What changed in this filing

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Item 1. Financial Statements

2022-08-22 compared with 2022-05-13 · 513 added, 309 removed, 443 unchanged (65% of the section changed)

5 unchanged sentences

Cash and cash equivalents attributed to variable interest entity

Accounts Receivable, less allowances of $ 33,000 and $ 33,000 , respectively

Accounts Receivable, less allowances of none and $ 33,000 , respectively

Marketable securities

13 unchanged sentences

Loans and notes payable, current attributed to variable interest entity

Long-term debt, current

Long-term debt (working interest royalty programs), current

Total current liabilities

1 unchanged sentence

Loans and notes payable, long term

Long-term debt

Long-term debt (working interest royalty programs)

Deferred income tax liabilities

1 unchanged sentence

Stockholders' equity:

Convertible, preferred

stock, $ .001 par value;

3,400,000 shares authorized;

Series A- 66,667 issued and outstanding (1)

stock, $ .001

Convertible, preferred stock, $ .001 par value;

3,400,000 shares

(1) Series A- 66,667 issued and

outstanding (1)

Common stock, $ .001 par value;

41,666,667 shares authorized;

and 12,330,859

were issued and outstanding as of March 31, 2022 and December 31, 2021 (1)

15,038,619 and 12,330,859 were issued and outstanding as of June 30, 2022 and December 31, 2021 (1)

Additional paid-in capital

12 unchanged sentences

VIVAKOR, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended

Six Months Ended

Cost of revenues

7 unchanged sentences

( 1,724,626 )

Other income:

Unrealized gain on marketable securities

( 5,479,964 )

( 3,861,198 )

Other income (expense):

Unrealized gain (loss) on marketable securities

( 1,652,755 )

( 8,949,169 )

Interest income

Interest expense

Total other income

Gain on disposition of asset

Total other income (expense)

( 1,627,263 )

( 9,096,785 )

Loss before provision for income taxes

( 5,227,863 )

( 10,821,411 )

( 5,953,098 )

Provision for income taxes

Consolidated net loss

( 5,227,863 )

Consolidated net income (loss)

( 10,524,934 )

( 5,953,898 )

( 1,149,934 )

Net loss attributable to noncontrolling interests

( 1,114,003 )

( 1,255,844 )

Net income (loss) attributable to Vivakor, Inc.

( 4,905,317 )

( 9,410,931 )

$ ( 5,506,200 )

Net loss attributable to common shareholders

$ ( 4,905,317 )

$ ( 9,410,931 )

$ ( 5,506,200 )

Dividend on preferred stock

Net income loss to parent

$ ( 4,905,317 )

$ ( 9,453,127 )

$ ( 5,506,200 )

Basic and diluted net loss per share (1)

7 unchanged sentences

VIVAKOR, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES

IN STOCKHOLDERS’ EQUITY(DEFICIT)

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Series A Preferred Stock

Additional Paid-in

Non-controlling

Total Stockholders'

March 31, 2022 (unaudited)

$ ( 36,332,242 )

Stock options issued for services

Stock based compensation

Distributions by noncontrolling interest

Issuance of noncontrolling interest for a reduction of debt

( 4,905,317 )

( 5,227,863 )

June 30, 2022 (unaudited)

$ ( 41,237,559 )

Series A Preferred Stock

Additional Paid-in

Non-controlling

Total Stockholders'

December 31, 2021 (1)

2 unchanged sentences

Conversion of Series A Preferred Stock to Common Stock

Common Stock issued for cash

Common Stock issued for cash, net of offering costs

Common stock issued for fractional shares from reverse stock split

3 unchanged sentences

Issuance of noncontrolling interest for a reduction of debt

March 31, 2022 (unaudited)

( 5,506,200 )

A Preferred Stock

( 5,953,898 )

June 30, 2022 (unaudited)

$ ( 41,237,559 )

Series A Preferred Stock

Additional Paid-in

1 unchanged sentence

Total Stockholders'

March 31, 2021 (1)

$ ( 20,688,151 )

Common Stock issued for a reduction of liabilities (1)

Conversion of temporary equity Series B and B-1 Preferred Stock to Common Stock (1)

Stock options issued for services

Stock based compensation

Issuance of noncontrolling interest for a reduction of debt

Dividend paid in Series B-1 Preferred Stock

( 9,410,931 )

( 1,114,003 )

( 10,524,934 )

June 30, 2021 (unaudited)

$ ( 30,141,278 )

Series A Preferred Stock

Additional Paid-in

Non-controlling

Total Stockholders'

December 31, 2020 (1)

1 unchanged sentence

Common Stock issued for services (1)

Common Stock issued for a reduction

of liabilities (1)

Common Stock issued for the purchase

of a license (1)

Conversion of temporary equity Series

B and B-1 Preferred Stock to Common Stock (1)

Common Stock issued for a reduction of liabilities (1)

Common Stock issued for the purchase of a license (1)

Conversion of temporary equity Series B, B-1, and C-1 Preferred Stock to Common Stock (1)

Stock options issued for services

Stock based compensation

Issuance of noncontrolling interest for a reduction of debt

Dividend paid in Series B-1 Preferred Stock

Net income (loss)

March 31, 2021 (unaudited)

( 1,255,844 )

( 1,149,934 )

June 30, 2021 (unaudited)

$ ( 30,141,278 )

Share and per share amounts have been retroactively adjusted to reflect the one-for-thirty reverse stock split effective February 14,

2 unchanged sentences

VIVAKOR, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

Three Months Ended

CONSOLIDATED STATEMENT OF CASH FLOWS

Six Months Ended

OPERATING ACTIVITIES:

1 unchanged sentence

$ ( 5,953,898 )

$ ( 1,149,934 )

Adjustments to reconcile net income to net cash used in operating activities:

2 unchanged sentences

Common stock issued for services

Gain on disposal of asset

Unrealized gain (loss) marketable securities

( 3,734,275 )

( 12,683,444 )

Deferred income taxes

2 unchanged sentences

Accounts receivable

Accounts payable

Accounts payable and accrued expenses

Accrued interest on notes receivable

2 unchanged sentences

( 2,808,793 )

( 2,053,627 )

INVESTING ACTIVITIES:

Issuance of notes receivable

Proceeds from notes receivable

Payment on costs of patents

Purchase of a technology license

Proceeds from disposal of equipment

Purchase of equipment

( 1,129,515 )

( 1,334,123 )

Net cash used in investing activities

( 1,067,562 )

( 1,384,452 )

FINANCING ACTIVITIES:

Payment of long-term debt

Proceeds from loans and notes payable

15 unchanged sentences

Capitalized interest on construction in process

Dividend paid in Series B-1 Preferred Stock

See accompanying notes to consolidated financial

25 unchanged sentences

in Kuwait and Utah due to COVID-19 government restrictions, Utah has resumed operations in full.

Kuwait has allowed for the Company

to obtain site personnel visas to recommence operations.

