cash resources to meet its working capital needs for the next 12 months. We are relying upon the future results of our two new key executives in selling WR Fund units which in turn will, if successful, raise substantial capital for the WR Fund and at some point eliminate our need to pay their salaries since the commissions payable to them will eliminate the Company’s obligation. We have relied upon related party loans, principally from our Chief Executive Officer.

Ecoark had previously entered into a written Participation Agreement with Ault Energy, LLC (“Ault Energy”), a subsidiary of Ault Alliance, Inc. (“Ault”). After we acquired Ecoark’s oil and gas exploration and drilling business, we orally agreed to provide Ault Energy with similar rights. In ~~conjunction~~furtherance of this understanding, we entered into written Participation Agreements with Ault Energy. As a result of delays in Ault Energy meeting its payment obligations, on April 4, 2023 we entered into an agreement with Ecoark and with Ault (dated March 29, 2023) under which the parties agreed we were owed $3.25 million for the participation rights, and Ecoark agreed to pay us up to $3.25 million in exchange for Ault Energy agreeing to the redemption of shares of its preferred stock of Ecoark. As of August 8, 2023, the balance due the Company from Ecoark was $1,380,627 from under this agreement. The sums received were credited to the project on the Company’s mineral lease located in Concordia Parish, Louisiana. In addition, Ault Energy has a payable to the Company of $364,942 relating to other drilling obligations. The Company has reserved both the $1,380,627 and the $364,942 due from Ault Energy as of June 30, 2023.

Based upon Ecoark’s public filings with the ~~approximately $4.5 million received as~~SEC, Ecoark has no cash resources and we are uncertain if it will make any further payments although Ault’s Executive Chairman has assured us Ecoark will pay us. While we understand from public filings that Ault has recently raised capital, given their liquidity issues, we cannot predict with certainty if and when we will receive the remaining balance due or any portion thereof from Ault for these participation rights.

Due to Ault Energy’s failure to make timely payments of ~~November 8, 2022~~the full amounts, the Company has concluded that Ault Energy’s participation rights are no longer enforceable except for amounts previously paid and for which all other obligations of Ault Energy have been satisfied. The Company is under no obligation to offer Ault Energy participation rights in the ~~PIPE Offering described above, White River plans to initiate~~future, although it may do so voluntarily. We are seeking a ~~long-term business strategy to focus on sourcing~~replacement source of capital for ~~its current and future drilling projects through WR Fund #1~~one or more investors to acquire Ault Energy’s interests in ~~a non-dilutive manner~~the affected wells. As another option, if we are unable to ~~stockholders as opposed~~collect payment, we may seek to ~~equity financing through common or preferred stock issuances from WREC.~~

~~As consideration~~exercise creditors’ remedies for managing WR Fund #1, WR Fund #1 Manager will receive a 1% annual management fee and a promoted working interest and carried working interest on successfully completed drilling projects. See above under “White River Energy Corp Subsidiaries.”the unpaid amounts.

On July 13, 2023, the Manager and the WR Fund entered into a Managing Broker-Dealer Agreement with Emerson Equity LLC (the “Broker”), pursuant to which the Broker agreed to serve as the managing broker-dealer to assist in selling partnership units of the WR Fund in a private placement offering for gross proceeds of up to $50,000,000 on a “best efforts” basis, which it may undertake with the efforts of other broker-dealers, in exchange for compensation consisting of (i) a selling commission of up to 6% of the gross proceeds from units sold by the Broker in the offering (“Total Sales”), (ii) a placement fee equal to 1.5% of Total Sales, (iii) a wholesaler fee equal to up to 1.25% of the Total Sales, and (iv) a marketing diligence allowance equal to up to 1% of the Total Sales. The Broker is currently seeking to raise capital using other broker-dealers it with which has a relationship. Our two senior executives we recently hired are associated persons with the Broker.

As disclosed under “Unregistered Sales of Equity Securities and Use of Proceeds,” on August 10, 2023, the Company extended the maturity date of the 10% Senior Secured Promissory Note (the “Note”) originally issued on December 20, 2022 to December 16, 2023. It also entered into a new Securities Purchase Agreement with the same lender, borrowed $1,000,000 and issued an additional Note having a principal amount of $1,111,111 and with identical terms as the December 2022 Note as amended, and agreed to provide the lender with a carried working interest in one or more productive oil wells in an amount to be mutually agreed by the parties, and that if such interest does not result in revenue to the lender of at least $1,111,111 within 24 months from the date of the amendment, to pay the lender the difference between such amount and the amount actually received by the lender pursuant to the carried working interest.

Finally, the Company is exploring various forms of financing which could serve as a bridge financing to help White River sustain operations until the broker-dealer or investment bank are able to raise capital for the Company.

The Company will continue to require additional capital from either the WR Fund or from other sources to assist in their operations and drilling projects. The raising of additional funds may be on terms that continue to dilute the current shareholders.

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, net sales and expenses. We evaluate our estimates and assumptions on an ongoing basis and base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for the judgments we make about the carrying value of assets and liabilities that are not readily apparent from other sources. Because these estimates can vary depending on the situation, actual results may differ from these estimates. Making estimates and judgments about future events is inherently unpredictable and is subject to significant uncertainties.

There have been no material changes to our critical accounting policies and estimates as compared to those disclosed in our Form 10-K. For a description of our critical accounting policies and estimates, see Part I, Item 1, Note 1, “Description of Business, Basis of Presentation and Summary of Significant Accounting Policies” in our notes to the consolidated financial statements in this Report.

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.~~Act. Based on ~~his~~their evaluation as of the end of the period covered by this ~~Quarterly~~ Report, ~~on Form 10-Q,~~ Mr. ~~Jay Puchir, who is presently serving as~~Randy May, our Chief Executive Officer and ~~Principal~~Mr. Jay Puchir, our Chief Financial Officer ~~has~~have concluded that our disclosure controls and procedures were not effective to ensure that the information relating to our company, required to be disclosed in our SEC reports (i) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure as a result of material weaknesses in our 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.

From time-to-time, we may be involved in litigation relating to claims arising out of our operations in the normal course of business. As of the date of this Report, other than the following paragraphs, we are not aware of any ~~other~~ pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of our ~~operations~~operations.

The Company is a party to two separate actions in the United States District Court, Western District of Louisiana (Alexandria Division) filed on December 30, 2021. In each complaint the plaintiffs namely, in one case Steve H. Crooks and Era Lea Crooks (Case No. 1:21-CV-04457) (“Louisiana Case 1”) and in the other case Ricky Shirley and Dana Shirley (Case No. 1:21-CV-04458) (“Louisiana Case 2”), as plaintiffs who own property in Louisiana filed complaint against multiple defendants, who are involved in oil and gas drilling and production, including White River Operating, LLC (the “Operator”). The other defendants in Louisiana Case 1 are Sanchez Oil & Gas Corporation and Day Town Operating LLC. The other defendants in Louisiana Case 2 are Sanchez Oil & Gas Corporation, Day Town Operating LLC, Pryme Energy, LLC, Belle Exploration, Inc. and Kepco Operating, Inc. The complaints allege that the Operator and the other defendants acted in bad faith in removing minerals from the plaintiffs’ property, and the plaintiffs seek to recover all proceeds from the Operator on the sale of production without deducting any costs. The two cases combined total $299,032 in estimated production. These cases are still in the early stages and management has concluded that there ~~are~~is a remote possibility of the plaintiff securing a favorable outcome and has not accrued for these amounts. The Operator maintains that their costs on the leases in question exceed the proceeds received from the sale of production.

The Company is the operator of leases that relate to a lawsuit filed in the 7^th Judicial District Court, Concordia Parish, Louisiana filed by Ravenwood Lands of Louisiana, L.L.C. et. al. v. Chevron U.S. Inc., et. al (Docket No. 54134; Div. “A,” 7th JDC; Parish of Concordia; State of Louisiana). The Company received a verbal demand to plug wells that have no ~~proceedings~~future utility in Concordia Parish to avoid being named in a lawsuit. In August 2022, the plaintiff filed the lawsuit alleging an environmental tort for contamination of groundwater and soil on plaintiffs’ lands, which ~~any~~lawsuit did not name the Company as a defendant although the Company had performed certain work, including the plugging and abandonment of ~~our directors, officers or affiliates, or any registered or beneficial shareholder, is an adverse party or~~a well, removal of certain equipment and upgrades at one of its tank battery facilities on the property. Moreover, the Company executed a tolling agreement that suspended the statute of limitations, which has ~~a material interest adverse to our interest.~~been amended twice and currently expires in October 2023.

~~We cannot predict our future results because we have a limited operating history, both as a standalone oil and gas company and in general.~~

In July 2022, we acquired our oil and gas business, which presently comprises all of our operations and revenue. In September 2022, we sold our legacy businesses, which consisted of a small online sporting goods and apparel sales business and a development stage cannabis business. Further, White River’s oil and gas operations arethe below Risk Factor, see also ~~relatively new, and until we acquired~~ the business from Ecoark Holdings, Inc. (“Ecoark”), had operated as a portion of a larger public holding company with greater diversification and access to capital. Given our limited operating history both as a standalone company, in our newly acquired oil and gas business, and in general, it may be difficult to evaluate our future performance or prospects. You should consider the uncertainties that we may encounter as a company that should still be considered an early-stage oil and gas company. These uncertainties include:

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

~~We had incurred net losses~~Company’s Annual Report on ~~an annual basis since our inception and may continue to experience losses and negative cash flow in the future.~~

As of November 10, 2022, we had cash (not including restricted cash) of approximately $2,750,000. We have not been profitable on an annual basis since inception and had previously incurred significant operating losses and negative cash flow from operations. We recorded a net loss of approximately $6,922,753 and $9,756,222Form 10-K for the fiscal ~~years~~year ended March 31, ~~2022 (FY 2022)~~2023 and ~~2021 (FY 2021). We will likely continue to incur losses and experience negative cash flows from operations~~Registration Statement on Form S-1 (File No. 333-268707) for the ~~foreseeable future. If we cannot achieve positive cash flow from operations or net income, it may make it more difficult~~Risk Factors applicable to ~~raise capital based on our common stock on acceptable terms.~~the Company and its securities.

Because we may require additional capital to fund our business objectives and support our growth, our inability to generate and obtain such capital could harm our business, operating results, financial condition and prospects.

Since March 27, 2020, White River Holdings Corp, our new subsidiary, increased its operating expenses in supporting its business of oil and gas exploration and drilling and consummating acquisitions of oil and gas properties. Following our acquisition from Ecoark, we intend to continue to make substantial investments to fund our business and support our growth. Although we recently raised approximately $4,500,000 in a private placement, we may desire to increase our drilling activity or acquire additional oil and gas properties. In addition, a subsidiary is seeking to raise capital for an oil and gas drilling fund in which we will be the managing general partner.

If we are unable to ~~obtain adequate financing, our ability~~collect sums due to ~~continue to support~~us for certain participation rights, we could experience material adverse consequences on our business ~~growth~~ and ~~to respond to business challenges could be significantly impaired, and our business may be adversely impacted. In addition, our inability to generate or obtain the~~ financial ~~resources needed may require us to delay, scale back, or eliminate some or all of our operations and business objectives and sell some of our assets.~~condition.

~~Further, if we (as contrasted to the drilling fund discussed~~As described elsewhere in this Report) raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity or debt securities we issue could have rights, preferences and privileges superior to those of holders of our common stock.

From time-to-time, we may need to access capital markets to obtain long-term and short-term financing. However, our ability to access capital markets could be limited or adversely affected by, among other things, oil and gas prices, interest rates, our asset base, our track recordReport, in the industry, and the health or market perceptions of the drilling and overall oil and gas industry and the global economy. In addition, many of the factors that affect our ability to access capital markets, including the liquidity of the overall capital markets and the state of the economy and/or the oil and gas industry, among others, are outside of our control. There have also been efforts in recent years aimed at the investment community, including leading investment advisors, sovereign wealth funds, public pension funds, universities and other groups, promoting the divestment of fossil fuel equities as well as pressuring lenders and other financial services companies to limit or curtail activitiesconnection with companies engaged in the extraction of fossil fuel reserves, which, if successful, could limit our ability to access capital markets. No assurance can be given that we will be able to access capital markets on terms acceptable to us when required to do so, which could adversely affect our business, financial condition and results of operations.

~~Since the Company’s Executive Chairman and Chief Executive Officer are involved in other oil and gas ventures, and received certain interests and~~its participation rights in ~~our oil~~various drilling projects, as of August 4, 2023 Ault Energy, a subsidiary of Ault, owes us $1,745,569 in obligations related to various drilling projects. We entered into an agreement on April 4, 2023 with Ecoark and ~~gas drilling and production efforts pursuant to their employment agreements, conflicts of interest may arise.~~

Each of Randy May, the Company’s Executive Chairman, and Jay Puchir, the Company’s Chief Executive Officer, are involved in a new oil and gas venture in which they are the managers of a Company subsidiary, which is the managing general partner of a fund formed to invest in various oil and gas exploration and production ventures (the “Fund”). The Company will act as the driller for the Fund and expects to receive management fees. While the Company’s management believes workingAult (dated March 29, 2023) with the ~~Fund will benefit~~goal of permitting Ecoark to pay us the ~~Company, the Company and the Fund may compete with each other in drilling opportunities which creates a conflict~~sums due on behalf of ~~interest. To the extent that we have capital available~~Ault. However, due to invest in drilling for our own account and the Fund participates either with us, or separately, to the extent that a well is successful, this conflict can adversely affect us. At the same time, we benefit if the well is not successful.

~~Additionally, pursuant to their respective employment agreements, each~~Ecoark’s lack of Messrs. May and Puchir were granted a 5% overriding royalty interest from the Company and its subsidiaries in any and all successfully drilled and completed oil and/or gas wells, as well a participation right of 15% and 10%, respectively, in the funding and ownership interest in any drilling or participation by the Company or any subsidiary in the drilling by a third party of an oil and gas well, which does not include the Fund but will include any other investment funds the Company sponsors. The initial terms of their employment agreements are five years, subject in each case to possible renewal. While these arrangements are intended to directly align these officers’ incentives with the Company’s oil and gas exploration, drilling and production efforts by compensating them for the success of such ventures, they also directly divert any revenue generated by these ventures to these officers and away from the Company, which may be adverse to the Company and its shareholders. For example, a well that could have been profitable, or our operations as a whole, may not be profitable where they otherwise would have been as a result of the rights we have provided to these individuals. Mr. May also has personal oil and gas investments which may also compete with the Company. These conflicts of interest may adversely affect our operations and financial condition, divert management’s time and attention away from running our primary business and result in our management to providing business opportunities to the Fund instead of the Company, any of which could materially adversely affect us.

~~Any of these or other endeavors that those involved in our operations chooses to pursue could materially harm our operations and ability to execute our business plan.~~

~~Because we have agreed with the Fund that we will redeem all of its partners in five years,~~cash resources, we may not ~~have~~receive any further amounts. Further, the ~~capital to meet this obligation.~~

In order to attract investors to the Fund, we agreed to redeem all of its partners (other than our subsidiary which is the managing general partner) five years after it terminates its offering which will be not later than but possibly earlier than June 30, 2023. The Fund is seeking to raise up to $200 million, andCompany also has very limited cash resources as of the date of this Report has raised $3,000,000. The redemption will be based upon a 20% discount to an industry formula. We cannot predict what our financial condition or oil and drilling business will be on the redemption date. We may have to engage in ~~financing activities which will be very unfavorable to us including indebtedness with high interest and other unfavorable terms. If we fail to meet our redemption obligation, we may cease operations.~~

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

The Company’s drilling plan entails extracting oil reserves across its over 30,000 acres of shallow and deep drilling rights. The Company recently bought a deep drilling rig to further vertically integrate its operations. However, with historically high oil prices, ancillary services related to drilling and producing oil wells have risen significantly. While the Company is largely vertically integrated, it still relies on third parties for certain functions, including obtaining and deploying concrete and wire lining to evaluate the potential for production of a drill site and commencing oil producing operations.