These suspensions have had a negative impact on our business and there can be

no guaranty that we will not need to suspend operations again in the future as a result of the pandemic.

Kuwait has allowed for the Company to

obtain site personnel visas to recommence operations.

These suspensions have had a negative impact on our business and there can be no

guaranty that we will not need to suspend operations again in the future as a result of the pandemic.

Interim Financial Information

The accompanying unaudited condensed

consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of

America (“U.S.

GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and

Exchange Commission (“SEC”).

Certain information and disclosures normally included in consolidated financial statements

prepared in accordance with U.S.

GAAP have been condensed or omitted.

Accordingly, these condensed consolidated financial statements

should be read in conjunction with the audited consolidated financial statements and the related notes for the year ended December

The unaudited condensed consolidated financial statements have been prepared on a basis consistent with that used

to prepare the audited annual consolidated financial statements and include, in the opinion of management, all adjustments,

consisting of normal and recurring items, necessary for the fair presentation of the condensed consolidated financial statements.

The operating results for the three months ended March 31, 2022 are not necessarily indicative of the results expected for the full

year ending December 31, 2022.

The accompanying unaudited condensed consolidated

financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.

GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

Certain information and disclosures normally included in consolidated financial statements prepared in accordance with U.S.

been condensed or omitted.

Accordingly, these condensed consolidated financial statements should be read in conjunction with the audited

consolidated financial statements and the related notes for the year ended December 31, 2021.

The unaudited condensed consolidated financial

statements have been prepared on a basis consistent with that used to prepare the audited annual consolidated financial statements and

include, in the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation

of the condensed consolidated financial statements.

The operating results for the three and six months ended June 30, 2022 are not necessarily

indicative of the results expected for the full year ending December 31, 2022.

Principles of Consolidation

6 unchanged sentences

of a VIE’s expected losses or receive portions of the entity’s expected residual returns.

For the three months ended March

For the six months ended June 30,

2022 and year ended December 31, 2021 the following entities are considered to be a VIE and are consolidated in our consolidated financial

Viva Wealth Fund I, LLC and RPC Design and Manufacturing, LLC.

For the three months ended March 31, 2022 and year ended December

For the six months ended June 30, 2022 and year ended December

31, 2021 the following entities were considered to be a VIE, but were not consolidated in our consolidated financial statements due to

2 unchanged sentences

Fund, LLC, and International Metals Exchange, LLC.

For the three months ended March 31, 2022 and year ended December 31, 2021 the unaudited

For the six months ended June 30, 2022 and year ended December 31, 2021 the unaudited

financial information for the unconsolidated VIEs is as follows:

8 unchanged sentences

RPC Design and Manufacturing, LLC:

of March 31, 2022 and year ended December 31, 2021, investors in RDM have a noncontrolling interest of $ 538,684

and $ 629,694 ,

respectively.

As of March 31, 2022 and December 31, 2021, the cash and cash equivalents of this VIE are not restricted and can be

used to settle the obligations of the reporting entity.

As of March 31, 2022 and December 31, 2021 this VIE has an outstanding note

payable to the reporting entity in the amount of $ 382,330

and $ 354,566 ,

which is eliminated upon consolidation.

We have the primary risk (expense) exposure in financing and operating the assets and are

responsible for 100% of the operation, maintenance and any unfunded capital expenditures, which ultimately could be 100% of a custom

machine, and the decisions related to those expenditures including budgeting, financing and dispatch of power.

Based on all these

facts, it was determined that we are the primary beneficiary of RDM.

Therefore, RDM has been consolidated by the Company.

intercompany revenue and expense associated with RDM and its license agreement with the Company has been eliminated in

consolidation.

June 30, 2022 and year ended December 31, 2021, investors in RDM have a noncontrolling interest of $ 387,049 and $ 629,694 , respectively.

As of June 30, 2022 and December 31, 2021, the cash and cash equivalents of this VIE are not restricted and can be used to settle the

obligations of the reporting entity.

As of June 30, 2022 and December 31, 2021 this VIE has an outstanding note payable to the reporting

entity in the amount of $ 628,828 and $ 354,566 , which is eliminated upon consolidation.

We have the primary risk (expense) exposure in

financing and operating the assets and are responsible for 100% of the operation, maintenance and any unfunded capital expenditures, which

ultimately could be 100% of a custom machine, and the decisions related to those expenditures including budgeting, financing and dispatch

Based on all these facts, it was determined that we are the primary beneficiary of RDM.

Therefore, RDM has been consolidated

by the Company.

Any intercompany revenue and expense associated with RDM and its license agreement with the Company has been eliminated

in consolidation.

Viva Wealth Fund I, LLC:

31, 2022 and December 31, 2021, the cash and cash equivalents of this VIE are restricted solely for the use of proceeds of the VWFI offering

(to manufacture RPCs) and cannot be used to settle the obligations of the reporting entity.

As of March 31, 2022 and December 31, 2021,

the Company has cash attributed to variable interest entities of $ 322,268 and $ 199,952 .

As of March 31, 2022, VWFI has reached $6,250,000

in funding and has released the funding for construction of RPC Series A.

VWFI has commenced fundraising for RPC Series B.

that VWFI does not raise at least $6,250,000 for these RPC Series by the offering termination date (which date has been extended until

November 13, 2022), then the convertible notes and/or units would convert into Vivakor common stock where the minimum conversion price

will be the greater of $13.50 or a 10% discount to market per share or in the event of a public offering, 200% of the per share price

of the Company common stock sold in the underwritten offering, which was closed on February 14, 2022 at $5.00 per share.

As of April 28,

2022, VWFI has raised approximately $2,870,000 for RPC Series B.

VWFI unit holders may also sell their units to the Company for their

principal investment amount on the 3 rd , 4 th , and 5 th anniversary of the offering termination date, which if this option

were exercised, the Company may elect to pay the amount in either cash or common stock.

Company also has the option to purchase any LLC units where the members did not exercise their conversion option under the same terms

and pricing for cash or common stock.

VWFI has entered into a license agreement with the Company indicating that VWFI will pay the Company

a license fee of $1,000,000 per series of equipment manufactured with the Company’s proprietary technology.

All of the operations

of VWFI relate to private placement offering to fund and manufacture proprietary equipment for the Company, as intended in VWFI’s

design and organization by the Company, so that the Company controls VWFI in its business purpose, use of proceeds, and selling and leasing

of its equipment solely to the Company.

30, 2022 and December 31, 2021, the cash and cash equivalents of this VIE are restricted solely for the use of proceeds of the VWFI

offering (to manufacture RPCs) and cannot be used to settle the obligations of the reporting entity.

As of June 30, 2022 and

December 31, 2021, the Company has cash attributed to variable interest entities of $ 296,257

and $ 199,952 .

As of June 30, 2022, VWFI has reached $6,250,000 in funding and has released the funding for construction of RPC Series A.

commenced fundraising for RPC Series B.