We expect to pay for projected capital expenditures related to exploring and drilling additional oil wells with cash flows from operations or the proceeds from equity sales, including the Company’s recent financings. If we were unable to generate sufficient cash from operations, we would need to seek alternative sources of capital, including financing, to meet our capital requirements. To the extent that our working capital is insufficient, we may have to scale back operations including our drilling activity.

~~Since analyzing a well’s potential is very risky, our management may make errors in assessing the potential of wells which could lead to limited revenue.~~

In our efforts to acquire, explore, and drill interests in oil and gas wells, management will assess reports about the recoverable reserves, future oil and gas prices, operating costs, potential liabilities, and other factors relating to the wells. These assessments are necessarily inexact, and their accuracy is inherently questionable and uncertain. The review of a subject property in connection with its acquisition assessment may not reveal all existing or potential problems or permit it to become sufficiently familiar with the property to fully assess its deficiencies and capabilities. Management and other personnel involved in the process may not inspect every well, and may not be able to observe structural and environmental problems even if it does inspect a well. If problems are identified, various affiliates, vendors, contractors, or third parties may be unwilling or unable to provide effective contractual protection against all or part of those problems. Any acquisition of property interests may not be economically successful, and unsuccessful acquisitions may have a material adverse effect on the Company’s financial condition, and future results of operations.

~~Unless we develop new reserves, reserves we acquire and subsequent production will decline, which would adversely affect our future cash flows and results of operations.~~

Producing oil reservoirs generally are characterized by declining production rates that vary depending upon reservoir characteristics and other factors. Unless we conduct successful ongoing exploration and development activities or continually acquire properties containing proven reserves, our proven reserves will decline as those reserves are produced. Our future reserves and production, and therefore our future cash flow and results of operations, are highly dependent on our success in efficiently and economically finding or acquiring recoverable reserves. We may not be able to develop, find or acquire sufficient reserves to replace our current and future production. Further, our projections about a well’s production prospects could prove to be incorrect. For example, in late 2022 a number of U.S.-based oil and gas companies have produced less oil than expected, and adjusted there production estimates downward as a result. If we are unable to replace our current and future production, the value of our reserves will decrease, and our business, financial condition and results of operations would be materially and adversely affected. If our estimates provide to be incorrect now or in the future, for some or all of the wells we are exploring and producing from, it could materially adversely affect our operating results.

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

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

Further, we are required to obtain and maintain numerous environmental and oil and gas-related permits, approvals and certificates from various federal, state and local governmental agencies in connection with our exploration and production operations, and may incur substantial costs in doing so. If we acquire gas wells we may in the future be charged royalties on gas emissions or required to incur certain capital expenditures for air pollution control equipment or other air emissions-related issues. Additionally, our operations are subject to a number of federal and state laws and regulations, including the federal occupational safety and health and comparable state statutes, aimed at protecting the health and safety of employees.

Another significant risk inherent in drilling plans is the need to obtain drilling permits from local, state, federal and other governmental authorities, as appropriate. Delays in obtaining regulatory approvals and drilling permits, including delays which jeopardize our ability to realize the potential benefits from leased properties within the applicable lease periods, the failure to obtain a drilling permit for a well, or the receipt of a permit with unreasonable conditions or costs could have materially adverse effects on our ability to capitalize on proposed projects. As long as the Biden Administration or a successor Democratic Administration holds the Office of President, we expect the permitting process on federal lands will be marked by delays and refusals.

Although we will use third party contractors to handle delivery of crude oil and by-products, we may be subject to environmental liabilities for the acts of the contractors arising from the hauling and handling of hazardous materials, air emissions from our vehicles and facilities, and engine idling and discharge. Our operations involve the risks of environmental damage and hazardous waste disposal, among others. If we are involved in an accident involving hazardous substances, if there are releases of hazardous substances we transport, if soil or groundwater contamination is found at our facilities or results from our operations, or if we are found to be in violation of applicable environmental laws or regulations, we could owe clean-up costs and incur related liabilities, including substantial fines or penalties or civil and criminal liability, any of which could have a materially adverse effect on our business and operating results.

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

Our operations may generate waste that may be subject to the Federal Resource Conservation and Recovery Act (“RCRA’) and comparable state statutes. The EPA and various state agencies have limited the approved methods of disposal for certain hazardous and nonhazardous waste. Furthermore, certain wasted generated by natural gas and oil operations that are currently exempt from treatment as hazardous waste may in the future be designated as hazardous waste and therefore become subject to more rigorous and costly operating and disposal requirements.

The Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), RCRA and analogous state laws impose liability, without regard to fault or the legality of the original conduct, on specified classes of persons that are considered to have contributed to the release of a hazardous substance into the environment. These classes of persons include the owner or operator of the disposal site or sites where the release occurred and companies that disposed or arranged for the disposal of the hazardous substances found at the site. Persons who are or were responsible for releases of hazardous substances under CERCLA may be subject to joint and several liability for the costs of cleaning up the hazardous substances that have been released into the environment, for damages to natural resources, and for the costs of certain health studies. It is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by the hazardous substances released into the environment.

Our operations also may become subject to the Clean Air Act (“CAA”) and comparable state and local requirements. In 1990, Congress adopted amendments to the CAA containing provisions that have resulted in the gradual imposition of certain pollution control requirements with respect to air emissions. The EPA and states have developed and continue to develop regulations to implement these requirements. We are also subject to a variety of federal, state, local and international permitting and registration requirements relating to protection of the environment. While the Company believes it is in substantial compliance with current applicable environmental laws and regulations and that continued compliance with existing requirements will not have a material adverse effect on its operations, but it cannot be certain.

Legislation, regulations or government actions related to climate change, greenhouse gas emissions and sustainability initiatives and other “ESG” laws, regulations and government action, could result in increased compliance and operating costs and reduced demand for fossil fuels, and concern in financial and investment markets over greenhouse gasses and fossil fuel production could adversely affect demand for our products, limit our access to capital and materially and adversely affect our future operating results.

As described above, our operations are regulated extensively at the federal, state and local levels. Environmental and other governmental laws and regulations have increased the costs to plan, design, drill, install, operate and abandon oil and natural gas wells. The trend in recent years has been increased scrutiny and regulatory oversight of the oil and gas industry, including among other things increasingly the proposal of new laws and regulations aimed at reducing or restricting oil and gas production and use. Under these laws and regulations, we could also be liable for personal injuries, property damage and other damages. In addition, failure to comply with these laws and regulations may result in the suspension or termination of our operations and subject us to administrative, civil and criminal penalties and fines. Some of the recent government undertakings which may apply to the oil and gas industry are outlined in the paragraphs that follow.

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

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

In November 2021, the EPA released new proposed methane rules which would impose regulations on methane release at existing wells nationwide. These new rules, among other things, would implement a comprehensive monitoring program to require companies to find and fix leaks. Additionally, the new rules would require well operators to place gas that is produced in a pipeline to be sold when possible to prevent wasting the gas, which could force us or well operators on which we rely to sell the gas at lower prices and thereby reduce our revenues. As with most regulations, smaller participants like us will face more burdens due to the ~~compliance~~failure of Ault Energy and ~~other costs and~~Ecoark to pay these obligations. As a result, as a practical matter, the ~~limited revenue~~Company’s most realistic option is to ~~absorb such costs. The EPA is expected~~provide notice to issue a supplemental proposal in 2022 in the hopes of identifying additional regulatory means of reducing methane and other emissions, and has indicated an intention to adopt final rules before the end of calendar year 2022.