In the event that VWFI does not raise at least $6,250,000 for these RPC Series by the

offering termination date (which date has been extended until November 13, 2022), then the convertible notes and/or units would

convert into Vivakor common stock where the minimum conversion price will be the greater of $13.50 or a 10% discount to market per

share or in the event of a public offering, 200% of the per share price of the Company common stock sold in the underwritten

offering, which was closed on February 14, 2022 at $5.00 per share.

As of August 8, 2022, VWFI has raised approximately $4,690,000

for RPC Series B.

VWFI unit holders may also sell their units to the Company for their principal investment amount on the

3 rd , 4 th , and 5 th anniversary of the offering termination date, which if this option were

exercised, the Company may elect to pay the amount in either cash or common stock.

The Company also has the option to purchase any

LLC units where the members did not exercise their conversion option under the same terms and pricing for cash or common stock.

has entered into a license agreement with the Company indicating that VWFI will pay the Company a license fee of $1,000,000 per

series of equipment manufactured with the Company’s proprietary technology, however these transactions are eliminated upon consolidation.

All of the operations of VWFI relate to private

placement offering to fund and manufacture proprietary equipment for the Company, as intended in VWFI’s design and

organization by the Company, so that the Company controls VWFI in its business purpose, use of proceeds, and selling and leasing of

its equipment solely to the Company.

Creditors of VWFI have no recourse to the general credit of the Company.

We have the primary risk

(expense) exposure in financing and operating the assets and are responsible for 100% of the operation, and any unfunded capital expenditures,

and the expense to the unit holders in conversion to common stock if series of equipment cannot be fully funded, which ultimately could

be 100% of any custom machine.

We are responsible for the decisions related to the expenditures of VWFI proceeds including budgeting,

financing and dispatch of power surrounding the series of equipment.

Based on all these facts, it was determined that we are the primary

beneficiary of VWFI.

Therefore, VWFI has been consolidated by the Company.

We have the primary

risk (expense) exposure in financing and operating the assets and are responsible for 100% of the operation, and any unfunded

capital expenditures, and the expense to the unit holders in conversion to common stock if series of equipment cannot be fully

funded, which ultimately could be 100% of any custom machine.

By request of the fund manager, we are responsible for the decisions

related to the expenditures of VWFI proceeds including budgeting, financing and dispatch of power surrounding the series of

Based on all these facts, it was determined that we are the primary beneficiary of VWFI.

Therefore, VWFI has been

consolidated by the Company.

Long Lived Assets

The Company reviews the carrying values of its

long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

If the expected future cash flow from the use of the asset and its eventual disposition is less than the carrying amount of the asset,

an impairment loss is recognized and measured using the fair value of the related asset.

No impairment charges were incurred during the

three months ended March 31, 2022 or for the year ended December 31, 2021, as the Company was still

in the early phases of our business plan and operating losses were expected in our early phases .

The Company reviews the carrying values of

its long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount may not

be recoverable.

If the expected future cash flow from the use of the asset and its eventual disposition is less than the carrying

amount of the asset, an impairment loss is recognized and measured using the fair value of the related asset.

No impairment charges

were incurred during the six months ended June 30, 2022 or for the year ended December 31, 2021, as the Company was still in the

early phases of our business plan and operating losses were expected in our early phases.

On March 11, 2020, the World Health

Organization (“WHO”) declared the COVID-19 outbreak to be a global pandemic.

In addition to the devastating effects on human

life, the pandemic is having a negative ripple effect on the global economy, leading to disruptions and volatility in the global financial

states and many countries have issued policies intended to stop or slow the further spread of the disease.

operations were suspended to comply with the social distancing measures implemented in Kuwait, but has since allowed for the Company to

obtain site personnel visas to recommence operations.

Our Utah operations were temporarily suspended from March through May 2020, but

have since resumed in full.

There can be no assurance, however, that market conditions will not change or demand for the Company’s

services will continue, which could result in impairment of long-lived assets in the future.

In addition to the devastating effects on

human life, the pandemic is having a negative ripple effect on the global economy, leading to disruptions and volatility in the

global financial markets.

states and many countries have issued policies intended to stop or slow the further spread of

We have observed supply chain disruptions from the COVID-19 pandemic that has contributed to delays in the completion

of the manufacturing of our RPCs, although we do not believe that these delays have constituted a triggering event for impairment of

Our Kuwait operations were suspended to comply with the social distancing measures implemented in Kuwait, but in 2022

has allowed for the Company to obtain site personnel visas to recommence operations.

Our Utah operations were temporarily

suspended from March through May 2020, but have since resumed in full in its manufacturing of its RPCs, and construction and implementation of site and infrastructure preparations

in anticipation of commencing operations in 2022.

There can be no assurance, however, that market conditions

will not change or demand for the Company’s services will continue, which could result in impairment of long-lived assets in

Intangible Assets :

30 unchanged sentences

assets and found that certain losses and a delay in our business plan may have constituted a triggering event for our intangible assets.

We performed an analysis and assessed that there to be no impairment for the three months ended March 31, 2022 or for the year ended December

We performed an analysis and assessed that there was no impairment for the six months ended June 30, 2022 or for the year ended December

Advertising Expense

costs are expensed as incurred.

The Company did not incur advertising expense for the three months ended March 31, 2022 and 2021.

Advertising costs are expensed as incurred.

Company did not incur advertising expense for the six months ended June 30, 2022 and 2021.

Net Income/Loss Per Share

5 unchanged sentences

period determined using the treasury stock method if their effect is dilutive.

Potential dilutive instruments as of March 31, 2022

Potential dilutive instruments as of June 30, 2022

and 2021 include the following:

2 unchanged sentences

shares of common stock (due to the event of a public offering of the Company’s common stock in February 2022 this will convert

to 833,333 shares), convertible Series B preferred stock convertible into approximately none

shares of common stock, convertible Series B-1 preferred stock convertible into approximately none

shares of common stock, convertible Series C-1 preferred stock convertible into approximately none

shares of common stock, stock options granted to employees of 183,333

to 833,333 shares), stock options granted to employees of 2,039,585

shares of common stock.

Stock options granted to Board members or consultants of 466,667

shares of common stock were granted as of March 31, 2022.

shares of common stock were granted as of June 30, 2022 and 2021.

There were also warrants issued and outstanding to EF Hutton of 80,000

shares of common stock as of March 31, 2022.

shares of common stock as of June 30, 2022.

These warrants were related to and granted during the close of the

underwritten public offering in February 2022

Use of Estimates

47 unchanged sentences

recorded values of notes payable approximate their current fair values because of their nature, rates, and respective maturity dates or

We have historically suffered net losses and cumulative

negative cash flows from operations, and as of March 31, 2022, we had an accumulated deficit of approximately $ 36.3 million.

31, 2022 we had cash of $ 6,847,224 .

The Company closed an underwritten public offering of 1,600,000 shares of common stock, at a public

offering price of $5.00 per share, for aggregate gross proceeds of $ 8 million, prior to deducting underwriting discounts, commissions,

and other offering expenses.

Prior to the offering, we financed our operations primarily through debt financing, private equity offerings

our working interest agreements.