~~While a recent U.S. Supreme Court case imposed limitations on the EPA’s authority~~Ault Energy that it will terminate Ault’s rights under the ~~Clean Air Act, including by holding that the EPA’s attempted energy generation shifting entailed an overly broad interpretation of the statute’s delegation of authority,~~Participation Agreement and either find other investors or if the ~~EPA adopts~~well begins production use the ~~above or other regulations and such regulations are held~~production that Ault would have received to ~~be valid,~~fund the ~~resulting new regulatory framework could impose additional restrictions and costs on our operations which could materially adversely affect our business.~~Company’s operations. The ~~regulations at issue in~~failure to receive the ~~recent case pertained~~sums due has exacerbated the Company’s liquidity problems. The failure to an attempt to shift a portion of U.S. energy production from coal to natural gas by an enumerated percentage by 2030. In February 2022, a federal judge blocked a Biden Administration executive order which usedreceive the ~~“social cost of carbon.” The Interior Department responded by suspending permits for oil and gas drilling.~~

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

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

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

~~Because of the trend to use alternative energy technologies rather than oil and gas, it could have a material adverse effect on our results of operations~~.

Since our business depends on the level of activity in the oil and natural gas industry, any improvement in or new discoveries of alternative energy technologies that increase the use of alternative forms of energy and reduce the demand for oil and natural gas could have a material adverse effect on our business, financial condition, and results of operations. As the United States and certain other countries transition to electric vehicles and as certain states in the United States are banning any usage of gas as a fuel, the oil and gas business is adversely affected. We will be further subject to state regulatory efforts such as California’s announced goal of eliminating the sale of vehicles which use gas by 2035. Automobile manufacturers are beginning to announce that they will only manufacture electric vehicles in the future. President Biden has also stated that the 2022 retail price rise in the price of gasoline was part of a plan to transition to electric vehicles.

As an example, in August 2022, the California Air Resources Board passed a rule banning the sale of gas vehicles by 2035, requiring 35% of new passenger vehicles sold by 2026 to be electric or otherwise not using gas with the number rising to 68% by 2030. It has been reported that more than a dozen states typically follow California which is the largest market for the sale of passenger vehicles. The State of Washington has enacted a Rule similar to California. California also enacted a law effective July 1, 2022 banning the sale of gas powered lawn mowers and leaf blowers starting in 2024. Further in late September 2022 the California Air Resources Board banned natural gas heaters and furnaces by 2030. As this and the other trends outlined above are implemented, the Company could incur material and adverse effects on its results of operations.

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

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

~~If Congress enacts the proposed price gouging bill, it could have a material adverse effect on our oil and gas operations and the fund.~~

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

~~Because competition in the oil and natural gas industry is intense, we may be unable to effectively compete with larger companies with greater financial, technical and managerial resources.~~

We are a relatively small participant in the United States onshore oil and gas exploration and drilling industry and we face significant competition from major energy companies with substantial financial, technical, management, and other resources as well as large and other privately-held businesses which have competitive advantages. While we are mostly vertically integrated, our cost of operations is dependent in part on certain third-party services, and competition for these services can be significant, especially in times when commodity prices are high. Similarly, if and as we grow we will compete for trained, qualified personnel, and in times of lower prices for oil, we and other companies with similar production profiles may not be able to attract and retain this talent. Conversely, some of our competitors have a broader portfolio properties, assets and rights that in many cases enable them to both explore and drill wider geographic areas with a greater likelihood of success and/or complete the exploration, drilling, distribution and sale processes at lower costs while also offering related services to third parties.

Our ability to acquire and develop reserves in the future, and maintain and grow our customer base will depend on our ability to evaluate and select suitable properties and assets and to consummate transactions in a highly competitive environment for acquiring such properties and assets, marketing oil and gas, securing and compensating trained personnel and meeting demand for our products and services. Also, there is substantial competition for capital available foryour investment in the oil and gas industry. Our competitors may be able to pay more for personnel, property and services and to attract capital at lower rates. Because of our small size, we may be more affected than larger competitors. Further, the current inflation the United States is facing will affect us more that many well capitalized competitors.

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

We currently own three deep drilling rigs which can reach vertical depths of up to 20,000 feet, and three workover rigs. However, we do not currently own a drilling rig capable of drilling deep lateral wells in formations on our oil and gas mineral lease properties such as the Tuscaloosa Marine Shale (“TMS”). When the prices of crude oil increase, or the demand for equipment and services is greater than the supply in certain areas, we could encounter an increase in the cost of securing a deep drilling rig capable of performing lateral drilling projects in the TMS. In addition, larger producers may be more likely to secure access to such equipment by offering more lucrative terms. If we are unable to acquire access to such resources, or can obtain access only at higher prices, our ability to convert our reserves into cash flow could be delayed and the cost of producing those reserves could increase significantly. In addition to increasing our costs, we may face the possibility of poorly rendered services or faulty or damaged equipment coupled with potential damage to downhole reservoirs and personnel injuries. Such issues can increase the actual cost of services, extend the time to secure such services and add costs for damages due to accidents sustained from the overuse of equipment and inexperienced personnel. All of these factors may adversely affect our results of operations and financial condition.

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

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

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

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

~~Because of the speculative nature of drilling oil and gas wells, we cannot guarantee any return on your investment.~~

Oil and natural gas exploration is an inherently speculative activity. Before the drilling of a well, we cannot predict with absolute certainty the volume of oil and natural gas recoverable from the well; or the time it will take to recover the oil and gas.

In addition, oil and gas wells by their nature are depleting assets with respect to which production could last anywhere from a few months to more than 30 years. As a result, annual production will naturally decline over the life of a well, and so too will returns to investors.

~~Even if targeted wells are completed and produce oil and gas in commercial quantities, it may not produce enough oil and gas to pay for the costs of drilling and completing the well.~~

~~Because the oil and gas drilling business is very cyclical, we may face a downturn which in turn can adversely affect our business.~~

Between inflation, supply chain shortages and the war in Ukraine, among other factors, the price of oil has spiked in 2022 with peak oil prices over $122 per barrel of oil for WTI crude on June 8, 2022, which was the highest level in over 10 years. However, as the economy is seemingly worsening and the stock market declining, the price of crude oil fell to early January levels with WTI crude at $78.74 on September 24, 2022, although the price has since increased to above $90 in early November 2022. Changes in oil and natural gas prices (and specifically downwards trends or the lack of an increase) will have a significant adverse impact on our cash flow. Lower oil and gas prices may not only impact our revenues, but also may reduce the amount of oil and gas that we can produce economically. Historically, oil and gas prices have been volatile, and it is likely that they will continue to be volatile in the future. At some point, the regulatory factors facing fossil fuels and the drilling for oil as well as a recession may make oil drilling financially unattractive. In that event, our results of operations may be materially and adversely affected.

The volatility of oil and natural gas prices could also hamper our ability to produce oil and gas economically. Oil and natural gas prices are volatile, and a decline in prices, especially recent historic declines below zero, would significantly, adversely affect both profitability and overall financial health of the Company. The oil and gas industry has experienced severe downturns characterized by oversupply and/or weak-to-zero demand.

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

Currently, oil prices are higher than they have been in prior years, although there can be no certainty as to if, when and to what extent they may decline in the future. Further, while higher oil prices generally provide benefits to our drilling operations to the extent we have productive wells during the high price periods, they also pose increased costs in drilling additional wells.

~~Our operating results fluctuate due to the effect of seasonality, adverse weather or other natural occurrences that generally impact the oil and gas industry.~~

Operating levels of the oil industry have historically been lower in the winter months because of adverse weather conditions. Accordingly, our revenue generally follows a seasonal pattern. Revenue can also be affected by other adverse weather conditions, holidays and the number of business days during a given period because revenue is directly related to the available working days. From time-to-time, we may also suffer short-term impacts from severe weather and similar events, such as tornadoes, hurricanes, blizzards, ice storms, floods, fires, earthquakes, and explosions that could harm our results of operations or make our results of operations more volatile.