We believe we have other liquid assets that may be used to assist in financing the operations of the

Company if needed, including marketable securities in Scepter, which hold a fair value $ 3,470,784 as of March 31, 2022 and have been deposited

We believe the liquid assets from the Company’s available for sale investments and funding provided from subsequent

fundraising activities of the Company give it adequate working capital to finance our day-to-day operations for at least twelve months

through April 2023.

We have historically suffered net losses and

cumulative negative cash flows from operations, and as of June 30, 2022, we had an accumulated deficit of approximately $ 41.3

As of June 30, 2022 we had cash of $ 5,204,591 .

Company closed an underwritten public offering of 1,600,000

shares of common stock, at a public offering price of $5.00 per share, for aggregate gross proceeds of $ 8

million, prior to deducting underwriting discounts, commissions, and other offering expenses.

Prior to the offering, we financed our

operations primarily through debt financing, private equity offerings our working interest agreements.

We believe we have other

liquid assets that may be used to assist in financing the operations of the Company if needed, including marketable securities in

Scepter, which hold a fair value $ 1,818,029

as of June 30, 2022 and have been deposited for trading.

We believe the liquid assets from the Company’s available for sale

investments and funding provided from subsequent fundraising activities (see Note 15) of the Company give it adequate working

capital to finance our day-to-day operations for at least twelve months through August 2023.

Prepaid Expenses and Other Assets

As of June 30, 2022 and December 31, 2021, our

other assets mainly consist of various deposits with vendors, professional service agents, or security deposits on office and warehouse

As of June 30, 2022 and December 31, 2021 we had office and warehouse lease deposits in the amount of $ 61,676 and $ 73,245 .

of June 30, 2022 we had deposits in the amounts of $ 161,458 with vendors, professional service agencies, and a reclamation bond with the

Utah Division of Oil, Gas and Mining in the amount of $ 14,288 .

Marketable Securities

3 unchanged sentences

ODYY, OTC Markets.

In December 2021 we sold

such shares of Odyssey in a private transaction for a purchase price of $ 860,491 , with $10,000 cash delivered at signing and a note issued

in favor of Vivakor in the amount of $850,491, reflecting the market price at that time.

The Company accounted for such

securities based on the quoted price from the OTC Markets where the stock is traded, which resulted in the Company recording an unrealized

gain of $ 2,089,667 on these marketable securities for the three months ended March 31, 2021.

In December 2021 we

sold such shares of Odyssey in a private transaction for a purchase price of $ 860,491 ,

with $10,000 cash delivered at signing and a note issued in favor of Vivakor in the amount of $850,491, reflecting the market price

at that time.

The Company accounted for such securities based on the quoted price from the OTC Markets where the stock is traded,

which resulted in the Company recording an unrealized loss of $ 595,392

on these marketable securities for the three months ended June 30, 2021 compared to an unrealized gain of $ 1,494,275

for the six months ended June 30, 2021.

In 2019 the Company had an investment of $ 800,000

4 unchanged sentences

the investment as marketable securities with the change in unrealized gains and losses on the investment included in the statement of

operations for the three months ended March 31, 2022 and 2021.

operations for the three months ended June 30, 2022 and 2021.

In August 2021 we converted $ 81,768 of our note receivable with Scepter

2 unchanged sentences

the Scepter price per share on OTC Markets was $0.0062 per share, which resulted in a $ 87,044 gain on the disposition of the note receivable.

The Company accounted for such securities based on the quoted price from the OTC Markets where the stock is traded, which resulted in

the Company recording an unrealized gain on marketable securities of $ 1,239,566 and $ 10,593,777 for the three months ended March 31, 2022

As of March 31, 2022 and December 31, 2021, the Company’s Chief Executive Officer has an immediate family member who sits

on the board of directors of Scepter Holdings, Inc.

As of March 31, 2022 and December 31, 2021 our Scepter marketable securities were

valued at $ 3,470,784 and $ 2,231,218 .

As of March 31, 2022 and December 31, 2021,

marketable securities were $ 3,470,784

The Company has accounted for such securities based on the quoted price from the OTC Markets where the stock is traded, which resulted

in the Company recording an unrealized loss on marketable securities of $ 1,652,755 and $ 8,353,777 for the three months ended June 30,

2022 and 2021 compared to an unrealized gain (loss) of $( 413,189 ) and 2,240,000 for the six months ended June 30, 2022 and 2021.

June 30, 2022 and December 31, 2021, the Company’s Chief Executive Officer has an immediate family member who sits on the board

of directors of Scepter Holdings, Inc.

As of June 30, 2022 and December 31, 2021 our Scepter marketable securities were valued at $ 1,818,029

and $ 2,231,218 .

For the three

months ended March 31, 2022 and 2021, the Company recorded a total unrealized gain of $ 1,239,566

and $ 12,683,444 on

marketable securities in the statement of operations.

As of March 31, 2022, inventories consist

primarily of raw materials (including tar-sand stockpiles) and finished goods (which includes Fenix iron).

The tar-sand stockpiles

consist of 10,000 tons of tar sand stockpile and are anticipated to be used for our extraction remediation units.

The stockpiles

were acquired on when the Company entered into a land lease agreement for located in Vernal, Utah.

Under the terms of the lease

agreement, we are required to pay $3 per ton of oil sands processed.

As a condition of the lease, we were required to provide

$ 30,000 toward initial

tonnage of oil sands to be processed at a cost of approximately $3.00 per ton.

The nano Fenix Iron are finished goods that

have a 20-year shelf life and were acquired at cost for $ 192,000 .

As of June 30, 2022 and December 31, 2021, marketable

securities were $ 1,818,029 and $ 2,231,218 .

For the three months ended June 30, 2022 and 2021, the Company recorded a total unrealized

loss of $ 1,652,755 and $ 8,949,169 compared to an unrealized gain (loss) of $( 413,189 ) and $ 3,734,275 for the six months ended June 30,

2022 and 2021 on marketable securities in the statement of operations.

As of June 30, 2022, inventories consist primarily

of raw materials (including tar-sand stockpiles) and finished goods (which includes Fenix iron).

The tar-sand stockpiles consist of 10,000

tons of tar sand stockpile and are anticipated to be used for our extraction remediation units.

The stockpiles were acquired when the

Company entered into a land lease agreement for located in Vernal, Utah.

Under the terms of the lease agreement, we are required to pay

$3 per ton of oil sands processed.

As a condition of the lease, we were required to provide $ 30,000 toward initial tonnage of oil sands

to be processed at a cost of approximately $3.00 per ton.

The nano Fenix Iron are finished goods that have a 20-year shelf life and were

acquired at cost for $ 192,000 .

As of December 31, 2021, inventories consist primarily of the Fenix Iron.

Inventories are valued at the lower of cost or market (net

realizable value).

Inventories are valued at the

lower of cost or market (net realizable value).