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

In the ordinary course of our planned business, we may be exposed to various claims and litigation related to commercial disputes, personal injury, property damage, environmental liability and other matters. If we incur increases in litigation or serious claims, there are developments in legislative or regulatory trends, or our employees or contractors incur a catastrophic accident or series of accidents, involving property damage, personal injury, or environmental liability it could have a material adverse effect on our operating results and financial condition.

~~The extension of our active oil and gas mineral leases are in some cases subject to performing continuous drilling operations.~~

Our oil and gas mineral leases may contain acreage that is either held by production or not. In order to extend the leased acreage not held by production, the Company must maintain minimum continuous drilling operations in order to extend these leases to future periods. Further, at least one of our leases requires us to drill a new well every 270 days in order to maintain the rights, and our failure to do so would result in us losing the rights unless the owner agrees to a waiver or extension. The Company’s inability to perform operations during any given period could result in the Company’s losing the rights to future operations on that lease.

~~We may be required to meet future drilling conditions and lack the capital to protect our interest in one or more wells.~~

In addition to the requirements under our current interests, we may acquire interests in wells that require continuous drilling in order to maintain our interest. In the past, White River Holdings Corp a then subsidiary of Ecoark was unable to meet the drilling condition, which permitted our Executive Chairman to personally acquire a portion of the working interest when he made the required investment. Because we may acquire oil and gas mineral leases that may require future drilling to maintain the leasehold interest, if we do the Company will be required to invest in future drilling in order to extend these leases to future periods or lose the interest in any such leases. If we lack the capital, our affiliates may acquire the leases by investing their own capital.

~~Our ability to spread the risks of drilling among many wells may be limited~~.

Our ability to spread risks through diversification will be related to our ability to obtain the necessary capital and other resources needed to evaluate a well’s prospects and deploy drilling equipment, as well as acquire and maintain drilling rights. Limited capital will force us to drill fewer wells, or forego opportunities management deems to be attractive, which decreases our ability to spread the risks of drilling and mitigate the possibility of deploying our limited resources towards a successful drilling venture. In addition, our revenue and ability to achieve or maintain profitability may decrease if management is unable to find enough suitable well locations to be drilled. While we have over 30,000 acres to select drilling locations from, there can be no assurance that we will be successful in drilling in a manner or pace that enables us to generate sufficient revenue at low enough costs to become profitable.

The Company ~~may face issues with title defects, which could result in losses in leases which~~has reserved the ~~fund acquires.~~

~~There may be defects in the title to the leases on which the Company’s wells are drilled. In certain instances, the Company may elect not to obtain title opinions or take certain other~~sums due ~~diligence related actions that could have otherwise unveiled problems, due to cost, timing or other constraints. Thus, the Company may experience losses~~ from title defects which arose during drilling that would have been disclosed by such due diligence. Also, the Company may waive title requirements for the leases on which the Company’s wells are drilled. Any failureAult Energy as of ~~title of working interest transferred to the Company could materially adversely affect our operating results and business.~~June 30, 2023.

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

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

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

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

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

On August 10, 2023, the Company borrowed $1,000,000 from Smithline Family Trust I, an accredited investor, and issued it a 10% Original Issue Discount Convertible Promissory Note due December 16, 2023. The foregoing transaction was were not registered under the Securities Act of ~~equity securities were previously disclosed.~~1933 and was exempt from registration pursuant to Section 4(a)(2) thereof and Rule 506(b) promulgated thereunder.

~~The Company’s Board of Directors approved five-year executive employment agreements pursuant to which our officers are entitled to the following compensation~~Secured Loan Amendment and ~~other rights:~~

Randy May, our Executive Chairman, is receiving an annual base salary of $400,000, and was granted 5,000,000 shares of restricted common stock with half of the shares vesting annually over a five-year period and the remainder vesting based on performance metrics set forth in the agreement. Under his agreement, Mr. May was also granted the following rights related to the Company’s oil and gas operations:

~~(A)~~As disclosed under “Part I – Item 2. – Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources,” on August 10, 2023, the Company extended the maturity date of the 10% Senior Secured Promissory Note (the “Note”) originally issued on December 20, 2022 to December 16, 2023. The Company also entered into a new Securities Purchase Agreement with the same lender, borrowed $1,000,000 and issued an ~~overriding royalty~~additional Note having a principal amount of $1,111,111 and with identical terms as the December 2022 Note as amended, and agreed to provide the lender with a carried working interest in one or more productive oil wells in an amount to be ~~held~~mutually agreed by the parties, and that if such interest does not result in ~~perpetuity~~revenue to the lender of at least $1,111,111 within 24 months from ~~either~~the date of the amendment, to pay the lender the difference between such amount and the amount actually received by the lender pursuant to the carried working interest. Finally, the Company ~~or its subsidiaries~~issued the lender participation rights equal to ~~5% in~~15% of any ~~and all successfully drilled and completed oil and/or gas~~future wells ~~(an “ORRI”) during the term of his employment.~~drilled.

~~(B) a 15% participation right in~~In connection with the ~~funding~~foregoing, the Company’s Chief Executive Officer and ~~ownership interest in any drilling or participation by~~Chief Financial Officer personally guaranteed the ~~Company or any subsidiary in~~August 2023 similar to their guarantees of the ~~drilling by~~December 2022 Note. The terms of the ~~Company or a third party of an oil~~December 2022 Note and ~~gas well other than~~related agreements were previously disclosed on the ~~Fund (a “Participation Right”).~~Company’s Current Report on Form 8-K filed on December 21, 2022.

Jay Puchir, our Chief Executive Officer, is receiving an annual base salary of $350,000 and was granted 5,000,000 shares of restricted common stock with half of the shares vesting annually over a five-year period and the remainder vesting based on performance metrics set forth in the agreement. Under his agreement, Mr. Puchir was also granted the following rights related to the Company’s oil and gas operations:MIPA Amendment

~~(A) a 5% ORRI during~~As disclosed under Note 2 to the ~~term of his employment.~~financial statements contained in this Report, on August 10, 2023 we entered into an Amendment with the Seller to modify the MIPA and extend our time to close as follows:

~~Alisa Horgan, our Chief Administrative Officer~~The foregoing descriptions do not purport to be complete and ~~a member~~is qualified in its entirety by the full text of ~~our Board~~the agreements related thereto, copies of ~~Directors and Mr. May’s daughter, is receiving an annual base salary of $180,000, and was granted 2,000,000 shares of restricted common stock with the shares vesting annually over a 10-year period.~~which are filed as exhibits to this Report.

~~Her Husband,~~ Richard Horgan, Senior Vice President of M&A and our former Chief Executive Officer, is receiving an annual base salary of $200,000, and was granted 2,000,000 shares of restricted common stock with the shares vesting annually over a 10-year period.

~~Each of the above employment agreements are also subject to the following severance provisions:~~

Generally, “change of control” is defined in the employment agreements to include a transfer of 50% of the voting securities or interests of the Company or a key subsidiary (as defined in the Internal Revenue Code and Treasury Regulations thereunder), including through a merger or asset purchase, a change in the majority of the Board of Directors in a two-year period, or a liquidation or dissolution by the Company. The definition of change of control is subject to certain exceptions and limitations as more particularly set forth in the employment agreements.

Generally, “good reason” is defined as a material diminution in the officer’s authority, duties or responsibilities due to no fault of his or her own (unless he or she has agreed to such diminution); any other action or inaction that constitutes a material breach by the Company under the employment agreement; or a relocation of the principal place of employment to a location outside the location specified in the employment agreements.

Generally, “cause” is defined as a felony conviction or plea related to the business of the Company; gross negligence or intentional misconduct in carrying our his or her duties resulting in material harm to the Company; misappropriation of Company funds or otherwise defrauding the Company; breach of fiduciary duty to the Company; material breach of any agreement with the Company without timely cure; breach of certain restrictive covenants set forth in the employment agreement; a federal injunction enjoining the officer from violating federal securities laws; a cease and desist order or other order issued by the SEC; refusal to carry out a resolution adopted by the Company’s Board of Directors after a reasonable opportunity to dispute such resolution; or alcohol or drug abuse in a manner that interferes with the successful performance of his or her duties.

Under the terms of the employment agreements, the officers are subject to non-competition and non-solicitation covenants during the term of their employment and during one year following termination of employment with the Company. The employment agreements also contain customary confidentiality and non-disparagement covenants.

~~In addition, the Company agreed to the following compensation for each non-employee director:~~

(A) an annual grant of $100,000 in restricted stock which will vest on the final business day of each quarter equal to one-fourth of the total stipend, or $25,000 per quarter, with the number of shares to be determined based on the volume weighted average price of the Company’s common stock as of each quarterly vesting (the “Restricted Stock Grant”).

~~(B) an annual cash fee of $50,000 which will vest on the final business day of each quarter equal to one-fourth of the total fee, or $12,500 per quarter (the “Cash Fees”).~~

The director compensation set forth above is subject to upward adjustment upon the successful uplisting of the Company to a national securities exchange, whereupon the Restricted Stock Grant will be increased to $200,000 per year and the Cash Fees will be increased to $100,000 per year.

~~In addition, the Company agreed to enter into indemnification agreements with each of its officers and directors.~~

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

+ Certain schedules, appendices and exhibits to this agreement have been omitted in accordance with Item 601(b)(2) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished supplementally to the Securities and Exchange Commission staff upon request.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Part I - FINANCIAL INFORMATION	F-1
Item 1.
Condensed Consolidated Balance Sheets	F-2
Condensed Consolidated Statements of Operations	F-3
Condensed Consolidated Statements of Stockholders’ Equity	F-4
Condensed Consolidated Statements of Cash Flows	F-5
Notes to the Condensed Consolidated Financial Statements	F-6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	3
Item 3. Quantitative and Qualitative Disclosures About Market Risk	8
Item 4. Controls and Procedures	8
Part II - OTHER INFORMATION	9
Item 1. Legal Proceedings	9
Item 1A. Risk Factors	9
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	9
Item 3. Defaults Upon Senior Securities	9
Item 4. Mine Safety Disclosures	9
Item 5. Other Information	9
Item 6. Exhibits	10
SIGNATURES	11

Condensed Consolidated Balance Sheets as of June 30, 2023 (unaudited) and March 31, 2023	F-2
Condensed Consolidated Statements of Operations (unaudited) for the three months ended June 30, 2023 and 2022	F-3
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (unaudited) for the three months ended June 30, 2023 and 2022	F-4
Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended June 30, 2023 and 2022	F-5
Notes to Condensed Consolidated Financial Statements	F-6

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

Balance - March 31, 2021		-	$	-		7,000,000	$	700	$	2,325,091		$	(9,756,222	)	$	(7,430,431	)

Cost allocations from Ecoark Holdings		-		-		-		-		(974,485	)		-			(974,485	)
Net income for the period		-		-		-		-		-			1,017,766			1,017,766

Balance - June 30, 2021		-		-		7,000,000		700		1,350,606			(8,738,456	)		(7,387,150	)

Common shares issued in exercise of warrants		-		-		1,400,000		140		(140	)		-			-
Cost allocations from Ecoark Holdings		-		-		-		-		1,675,482			-			1,675,482
Net loss for the period		-		-		-		-		-			(2,632,469	)		(2,632,469	)

Balance - September 30, 2021		-	$	-		8,400,000	$	840	$	3,025,948		$	(11,370,925	)	$	(8,344,137	)

Balance - March 31, 2022		-	$	-		8,400,000	$	840	$	591,167		$	(16,678,975	)	$	(16,086,968	)

Net loss for the period		-		-		-		-		-			(1,986,544	)		(1,986,544	)
Net income (loss)		-		-		-		-		-			(1,986,544	)		(1,986,544	)

Balance - June 30, 2022		-		-		8,400,000		840		591,167			(18,665,519	)		(18,073,512	)
Beginning balance		-		-		8,400,000		840		591,167			(18,665,519	)		(18,073,512	)

Net loss for the period July 1, 2022 through July 25, 2022		-		-		-		-		-			(2,608,986	)		(2,608,986	)
To reflect the reverse merger of White River Holdings Corp.		1,200		1		-		-		32,827,292			-			32,827,293
To record contribution of capital by Ecoark Holdings Inc.		-		-		-		-		3,000,000			-			3,000,000
Stock-based compensation		-		-		-		-		657,935			-			657,935
Net loss for the period		-		-		-		-		-			(8,539,886	)		(8,539,886	)

Balance - September 30, 2022		1,200	$	1		8,400,000	$	840	$	37,076,394		$	(29,814,391	)	$	7,262,844
Ending balance		1,200	$	1		8,400,000	$	840	$	37,076,394		$	(29,814,391	)	$	7,262,844

	2022			2021
	SEPTEMBER 30,
	2022			2021
	(unaudited)			(unaudited)
CASH FLOW FROM OPERATING ACTIVITIES FROM OPERATIONS
Net loss	$	(13,135,416	)	$	(1,614,703	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities
Home office allocation		-			700,997
Depreciation, amortization, depletion, accretion and impairment		6,202,606			1,234,262
Share-based compensation		657,935			-
Loss on disposal of Norr and Elysian		144,654			-
Gain on disposal of oil and gas property, ARO and fixed assets		(391,533	)		(29,078	)
Changes in assets and liabilities
Accounts receivable		224,398			414,860
Inventory		15,101			21,167
Prepaid expenses and other current assets		79,206			(78,838	)
Amortization of right of use asset - operating leases		71,353			59,669
Due to Ecoark Holdings		3,884,620			2,779,952
Operating lease expense		(77,002	)		(63,765	)
Accrued payable and accrued liabilities		(284,663	)		(3,096,728	)
Total adjustments		10,526,675			1,942,498
Net cash (used in) provided by operating activities of continuing operations		(2,608,741	)		327,795
Net cash used in discontinued operations		(81,053	)		-
Net cash (used in) provided by operating activities		(2,689,794	)		327,795

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of oil and gas properties, net of asset retirement obligations		-			(303,500	)
Advances on note receivable		(200,000	)		-
Proceeds from the sale of fixed assets		-			2,500
Proceeds from the sale of oil and gas properties		999,999			-
Purchase of fixed assets		(889,352	)		-
Net cash (used in) investing activities		(89,353	)		(301,000	)

CASH FLOWS FROM FINANCING ACTIVITIES
(Decrease) in cash overdraft		(27,918	)		(26,387	)
Proceeds from long-term debt		145,266			-
Repayment of long-term debt		(9,894	)		-
Proceeds from Ecoark Holdings in acquisition of White River		3,000,000			-
Net cash provided by (used in) financing activities		3,107,454			(26,387	)

NET INCREASE IN CASH AND RESTRICTED CASH		328,307			408

CASH AND RESTRICTED CASH - BEGINNING OF PERIOD		251,050			250,413

CASH AND RESTRICTED CASH - END OF PERIOD	$	579,357		$	250,821

SUPPLEMENTAL DISCLOSURES
Cash paid for interest expense	$	6,168		$	-
Cash paid for income taxes	$	-		$	-

SUMMARY OF NON-CASH ACTIVITIES:				��
Contribution by Ecoark Holdings	$	28,953,510		$	-
Net assets acquired from Enviro Technologies US Inc.	$	46,157		$	-