Property and Equipment

The following table sets forth the components

of the Company’s property and equipment at March 31, 2022 and December 31, 2021:

of the Company’s property and equipment at June 30, 2022 and December 31, 2021:

Schedule of property and equipment, net

March 31, 2022

June 30, 2022

December 31, 2021

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Total fixed assets

For the year ended December 31, 2021 the Company

paid $ 64,950 with 5,413 shares of Series C-1 Preferred Stock for equipment, which has been valued based on similar cash purchases of the

Series C-1 Preferred Stock at approximately $12.00 per share.

For the three months ended March 31, 2022 and 2021 depreciation expense

was $ 2,890 .

For the three months ended March 31, 2022 and 2021 capitalized interest to equipment from debt financing was $ 488,014 and

Equipment that is currently being manufactured is considered construction in process and is not depreciated until the equipment

is placed into service.

Equipment that is temporarily not in service is not depreciated until placed into service.

For the year ended December 31, 2021 the

Company issued 5,413 shares

of Series C-1 Preferred Stock value at $ 64,950

for equipment, which has been valued based on similar cash purchases of the Series C-1 Preferred Stock at approximately $12.00 per

For the six months ended June 30, 2022 and 2021 depreciation expense was $ 195,387 and

For the six months ended June 30, 2022 and 2021

capitalized interest to equipment from debt financing was $ 256,235 and

Equipment that is

currently being manufactured is considered construction in process and is not depreciated until the equipment is placed into

Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist

of the following:

Schedule of accounts payable and accrued expenses

Accounts payable

Office access deposits

Accrued compensation

Unearned revenue

Accrued interest (working interest royalty programs)

Accrued tax penalties and interest

Accounts payable and accrued expenses

As of December

31, 2021 the Company accrued $225,000 for a milestone payment to be paid to TBT Group, Inc.

(of which an independent Vivakor Board

member is a 7% shareholder) related to our worldwide, exclusive license agreement for the license of piezo electric and energy harvesting

technologies for creating self-powered sensors for making smart roadways.

This milestone payment was paid in March 2022.

Loans and Notes Payable

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Various promissory notes and convertible notes

Novus Capital Group LLC Note

Novus Capital Group LLC Note (a)

Triple T Notes

National Buick GMC

Various Convertible Bridge Notes (a)

Various Convertible Bridge Notes (b)

Blue Ridge Bank

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JP Morgan Chase Bank

Various Promissory Notes (b)

Various Promissory Notes (c)

Total Notes Payable

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Loans and notes payable, long term

_____________

Schedule of maturities of loans and notes payable

In 2021 and 2020 the Company entered into various convertible

promissory notes as follows:

Throughout 2021 and 2020 the Company entered into

convertible promissory notes with an aggregate principal of $ 415,000 .

The notes accrue interest at 10 % per annum and have a maturity of

the earlier of 12 months or the consummation of the Company listing its Common Stock on a senior stock exchange.

The notes are convertible

at the Company’s option into shares of the Company’s common stock at a price equal to 80% of the opening price of the Company’s

common stock on the national exchange or the offering price paid by the investors in the financing in connection with the uplist, whichever

is lower, or (ii) repaid in cash in an amount equal to the indebtedness being repaid plus a premium payment equal to 15% of the amount

being repaid.

If an event of default has occurred and the Company does not convert the amounts due under the Note into the Company’s

common stock, then the Company will have the option to convert the outstanding indebtedness into shares of the Company’s common

stock at a price equal to 80% of the weighted average trading price of the Company’s common stock on the OTC Markets, or be repaid

in cash in an amount equal to all principal and interest due under the Note.

All of these notes were converted to common stock as of March

13, 2020, the Company entered into a convertible promissory note in an amount of $280,500 having an interest rate of 12% per annum.

note bears a 10% Original Issue Discount.

The loan shall mature in 1 year and may be convertible at the lower of $12.00 or 80% of the

lowest median daily traded price over ten trading days prior to conversion, but in the event of a Qualified Uplist the note may be converted

at a 30% discount to market.

The Company also issued 3,333 restricted shares with no registration rights in conjunction with this note,

which was recorded as a debt discount in the amount of $44,000, which is amortized to interest expense over the term of the agreements

using the effective interest method.

On March 28, 2021 the parties amended this agreement to state that in no event shall the conversion

price be lower than $3.00 per share.

In October 2021 the parties agreed to extend the maturity of this loan to April 13, 2022 in exchange

for an increase in principal owed of $30,000.

This note has been converted to common stock as of March 31, 2022.

4, 2021, the Company entered into a convertible promissory note in an amount of $277,778 having an interest rate of 12% per annum.

note bears a 10% Original Issue Discount.

The loan shall mature in 1 year and may be convertible at the lower of $12.00 or 80% of the

lowest median daily traded price over ten trading days prior to conversion, but in the event of a Qualified Uplist the note may be converted

at a 30% discount to market.

The Company also issued 3,333 restricted shares with no registration rights in conjunction with this note,

which was recorded as a debt discount in the amount of $36,000, which is amortized to interest expense over the term of the agreements

using the effective interest method.

On March 28, 2021 the parties amended this agreement to state that in no event shall the conversion

price be lower than $3.00 per share.

In February 2022 the parties agreed to extend the maturity of this loan to August 8, 2022 in exchange

for an increase in principal owed of $25,000.

This note has been converted to common stock as of March 31, 2022.

Viva Wealth Fund I, LLC is offering up to $25,000,000 in convertible notes in a private offering .

As of March 31, 2022, VWFI has raised $8,990,000 and converted $7,480,000 of this debt to VWFI LLC units.

A convertible note will automatically convert into the LLC units at the earlier of (i) the date that the Equipment is placed into quality control and testing or (ii) six months from the date of investment.

__________________

On September 5, 2017, the Company acquired patents in the amount of $4,931,380 in which the Company also agreed to assume the encumbering debt on asset in the amount of $334,775 due in December 2019 with no interest accruing until 2020 and a deferred tax liability of $1,043,398.

As of April 1 2022, the lender agreed to extend the maturity of the note to April 1, 2023 with an initial payment of $52,448 and approximate monthly payment of $29,432 thereafter until the note is fully paid.

In 2021 and 2020 the Company entered into various convertible promissory notes as follows:

Throughout 2021 and 2020 the Company

entered into convertible promissory notes with an aggregate principal of $ 415,000 .

The notes accrue interest at 10 % per annum and have

a maturity of the earlier of 12 months or the consummation of the Company listing its Common Stock on a senior stock exchange.

are convertible at the Company’s option into shares of the Company’s common stock at a price equal to 80% of the opening price

of the Company’s common stock on the national exchange or the offering price paid by the investors in the financing in connection

with the uplist, whichever is lower, or (ii) repaid in cash in an amount equal to the indebtedness being repaid plus a premium payment

equal to 15% of the amount being repaid.

If an event of default has occurred and the Company does not convert the amounts due under the

Note into the Company’s common stock, then the Company will have the option to convert the outstanding indebtedness into shares

of the Company’s common stock at a price equal to 80% of the weighted average trading price of the Company’s common stock

on the OTC Markets, or be repaid in cash in an amount equal to all principal and interest due under the Note.

All of these notes were

converted to common stock as of June 30, 2022.

October 13, 2020, the Company entered into a convertible promissory note in an amount of $280,500 having an interest rate of 12% per annum.

The note bears a 10% Original Issue Discount.

The loan shall mature in 1 year and may be convertible at the lower of $12.00 or 80% of

the lowest median daily traded price over ten trading days prior to conversion, but in the event of a Qualified Uplist the note may be

converted at a 30% discount to market.

The Company also issued 3,333 restricted shares with no registration rights in conjunction with

this note, which was recorded as a debt discount in the amount of $44,000, which is amortized to interest expense over the term

of the agreements using the effective interest method.

On March 28, 2021 the parties amended this agreement to state that in no event

shall the conversion price be lower than $3.00 per share.

In October 2021 the parties agreed to extend the maturity of this loan to April

13, 2022 in exchange for an increase in principal owed of $30,000.

This note has been converted to common stock as of June 30, 2022.

February 4, 2021, the Company entered into a convertible promissory note in an amount of $277,778 having an interest rate of 12% per annum.

The note bears a 10% Original Issue Discount.

The loan shall mature in 1 year and may be convertible at the lower of $12.00 or 80% of

the lowest median daily traded price over ten trading days prior to conversion, but in the event of a Qualified Uplist the note may be

converted at a 30% discount to market.

The Company also issued 3,333 restricted shares with no registration rights in conjunction with

this note, which was recorded as a debt discount in the amount of $36,000, which is amortized to interest expense over the term

of the agreements using the effective interest method.

On March 28, 2021 the parties amended this agreement to state that in no event

shall the conversion price be lower than $3.00 per share.

In February 2022 the parties agreed to extend the maturity of this loan to August

8, 2022 in exchange for an increase in principal owed of $25,000.

This note has been converted to common stock as of June 30, 2022.

Wealth Fund I, LLC is offering up to $25,000,000 in

convertible notes in a private offering .

As of June 30, 2022, VWFI has raised $10,510,000

and converted $8,575,000 of this debt to VWFI LLC units.

A convertible note will automatically convert

into the LLC units at the earlier of (i) the date that the Equipment is placed into quality control and testing or (ii) six months

from the date of investment.

The convertible notes will accrue interest at 12% per annum and are paid quarterly.

At the maturity date, remaining interest will be paid, at which time no further interest payments will accrue.

Upon the offering termination date, all units accepted for any series of equipment will automatically convert to Vivakor common stock if the Company has not accepted subscriptions for at least $6,250,000 for a series of equipment.

The conversion price of the automatic stock conversion will be the the greater of $13.50 or a 10% discount to market per share or in the event of a public offering, 200% of the per share price of the Company common stock sold in an underwritten offering, which was closed on February 14, 2022 at $5.00 per share.

The termination date of the offering has been extended until November 13, 2022 in the sole discretion of the Company.

As of April 28, 2021 VWFI has reached $6,250,000 in funding and has released the funding for construction of RPC Series A.

VWFI has commenced fundraising for RPC Series B and has raised approximately $2,870,000 to manufacture RPC Series B.

Subsequent to March 31, 2022 an additional $130,000 of this debt has been converted into units of the LLC.

maturity date, remaining interest will be paid, at which time no further interest payments will accrue.

Upon the offering

termination date, all units accepted for any series of equipment will automatically convert to Vivakor common stock if the Company

has not accepted subscriptions for at least $6,250,000 for a series of equipment.

The conversion price of the automatic stock

conversion will be the the greater of $13.50 or a 10% discount to market per share or in the event of a public offering, 200% of the

per share price of the Company common stock sold in an underwritten offering, which was closed on February 14, 2022 at $5.00 per

The termination date of the offering has been extended until November 13, 2022

in the sole discretion of the Company.

As of April 28, 2021 VWFI has reached $6,250,000 in funding and has released the funding for

construction of RPC Series A.

VWFI has commenced fundraising for RPC Series B and has raised approximately $4,690,000 to manufacture

RPC Series B.

Subsequent to June 30, 2022 an additional $30,000 of this debt has been converted into units of the LLC.

Commitments and Contingencies

Commencing on September 15, 2019, the Company

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of the lease, we were required to provide a $ 3,766 security deposit.

On April 1, 2022, the Company entered into a lease

agreement for approximately 2,000 square feet of office and warehouse space located in Houston, Texas.

Commencing on April 1, 2022, the

Company entered into a month-to-month lease with JVS Holdings, Inc.

The lease may be terminated at any time or for any reason with a 30-day

written notice to terminate.

The lease requires a monthly lease payment of $ 2,000 as long as the Company remains in the space.

The right-of-use asset for operating leases as

of March 31, 2022 and December 31, 2021 was $ 795,107 and $ 663,291 .

Rent expense for the three months ended March 31, 2022 and 2021 was

of June 30, 2022 and December 31, 2021 was $ 721,550 and $ 663,291 .

Rent expense for the six months ended June 30, 2022 and 2021 was $ 199,170

and $ 186,086 .

The following table reconciles the undiscounted

cash flows for the leases as of March 31, 2022 to the operating lease liability recorded on the balance sheet:

cash flows for the leases as of June 30, 2022 to the operating lease liability recorded on the balance sheet:

Schedule of lessee operating lease liability

11 unchanged sentences

borrowing rate was determined to be 7%.

Employment Agreements

In June 2022, the Company entered into employment

agreements with its Chief Executive Officer and Chief Financial Officer, which provide for annual base salaries of $375,000 and $350,000,

respectively, and provide for incremental increases in their salaries upon the Company’s achievement of specific performance metrics.

The Company is currently accruing substantial portions of both executive’s base salaries (see Note 7).

The employment agreements

provide for the grant of stock options to the Chief Executive Officer and Chief Financial Officer to purchase up to 955,093 and 917,825

shares of the Company’s common stock, respectively, at an exercise price equal to 110% and 100% of the fair market value of the

Company’s common stock on the date of grant.

The stock option will vest after two years of continuous employment, subject to acceleration

if terminated without cause or resignations for good reason.

The agreement also provides that it is anticipated that the executives will

receive bonuses for 2022 which will be determined by the Company’s Compensation Committee and Board of Directors after taking into

account the general business performance of the Company, including any completed financings and or acquisitions.

Long-term Debt

To assist in funding the manufacture of the Company’s

Remediation Processing Centers, between 2015 and 2017, the Company entered into two agreements which include terms for the purchase of

participation rights for the sale of future revenue of the funded RPCs.

The RPCs are estimated to enter scaled up operations in 2022 and

make estimated payments.

The Company estimates future payments based on revenue projections for the RPCs.

Due to delays in scaled up operations

(see Note 1 Long Lived Assets ) the effective interest rate of these agreements increased from approximately 33% to 36%.