	2023			2022
	2023			2022

CASH FLOW FROM OPERATING ACTIVITIES FROM OPERATIONS
Net loss	$	(15,166,868	)	$	(1,986,544	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities
Depreciation, amortization, depletion, accretion and impairment		317,564			168,864
Share-based compensation		3,720,054			-
Bad debt		2,055,743			-
Change in fair value of derivative liability		2,343,320			-
Derivative expense		2,427,596			-
Amortization of discounts - convertible notes		414,548			-
Expense recorded for advances from related parties		229,635			-
Amortization of discount - Series C Preferred Stock		1,145,441			-
Changes in assets and liabilities
Accounts receivable		(699,650	)		(160,695	)
Accounts receivable - related parties		(178,777	)		-
Receivable - Participation Agreement		59,971			-
Inventory		(4,956	)		(28,981	)
Prepaid expenses and other assets		101,850			(648,736	)
Amortization of right of use asset - operating leases		41,880			35,652
Amortization of right of use asset - financing leases		9,465			-
Deferred drilling costs		(317,350	)		-
Contribution from BitNile Metaverse, Inc.		-			2,597,455
Operating lease expense		(39,473	)		(38,476	)
Accrued payable and accrued liabilities		765,370			(638,477	)
Total adjustments		12,392,231			1,286,606
Net cash used in operating activities		(2,774,637	)		(699,938	)

CASH FLOWS FROM INVESTING ACTIVITIES
Additions of oil and gas properties		(894,386	)		-
Proceeds from the sale of oil and gas properties		-			999,999
Purchase of fixed assets		(4,600	)		(605,600	)
Net cash (used in) provided by investing activities		(898,986	)		394,399

CASH FLOWS FROM FINANCING ACTIVITIES
(Decrease) in cash overdraft		-			110,273
Repayments of advances from related parties		(115,199	)		-
Advances from related parties		2,730,326			-
Repayment of convertible note		(625,000	)		-
Proceeds from Series C Preferred Stock, net		1,141,000			-
Proceeds from long-term debt		-			145,266
Repayment of long-term debt and note payable		(25,281	)		-
Payment of lease liability		(7,382	)		-
Net cash provided by financing activities		3,098,464			255,539

NET (DECREASE) IN CASH AND RESTRICTED CASH		(575,159	)		(50,000	)

CASH AND RESTRCITED CASH - BEGINNING OF PERIOD		827,790			251,050

CASH AND RESTRICTED CASH - END OF PERIOD	$	252,631		$	201,050

SUPPLEMENTAL DISCLOSURES
Cash paid for interest expense	$	165,136		$	-
Cash paid for income taxes	$	-		$	-

SUMMARY OF NON-CASH ACTIVITIES:

Fixed assets acquired for long-term debt and accounts payable	$	103,058		$	-

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

	(a)	The assets and liabilities of the legal subsidiary recognized and measured at their ~~precombination~~pre-combination carrying amounts;
	(b)	The assets and liabilities of the legal parent recognized and measured in accordance with the guidance in this topic applicable to business combinations (ASC 805);
	(c)	The retained earnings and other equity balances of the legal subsidiary before the business combination;
	(d)	The amount recognized as issued equity interests in the consolidated financial statements determined by adding the issued equity interest of the legal subsidiary outstanding immediately before the business combination to the fair value of the legal parent determined in accordance with the guidance in ASC 805 applicable to business combinations. However, the equity structure reflects the equity structure of the legal parent, including the equity interests the legal parent issued to ~~effect~~affect the combination. Accordingly, the equity structure of the legal subsidiary is restated using the exchange ratio established in the acquisition agreement to reflect the number of shares of the legal parent issued in the reverse acquisition.

	1			2			3 ⁽¹⁾			4 ⁽²⁾			5
	Historical White River			White River			Other			Other
	Energy			Holdings			Transaction			Transaction
	Corp			Corp.			Adjustments			Adjustments			Pro Forma
								(1)			(2)
ASSETS

CURRENT ASSETS
Cash	$	140,241		$	251,050		$	-		$	(140,241	)	$	251,050
Accounts receivable		-			634,483			-			-			634,483
Prepaid expenses and other current assets		71,756			318,771			-			(71,756	)		318,771
Inventory		-			107,026			-			-			107,026
Current assets held for sale		-			-			-			-			-
Total current assets		211,997			1,311,330			-			(211,997	)		1,311,330

NON-CURRENT ASSETS

Property and equipment, net		1,466			596,464			-			(1,466	)		596,464
Capitalized drilling costs		-			604,574			-			-			604,574
Oil and gas reserves		-			6,626,793			-			-			6,626,793
Right of use asset - operating leases		-			243,494			-			-			243,494
Other assets		-			14,760			-			-			14,760
Goodwill		-			2,100,374			-			-			2,100,374
Total non-current assets		1,466			10,186,459			-			(1,466	)		10,186,459

TOTAL ASSETS	$	213,463		$	11,497,789		$	-		$	(213,463	)	$	11,497,789

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	23,500		$	918,700		$	-		$	(23,500	)	$	918,700
Current portion of lease liability - operating leases		-			155,263			-			-			155,263
Cash overdraft		-			27,918			-			-			27,918
Due to Ecoark Holdings.		-			25,068,890			-			-			25,068,890
Total current liabilities		23,500			26,170,771			-			(23,500	)		26,170,771

NON-CURRENT LIABILITIES
Asset retirement obligation		-			1,303,751			-			-			1,303,751
Lease liability - operating leases, net of current portion		-			110,235			-			-			110,235
Total non-current liabilities		-			1,413,986			-			-			1,413,986

Total liabilities		23,500			27,584,757			-			(23,500	)		27,584,757

STOCKHOLDERS’ EQUITY (DEFICIT)

Preferred stock, $0.0001 par value		-			-			-			-			-
Common stock, $0.0001 par value		840			60			(60	)		-			840
Additional paid-in capital		4,316,779			591,947			(4,127,596	)		(189,963	)		591,167
Accumulated deficit		(4,126,539	)		(16,678,975	)		4,126,539			-			(16,678,975	)
Total stockholders’ equity (deficit) before non-controlling interest		191,080			(16,086,968	)		(1,117	)		(189,963	)		(16,086,968	)
Non-controlling interest		(1,117	)		-			1,117			-			-
Total stockholders’ equity (deficit)		189,963			(16,086,968	)		-			(189,963	)		(16,086,968	)

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	213,463		$	11,497,789		$	-		$	(213,463	)	$	11,497,789

	Three Months Ended June 30, 2022
	(Unaudited)
Revenues	$	116,461
Net loss	$	(1,986,544	)
Net loss per share	$	-

	June 30, 2023			March 31, 2023
	(unaudited)
Land	$	140,000		$	140,000
Buildings (39 years)		236,000			236,000
Machinery and equipment (3 to 10 years)		3,248,816			3,141,159
Total property and equipment		3,624,816			3,517,159
Accumulated depreciation and impairment		(352,502	)		(265,727	)
Property and equipment, net	$	3,272,314		$	3,251,432

Activity Category	March 31, 2022			Adjustments (1)			September 30, 2022
Proved Developed Producing Oil and Gas Properties
Cost	$	4,915,968		$	(2,231,401	)	$	2,684,567
Accumulated depreciation, depletion and amortization		(3,225,527	)		1,059,850			(2,165,677	)
Changes in estimates		-			-			-
Total	$	1,690,441		$	(1,171,551	)	$	518,890

Undeveloped and Non-Producing Oil and Gas Properties
Cost	$	4,936,352		$	(28,266	)	$	4,908,086
Changes in estimates		-			-			-
Total	$	4,936,352		$	(28,266	)	$	4,908,086

Grand Total	$	6,626,793		$	(1,199,817	)	$	5,426,976

Activity Category	March 31, 2021			Adjustments (1)			September 30, 2021
Proved Developed Producing Oil and Gas Properties
Cost	$	7,223,379		$	-		$	7,223,379
Accumulated depreciation, depletion and amortization		(739,037	)		(722,344	)		(1,461,381	)
Changes in estimates		-			-			-
Total	$	6,484,342		$	(722,344	)	$	5,761,998

Undeveloped and Non-Producing Oil and Gas Properties
Cost	$	5,868,137		$	-		$	5,868,137
Changes in estimates		-			-			-
Total	$	5,868,137		$	-		$	5,868,137

Grand Total	$	12,352,479		$	(722,344	)	$	11,630,135

	September 30, 2022			March 31, 2022
		(unaudited)
Truck loan – Amur Capital ^(a)	$	80,634		$	-
Truck loan – Mitsubishi ^(b)		54,738			-
Total long-term debt		135,372			-
Less: current portion		(42,668	)		-
Long-term debt, net of current portion	$	92,704		$	-

(a)	On May 13, 2022, entered into long-term secured note payable for $87,964 for two service trucks maturing ~~May~~April 13, 2026. The note is secured by the collateral purchased and accrued interest annually at ~~11.99~~11.99%% with principal and interest payments due monthly. There is no accrued interest as of ~~September~~June 30, ~~2022.~~2023.