Long-term debt consists of the following:

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Long term debt

The following table sets forth the estimated payment

schedule of long-term debt as of March 31, 2022:

The following table sets forth the estimated

payment schedule of long-term debt as of June 30, 2022:

Schedule of long-term debt maturities

1 unchanged sentence

The following table shows all changes to temporary equity during for

the three months ended March 31, 2021.

the six months ended June 30, 2021.

Schedule of temporary equity

Convertible Preferred Stock

March 31, 2021

Dividend paid in Series B-1 Preferred Stock

Conversion of Series B and B-1 Preferred Stock to Common Stock

( 1,281,500 )

( 3,445,716 )

( 4,658,123 )

June 30, 2021

Convertible Preferred Stock

December 31, 2020

Series C-1 Issue for a reduction in stock payables

Dividend paid in Series B-1 Preferred Stock

Conversion of Series B and B-1 Preferred Stock to Common Stock

March 31, 2021

( 1,301,500 )

( 3,507,981 )

( 4,658,123 )

June 30, 2021

During the year ended December 31, 2021, all shares of Series B, B-1,

and C-1 Preferred Stock were converted to common stock.

Noncontrolling Interest

For the six months ended June 30, 2022 and 2021, the Company converted

$ 3,025,000 and $ 735,000 in Viva Wealth Fund I, LLC convertible promissory notes into 605 and 147 units of noncontrolling interest in Viva

Wealth Fund I, LLC.

For the six months ended June 30, 2021 and 2020,

the Company paid distributions to Viva Wealth Fund I, LLC unit holders of $ 343,889 and none .

Share-Based Compensation & Warrants

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statement based on their fair values at the date of grant, net of estimated forfeitures.

As of March 31, 2022 and December 31, 2021, the

Company has granted stock-based compensation to employees, including a 16,667 share stock award, which was issued in 2018 and vests at

the end of four years, and a 166,667 stock options that was issued in 2020 and cliff vests at the end of five years.

For the three months

ended March 31, 2022 and 2021, stock-based compensation was $ 111,528 .

As of June 30, 2022 and December 31, 2021,

the Company has granted stock-based compensation to employees, including a 16,667

share stock award, which was issued in 2018 and vested in May 2022, 166,667

in employee stock options that were issued in 2020 and cliff vest at the end of five years, and 1,872,918

employee stock options granted in June 2022 and vest over a period of two years.

For the six months ended June 30, 2022 and 2021,

stock-based compensation was $ 1,340,703

and $ 223,056 .

In 2020, the Company also granted non-statutory stock options, including 133,333

133,333 stock options to the Board of Directors, which vests over 1 year, and a 333,334 stock option to a consultant, which vests over

Non-statutory stock-based compensation was $ 427,500 and $ 302,500 for the three months ended March 31, 2022 and 2021.

the Company closed on its underwritten public offering in which the Company granted the underwriter, EF Hutton, division of Benchmark

Investments, LLC ("EF Hutton"), a 45-day option to purchase up to an additional 240,000 shares of Common Stock at the public

offering price per share, less the underwriting discounts and commissions, to cover over-allotments, if any.

These options were not exercised

stock options to the Board of Directors, which vests over 1 year, and a 333,334

stock option to a consultant, which vests over 4 years.

Non-statutory stock-based compensation was $ 855,000

and $ 730,000

for the six months ended June 30, 2022 and 2021.

In 2022, the Company closed on its underwritten public offering in which the

Company granted the underwriter, EF Hutton, division of Benchmark Investments, LLC ("EF Hutton"), a 45-day option to

purchase up to an additional 240,000

shares of Common Stock at the public offering price per share, less the underwriting discounts and commissions, to cover

over-allotments, if any.

These options were not exercised and expired.

There were no other options granted during the

three months ended March 31, 2022 and 2021, respectively.

six months ended June 30, 2022 and 2021, respectively.

The assumptions used in the Black-Scholes option

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Schedule of warrant assumptions

December 31, 2020

through March 31, 2022

December 31, 2020 through June 30, 2022

Risk-free interest rate

5 unchanged sentences

The following table summarizes all stock option

activity of the Company for the three months ended March 31, 2022 and 2021:

activity of the Company for the six months ended June 30, 2022 and 2021:

Schedule of option activity

Outstanding, December 31, 2021

Outstanding, March 31, 2022

Outstanding, June 30, 2022

Exercisable, December 31, 2021

Exercisable, March 31, 2022

Exercisable, June 30, 2022

Outstanding, December 31, 2020

Outstanding, March 31, 2021

Outstanding, June 30, 2021

Exercisable, December 31, 2020

Exercisable, March 31, 2021

As of March 31, 2022 and December 31, 2021, the

Exercisable, June 30, 2021

As of June 30, 2022 and December 31, 2021, the

aggregate intrinsic value of the Company’s outstanding options was approximately none.

1 unchanged sentence

based on the fair market value of the Company’s common stock.

As of March 31, 2022 and December 31, 2021,

As of June 30, 2022 and December 31, 2021,

the Company had 80,000

2 unchanged sentences

shares of common stock, at a public offering price of $5.00 per share.

In addition, the Company has issued the

underwriter, EF Hutton, 5-year warrants to purchase 80,000

In addition, the Company has issued the underwriter, EF

Hutton, 5-year warrants to purchase 80,000

shares of common stock at an exercise price equal $ 5.75 .

The impact of these warrants has no effect on stockholder’s equity, as they are considered equity-like instruments, and are

considered a direct expense of the offering.

and were valued with a fair market value of $374,000.

We used the Black-Scholes option pricing model to determine the fair value of

the warrants, with assumptions of a risk free rate of 1.92%, an expected life of 5 years, and volatility of 167%.

The impact of

these warrants has no effect on stockholder’s equity, as they are considered equity-like instruments, and are considered a

direct expense of the offering.

The Company calculates its quarterly tax provision

8 unchanged sentences

applied to year-to-date ordinary income or loss to calculate the year-to-date interim tax provision.

The Company recorded a provision for income taxes

of $ 800 and $ 1,020,388 for the three months ended March 31, 2022 and 2021, respectively.

The Company is projecting a (0.04)% effective

tax rate for the year ending December 31, 2022, which is primarily the result of projected provision from book loss incurred for the year

offset by additional valuation allowance on the net operating losses.

The Company’s effective tax rate for 2021 was 9.18 % which

was the result of the benefit of book income for the year.

Company recorded a provision for income taxes of $ 800 and $ 723,911 for the six months ended June 30, 2022 and 2021, respectively.

Company is projecting a (0.04)% effective tax rate for the year

ending December 31, 2022, which is primarily the result of projected provision from book loss incurred for the year offset by additional

valuation allowance on the net operating losses.

The Company’s effective tax rate for 2021 was 9.18 % which was the result of the

benefit of book income for the year.

As of December 31, 2021, the Company had estimated

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Subsequent Events

The Company has evaluated subsequent events through

the date the financial statements were available to issue.

On April 1, 2022, the Company entered into a lease

agreement for approximately 2,000 square feet of office and warehouse space located in Houston, Texas.