(b)	On June 21, 2022, entered into long-term secured note payable for $61,973 for a service truck maturing December 21, 2024. The note is secured by the collateral purchased and accrued interest annually at 11.99% with principal and interest payments due monthly. There is no accrued interest as of ~~September~~June 30, ~~2022.~~2023.

(c)	On October 11, 2022, entered into long-term secured note payable for $50,142 for a tractor maturing October 11, 2025. The note is secured by the collateral purchased and accrued interest annually at 7.99% with principal and interest payments due monthly. There is no accrued interest as of June 30, 2023.

(d)	On October 18, 2022, entered into long-term secured note payable for $37,599 for equipment maturing October 18, 2027. The note is secured by the collateral purchased and accrued interest annually at 11.99% with principal and interest payments due monthly. There is no accrued interest as of June 30, 2023.

(e)	In August 2022, entered into long-term note payable in the amount of $28,900 for equipment maturing August 2, 2026. The note is secured by the collateral purchased and interest is accrued at 6.50% with principal and interest due monthly. There is no accrued interest as of June 30, 2023.

(f)	In January 2023, entered into long-term note payable in the amount of $99,000 for a rig maturing January 9, 2026. The note is secured by the collateral purchased and interest is accrued at 7.99% with principal and interest due monthly. There is no accrued interest as of June 30, 2023.

(g)	In June 2023, entered into long-term note payable in the amount of $80,764 for an automobile maturing June 2029. The note is secured by the automobile and interest is accrued at 9.79% with principal and interest due monthly. There is no accrued interest as of June 30, 2023.


2024	$	117,961
2025		112,835
2026		77,783
2027		24,334
2028		18,626
Thereafter		16,941
Total	$	368,480

	Three Months Ended June 30, 2023		Three Months Ended June 30, 2022
Expected term		0.20– 5.00 years		-
Expected volatility		66- 197 %		-%
Expected dividend yield		-		-
Risk-free interest rate		3.60 – 5.43 %		-%
Exercise price	$	1.00		-
Market price		1.09 – $1.24		-

Beginning balance as of March 31, 2023	$	10,483,371
Issuances of Series C Warrants – derivative liabilities		2,427,596
Change in fair value of derivative liabilities		2,343,320
Ending balance as of June 30, 2023	$	15,254,287

	RSUs			Weighted Average Grant Price			Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at March 31, 2023		17,425,000		$	0.91			5.95	$	1,568,250
Granted		6,150,000			1.23			5.66		636,000
Vested		(1,962,500	)		(1.23	)
Exercised		-			-			-		-
Forfeited or expired		-			-			-		-
Outstanding at June 30, 2023		21,612,500		$	1.20			5.43	$	6,386,250

	Date of Grant
~~Expected term (years)~~		10
~~Expected volatility~~		~~283~~	%
~~Risk-free interest rate~~		~~2.55~~	%
~~Dividend yield~~		0	%

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Balance outstanding at March 31, 2023		60,421	$	5.20		4.77
Granted		-		-		-
Exercised		-		-		-
Forfeited		-		-		-
Expired		-		-		-
Cancelled		-		-		-
Balance outstanding at June 30, 2023		60,421	$	5.20		4.52
Exercisable at June 30, 2023		60,421	$	5.20		4.52

	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Balance outstanding at March 31, 2021		60,421	$	5.20		6.77
Granted		-		-		-
Exercised		-		-		-
Forfeited		-		-		-
Expired		-		-		-
Cancelled		-		-		-
Balance outstanding at March 31, 2022		60,421	$	5.20		5.77
Exercisable at March 31, 2022		60,421	$	5.20		5.77

Warrants	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at March 31, 2023		10,293,632	$	1.00		4.59	$	-
Granted		2,282,000		1.00		5.00		-
Exercised		-		-		-		-
Forfeited or expired		-		-		-		-
Outstanding at June 30, 2023		12,575,632	$	1.00		4.43	$	3,018,152
Exercisable at June 30, 2023		12,575,632	$	1.00		4.43	$	3,018,152

Warrants	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Outstanding at March 31, 2021		10,628	$	16.625		1.45	$	-
Granted		-		-		-		-
Exercised				-		-		-
Forfeited or expired		-		-		-		-
Outstanding at March 31, 2022		10,628	$	16.625		0.45	$	-
Exercisable at March 31, 2022		10,628	$	16.625		0.45	$	-

	~~Six Months Ended~~ ~~September 30,~~ ~~2022~~			~~Year Ended~~ March 31, 2022
~~Expected term~~		-			-
~~Expected volatility~~		-	%		-	%
~~Expected dividend yield~~		-			-
~~Risk-free interest rate~~		-	%		~~0.10~~	%

Maturity of lease liability for the financing leases for the period ended June 30,
2024	$	55,427
2025	$	55,427
2026	$	55,427
2027	$	18,476
Imputed interest	$	(46,851	)
Total lease liability	$	137,906

Amortization of the right of use asset for the period ended September 30,
2023	$	143,318
2024	$	28,823

Total	$	172,141

Amortization of the right of use asset for the period ended June 30,
2024	$	100,179
2025	$	47,938
2026	$	55,746
2027	$	20,575

Total	$	224,438

	Six months ended September 30, 2022		Six months ended September 30, 2021
		(unaudited)		(unaudited)
Operating lease expense	$	72,244	$	70,084

	Three Months ended June 30, 2023		Three Months ended June 30, 2022
	(unaudited)		(unaudited)
Operating lease expense	$	36,122	$	36,122

Financing lease expense
Depreciation of capitalized finance lease assets		9,465		-
Interest expense on finance lease liabilities		6,475		-
Total lease cost	$	52,062	$	36,122

	Level 1		Level 2		Level 3
June 30, 2023
Derivative liabilities	$	-	$	-	$	15,254,287

March 31, 2023
Derivative liabilities	$	-	$	-	$	10,483,371

	●	The Seller agreed to extend the closing date to October 31, 2023;
	●	If not closed by that date, the Seller agreed to a December 31^st extension if we pay it $20,000 on November 1, 2023;
	●	We agreed to pay Commenda’s prepaid operating and transactional expenses since January 1, 2023 which are estimated to be approximately $60,000;
	●	We agreed to immediately pay the Seller $30,000 which is one-half of the final purchase price due as a non-refundable deposit; and
	●	We agreed to promptly pay Commenda’s operating expenses each month.

	2022			2021
Revenue	$	319		$	-
Operating expenses		137,877			-
Other (income) loss		-			-
Net loss from discontinued operations	$	(137,558	)	$	-

	2022			2021
Proceeds from sale	$	3		$	-
Cash		(3,205	)		-
Inventory		(40,901	)		-
Loss on disposal of discontinued operations	$	(44,103	)	$	-

	-	Coochie Oil Field

	-	Five Mile Bayou Oil Field

	-	Lake Ophelia Oil Field

	-	Lake St John Oil Field

	-	North Bayou Jack Oil Field

	-	Tew Lake Oil Field

-	~~White~~-	Henry Oil Field

-	Horseshoe Lake Oil Field

-	Pearl River ~~Operating LLC (“WR Operating”)~~Oil Field

-	Thanksgiving Oil Field