Commencing on April 1, 2022, the

Company entered into a month-to-month lease with JVS Holdings, Inc.

The lease may be terminated at any time or for any reason with a 30-day

written notice to terminate.

The lease requires a monthly lease payment of $2,000 as long as the Company remains in the space.

On April 1, 2022 the Company amended a note payable

with a principal balance of $334,775 to extend the note’s maturity date to April 1, 2023, with monthly payments of approximately

$29,432 until paid in full.

On April 26, 2022, the Company entered into a

10-year contract with Hot Oil Transport, LLC, a supplier of asphalt materials.

The quantity of product purchased pursuant to the

agreement shall be 1,000 tons of product per week, or the entirety of any lesser amount that may be produced by the Company during any

Buyer shall also have the first right of refusal to purchase all or any portion of additional product that may be produced

by the Company within the state of Utah.

Subject to the Company’s right to continue operating at the current plant site in Vernal,

the agreement shall automatically renew for two successive 10-year terms unless either party terminates the agreement by written notice

to the other party not less than three months prior to the expiration of the initial term or any renewal term.

Subsequent to March 31, 2022, VWFI has raised

$130,000 in conjunction with the $25,000,000 private placement offering to sell convertible promissory notes, which convert to VWFI LLC

units, to accredited investors to raise funds to manufacture equipment that manufacture RPC Series B.

Subsequent to March 31, 2022, VWFI

has also converted $315,000 of convertible debt into VWFI LLC units.

The Company has evaluated

subsequent events through the date the financial statements were available to issue.

On August 1, 2022, we

closed a Membership Interest Purchase Agreement, (the “MIPA”), with Jorgan Development, LLC, a Louisiana limited liability

company ("Jorgan") and JBAH Holdings, LLC, a Texas limited liability company ("JBAH" and, together with Jorgan, the

"Sellers"), as the equity holders of Silver Fuels Delhi, LLC, a Louisiana limited liability company ("SFD") and White

Claw Colorado City, LLC, a Texas limited liability company ("WCCC" ) whereby, the Company acquired all of the issued and outstanding

membership interests in each of SFD and WCCC (the “Membership Interests”), making SFD and WCCC wholly owned subsidiaries of

The purchase price for the Membership Interests is approximately $37.4 million, subject to post-closing adjustments, payable

by the Company in a combination of 3,009,552 shares of the Company’s common stock, amount equal to 19.99% of the number of issued

and outstanding shares of the Company’s common stock immediately prior to issuance, a secured three-year promissory notes made by

the Company in favor of the Sellers, and the assumption of certain liabilities of SFD and WCCC.

The shares of the Company’s common

stock and the Notes will have an aggregate value of approximately $32,942,939.

Sellers have entered

into 18-month lock-up agreements at closing with regard to the 3,009,552 common shares issued for consideration for the Membership Interests.

Under the MIPA, the

Company has committed to make a payment to the Sellers on or before the 18-month anniversary of the closing date in the amount of

$16,471,469 whether in cash or unrestricted common stock.

In the event of a breach

of the terms of the MIPA, the Notes, or the Pledge Agreement, the sole and exclusive remedy of the parties will be to unwind the MIPA

The principal amount

of the Notes, together with any and all accrued and unpaid interest thereon, will be paid to the Sellers on a monthly basis in an amount

equal to the Monthly Free Cash Flow continuing thereafter on the twentieth (20 th ) calendar day of each calendar month thereafter.

Monthly Free Cash Flow means cash proceeds received by SFD and WCCC from its operations minus any capital expenditures (including, but

not limited to, maintenance capital expenditures and expenditures for personal protective equipment, additions to the land/current facilities

and pipeline connections) and any payments on capital lease obligations of SFD and WCCC.

In conjunction with the

closing under the MIPA, SFD, WCCC and the Company will enter into a Shared Services Agreement with Endeavor Crude, LLC, a Texas limited

liability company affiliated with the Sellers (“Endeavor”), under which Endeavor will provide certain operating and administrative

services to SFD and WCCC.

In conjunction with the

closing we entered into a Master Netting Agreement, hereto (the “Netting Agreement”), with Jorgan, JBAH, Endeavor and White

Claw Crude, LLC under which all amounts as a result of all Contracts during a given calendar month shall be netted against all amounts

owed as a result of all contracts and the resulting net amount shall be payable.

The Netting Agreement includes contracts such as the

MIPA, the Notes, any pledge agreements, the Shared Services Agreement, the Crude Petroleum Supply Agreement dated January 1, 2021, by

and between WC Crude and SFD, as amended, and the Oil Storage Agreement dated January 1, 2021, by and between WC Crude, as Shipper, and

WCCC, as Operator, as amended.

In the acquisition

of WCCC we also acquired WCC’s Oil Storage Agreement with WC Crude, under which WC Crude has the right, subject to the payment of

service and maintenance fees, to store volumes of crude oil and other liquid hydrcarbons at a certain crude oil and liquid hydrocarbon

receipt, storage, blending, throughput and delivery terminal operated by WCCC, which expires on December 31, 2031.

In the acquisition of

SFD, we acquired a Crude Petroleum Supply Agreement with WC Crude (the “Supply Agreement”), under which WC Crude supplies

volumes of Crude Petroleum to SFD.

WC Crude and SFD will be entered into an amendment to the Supply Agreement, in conjunction with the

closing under the MIPA, which provides for the delivery to SFD a minimum of 1,000 sourced barrels per day, and includes a guarantee that

when SFD resells these barrels, if SFD does not make at least a $5.00 per barrel margin that WC Crude will pay to SFD the difference between

the sales price and $5.00 per barrel In the event that SFD makes more than $5.00 per barrel, SFD will pay WC Crude a profit sharing payment

in the amount equal to 10% of the excess price over $5.00 per barrel, which amount will be multiplied by the number of barrels associated

with the sale.

The Supply Agreement, as amended, will remain in effect through and including December 31,2031.

In the acquisition of

SFD, we acquired a crude oil gathering, storage, and transportation facility located on approximately 9.3 acres near Delhi, Louisiana,

along with its existing sales agreements, where a subsidiary of a large NYSE traded energy company is obligated to purchase blended crude

oil from SFD in amounts up to 60,000 barrels per month.

With prior approval, SFD is eligible to sell to the Purchaser amounts greater

than 60,000 barrels of crude oil per month.

In the acquisition of WCCC, we acquired a 120,000 barrel crude oil storage tank, in the heart

of the Permian Basin, located near Colorado City, Texas.

The storage tank is presently connected to the Lotus pipeline system

Subsequent to June 30, 2022, VWFI has raised $430,000

in conjunction with the $25,000,000 private placement offering to sell convertible promissory notes, which convert to VWFI LLC units,

to accredited investors to raise funds to manufacture equipment that manufacture RPC Series B.

Subsequent to June 30, 2022, VWFI has also

converted $30,000 of convertible debt into VWFI LLC units.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements